APICS 1 quiz Questions
What is an example of corruption that should be worked against if a company is following the UN Global Compact's 10 principles? A Union membership B Racial discrimination C Child labor D Bribery
D Bribery Bribery is a form of corruption, and it is specifically listed in the UN Global Compact. Child labor and racial discrimination are both considered to be in violation of the UN Global Compact but are not considered forms of corruption. The UN Global Compact embraces the right of freedom of association and collective bargaining.
When following the UN Global Compact Management Model, what must an organization do once it has assessed its current state of risks and opportunities related to human rights, labor, the environment, and anti-corruption? A Adjust metrics to ensure that there is a way to determine if new policies and procedures are being followed. B Transform organizational strategy into tactics, such as capital improvement projects. C Commit in a transparent way to incorporate the principles into formal governance structures. D Create or refine the organization's strategy and related policies, goals, and metrics.
D Create or refine the organization's strategy and related policies, goals, and metrics. The "Assess" step, described in the question, is the second step in the model. The next step is the "Define" step, which consists of creating or refining the organizational strategy and related polices, goals, and metrics based on the results of the assessment step.
Which is the biggest tradeoff that needs to be accepted when an industry with strong seasonality chooses a level production strategy? A Lower production efficiency. B Increased overtime costs. C Skilled workers unavailable for rehire. D Increased inventory carrying cost.
D Increased inventory carrying cost. A level strategy for a seasonal product requires building extra inventory in times of low demand to enable satisfying demand at the seasonal peak. This is called anticipation inventory. It results in higher average inventory levels and therefore higher inventory carrying costs. The other answers are tradeoffs of other methods such as the chase strategy.
An organization is examining its corporate social responsibility policies and wants to start by looking to internal influences to guide any changes it makes. Which of the following is an example of an internal influence? A Trade blocs B National laws and regulations C Local competition D Intended customers
D Intended customers Internal influences are generally within the organization's control and include the customers that the company chooses to market to. National laws, trading blocs, and local competition are all examples of external influences.
What is an example of an external influence that may guide strategy regarding corporate social responsibility? A Employee organizations B Customer segments C The organization's chief environmental officer D International competition
D International competition External influences are influences that the organization cannot exert control over, such as international competition. A company may choose to market to particular customer segments or avoid others, may endorse or ban employee organizations, and may choose to dismiss or eliminate the role of a chief environmental officer, so those are all examples of internal influences.
Why does the UN Global Compact single out supply chain partners as an important factor in a firm's ability to comply with its 10 principles? A It spreads the Compact's reach, even though partner actions can't impact the firm. B Customers define which of the principles have the highest priority. C If the organization uses unionized labor, all of its suppliers should, too. D It motivates suppliers in countries with low labor costs toward compliance.
D It motivates suppliers in countries with low labor costs toward compliance. In an extended supply chain, the actions of an organization's suppliers may reflect positively or negatively on the organization, especially if they are the channel master or most visible partner in the network. Therefore, the Global Compact stresses the need to ensure that suppliers are compliant with the principles (or are making reasonable progress in that direction). When located in countries with lower labor costs, it is both more important to ensure compliance, while also harder to do so.
A chemical company waits to manufacture batches of products until customers place orders, due to the products' shelf life. This is an example of which of the following production environment strategies? A. Engineer-to-order B Make-to-stock C Assemble-to-order D Make-to-order
D Make-to-order In a make-to-order production environment, a good or service can be made after receipt of a customer's order.
Which type of metrics should be tracked in real time whenever possible? A Tactical B Financial C Strategic D Operational
D Operational Operational metrics measure the immediate short term on an hourly or daily basis and should be monitored in real time whenever possible to determine operational issues that are having the most impact on the business.
Which is a category of performance measures that relates to daily work routines, such as cycle time and utilization? A Strategic metrics B Sustainability metrics C Tactical metrics D Operational metrics
D Operational metrics Operational metrics relate to daily work. Tactical metrics relate to intermediate-term goals to support the strategic plan. Strategic metrics relate to the long-term goals of a business. Although sustainability can be measured, it is not necessarily associated with daily operations.
Which is an advantage of work cells? A Reduced requirements for worker skills B Maximum machine use C Larger batches and lower unit costs D Reduced material movement
D Reduced material movement Work cells can result in reduced material movement, or reduced waste, because workstations are placed together in a flow production system. The other options are incorrect because the cellular layout does not necessarily influence the use of the machine; work cells result in smaller batches; and workers in a cell need to be cross-trained to perform more than one function.
