SCM Study Set
false
A Master Production Schedule is an engineering document that shows an inclusive listing of all component parts and subassemblies making up the end item.
planned order release
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:
true
A level production strategy works well for make-to-stock manufacturing firms, which typically emphasize immediate delivery of off-the-shelf, standard goods at relatively low prices.
true
A material requisition and a purchase requisition are the same thing.
win win negotiations
A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as:
vendor managed inventory
A service where key customers ask suppliers to take on the job of store level replenishment planning is called:
supply, operations, logistics, integration
According to the text, the FOUR important elements of the supply chain are:
false
According to the textbook, in the 1950's and 1960's, mass production techniques focused on creating supplier partnerships, improving process design and flexibility, and improving product quality.
true
According to the textbook, the keys to successful supply chain management include trust, cooperation, collaboration and honest, accurate communication between supply chain partners
supplier lead times
According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT:
lack of communication within an organization
According to the textbook, which of the following is considered a reason that ERP implementations fail?
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.
false
An MRP system has a subassembly with a lot size of 500 units. In terms of filling future requirements, this would mean that planned order releases for the subassembly would always have to be exactly 500 units.
both a and b (erp systems are designed to take advantage of internet technology, erp systems enable the firm to automate some of the steps of a manufacturing process)
An advantage/benefit of utilizing an ERP system includes which of the following?
early supplier involvement
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:
false
Benchmarking is the practice of watching the mistakes other businesses do and trying to avoid the same mistakes.
creates numerous job opportunities in the purchasing department
Benefits derived from implementing e-procurement systems include all of the following EXCEPT:
true
CPFR is more likely to succeed if companies educate their employees on the benefits of the process changes and the disadvantages of maintaining the status quo.
false
Dependent demand must be forecasted to be accurate.
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.
ERP
Enterprise Resource Planning
true
Environmental supplier certifications can be used to identify rogue suppliers before they can cause problems.
post-transaction costs
Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as:
create an alliance board to oversee alliances
For a large company with many strategic supplier alliances, what would be the best way to manage them?
true
Forecast error is the actual quantity minus the forecast.
true
Foreign suppliers located farther away may be able to deliver goods faster than domestic suppliers due to more efficient transportation and logistical systems.
true
Generally, firms outsource noncore activities while focusing on core competencies. Group of answer choices
true
ISO 14000 is a family of international standards for environmental management
supplier certification program
ISO 14000 may play a role in a firm's
false
If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease.
most recent positive ATP
If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the:
equal to the annual ordering cost
If an item is ordered using its economic order quantity, the annual carrying cost should be:
true
Implementing a best-of-breed solution may cause firms to link databases from multiple software applications of different vendors.
stockouts
In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors.
Level 0
In a bill of materials, items at which level are independent demand items?
who have ISU 9001 certifications
In general, European companies prefer suppliers:
imbalances in supply and demand
Inaccurate forecasts can result in negative outcomes like:
demand for a firm's end product
Independent demand is the:
true
Individual biases could negatively impact the effectiveness of the Sales Force Composite forecasting approach, due to the proximity of the sales personnel to the consumers.
false
It is best for firms to learn through their own experiences the methods and tools that work the best, rather than benchmarking.
false
It is possible to expect 100 percent forecast accuracy most of the time.
JIT
Just-In-Time
true
Legacy MRP systems typically utilized multiple software packages and databases which caused the same information to be stored in multiple locations. Group of answer choices
the same information to be stored in multiple locations
Legacy MRP systems typically utilized multiple software packages and databases which caused:
true
Legacy systems were designed to perform a very specific operational function.
true
MRO supplies are a type of indirect costs.
true
Minimizing the negative impacts of the bullwhip effect on supply chains is one of the goals of an effective CPFR system.
true
NAFTA and WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries
true
One of the assumptions of the economic order quantity model (EOQ) is that purchase price must remain constant.
true
One of the benefits of CPFR include integration of planning, forecasting, and logistics activities.
Material requirements planning (MRP)
One operational method for managing inventory is the implementation of a software system which can be referred to as:
the supplier's recycled content
One standard which is measured in environmental supplier certification is:
false
Pareto Analysis means that 20 percent of the items get about 80 percent of the safety stock.
ethical sourcing
Promoting diversity by intentionally buying from small firms or ethnic minority businesses is an example of:
true
Purchasing can be broadly classified into two categories: merchants and industrial buyers.
historical data
Quantitative forecasts use mathematical techniques that are based on: Group of answer choices
false
Radio Frequency Identification (RFID) is beginning to replace bar code inventory tracking, however a weakness is that it requires a direct line of sight for RFID tags to be read.
true
Steering wheels purchased by Ford are an example of dependent demand.
