Pretest
Which of the following could appear in a planning (modular) bill of material?
A planning or modular bill of material (BOM) is used to manage product options in master scheduling. The master scheduling process is used to forecast the number of planning BOM items needed in total for the period's production. For more information, refer to Module 2, Section A, Chapter 5, Topic 2
Which of the following is the best example of employing metrics for supply chain reliability?
A worker starts double-checking quantities after receiving automated feedback indicating that shipment quantity accuracy is below the standard.
What is ISO 26000?
According to the APICS CSCP ECM Supplemental Glossary, ISO 26000 is "an international standard adopted by the International Standards Organization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility. ISO 26000 is not a management system standard and it's not intended or appropriate for certification purposes or regulatory or contractual use."
According to the SCOR® model, total cost to serve is made up of:
According to the SCOR® model, the total cost to serve equals the sum of the cost to strategize and plan, the cost to source, the cost to make, the cost to deliver, and the cost to return.
Which of the following are customer-focused metrics?
Response accuracy, backorders, flexibility
Which type of supply chain has a short product life cycle, unstable customer demand, and a high number of forecasting errors?
Responsive
Which of the following functional areas is primarily responsible for demand forecasting?
Sales and marketing
Which of the following sources of customer information best provides insight into what customers are asking for and what they're not interested in?
Sales representatives
Six sigma emphasizes the importance of training at which of the following levels?
Six sigma emphasizes the importance of all process participants, from top management to basic service or shop-floor employees, and it includes training at all levels. For more information, refer to Module 3, Section C, Chapter 4, Topic 2
Which of the following correctly identifies the membership of shipping associations?
Smaller export firms seeking discounted rates
Who can perform SA8000:2014 certification audits?
Social Accountability Accreditation Services (SAAS) provides certification bodies with information on the steps that need to be done to be accredited to perform SA8000:2014 certification audits. For more information, refer to Module 3, Section A, Chapter 2, Topic 3
Which of the following can happen when you customize an enterprise resources planning (ERP) system?
May unintentionally alter a different module
Which of the following is required for successful implementation of customer relationship management (CRM) and/or supplier relationship management (SRM) strategies?
New job definitions
Which of the following is a characteristic of design for remanufacturing?
Proven characteristics of design for remanufacturing include lower cost to the customer, lower impact on the environment, and lower product development costs.
Which of the following statements about the role of purchasing in a supplier relationship management (SRM) model is correct?
Purchasing roles have become more layered between strategic management and buying.
Why might a supply chain planner choose to use a contract carrier?
Rates are usually lower than with common carriers, and they can better respond to customer needs.
Which is the best method for communicating with remote stakeholders?
The method they say they prefer
Which of the following situations applies to lifetime customers?
They increase the need for customer relationship management (CRM) activities.
An investment in a warehouse will cost $1 million now and will provide $300,000 per year in increased profits for four years. What might make this investment seem less advantageous to a finance professional?
Time value of money
Which of the following statements most accurately identifies the effect of increasing order sizes on inventory carrying and ordering costs in the economic order quantity calculation?
Total costs drop up to a point and then rise steadily. The larger the order, the higher the carrying costs, because there is more inventory to hold. Ordering costs tend to go down as orders grow larger because of economies of scale. Larger orders can be placed less frequently than smaller orders, thus reducing the number of orders or setups
Which of the following (assuming work center- and period-specific data) would provide the number of units that can be produced at a work center during a single period of time?
Total time available divided by lead time
Moving average forecasts are generally superior to naive forecasts in correcting for which of the following sources of variability?
Very short-term fluctuations in demand attributable to no known cause
Which of the following is true of electronic data interchange (EDI)?
While EDI still often needs to be batch-processed, it is commonly used. However, it can transfer only transactional information and not more complex communications.
What should receiving personnel do when a shipment of goods comes in from an ISO 9001-certified supplier?
While ISO 9001 certification indicates conformity to the quality process, it is never a statement of product conformity. It relates to the ability to be consistent and high quality rather than to specific goods or services.
