Purchasing Ch. 16

The downside of poor forecasting includes all of the following except _____. a. higher inventory volumes b. poor customer service as inventory is misallocated across locations and products c. higher inventory carrying charges d. excessive safety stock levels e. decreased customer service costs

a. higher inventory volumes

A/An _____ system takes a period-by-period set of master production schedule requirements (anticipated or booked customer orders) and produces a time-phased set of material, component, and subassembly requirements timed to support an expected build schedule. a. kanban b. DRP c. just-in-time d. perfect order e. MRP

a. kanban

All of the following are common signaling methods used in a kanban system except _____. a. single-card system b. color coding of containers c. designated storage spaces d. computerized bar coding systems e. verbal notification

a. single-card system

_____ involves frequent deliveries of smaller quantities directly to the point of use at the purchaser. a. Lean supply b. Lean transportation c. Lean warehousing d. Lean ordering e. None of the above.

b. Lean transportation

Production inventory consumes a minor portion of inventory investment.

False

Record integrity exists when the physical inventory on hand exceeds the electronic record on hand, regardless of the quantity of inventory.

False

Using a RFID system, if supplier quality and lead times are reliable, planners can time the arrival of components just before production of the final part number.

False

Very few organizations use distributors to provide at least some portion of their inventory requirements, particularly maintenance, repair, and operating supplies.

False

According to JIT, inspection is a waste of both time and personnel caused by defects.

True

_____ means that supply chains must have perfect quality. a. DRP b. Flow c. Pull d. Push e. Striving for excellence

a. DRP

_____ means that customer orders start the work process, which ripples down through the supply chain. a. Make-to-stock b. Push c. MRP d. DRP e. Pull

a. Make-to-stock

Which of the following is not one of the key principles of the lean concept? a. Maximize the use of people. b. Simplify first, and only then apply new technology. c. Focus on gradual, but continuous, improvement. d. Minimize waste (including poor quality). e. All of the above.

a. Maximize the use of people.

_____ of inventory refers to the amount of inventory that a firm owns at any given time. a. Volume b. Velocity c. Value d. Vigor e. None of the above.

a. Volume

Which of the following is an example of WIP inventory? a. Waiting to be moved to another process. b. Currently being worked on at a work center. c. Lining up at a processing center due to a capacity bottleneck or machine breakdown. d. All of the above. e. None of the above.

a. Waiting to be moved to another process.

_____ inventory includes the items purchased from suppliers or produced internally to directly support production requirements. a. Work-in-process b. Finished-goods c. MRO suppliers d. Pipeline/in-transit e. Raw material and semifinished items

a. Work-in-process

Decisions in lean must be based on the opinions or preferences of influential individuals, as well as on facts and data.

False

Which of the following is not one of the functions of a distribution resource planning system? a. Forecasting finished-goods inventory requirements. b. Establishing correct inventory levels at each stocking location. c. Determining the timing and replenishment of finished-goods inventories. d. Producing a time-phased set of material, component, and subassembly requirements timed to support an expected build schedule. e. Transportation planning and vehicle load scheduling.

d. Producing a time-phased set of material, component, and subassembly requirements timed to support an expected build schedule.