Supply Chain Management Test 2

If an item is ordered using its economic order quantity, the annual carrying cost should be: a. equal to the annual ordering cost. b. slightly less than the annual ordering cost. c. twice the annual purchase price. d. the square root of the annual ordering cost. e. None of these choices are correct.

a. equal to annual ordering costs

Which tool is useful for presenting data in an organized fashion, indicating process problems from most to least severe: a. Pareto Charts b. Check Sheets c. Cause-and-Effect Diagrams d. Fishbone Diagrams

a. Pareto Charts

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

a. Shingo

The Malcolm Baldrige National Quality Award recognizes firms for their quality achievements but is only given to U.S. firms. a. True b. False

a. True

When lean firms share their best practices with supply chain members, this is referred to as yokoten. a. True b. False

a. True

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 year 2000 millennium bug b. The increased use of email during the 1990's c. The trend for companies to eliminate their supply chain partners d. all of these choices are correct

a. the year 2000 millennium bug

A positive error implies that a forecast was? a. too low b. too high c. neither too high or too low d. the sign of an error gives no information as the direction of the error

a. too low

If at the end of the year, the cost of revenue = $2,500, total revenue = $12,000 and inventory value = $2,000, the inventory turnover ratio would be: a. 1.250 b. 0.375 c. 0.208 d. 0.800 e. 2.667

a. 1.250

Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,200 6 18,500 a. 14,030 b. 15,220 c. 13,190 d. 12,660

a. 14,030

According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Top management becomes overcommitted to the point where they constantly encourage the employees during implementation b. Lack of communication within an organization c. Organizations tend to spend too much time and money training their employees on the new system d. all of these choices are correct

b. Lack of communication within an organization

Which one of the following is NOT a type of qualitative forecasting? a. sales force composite b. simple moving average c. consumer survey d. jury of executive opinion

b. Simple moving average

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. rough-cut capacity plan b. material requirements plan c. resource requirements plan d. master production schedule

b. material requirements plan

Which strategy uses overtime and subcontracting to cope with the high demand periods? a. the level production strategy b. mixed production strategy c. the chase production strategy d. the aggregate production strategy

b. mixed production strategy

When there is not a lot of currently relevant data available it is generally best to use: a. simple moving average forecasting b. qualitative forecasting c. naive forecasting d. time series forecasting

b. qualitative forecasting

The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. premier application b. single integrator c. best-of-breed d. elite integrator

b. single integrator

Which of the following is TRUE regarding the EOQ figure below? a. a lot size of G has an annual total cost of about C b. The EOQ is at lot size G, and curve K is the annual holding cost curve. c. At lot size H both holding costs and ordering costs exceed the annual total cost. d. Curve J represents the annual ordering cost, and curve L represents the annual holding cost.

b. the EOQ is at lot size G, and the curve K is the annual holding cost curve

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that: a. your order size was lower than the EOQ b. your order lot size was higher than the EOQ c. your order lot size was equal to the EOQ d. nothing because there is insufficent information to discern where the EOQ would be

b. your order lot size was higher than the EOQ

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? a. demand time fence b. material requirements plan c. master production schedule d. capacity requirements plan

c. Master production schedule

Which of the following would be considered a dependent demand item? a. furniture b. televisions c. bicycle tires used to assemble a bicycle d. retail customers

c. bicycle tires used to assemble a bicycle

Which of the following is a disadvantage of carrying too much inventory? a. it reduces the need to conduct cycle counts b. it increases the need to purchase items c. it creates an unnecessary waste of scare resources d. it leads to higher annual inventory ordering costs e. it leads to lower average finished good inventories

c. it creates an unnecessary waste of scarce resources

Which of the following is NOT a common module of ERP systems? a. supply chain management b. customer relationship management c. marketing resources management d. human resources management

c. marketing resources management

The Five-Ss refer to: a. Robust evaluation techniques b. Keiretsu relationships c. Overspending habits d. Industrial housekeeping

d. Industrial housekeeping

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

d. Just in time

Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a: a. TQM Network b. Keiretsu Network c. Semaphore System d. Kanban System