Which of the following is a production planning method that performs inventory calculations at the item level?
While master planning plans production at the aggregate level, master scheduling is used to schedule inventory production at the item level. For more information, refer to Module 2, Section A, Chapter 5, Topic 1
Customer relationship management (CRM) and supplier relationship management (SRM) share a focus on:
gathering and sharing information.
A key role for supply chain managers when dealing with risks related to security and regulatory requirements imposed by countries and trading blocs is to:
minimize the financial impact of compliance.
The triple bottom line refers to which of the following?
The collective measure of the economic, social, and environmental consequences of one company's activities at a point in time
What is a key thing to understand about an organization's macro environment?
The macro environment cannot be controlled, only understood.
The only Level 1 SCOR measure of supply chain reliability is:
The only Level 1 SCOR measure of supply chain reliability is perfect order fulfillment. It is defined as the percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage.
Which of the following statements about reverse logistics is true?
The products will not necessarily move through the same tiers as in the forward chain.
Which of the following is a primary benefit of risk categorization?
It may be possible to address several risks with one action.
What is the most important factor in choosing suppliers for multiple supply chains?
It varies based on the product line needs.
What is a benefit of visualizing prior sales data in chart form when trying to determine future sales?
It will indicate how the data need to be prepared.
What can sustain a change effort?
Leading and managing using the new policies, processes, and procedures
Which level of SCOR is differentiated for operational strategy metrics such as make-to-stock?
Level 2 SCOR metrics are the operational strategy metrics. Examples of operational strategies include make-to-stock and make-to-order. For more information, refer to Module 3, Section C, Chapter 2, Topic 2
A culture that values thrift and perseverance, orders relationships by status and values, and seeks a balance between work and family life, especially in time, is exhibiting which of Hofstede's dimensions of culture?
Long-term orientation and feminine traits
Why do the Level 1 SCOR metrics for the source process differ for make-to-stock when compared to make-to-order or engineer-to-order operating environments?
Make-to-stock creates a buffer inventory between source, make, and deliver. Since perfect order fulfillment is a measure of performance for the deliver process, it doesn't apply to make-to-stock. However, it does apply to the other two methods, because delays in production could affect the final delivery time to the customer. For more information, refer to Module 3, Section C, Chapter 2, Topic 2
A project charter specifies the project manager and a high-level budget and states that the project's intent is to reduce inventory levels before the year-end financial statement deadline. What else needs to be defined before getting started?
Measurable objectives
Suppliers are folded into the purchasing entity, business goals are shared, and competition has been eliminated. This best exemplifies which of the following types of business relationships?
Mergers and acquisitions
Which warehouse function typically benefits from a full load discount and more efficient use of storage space in the warehouse?
Mixing
Repeated transactions are funneled through an account manager and regulated through medium-term contracts. This best exemplifies which of the following types of business relationships?
Ongoing relationship
An organization's sales and operations planning (S&OP) process is only as good as the organization's:
communications.
Which of the following could be a key performance indicator (KPI) for replenishment?
Order fill rate
What is a Level 1 SCOR metric for planning demand and supply?
Order fulfillment cycle time is a Level 1 metric that measures responsiveness for the plan process.
A company performs transportation of both materials and finished product for a global manufacturer. To manage fluctuations in demand, they contract with service providers in geographical regions, who in turn manage contracts with individual suppliers. This best describes a:
fourth-party logistics (4PL) company.
In the implementation phase of the ISO 31000 process framework for risk management, what step comes before assessing risks?
Place risks in appropriate context. Before assessing risks, organizations should place risks in the appropriate context. All of the incorrect answers are actually part of the assess risks phase. For more information, refer to Module 3, Section B, Chapter 4, Topic 2
In which of the following stages of the continuous improvement model would a process map be used?
Process analysis
Which of the 4 Ps of marketing strategy can be described as design to increase customer value, potential for added value, competitive differentiation, and increased profit?
