Operations Management Exam 3

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. The Level Production Strategy b. Mixed Production Strategy c. The Chase Production Strategy d. The Aggregate Production Strategy

A. The level production strategy

A service where key customers ask suppliers to take on the job of store level replenishment planning is called: a. Vendor managed inventory b. Early supplier involvement scheduling c. Strategic inventory planning d. Purchase spend reduction forecasting

A. Vendor managed inventory

As described in the text, a "fair trade product" refers to selling and purchasing products without a cash transaction. a. True b. False

False

ERP Implosion is the process of converting a parent item's planned order releases into component gross requirements. a. True b. False

False

It is best for firms to learn through their own experiences the methods and tools that work the best, rather than benchmarking. a. True b. False

False

The mixed strategy uses overtime and subcontracting to cope with the high demand periods. a. True b. False

True

The __________ specifies which end product is to be made, how many are required, and when they need to be completed. a. Aggregate production plan b. Master production schedule c. Bill of material d. Super bill of materials

A. Aggregate production plan

Calculate the final discrete available-to-promise quantity for Week 1 using the following table. a. ATP1 = 0 b. ATP1 = 10 c. ATP1 = 15 d. ATP1 = 20

B. ATP1 = 10

When a single company that is implementing an ERP system chooses to use one company to provide an operations module, another to provide the sales and marketing application, and yet another company to provide the finance and accounting module, that single company has chosen to utilize the single integrator approach. a. True b. False

False

A practice aimed at ensuring that purchased products or materials meet environmental objectives of the organization is referred to as green purchasing. a. True b. False

True

An ERP system is generally a multi-module application software for managing an enterprise's internal functional activities, as well as its suppliers and customers. a. True b. False

True

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization. a. True b. False

True

Creating strategic supplier alliances benefits firms by increasing the performance and value of suppliers as well as increasing brand awareness. a. True b. False

True

Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. Best-of-breed solution b. Elite integrator solution c. Multi-modular solution d. Premier application solution

A. Best of Breed solution

The acronym ERP is short for: a. Enterprise Resource Planning b. Electronic Resource Provider c. Executive Resource Plan d. Electronic Requirements Provider

A. Enterprise Resource Planning

The use of environmental supplier certification programs assists companies by which of the following? a. Identifying strategic alliance candidates b. Identifying companies who are the most popular with consumers c. Helping communities who are in jeopardy of plant closures d. All of the above

A. Identifying strategic alliance candidates

In a bill of materials, items at which level are independent demand items? a. Level 0 b. Level 1 c. Level 2 d. Level 3

A. Level 0

Benchmarking is: a. A system of performance metrics that seeks to motivate suppliers to perform better. b. A practice where companies attempt to learn and apply the best practices of other companies. c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

B. A practice where companies attempt to learn and apply the best practices of other companies

Which of the following MRP terms represents the parts demanded by a parent? a. Gross requirement b. Component c. Net requirement d. Scheduled receipt

B. Component

Why are firms migrating to ERP systems? a. ERP systems are easy to implement, particularly in large organizations b. ERP systems tie together a variety of specialized systems c. ERP systems are successful with two-dimensional processes d. ERP systems are inexpensive to implement

B. ERP systems tie together a variety of specialized systems

Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Fairly inexpensive to purchase and implement b. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries c. Flexible enough that it allows different companies with different business models to mold the new ERP system to fit the company's business model d. All of the above

B. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries

______________ considers the public consequences of organizational buying. a. The bullwhip effect b. Ethical sourcing c. Benchmarking d. Vendor managed inventory

B. Ethical sourcing

Which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance? a. Improving time to market b. Lowering inventory turnover rates c. Participating in value engineering/value analysis efforts d. Creating supplier alliances

B. Lowering inventory turnover rates

Legacy MRP systems typically utilized multiple software packages and databases which caused: a. The system to crash often b. The same information to be stored in multiple locations c. Data integrity d. Planned order releases

B. The same information to be stored in multiple locations

A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as: a. Distributive negotiations b. Win-win negotiations c. Optimal review period d. DMAIC improvement cycle

B. Win-win negotiations

Complete the following MRP record and provide the planned order releases for Week 1. Lead time is 2 weeks. Safety stock is 3. Use LFL lot sizes. a. 34 b. 26 c. 29 d. 14

C. 29

What is the most important output of the MRP? a. Bill of materials b. Distribution requirements plan c. Planned order releases d. Aggregate production plan

C. Planned order releases

In general, single integrator ERP solutions are better suited to more intricate workplaces. a. True b. False