d. Kanban system

Legacy MRP systems had which of the following limitations? a. the systems were not use-friendly b. the systems were designed to perform a very specific operational function c. the systems needed continuous modifications d. all of these choices are correct

d. all of these choices are correct

Which of the following is a benefit of CPFR? a. uses joint planning and promotions management b. integrates planning, forecasting, and logistics activities c. provides an analysis of key performance metrics d. all of these choices are correct

d. all of these choices are correct

Which one of the following is NOT a reason for firms to carry inventory? a. to increase production change/setup costs b. to meet variations in product demand c. to take advantage of quantity discounts d. to maintain independence of operations e. to allow for production scheduling flexibility

a. to increase production change/setup costs

The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue. a. True b. False

a. true

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. mean deviation b. bullwhip effect c. delphi method d. CPFR effect

b. bullwhip effect

The primary purpose of the basic economic order quantity (EOQ) model is to: a. Maximize the customer service level b. Minimize the sum of purchase cost and holding cost c. Calculate the optimum safety stock level d. Calculate the reorder point, so that replenishments take place at the proper time e. None of these choices are correct.

e. none of these are correct

Calculate the defects per million opportunities (DPMO) given the following:Blake, owner of Blakester's T-shirt Shoppe, keeps track of customer complaints. For each T-shirt sold, there are four possible complaints: T-shirt shrinks, poor quality, design wears off, and doesn't fit right. Each week, Blake calculates the rate of T-shirt "defects" per total T-shirts sold, and then uses this information to determine his company's DPMO. During the past week, his company sold 1200 T-shirts. His company received 22 customer shrinkage complaints, 16 poor quality complaints, 12 design wears off complaints, 8 doesn't fit right complaints.Calculate his firm's DPMO. a. 12,083 b. 5.8 x 10-6 c. 69,600 d. 0.193

a. 12,083

Using the data set below, what would be the forecast for period 5 using a four period weighted moving average? The weights for each period are 0.05, 0.15, 0.30, and 0.50 from the oldest period to the most recent period, respectively. (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,220 6 18,500 a. 13, 710 b. 13,105 c. 14,610 d. 12,820

a. 13,710

The cost of a product is $5, and the carrying cost rate is 20%; the cost of processing an order is $45 and the annual demand is 1000. What is the economic order quantity (EOQ)? a. 300 b. 200 c. 5 d. 25 e. 20

a. 300

A company produces 8-pound bags of cat litter; as shown below, it gathered 5 samples with 6 bags in each sample for quality control purposes. The weights of each of the bags are listed below.x̄̄ Bag Number of Each sample Sample 1. 2. 3. 4. 5. 6 1 7.98. 8.34. 8.02. 7.94 8.44 7.68 2. 8.33 8.22. 8.08. 8.51. 8.41. 8.28 3. 7.89. 7.77 7.91. 8.04. 8.00 7.89 4. 8.24 8.18. 7.83. 8.05 7.90. 8.16 5. 7.87 8.13. 7.92. 7.99. 8.10. 7.81 a. 8.06 b. 7.97 c. 8.26 d. 7.92

a. 8.06

Calculate the final discrete available-to-promise quantity for Week 1 using the following table. BI=30 Weeks 1 2 3 4 MPS. 10 10 15. 10 Orders 20 5 25 15 ATP:D a. ATP1=10 b. ATP1=15 c. ATP1=20 d. ATP1=0

a. ATP1=10

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 these choices are correct

a. Customer relationship management and Human resource management

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

a. ERP systems tie together a variety of specialized systems

The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from: a. exchange of forecasting information b. sophisticated forecasting algorithms c. Both "sophisticated forecasted algorithms" and "exchange of forecasting information" d. None of these choices are correct

a. Exchange of forecasting information

Which company probably played the largest role in the development of the Toyota Production System? a. Ford b. General Motors c. Chrysler d. Boeing

a. Ford

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

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

A forecasting method has produced the following data over the past 5 months shown in the data set. What is the mean absolute deviation (accurate to 1 decimals)? Month Actual Forecast 1 12. 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 2.0 b. 2.4 c. 10 d. -1.2

b. 2.4

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. Gross Requirements 1- 32 2-16 3-34 4-40 Projectd on hand inventory- 46 scheduled receipts- 10 on week 2 a. 34 b. 29 c. 26 d. 14

