Operations Management Final Exam

Organizations practicing lean production often increase their inventory levels in order to create a cushion against variability so that they can investigate and eliminate the weaknesses in their systems. a. True b. False

b. False

Pareto Analysis means that 20 percent of the items get about 80 percent of the safety stock. a. True b. False

b. False

Layout strategies help firms maximize all of the following EXCEPT: a. Service efficiencies b. Four Ms c. Customer service d. Server productivity

b. Four Ms

The Quick Response program, developed in the 1980's, was an offshoot of the following supply chain concept: a. Efficient Consumer Response b. Six Sigma c. Just-in-Time d. Kaisen

c. Just in Time

______________ creates the efficient flow of goods between supply chain partners, allowing profits and competitive advantage to be maximized. a. Operations b. Transportation planning c. Logistics d. Procurement

c. Logistics

Supply relationship management personnel routinely communicate with: a. Production personnel to obtain feedback on supplier and purchased item performance b. Marketing personnel for customer feedback c. Suppliers for new product development and performance feedback d. All of the above

d. All of the above

When salespeople need to fill end-of-quarter or end-of-year sales quotas they might use ___________, which creates greater use of safety stock causing the bullwhip effect. a. Stockpiling b. Bullwhip ordering c. Order fulfillment d. Order batching

d. Order Batching

The following is a term that refers to error or mistake proofing: a. Kaizen b. Muda c. Kanban d. Poka-yoke

d. Poka-yoke

Which of the following secures the right of employees to decide whether to join or financially support a union? a. Union shop laws b. Union planning forums c. Ethical union initiatives d. Right-to-work laws

d. Right-to-work laws

What component of a time series has variations in demand which show peaks and valleys that repeat over a consistent interval such as hours, days, weeks, months, or years? a. Trend Variations b. Cyclical Variations c. Random Variations d. Seasonal Variations

d. Seasonal Variations

Which person was a key figure in developing the Toyota Production System and also developed the concept of poka-yoke? a. Deming b. Ohno c. Toyoda d. Shingo

d. Shingo

In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to more than 1.00 and less than 100. a. True b. False

b. False

In general, performance measurement systems are mostly identical from company to company. a. True b. False

b. False

It is considered unethical for a firm to intentionally buy from women-owned businesses. a. True b. False

b. False

In Europe, rail transportation tends to be much more prevalent and reliable than rail transportation in the U.S., because European track, facilities, and equipment are newer and better maintained. a. True b. False

True

Lack of internal or external collaboration will create quality, cost, delivery timing, and other customer service problems that are detrimental to supply chains. a. True b. False

a. True

The economic order quantity model (EOQ) is the optimal independent demand order quantity that minimizes total annual inventory costs. a. True b. False

a. True

Capacity utilization = a. Capacity x Actual customers served per period b. Capacity / Actual customers served per period c. Actual customers served per period x Capacity d. Actual customers served per period / Capacity

D. Actual customers served per period/Capacity

A lean system is also known as a push system. a. True b. False

b. False

Firms can safeguard customer information by doing which of the following? a. Allow customers to opt-in and out of mailing lists b. Allow customers to access their accounts online to view information collected about themselves c. Both A & B d. None of these

c. Both A & B

Which of the following is a vital element in developing a strong supply chain through the practice of process integration? a. Developing and implementing a strong information technology system that allows for fast and easy information exchanges between supply chain partners b. Partner collaborations on methods to improve processes within the supply chain c. Partnerships, which value information sharing and partner collaborations d. All of the above

d. All of the above

Which of the following are intermodal transportation alternatives? a. Truck trailer-on-flatcar b. Roll-on-roll-off c. Piggyback service d. All of the above (Piggyback service)

d. All of the above (Piggyback Service)

An important outcome of statistical process control is: a. Firms can take corrective actions before process variabilities get out of control b. Firms can visually monitor process performance c. Firms can minimize total inventory cost d. Both A & B e. None of these

d. Both A & B

All of the following are considerations used in designing service layouts EXCEPT: a. Reduction of time to restock b. Impulse purchasing c. Speed up customer throughput d. Ease of access to parking lot

d. Ease of access to parking lot

Which of the following layouts is primarily designed to process parts, components, or jobs requiring the same or similar processing steps, saving duplication of equipment and labor: a. Work centers b. Production kanbans c. Work-in-process d. Manufacturing Cells

d. Manufacturing Cells

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about: a. 10% of their time on expediting orders b. 20% of their time on expediting orders c. 30% of their time on expediting orders d. None of the these

a. 10% of their time on expediting orders

Leading companies practicing sustainable sourcing and seeking to reduce costs would NOT use which of the following strategies? a. Backward integration to purchase suppliers b. Increase resource efficiencies c. Avoid use of noncompliant suppliers d. Rethink transportation and distribution systems

a. Backward integration to purchase suppliers

Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: a. Customer relationship management and Human resource management b. Computer assisted drawing and Photo enhancing c. Operating systems and Internet browsing d. All of the above

a. Customer relationship management and human resource management

Waste in Japan is also referred to as: a. Muda b. Kanban c. Poka-yoke d. Sakichi

a. Muda

Which of the following is TRUE? a. Performance metrics and personal business relationships are both keys to building successful partnerships. b. ISO 75000 is the supplier award given to the highest rated supplier in Japan. c. The key to successful partnerships is developing performance measures with weights greater than 3.50. d. SRM software modules are very affordable (less than $50,000) and can be implemented with a week.