False

The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. Best-of-breed b. Elite integrator c. Single integrator d. Premier application

C. Single integrator

Convincing your supplier to cutting back on packaging, fuel, or electricity is an example of: a. Ethical sourcing b. Sole sourcing c. Sustainable sourcing d. Global sourcing

C. Sustainable sourcing

One standard which is measured in environmental supplier certification is: a. The number of trucks owned by the supplier b. Technology investment by the supplier c. The suppliers' recycled content d. The number of on-time deliveries

C. The suppliers' recycled content

While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? a. The increased use of email during the 1990's b. The trend for companies to eliminate their supply chain partners c. The year 2000 millennium bug d. All of the above

C. The year 2000 millennium bug

Successful strategic supplier alliances can result in which of the following? a. Better market penetration. b. Access to new technologies and knowledge c. Higher return on investment d. All of these

D. All of these

Which of the following can be used as a punishment for suppliers that perform poorly? a. Elimination of future business with the focal firm b. Downgrade the supplier's status c. Billback penalty d. All of these

D. All of these

Which of the following could be an ethical and environmental certification requirement? a. Forest Stewardship Council (FSC) certification b. Energy Star certification c. Fair Trade certification d. All of these

D. All of these

Which of the following is a trend in ethical and sustainable sourcing? a. Using suppliers who are reducing their carbon footprint b. Discontinuing purchases from firms that use unacceptable labor practices c. Reducing the number of delivery miles traveled d. All of these

D. All of these

Legacy MRP systems had which of the following limitations? a. The systems needed continuous modifications b. The systems were not user-friendly c. The systems were designed to perform a very specific operational function d. All of these

D. All of those

The main benefit(s) from benchmarking sourcing practices is/are: a. Savings in energy consumption and materials, lower distribution costs, and improved corporate image among regulators, customers and community. b. Lower prices of goods and services, use of fewer buyers and lower administrative costs c. Larger market for products, economies of scale in purchasing and production, and lower labor costs. d. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies.

D. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies

Which of the following basic production strategies works best with make-to-order manufacturing firms? a. Capacity Production Strategy b. Mixed production Strategy c. Level Production Strategy d. Chase Production Strategy

D. Chase production strategy

Sustainability reporting is ______________ for American companies: a. Required in the U.S. b. Mandated quarterly c. Required every 3 years d. Largely a voluntary effort

D. Largely a voluntary effort

Sustainable sourcing practices include promoting diversity by intentionally buying from ethnic minority businesses. a. True b. False

False

The best-of-breed solution picks all the desired applications from a single vendor for the ERP system. a. True b. False

False

The legacy MRP system was programmed to coordinate with other functional areas in the firm. a. True b. False

False

The three basic production strategies for addressing the aggregate planning problem are the chase production strategy, the level production strategy, and the aggregate production strategy. a. True b. False

False

The use of ethical and environmental certifications for suppliers is decreasing. a. True b. False

False

There are just a small number of resources available for firms seeking to learn about and implement successful sourcing practices. a. True b. False

False

Criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments. a. True b. False

True

Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management. a. True b. False

True

Developing a collaborative negotiation infrastructure includes four steps: build a preparation process, develop a negotiation database, design a negotiation launch process, and institute a feedback mechanism. a. True b. False

True

ERP provides the mechanism for supply chain members to share information so that scarce resources can be fully utilized to meet demand, while minimizing the bullwhip effect and supply chain inventories. a. True b. False

True

ERP systems were designed to coordinate the information requirements for purchasing, planning, scheduling and distribution of an organization operating in a complex multi-unit global environment. a. True b. False

True

Environmental supplier certifications can be used to identify rogue suppliers before they can cause problems. a. True b. False

True

Firms assess their sourcing capabilities because the sourcing function is one of the most value-enhancing functions in an organization. a. True b. False

True

Functional products are characterized by low profit margins, relatively stable demands, and high levels of competition. a. True b. False

True

Implementing a best-of-breed solution may cause firms to link databases from multiple software applications of different vendors. a. True b. False

True

It is important for firms to addresses the impact of ethical and sustainable sourcing on other facets of the organization and its trading partners. a. True b. False

True

Lack of communication between the implementing firm and its ERP software provider can become a major hindrance for a successful implementation. a. True b. False

True

Rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program. a. True b. False

True

System nervousness is when even small changes to upper-level production plans cause major changes in lower-level production plans. a. True b. False

True

Two reasons ERP implementations have been known to fail include: lack of top management commitment and lack of communication between the firm and its ERP software provider. a. True b. False

True