b. 29

Use the information below to calculate the number of orders per year when using the EOQ: Annual demand for an item is 43,000 unitsThe cost to place an order is $200The per unit cost of the item is $50.00The annual holding rate is 35% a. 202 b. 49 c. 81 d. 123

b. 49

Calculate the inventory container size required given the following:Demand rate = 10 parts per hour, Safety stock required = 16%Number of containers = 14, Time to cycle through entire system = 6 hours a. 3 parts b. 5 parts c. 2 parts d. 4 parts

b. 5 parts

A company that produces 8 pound bags of cat litter gathered 5 samples of 6 bags each. The weights of each bags' contents are listed below. What would you plot on the x̄ chart for sample 2? Bag Number of Each sample Sample 1. 2. 3. 4. 5. 6 1 7.98. 8.34. 8.02. 7.94 8.44 7.68 2. 8.33 8.22. 8.08. 8.51. 8.41. 8.28 3. 7.89. 7.77 7.91. 8.04. 8.00 7.89 4. 8.24 8.18. 7.83. 8.05 7.90. 8.16 5. 7.87 8.13. 7.92. 7.99. 8.10. 7.81 a. All of the following numbers: 8.34, 8.22, 7.77, 8.18, 8.13 b. 8.305 c. All of the following numbers: 8.33, 8.22, 8.08, 8.51, 8.41, 8.28 d. 8.130

b. 8.305

Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? a. 20 percent of the items account for 80 percent of the tasks. b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items. c. 80 percent of the items account for 20 percent of the groups. d. 80 percent of the unit cost accounts for 20 percent of the items. e. None of these choices are correct.

b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items.

A company sells eggs in boxes with 12 cartons and 12 eggs in each carton, thus there are 144 eggs in each box. The organization wants to construct a P-chart to track the proportion of broken eggs in each sample (shown below). If the company used one box of eggs in each sample in the dataset below, what would be the centerline, upper control limit (UCL), and lower control limit (LCL) for the appropriate P-chart? (Use z = 3.) Choose the closest answer. Sample Eggs. Sample Eggs 1. 3 11 2 2. 5 12. 6 3 3 13 5 4 4 14 1 5 2 15 5 6 4 16 0 7 2 17 2 8 6 18 6 9 4 19 2 10 9 20 1 Total 72 a. Centerline = 0.30, UCL = 0.70, LCL = 0 b. Centerline = 0.025, UCL = 0.64, LCL = 0 c. Centerline = 0.083, UCL = 0.152, LCL = 0.014 d. Centerline = 0.50, UCL = 0.625, LCL = 0.375

b. Centerline 0.0025, UCL=0.64, LCL=0

Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves? a. Baldrige b. Crosby c. Juran d. Deming

b. Crosby

Lean production, JIT, and Six Sigma quality mean the same thing. a. True b. False

b. 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. a. True b. False

b. False

The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods. a. True b. False

b. False

Quantitative forecasts use mathematical techniques that are based on: a. Surveys b. Historical data c. Expert opinions d. Sales force knowledge of the market

b. Historical data

Inaccurate forecasts can result in negative outcomes like: a. Low inventory costs and stockouts b. imbalances in supply and demand c. High inventory costs and increased profits d. Material shortages and decreased costs of obsolescence

b. Imbalances in supply and demand

Classify the following inventory items as either A, B, or C items using the ABC inventory control system: Item Annual Sales. Unit cost 1 130 $4 2 400 15.30 3 25 17.00 4 1,320 1.25 5 90 2.10 a. item 1 (C), item 2 (B), item 3 (C), item 4 (A), item 5 (C) b. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C) c. item 1 (B), item 2 (A), item 3 (A), item 4 (C), item 5 (C) d. item 1 (B), item 2 (C), item 3 (B), item 4 (C), item 5 (A) e. item 1 (A), item 2 (B), item 3 (C), item 4 (A), item 5 (B)

b. Item 1 (C), item 2 (A), item 3(C), item 4 (B), item 5 (C)