a. Performance metrics and personal business relationships are both keys to building successful partnerships

Costs associated with investigating alternative suppliers and investigating alternative delivery options can be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

a. Pre-transaction costs

According to the SCOR model, which of the following is NOT one of the five supply chain operation process categories? a. Plan b. Market c. Return d. Source

b. Market

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Select the key dimensions of performance based on what is important to the end consumer b. The weights for all dimensions must sum to 1 or 100% c. Evaluate each of the performance measures on a rating between zero and one-hundred d. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score

a. Select the key dimensions of performance based on what is important to the end consumer

Which of the following is a reason that single sourcing is considered risky/bad? a. There could be supplier interruptions due to political instability b. It could establish close relationships with the supplier c. Larger orders make quantity discounts more likely d. Decreases the item to item quality variability of items purchased

a. There could be supplier interruptions due to political instability

As tighter control limits are instituted for the tracking signal, there is a greater probability of finding exceptions that require no action, but it also means catching changes in demand earlier. a. True b. False

a. True

At a service facility it has been calculated that they can handle the demand per hour approximately 76 percent of the time at a rate of 4 per hour. This means that approximately 24 percent of the time, demand per hour will be greater than four customers, causing queues to develop. a. True b. False

a. True

Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception. a. True b. False

a. True

Foreign suppliers located farther away may be able to deliver goods faster than domestic suppliers due to more efficient transportation and logistical systems. a. True b. False

a. True

One of the assumptions of the economic order quantity model (EOQ) is that purchase price must remain constant. a. True b. False

a. True

Poor logistics management can bring a supply chain to its knees, regardless of the quality of the products. a. True b. False

a. True

Procurement credit cards can be used for small purchases including meals, lodging, and travel expenses. a. True b. False

a. 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

a. True

Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes and variations due to common causes. a. True b. False

a. True

Supply chain analytics can be used along the supply chain to schedule production according to expected supplier deliveries a. True b. False

a. True

To control and enhance the capabilities of companies within a supply chain, well-designed performance measurement systems must be implemented. a. True b. False

a. True

Toyota initially designed their JIT program on Ford's manufacturing system. a. True b. False

a. True

Two methods for managing supply chain risk include utilizing a supply chain IT system and identifying backup suppliers. a. True b. False

a. True

Which of the following are required elements of an effective CRM initiative? a. Sending out promotional materials via e-mails and traditional mail to a large random group of a potential customers b. Cross-selling customers after an initial purchase c. Preserving a traditional sales force that communicates with the supply-chain members d. All of these

b. Cross-selling customers after an initial purchase

Which of the following customer service elements can be classified as an example of post-transaction elements? a. Salesperson politeness b. Customer complaint resolution c. Customer service policies d. The company's choice of organizational structure

b. Customer complaint resolution

Independent demand is the: a. Internal demand for all end-item parts and materials. b. Demand for a firm's end products. c. Forecasted demand for purchased items. d. Absolute demand for all items.

b. Demand for a firm's end products

According to the textbook, there are four key supply chain business processes: Purchasing, Manufacturing, Distribution, and Returns. a. True b. False

b. False

According to the textbook, third-party logistics providers (3LPs) do not offer assistance with helping products clear customs. a. True b. False

b. False

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

b. False

Generally speaking, motor carriers are less expensive than rail carriers to haul goods. a. True b. False

b. False

If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease. a. True b. False

b. False

The EOQ equation is derived by setting the annual purchase cost equal to the annual holding cost. a. True b. False

b. False

The batching of orders is unlikely to increase the likelihood of the bullwhip effect occurring. a. True b. False

b. False

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

b. False

The objectives of any CRM initiative should be focused on what the company can reasonably achieve. a. True b. False

b. False

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier. a. True b. False

b. False

Themed restaurants such as the ESPN zone (sports theme), Rainforest Cafe (jungle theme), and Chuck E. Cheese (kids theme) are all examples of Entertailment facilities. a. True b. False

b. False

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

b. False

Which of the following is NOT a technique for managing customers' perceived waiting times: a. Grouping customers b. Hiding the wait time c. Keeping customers occupied d. Starting the service quickly

b. Hiding the wait time

According to the text, all of the following are considered key supply chain business processes EXCEPT: a. Manufacturing flow management process b. Knowledge management process c. Supplier relationship management process d. Product development and commercialization