SRM
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:
true
System nervousness is when even small changes to upper-level production plans cause major changes in lower-level production plans.
false
The (s, S) continuous review policy is to order the same quantity, Q, when physical inventory reaches the reorder point.
false
The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock.
true
The ABC inventory matrix combines two ABC analyses—one is based on current inventory valuation and the other is based on annual inventory dollar usage..
false
The EOQ equation is derived by setting the annual purchase cost equal to the annual holding cost.
how many units should be ordered
The EOQ model with quantity discounts attempts to determine:
aggregate production plan
The __________ specifies which end product is to be made, how many are required, and when they need to be completed.
master of production schedule
The ___________ planning horizon is shorter than the aggregate production plan's, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon?
rough-cut capacity plan
The _______________ is used to check the feasibility of the Master Production Schedule.
false
The best-of-breed solution picks all the desired applications from a single vendor for the ERP system.
false
The chase production strategy works well when highly skilled workers are needed, especially in a tight labor market.
true
The economic order quantity model (EOQ) is the optimal independent demand order quantity that minimizes total annual inventory costs.
false
The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods.
true
The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue.
false
The optimal order quantity for the quantity discount model is always at one of the price breakpoints.
false
The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.
none of the above
The primary purpose of the basic economic order quantity (EOQ) model is to:
ethical sourcing
The purchasing department at Big Horn Sheep Corporation decided to intentionally increase purchases from small, underdeveloped nations. This decision can be considered:
exchange of forecasting information
The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from:
between 0 and 1
The smoothing constant for exponential smoothing must be?
true
The statistical reorder point is calculated as the average demand during the delivery lead time plus the desired safety stock.
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.
true
The total cost analysis demonstrates how other costs besides the unit cost can affect purchase decisions.
false
There are just a small number of resources available for firms seeking to learn about and implement successful sourcing practices. Group of answer choices
true
There are two approaches to deciding whether or not an action is ethical. The first approach is utilitarianism. The second approach is rights and duties.
TQM
Total Quality Management
true
Unless an organization has a firm grasp of the key issues surrounding supplier relationships, it cannot reap the benefits of such relationships.
Best of breed solution
Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. Group of answer choices
Vendor Managed Inventory
VMI
transaction cost
What type of major cost category is considered in the cost associated with placing and receiving the order?
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.
true
When both the demand and lead time of a product are variable, firms must keep a higher safety stock level compared to variations in just demand, to offer the same service level.
false
When developing successful partnerships, it is best to avoid inter-personal business relationships between buyers and suppliers.
scheduled receipt
Which of the following MRP terms represents a committed order awaiting delivery for a specific period?
component
Which of the following MRP terms represents the parts demanded by a parent?
TLS (Third party logistics services)
Which of the following acronyms is NOT paired with its correct "translation"?
chase production strategy
Which of the following basic production strategies works best with make-to-order manufacturing firms?
Excess costs for each firm in a supply chain
Which of the following can happen as a result of the bullwhip effect?
Sony buying trucks to deliver their finished goods inventories to their customers warehouses
Which of the following illustrates Forward Vertical Integration?
marketing resources management
Which of the following is NOT a common module of ERP systems?
to select the best suppliers
Which of the following is NOT a reason for supplier recognition programs?
developing efficient processes that will remain unchanged for the duration of the partnership
Which of the following is NOT important in developing a successful strategic alliance?
indiscrete available to promise
Which of the following is NOT one of the three basic methods used to calculate the available-to-promise quantities? Group of answer choices
performance metrics and personal business relationships are both keys to building successful partnerships
Which of the following is TRUE?
all of the above
Which of the following is a benefit of CPFR?
it creates unnecessary waste of scarce resources
Which of the following is a disadvantage of carrying too much inventory?
trust
Which of the following is a major cultural issue and big hurdle for widespread implementation of CPFR?
to control unnecessary administrative costs
Which of the following is a reason small value purchases are handled differently?
a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system
Which of the following is true under the Periodic Review System?
aggregate production plan
Which of the following keeps the production plan's capacity fixed during the planning horizon?
material requirements plan
Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or subassemblies over time period of few days to a few weeks?
a firm lacks the technology or expertise to produce an item
Which of the following would be a good reason to outsource (buy) versus making?
bicycle tires used to assemble a dependent demand item
Which of the following would be considered a dependent demand item?
a firm leases storage warehousing
Which of the following would be considered a third party provider?