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

b. Supplier lead times

Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series? a. Seasonal variations b. Trend variations c. Cyclical variations d. Random Variations

b. Trend variations

Which of the following is true under the Periodic Review System? a. there are no discrepancies between physical inventory and the stock record b. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system c. the only uncertainty is the magnitude of demand during the delivery lead time d. it is more expensive to administer compared to the Continuous Review System e. a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

b. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

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

b. aggregate production plan

Which of the following basic production strategies works best with make-to-order manufacturing firms? a. mixed production strategy b. chase production strategy c. capacity production strategy d. level production strategy

b. chase production strategy

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. supplier quality b. ergonomic conditions c. emerging markets d. new competition

b. ergonomic conditions

Which of the following is NOT consistent with the lean philosophy? a. Cross-training employees to increase processing flexibility b. Increasing batch sizes to take advantage of economies of scale c. Positioning WIP inventories near each processing center d. Developing a culture of continuous improvement within the organization

b. increasing batch sizes to take advantage of economies of scale

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. mixed production strategy b. the level production strategy c. the aggregate production strategy d. the chase production strategy

b. the level production strategy

Random variations in a Time Series component are due to: a. population growth b. Unpredictable events c. inaccurate response of the expert participants d. using a large value for the exponential smoothing constant

b. unpredictable events

The College Bookstore sells a unique calculator to college students. The demand for this calculator has a normal distribution with an average daily demand of 20 units and a standard deviation of 4 units per day. The lead time for this calculator is 9 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 420 units b. 80 units c. 200 units d. 180 units e. 20 units

c. 200

When demand and delivery lead time are known and constant, daily demand = 8, purchase lead time = 5 days, and the purchase price = $20/unit, then the reorder point is: a. 13. b. 56. c. 40. d. 32. e. 2.

c. 40

An advantage/benefit of utilizing an ERP system includes which of the following? a. ERP systems enable the firm to automate some of the steps of a manufacturing process b. ERP systems are designed to take advantage of Internet technology c. Both "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" d. None of these choices are correct

c. Both "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"

In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. A. the bullwhip effect b. excess stock c. stockouts d. price reductions

c. stockouts

Using the data set below, what would be the forecast for period 4 using a three period moving average: (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 15,750 5 20,500 6 18,500 a. 12,244 b. 11,500 c. 14,008 d. 11,883

d. 11,833

Based on the information in the data set below, what is the mean squared error (accurate to 1 decimal) Month Actual. Forecast 1 12 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 10.0 b. 0.8 c. 1.00 d. 8.0

d. 8.0

Which of the following is an example of how lean programs can help to protect the environment? a. Parts made from recycled materials b. Batch size reduction to reduce plastics c. Using rubber from used tires in auto parts d. All of these choices are correct.

d. All of these choices are correct

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 "Firms can take corrective actions before process variabilities get out of control" & "Firms can visually monitor process performance" e. None of these choices are correct.

d. Both "Firms can take corrective actions before process variabilities get out of control" & "Firms can visually monitor process performance"

Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Kanban Networks b. Jidoka Networks c. Kaizen Networks d. Keiretsu Networks

d. Keriretsu Networks

If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the: a. Master production schedule b. beginning inventory c. bills of materials d. most recent postitive ATP

d. Most recent positive ATP

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

d. Poka-yoke

Cyclical variations are longer than a year and can be influenced by: a. imbalances in supply & demand b. population growth c. events such as natural disasters d. Political factors

d. Political factors

Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. multi-modular solution b. elite integrator solution c. premier application soluction d. best of breed solution

d. best of breed solution

Which of the following is NOT an assumption of the economic order quantity (EOQ) model? a. Demand is known, constant, and independent, b. Quantity discounts are not possible c. The only variable costs are setup cost and holding cost d. production are use occur simultaneously e. lead time is known and constant

d. production and use occur simultaneously

When linear trend forecasts are developed, demand would typically be: a. the independent variable b. the lead variable c. the passive variable d. the dependent variable

d. the dependent variable

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

d. the same information to be stored in multiple locations

The College Bookstore sells a unique calculator to college students. The demand for this calculator is constant at 20 units per day. The lead time for this calculator is variable at an average of 9 days with a standard deviation of 2 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 182 units b. 46 units c. 26 units d. 226 units e. 246 units

e. 246