b. Knowledge management process

Higher inventories, higher costs, longer response times, and lost customers can result from? a. Lack of trust between trading partners b. Lack of supply chain visibility c. Lack of vendor managed inventories d. Reactive initiatives

b. Lack of supply chain visibility

Customer relationship management, distribution network, transportation management, and service response logistics are all important issues that are most closely related to: a. Purchasing b. Logistics c. Integration d. Manufacturing

b. Logistics

Which of the key supply chain business processes refers to meeting customer requirements by synchronizing the firm's marketing, production and distribution plans: a. Customer relationship management process b. Order fulfillment process c. Customer demand organization process d. Supply chain synchronization process

b. Order fulfillment process

Which of the following is a traditional performance measure? a. Average safety stock levels b. Overall total productivity c. Number of suppliers who are quality certified d. Number of product return per units sold

b. Overall total productivity

The element of a CRM program involved with the use of data-mining software and customer behavior analytics is: a. Segmenting customers b. Predicting customer behaviors c. Customer value determination d. Customer preference determination

b. Predicting customer behaviors

Intermodal marketing companies (IMCs) are companies that act as intermediaries between intermodal a. Trucking companies b. Railroad companies c. Waste management companies d. Warehouse management companies

b. Railroad companies

Substance disposal and recycling are part of which supply chain business process: a. Customer relationship management process b. Returns management c. Customer service management process d. Product development and commercialization process

b. Returns management

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as: a. CRM b. SRM c. ISO 9000 d. SCSS

b. SRM

The following is an example of the bullwhip effect: a. Barkley's produces a defective product and thus realizes an excessive increase in consumer returns b. Barkley's products are so successful that it adds a new retailer for distribution c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers d. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain

c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: a. Supplier certification programs b. Manufacturer certification programs c. Early supplier involvement d. Total Cost of Ownership initiatives

c. Early supplier involvement

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. New competition b. Supplier quality c. Ergonomic conditions d. Emerging markets

c. Ergonomic conditions

The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier. How often do they give this award? a. Every year b. Every 6 months c. Every 5 years d. Every 10 years

c. Every 5 years

According to the text, which of the following is a service strategy characterized by the idea that a service can serve a narrow target market better than a broad market? a. Differentiation strategy b. Demand strategy c. Focus strategy d. Transitional strategy

c. Focus strategy

Some businesses refer to sustainability in terms of supporting the three P's. This stands for: a. People, place, price b. Place, price, promotion c. People, planet, profit d. Planet, people, price

c. People, Planet, Profit

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as: a. Material requisition b. Purchase requisition c. Planned order release d. Traveling requisition

c. Planned order release

Cyclical variations are longer than a year and can be influenced by: a. Events such as natural disasters b. Imbalances in supply and demand c. Political factors d. Population growth

c. Political factors

According to the SCM profile Honda ___________ based on a supplier relations index developed by Planning Perspectives. a. Ranked lower in 2015 than 2014 b. Ranked near the bottom in 2015 c. Ranked near the top in 2015 d. Ranked fifth in 2015

c. Ranked near the top in 2015

Which of the following is a reason for favoring single sourcing? a. Encourages competition among suppliers b. Spreads the risk of supply interruption c. Reduces variabilities in quality levels d. Reduces information about new processing technologies

c. Reduces variabilities in quality levels

The following time-series approach to forecasting uses historical data to generate a forecast and works well when demand is fairly stable over time: a. Naïve Forecast b. Weighted Moving Average c. Simple Moving Average d. Exponential Smoothing

c. Simple Moving Average

Which of the following marked the end of the initial push by Congress to deregulate the entire U.S. transportation industry? a. The Granger Laws b. The Transportation Act of 1920 c. The Shipping Act of 1984 d. The Interstate Commerce Act of 2013

c. The Shipping Act of 1984

What type of major cost category is considered in the cost associated with placing and receiving the order? a. Turnover Cost b. Supplier-Development Cost c. Transaction Cost d. Pre-transaction Cost

c. Transaction cost

Sustainable sourcing policies should include which of the following? a. Use of minority workers b. Fair working conditions c. Use of renewable energy d. Use of child labor

c. Use of renewable energy

Which of the following issues is (are) important to consider when trying to determine the location of a firm's facilities? a. The stability in the location considered b. Environmental issues regulated by domestic laws or international trade agreements c. Access to suppliers from the location considered d. All of the above

d. All of the above

According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT: a. Making organizational and procedural changes b. Trust between supply chain partners c. Cost d. Supplier lead times

d. Supplier lead times

Which of the following are among the MOST important elements of the lean production philosophy? a. Quality inspections and a standardized product line b. Fully automated assembly lines and a large supplier base c. Large inventories and quality inspections d. Waste reduction and continuous improvement

d. Waste reduction and continuous improvement