80 percent of the total annual $ usage is accounted for, by 20 percent of the items
Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system?
to increase production change/ setup costs
Which one of the following is NOT a reason for firms to carry inventory?
mixed production strategy
Which strategy uses overtime and subcontracting to cope with the high demand periods ?
the year 2000 millennium bug
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?
Federal Acquisition Regulation
While most public procurement is focused on goals like those of purchasing departments in the private sector, U.S. federal government purchases must comply with the:
ethical sourcing
______________ considers the public consequences of organizational buying.
false
a SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization
Company C: Quality (70), Delivery (95), Cost (60)
a company using a weighted criteria evaluation has established these 3 categories and the appropriate weight in paranthesis: Quality (30), Delivery (40), Cost (30). The scores for each catgory are show below. Which of the following companies has the highest total score
a fair price
a fair trade product refers to one that is manufacctured or grown by a disadvantaged producer in a developing country that receives for its goods
false
a follow up is considered a reactive approach to speed up an overdue shipment
if the forecast bias is within the acceptable control limits
a forecast tracking signal is used to determine
true
a reason for making items instead of buying them would include better quality control.
ranked near the top of 2015
according to the SCM profile Honda ______ based on a supplier relations index developed by Planning Perspectives
true
according to the text, only about half of companies recognize excellent performance with supplier awards and appreciation banquets
true
according to the textbook, a supply chain's end customers are the only true source of income for all supply chain organizations
false
according to the textbook, environmental and social impacts are considered outside of supply chain management
encourage suppliers to keep their performance high
according to the textbook, supplier recognition programs:
true
according to the textbook, supply chain include raw material suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors, retailers and end-product consumers
raw material supplier, component manufacturer, end product manufacturer, wholesale distributor, retailer, end product consumer
according to the textbook, the order of product and service flow is as follows
false
according to the textbook, third-party logistics providers (3LPs) do not offer assistance with helping products clear customs
legislation requiring corporate ethical and sustainable sourcing
all of the following are reasons for the increasing use of ethical and sustainable sourcing practices except:
ergonomic conditions
all of the following may influence demand and should be considered when development a forecast except
supply chain risk
an internal or external event that causes a disruption or failure of supply chain operations is an example of
false
as companies outsource more and more parts, it becomes easier to achieve cost savings internally
true
automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception
true
companies outsource to help them reach their sustainability goals
ethical sourcing
considers the public consequences of organizational buying
true
cost savings is an advantage of using an e-procurement system
pre-transaction costs
costs associated with the investigating alternative suppliers and investigating alternative delivery options can be classified as:
true
creating strategic supplier alliances benefits firms by increasing the performance and value of suppliers as well as increasing brand awareness
true
criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments
logistics
customer relationship management, distribution network, transportation management, and service response logistics are all important issues that are most closely related to
political factors
cyclical variations are longer than a year and can be influenced by
true
cyclical variations are longer than a year and influenced by macroeconomics and political factors
true
decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs
Business Process Reengineering
developed in the 1990s as a popular way of developing radically new business processes in an effort to reduce waste and increase performance is referred to as
reduction of pollution emissions
direct benefits of ISO 14000 include:
supplier management
encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as:
true
firms assess their sourcing capabilities because the sourcing function is one of the most value-enhancing functions in an organization
select the most effective supplier
firms can use total cost analysis to
true
forecast error is the actual quantity minus the forecast
use performance measures to identify weaknesses
in designing an ethical and sustainable strategy a firm might make use of which of the following?
false
in total cost of ownership system, certification and training of suppliers would be considered post-transaction costs
ratio of cost of goods sold over average inventory cost
inventory turnover can be calculated by:
false
it is considered unethical for a firm to intentionally buy from women-owned businesses
false
it is critical that buyers and suppliers develop stronger relationships and partnerships based on a tactical rather than a strategic perspective
true
it is important for firms to address the impact of ethical and sustainable sourcing on other facets of the organization and its trading partners
backward integration to purchase suppliers
leading companies practicing sustainable sourcing and seeking to reduce costs would NOT use which of the following strategies?