Product
During which sales and operations planning meeting might a demand-side professional get vital information on a need to shorten time to market?
Product review meeting
Which of the following is an element of an e-business supply chain as opposed to a traditional supply chain?
Production focus on engineering competitive supply chains
In a distribution network with decentralized ordering, where in the chain do you find the most variance in order quantity?
Raw materials end of the chain
Which of the following actions is most likely to mitigate the consequences of the bullwhip effect?
Reducing lead times by simplifying processes
What is the current trend regarding the number of warehouses in a system?
Reduction in the total number in relation to product movement
Which of the following is generally considered to be the most responsible strategy for managing reverse logistics?
Reduction of resources used in extraction, manufacture, and packaging
When contracting logistics to a third-party provider (3PL), what should the contract specify, especially for the first six to 12 months of the relationship?
Specific relationship-building efforts by each party
Which option would reduce an organization's cash-to-cash cycle time?
Strategies such as VOI or consignment reduce inventory and decrease the cash-to-cash cycle time. An organization that is vertically integrated will own its inventory for much longer than one in a horizontal supply chain.
Which of the following would allow an organization to more confidently select suppliers and could serve as a tool for continual improvement of suppliers?
Supplier certification
Which supply chain participant would be in a position to improve the process value supply chain the most?
Suppliers
In the SCOR® model, which performance attribute is associated with the Level 1 metric, perfect order fulfillment?
Supply chain reliability
Which of the following is the best example of risk mitigation in a strategic alliance?
Surmounting limited availability of component suppliers
Which of the following is an aggregate-level inventory process?
ABC inventory classification Aggregate inventory management is accomplished through inventory policy setting and master scheduling and by classifying inventory, using a system such as ABC inventory classification. The other options are item inventory management systems. For more information, refer to Module 2, Section A, Chapter 7, Topic 2
The first step in setting strategy for moving toward greater collaboration in regard to the firm's enterprise resources planning (ERP) system is to do which of the following?
Analyze the current ERP system and understand its limitations.
The Green SCOR model uses which of the following attributes?
The Green SCOR model uses the following attributes: costs, asset management, flexibility, responsiveness, and reliability. For more information, refer to Module 3, Section A, Chapter 2, Topic 1
Which of the following statements describes the financial consequences to a U.S. firm under NAFTA when it transfers assembled materials from a maquiladora subcontractor back into the United States?
The U.S. firm pays a tax based only on the value added in Mexico.
When communicating with stakeholders, what can be both an asset and a liability and so needs to be directed toward a predefined purpose before being used?
The ability to communicate quickly, succinctly, and accurately is facilitated by the abundance and diversity of available information, data, and knowledge and by the vast array of technology and media. But equally important is the capability of knowing what information to communicate for a given purpose. For more information, refer to Module 1, Section B, Chapter 8, Topic 1
In general, the largest portion of a product's final cost can be attributed to which of the following?
As much as 70% of a product's delivery cost is attributable to its design. For more information, refer to Module 2, Section A, Chapter 1, Topic 4
Which of the following statements about the challenges of implementing customer relationship management (CRM) and supplier relationship management (SRM) strategies is true?
As structures and processes change, managers will need to acquire new skills to support implementation of SRM and CRM. Decision making will actually move downward throughout the organization, closer to critical points in the supply chain. For more information, refer to Module 2, Section B, Chapter 7, Topic 1
A benefit-cost analysis shows that an IT project costs $154,000 in the first year and $20,000 per year for the next three years. The direct cost savings are $40,000 per year for four years, and intangible cost savings are $30,000 per year for four years due to improved customer service and retention. Which of the following is a correct benefit-cost ratio?
The benefits are $280,000 over four years, and the costs are $214,000 over four years. Benefit-Cost Analysis = Total Benefits/Total Costs = $280,000/$214,000 = 1.308 For more information, refer to Module 1, Section B, Chapter 4, Topic 3
Organizations that have high sales volume and serve markets with more volatile demand and uncertain forecasting tend to focus on what type of manufacturing strategy?