toyota
lean production is typically associated with which of the following company's production systems
false
many large firms are moving to in-house vertically integrated structures where they have more control over each business unit
false
merchants primary task is to purchase raw materials for conversion purposes
true
one definition of supply chain management is "Coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers and customers
false
quantitative forecasting methods are based on opinions and intuition, whereas qualitative forecasting methods use mathematical models and relevant historical data to generate forecasts
inpredictable events
random variations in a Times Series component are due to
false
random variations represent either increasing or decreasing movements over many years due to factors such as population growth, population shifts, cultural changes and income shifts
true
rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program
true
successful supplier relationships involve equal decision-making control
true
supply chain analytics can be used along the supply chain to schedule production according to expected supplier deliveries
false
supply chain management activity includes managing the various compensation and benefit programs within an organization
coordination and collaboration with channel partners
supply chain management includes the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. it also includes:
true
supply chain management is concerned about how suppliers' products are designed, produced, and transported
largely a voluntary effort
sustainability reporting is _______ for american companies
false
sustainable sourcing practices include promoting diversity by intentionally buying from ethnic minority businesses
single integrator
the _____ solution picks all the desired applications from a single vendor for the ERP system
True
the assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost and customer service requirements can all be considered elements of operation
increasing supplier base
the benefits of implementing an effective supplier certification program include all of the following EXCEPT:
false
the bullwhip effect is the result of companies producing excessive defective products, defective items are whipped back from the end customer toward the manufacturer of the defect
bullwhip effect
the continuing cycle of erratic demand causing forecasts to include safety stock which in turn magnify supplier forecasts and cause production planning problems is know as
true
the development of relationships with suppliers brings about changes that must be managed for a company to stay focused on their core businesses
Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
the following is an example of the bullwhip effect
actual demand for period t munis the forecasted demand for period t
the formula for the forecast error, is calculated by using the equation
false
the foundation elements of supply chain management are supply, operations, customer service and logistics
true
the goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers
every 5 years
the hormel company awards their hormel food corporations no 1 award to their top supplier. how often do they give this award?
allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies
the main benefit (s) from benchmarking sourcing practices are
ensure the highest quality raw materials are purchased
the primary goals of purchasing include all EXCEPT:
1980s
the term supply chain management and the field it represents today seems to have emerged in the
false
the total cost of ownership concept does NOT include quantitative factors
supplier b
the total cost of ownership for Supplier A is 2670000. the total cost of ownership for supplier b is 1750000. the total cost of ownership for supplier c is 2990000. using total cost analysis it will be more cost effective to use.
false
the true value of CPFR comes from the sophisticated forecasting algorithms that provide companies with highly accurate forecasts, not from the exchange of forecasting information
false
the universally accepted definition of supply chain management is the management and integration of the parties involved in producing the end items coveted by consumers
false
the use of ethical and environmental certifications for suppliers is decreasing.
purchasing order costs
total cost of ownership does not consider which of the following factors?
true
toymaker spin master, did not properly forecast demands for their new product, hatchimals, in 2016. this caused stockouts for their distributors.
false
trend variations are wavelike moments that are shorter than a year
true
trucking companies, airfreight shipping companies, and information system providers can all be considered service providers to the supply chain
seasonal variations
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?
collaborative planning, forecasting, and replenishment
what does the acronym CPFR represent?
+-3
what is considered an acceptable range for a tracking signal
cash, accounts receivable, and inventory
when calculating return on investment, current assets include:
qualitative forecasting
when there is not a lot of currency relevant data available it is generally best to use
select the key dimensions of performance based on what is important to the end consumer
when using a weighted criteria evaluation system to evaluate suppliers, all of the following are true EXCEPT
lower shipping rates due to lower tariffs
which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers?
kaizen blitz
which of the following is NOT a form of countertrade?
developing efficient processes that will remain unchanged for the duration of the partnership
which of the following is NOT important in developing a successful strategic alliance?
reduces variabilities in quality levels
which of the following is a reason for favoring single sourcing?
recycling products and components
which of the following is a reverse logistic activity
specialization
which of the following is an advantage of a centralized purchasing department?
commitment by top management, interpersonal business relationships between employees of the companies, mutual-compatible needs that result in a win-win situation for the partners
which of the following is important in developing successful relationships in a partnership?
all of the above (they are expected to generate service and quality enhancements for the organization, they are expected to generate cost saving for the organization, they are viewed as strategic internal suppliers of the organization
which of the following is true of today;s purchasing staff members
lowering inventory turnover rates
which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance?
traveling requisition
which type of requisition is used for materials and standard parts that are requested on a recurring basis?
they can gauge their success in improving their own value-enhancing contributions to the firm
why do firms assess their sourcing capabilities
true
without supply chain trading partners collaborating and exchanging information, the supply chain will always be suboptimal and contain excess inventories, resulting in less-than- maximum supply chain profits