Assemble-to-order Organizations that serve markets with more volatile demand and uncertain forecasting need to focus on responsiveness so they can adapt quickly to changes. These organizations tend toward assemble-to-order manufacturing strategies (product components or modules are produced based on forecasts and are assembled when customer orders are placed) if sales volume is high. If sales volume is low, a make-to-order strategy is more appropriate. For more information, refer to Module 1, Section B, Chapter 2, Topic 2
What should be included for each risk during identification if it is applicable and known?
Assumed root cause
For a product or service, six sigma means that:
Assuming that one million opportunities for a defect will result in the familiar bell curve with the target value in the center, then about 99.9997% of those opportunities will fall within six sigmas (or standard deviations) from the target value.
Which of the following could substantially reduce the risk of an organization's products being counterfeited?
Auditing suppliers for ethical standards
Which of the following is a primary method of ensuring data accuracy?
Automating and transferring real-time data only when feasible
Which of the following performance measures pertain to availability in customer service?
Availability is the capacity to have inventory in stock when wanted by a customer. It is measured by stockout frequency, fill rate, and orders shipped complete. Consistency and flexibility are performance measures of operational performance.
When monitoring lead times, which of the following is most directly related to a customer's required level of safety stock?
Consistency
A consumer is dissatisfied with an organization's product and posts a poor review of it on a social networking site. Which of the following should the organization do if it locates this comment?
Contact the individual and attempt to listen or respond to the complaint.
Which two core lean principles are at the center of the House of Toyota?
Continuous improvement culture, respect for people
A supplier tracks shipments and sales and commits to ensuring that retailers have goods on hand. Retailers do not issue purchase orders. This describes which of the following inventory management models?
Continuous replenishment
Which type of warehouse has an advantage over other types because its warehouses are managed more efficiently and can often also provide economies of scale in transportation?
Contract
Which of the following is the next step in an intraenterprise strategy development process after the first step of determining goals and the desired end state of the supply chain?
Creating cross-functional and cross-business teams to guide the transformation
Which of the following is true of contracts for partnerships?
Cultural differences in contracts and problem resolution styles should be a primary consideration when arranging formal contracts
A focus on quality, affordability, or availability indicates a focus on which of the following?
Customer value
An importer will often give which one of the following independent operators power of attorney to pay import duties on its behalf?
Customs house broker
You work in the information technology group supporting the supply chain. Which of the following would be one of your primary concerns regarding supply chain design while in that role?
Determining which data are not important and thus can be ignored
If an organization is more responsive than efficient and more strategic than operational in its measurement focus, what would be the best place for it to be on a measurement frequency continuum?
Diagnostic
Which is an example of a service supply chain making investments now to satisfy the demands of its manufacturing customers for environmentally sustainable options?
Electric utility adding wind turbines
When measuring the success of a supply chain management strategy by the balanced scorecard approach, each key performance indicator should be linked to which of the following?
Financials All four measurement categories on the balanced scorecard (financial, customer, business process, and innovation and learning) should be taken into account and balanced against one another, but all measures must ultimately contribute to the bottom line. For more information, refer to Module 3, Section C, Chapter 2, Topic 1
What does a U.S.-based organization need to do to become ANSI Z.10-certified if it is already ISO 9001- and 140001-certified?
Focus on its safety principles; no changes are needed for it to work with ISO 9000 and 14000 Series Standards.
Which of the following components of demand is generally forecast by economists?
Forecasting of cycles, which tracks demand over a span of years or even decades, is a job generally performed by economists. For more information, refer to Module 2, Section A, Chapter 2, Topic 1
Which of the following is a valid general observation about forecasts?
Forecasts are always wrong, but supply planner estimates should not be used instead.
"Customer interest is high, and supply must be managed to meet demand and avoid stockouts that could boost growing competition." This sentence best describes what phase of the product life cycle?
Growth
Which of the following steps can an organization take to best ensure that a risk response plan remains a "living" document?
Hold a monthly risk meeting.
Which of the following represents a benefit of the internet and intranets for supplier relationship management (SRM)?
Improved, real-time communication can benefit supply relationships in all of the ways listed, from planning through production and distribution.
In organizations in Stage 4 of supply chain evolution, a supply chain function would likely:
In Stage 4, there is an initial, exploratory collaboration between a channel master and one or several partners in the chain—often a manufacturer and a component supplier or retailer and a supplier of finished goods. This stage also entails synchronizing ERP systems with supply chain partners and providing real-time tracking of customer shipments. For more information, refer to Module 1, Section A, Chapter 1, Topic 2
Which of the following statements about virtual organizations is correct?
In a virtual organization, there is integration of many systems and extensive sharing of information, often proprietary information. Forming virtual organizations thus requires trust and a cultural shift that embraces the common identity of the virtual organization. At the same time, the member organizations must evaluate the risk of the relationship and preserve their own identity and integrity. For more information, refer to Module 2, Section B, Chapter 7, Topic 3
What is one way that an organization could improve its risk management maturity level for process risks such as those related to supply chain strategy and implementation?
Incorporate risk inputs into inventory planning and scheduling models.
Which of the following factors has led to strategic sourcing and greater integration in the supply chain?
Increased expectation of high quality
Two red flags are (1) separate forecasts causing the bullwhip effect and (2) a general attitude that forecasts should remain trade secrets. What subcategory of risks do these red flags relate to?
Inter-organizational communications risks
Which supplier relationship management (SRM) technology allows information collected by one application or supply chain partner to be shared by all applications or allied partners?
Visibility and decision support systems (DSS) An analytical SRM solution helps facilitate the gathering, cleansing, and presentation of procurement information to allow organizations the visibility they need to support their business decisions. DSS analytical systems assist with optimizing suppliers, material quality, etc. For more information, refer to Module 2, Section B, Chapter 6, Topic 2
Which of the following is true of a warehouse management system (WMS)?
WMS portals allow data to be pushed to the user, or the user can initiate, or pull, the information transfer.
Supply chain participant priorities often conflict. Which of the following groups sets a priority on minimizing transportation costs and inventory levels?
Warehousing management
If supply chain partners agree to make information technology upgrades but a specific vendor cannot be agreed upon, which of the following standards could allow for both diversity and low-cost compatibility?
Web services and service-oriented architecture
Capacity and materials are committed to specific orders inside which of the following zones on the master production schedule?
When all capacity and materials have been committed to specific orders, a demand time fence may be placed on the MPS, marking off a frozen zone in which no orders can be filled without permission from senior management.
Which of the following types of waste is considered most serious?
When production is ahead of demand
The four stages of supply chain management evolution occur in which of the following?
Whether the supply chain ownership strategy rests on vertical integration, lateral integration, or a compromise (like keiretsu), the relative sophistication with which the chain is managed develops along the continuum that is divided into the four stages.
To win back customers after they have discontinued service, when should the initial communication be made?
Within 1 week
The economics of liability refers to:
how the cost of transportation varies along with the protection level of the cargo.
The goal of the relationship diagram used in continuous improvement is to
identify the major cause of an issue as well as pinpoint the most interrelated one. The goal of the relationship diagram used in continuous improvement is to identify the major cause of an issue as well as pinpoint the most interrelated one. For more information, refer to Module 3, Section C, Chapter 3, Topic 1
With a laterally integrated supply chain, an organization may:
make gains in scale and scope but lose its ability to see the larger processes.
If an organization creates a supply chain risk manager position, the first task of this person should be to:
map the entire supply chain and understand interdependencies.
Operational performance measures related to machine, worker, or department efficiency or utilization are usually:
poorly correlated with organizational performance.
The U.S. Food and Drug Administration (FDA) has developed regulations requiring more thorough documentation of:
the chain of custody or audit trail of drugs.
In an SCM implementation effort, the channel master is:
the organization that drives the implementation process. Designating one organization as channel master positioned at the center of the initiative during its inception can contribute to the strategy's success. The channel master should be capable of rallying supporters and driving the implementation beyond the preoccupation with improving internal competencies. For more information, refer to Module 1, Section A, Chapter 3, Topic 3
Which of the following describes the typical situation in regard to payment of import duties?
The importer pays the duty.
For make-to-stock production, the master production schedule includes production dates for which of the following?
The master production schedule includes dates of production for make-to-stock end items. (This can be either finished products or, in a modular approach, components.) For more information, refer to Module 2, Section A, Chapter 4, Topic 2
What is the return on supply chain fixed assets if supply chain revenue is US$500,000, cost of goods sold is US$350,000, supply chain management costs are US$75,000, and supply chain fixed assets cost US$300,000?
The return on supply chain fixed assets is 25%: [$500,000 (supply chain revenue) - $350,000 (cost of goods sold) - $75,000 (supply chain management costs)]/$300,000 (supply chain fixed assets cost) = 25%.
Which of the following is a benefit of using a third-party trading exchange that spends time preparing for its auctions?
The third party performs traditional procurement activities for many consumers, creating economies of scale.
Which of the following could improve the perceived reliability of the master scheduling process if previous last-minute changes approved by salespersons have created schedule havoc?
Time fences Time fences can help balance the need for a production system to maintain schedules and control costs against the need for it to be flexible. Rescheduling, additional setups, rerouting, expediting, overtime, and disrupted schedules for other items can all be direct costs of late changes, not to mention the toll it takes on the perceived reliability of the master production schedule and on customer service. For more information, refer to Module 2, Section A, Chapter 3, Topic 2
A boat manufacturer whose customers want unique boats could do which of the following to increase customer satisfaction in this area while staying profitable selling competitively priced midsize luxury watercraft?
Track customization decisions by geographical area and use it to advise customers.
Which of the following is an example of a sales force automation (SFA) tool?
Tracking applications for evolving sales opportunities
Which of the following would be most likely to reduce variability from standard time allowances?
Training operators increases consistency, because poorly trained operators tend to be inconsistent in achieving standard work times.
A purchaser and its suppliers form an ongoing relationship in which they all participate in improving the system. This best exemplifies which of the following distinctions between traditional purchasing and strategic sourcing?
Transactional versus collaborative purchasing
A response to the risk of poor quality from a supplier that involves specifying measurable quality levels in the contract and requiring the supplier to pay for the transportation of returns and replacements is an example of which of the following?
Transferring risk
A local region is offering tax advantages for businesses that relocate their operations there. If the total cost of manufacturing would be lowest in this region, what might still be a deal breaker?
Transportation infrastructure
Which of the following is not a main feature of lean production?
Use of teams of employees with very specialized technical skills
When Henry Ford organized Ford Motor Company to include raw materials extraction and dealerships as well as his assembly lines, he created which of the following?
Vertical integration is the ownership of many or all parts of the supply chain. By bringing many supply chain activities in-house and putting them under corporate management, vertical integration solves the problem of who will design, plan, execute, monitor, and control supply chain activities
As sales decline, customer care becomes more critical. As distribution and sales decrease, customers with products that are becoming obsolete must be supported. Success now can win customers loyal to the brand.
Decline As sales decline, customer care becomes more critical. As distribution and sales decrease, customers with products that are becoming obsolete must be supported. Success now can win customers loyal to the brand. For more information, refer to Module 1, Section B, Chapter 3, Topic 8
Which of the following may increase as a tradeoff when a logistics chain institutes risk pooling by moving inventory from several smaller warehouses to a larger central storage facility?
Delivery lead times
If design for the environment results in a higher-cost refrigerator for the manufacturer, which of the following could help sustain demand for this product?
Design the product to meet energy efficiency tax rebate requirements.
Obsolescence or theft risks are included in which inventory cost category?
Carrying costs
A supply chain has a large variety of SKUs that sell quickly but at different rates at each retail location. The distribution centers are independent and have knowledge of local demand that is hard to quantify. Which of the following inventory planning strategies is best for this supply chain?
Centralized planning can minimize overall inventory levels but may respond slowly to local demand. Decentralized inventory planning involves each supply chain stage determining its own inventory requirements and placing orders independently, so there is no coordination expense. Due the large variety of SKUs, it should use break-bulk warehouses to receive large shipments while shipping out individual orders so that no individual distribution center need receive a large supply of the same SKUs. Consolidation warehouses are for receiving items from multiple suppliers for consolidated bulk shipments to later supply chain partners (the opposite of break-bulking). For more information, refer to Module 2, Section A, Chapter 8, To
Which of the following is a type of supply chain collaboration designed to integrate the elements of demand management among supply chain partners?
Collaborative planning, forecasting, and replenishment
Piggyback service refers to which of the following types of cargo transport?
Combined truck and train transport
Which of the following is proved through actions more than words, such as by disciplining staff who violate a partnership agreement?
Commitment
After a firm selects its performance objectives and metrics, it must do which of the following next?
Communicate them and their benefits throughout the extended enterprise.
A shipper whose exports are carried from a foreign port to the importer's dock by trucks that return empty to the port might hire which of the following types of firms to find goods to carry on the backhaul route?
Non-vessel operating common carrier (NVOCC)
What supplier performance rating systems source indicates if a supplier-caused discrepancy is found after a part is shipped to stores or has been installed in an assembly?
Number of floor failure events
A supply chain manager can apply the SCOR model to which of the following?
All market interactions, including understanding aggregate demand via order fulfillment
The sales force out in the field is persisting in using manual methods for entering their hours and sales orders instead of using the new extranet web forms. Which of the following would be the best method of resolving this issue?
Allocate more funds and time to training.
A health-care provider in the Midwest revamps the procedures in its endoscopy clinic by borrowing from a car manufacturer's lean production system. Which of the following describes this?
Best-in-class benchmarking
The antiterrorism measures developed by the Customs-Trade Partnership against Terrorism (C-TPAT) apply to which of the following entities?
C-TPAT corporate participants only
Which of the following is most likely to be the main reason why the total warehouse inventory count of a key raw material would understate the organization's actual investment in that raw material?
Doesn't include in-transit inventory
Which of the following factors distinguishes total quality management (TQM) from other approaches?
Management's ongoing support of all process improvements related to a product
A plant has $1 in variable costs per unit produced, and units sell for $2 each. The plant has firm orders for 1,000,000 units and has $600,000 in overhead for the period. The gross profit margin for these units is thus $0.40 per unit. A special order request comes in and there is available capacity, but the price would be $1.50 per unit for 200,000 units. What would a marginal analysis suggest the organization do?
Marginal analysis considers only the additional costs and additional benefits. The overhead is a sunk cost in this decision and thus is ignored. The additional cost is $1 per unit in variable costs and the benefit is $1.50 per unit in variable costs, for a marginal net benefit of $0.50 per unit, or $100,000 in gross profit for 200,000 units. Since the organization has available capacity that would otherwise go unused, the rational decision is to accept this offer.
When conducting network modeling and operations research, what is an important input because it can show where demand for particular products is the strongest and thus may influence where to put assembly facilities?
Market plan When designing a supply chain, one must carefully consider the market plan. For example, if the market plan shows that Europe will be the primary source of demand for product X, it may make sense to assemble that product in Germany instead of China, despite comparatively higher labor costs. For more information, refer to Module 1, Section A, Chapter 4, Topic 3
Which of the following objectives was most important in earliest warehousing practices?
Market presence in each sales territory
Which of the following is an input to rough-cut capacity planning (RCCP)?
Master production schedule
Which of the following is at the center of operations in enterprise resources planning (ERP) systems because it was among the first systems to be automated?
Material requirements planning forms the basis for all other ERP modules. For more information, refer to Module 2, Section A, Chapter 5, Topic 2