A mass production shop with a continuous layout where products follow the same process is also known as: A discrete. B a job shop. C intermittent. D a flow shop.
D a flow shop. In a flow shop, the machines and the operators process a standard, uninterrupted material flow. The same operations are performed for each production run. The layout is designed to facilitate a product flow.
In a functional layout, A specialized equipment is used. B there is little buildup of WIP inventory. C capital costs are higher than in a product-based layout. D each work center must be flexible.
D each work center must be flexible. The advantage to a functional layout is that equipment can handle a wide variety of products. Capital costs generally are higher for a product layout, not a process layout. Dedicated equipment is used in a process layout, hence its relative inflexibility. There tends to be more WIP inventory in a process layout because, unlike in a product layout, workflow is lumpy because of varying batch sizes and non-standard routings.
In a product-based layout, A work centers are located according to equipment type. B workflow is lumpy. C a wide variety of different products can be produced. D there is little build-up of work-in-process (WIP) inventory.
D there is little build-up of work-in-process (WIP) inventory. The other answers are incorrect because workstations are located in a line formation for a product layout; work tends to flow at a regular rate in a product layout; and product layouts are not flexible enough to handle more than a limited variety of products.
Demand for the prior six months is 56, 58, 55, 50, 48, and 45 units, respectively. What is the three-month moving average forecast for the upcoming month? A. 52 units B. 54 units C. 104 units D. 48 units
D. 48 units To calculate the three-month moving average, sum the most recent three month's results and divide by the number of months, or 3: 50 units + 48 units + 45 units = 143 units/3 months = 47.67 units rounded up to 48 units.
Which of the following actions is most appropriate when bias is detected in a forecast? A. Delete the periods of demand that introduced the bias. B. Introduce sales programs to reduce the bias. C. Record the circumstances that created the bias. D. Change the forecasting method or the parameters.
D. Change the forecasting method or the parameters. When bias exists, the forecasting method or its parameters should be changed. Deleting the periods that introduced the bias would not be an acceptable practice, although there may be occasions where the demand history must be adjusted to account for exceptional circumstances. Introducing sales programs does not remove the cause of the bias in the forecast. Recording the circumstances that created the bias may be useful but is not the most appropriate course of action.
Sales for a concrete block manufacturer correlate directly with new home starts. The company would likely use which forecasting method? A. Seasonality B. Moving average C. Trend D. Extrinsic
D. Extrinsic Extrinsic forecasting correlates with indicators external to an organization that may influence demand.
Which of the following is assumed in the process of forecasting and should be factored into future forecasts? A. Increased production throughput B. Lead time variation C. Reduced setup time D. Forecast error
D. Forecast error Forecast error is the difference between actual demand and forecast demand, stated as an absolute value or a percentage.
A small engine parts manufacturer is working to segment suppliers and customers to enhance profitability. When it discusses the companies that carry those parts in retail locations, which segment is it considering? A. Ultimate customers B. Lead time C. Suppliers D. Intermediate customers
D. Intermediate customers Intermediate customers refers to the customers that are not at the end of the supply chain, which in this case would refer to retailers who carry the parts for sale to the general public. Ultimate customers would refer to the customers of those retailers that purchase the parts from those retail locations. Supplier segmentation refers to companies that supply the manufacturer with parts and raw materials. Lead time segmentation is a form of supplier segmentation.
Which of the following statements describes the strategic plan? A. It consists of tactical plans that direct the business to achieve competitive advantage on a continuous basis. B. It is a statement of long-range strategy and revenue, cost, and profit objectives and is usually accompanied by budgets a projected balance sheet and a cash flow. C. It is a time-phased statement of expected customer orders anticipated to be received. D. It defines how to marshal and determine actions to support the mission, goals and objectives of an organization.
D. It defines how to marshal and determine actions to support the mission, goals and objectives of an organization. The rationale is A strategic plan defines how to marshal and determine actions to support the mission, goals, and objectives of an organization.
A piece of electronics equipment is several years old, and new models with new functionality are common on store shelves. Which of the following factors are likely to be more important to consumers when choosing this product? A. Quality and delivery B. Price and quality C. Design and availability D. Price and delivery
D. Price and delivery Electronic equipment usually has relatively short life cycles. With newer models available, customers interested in the more mature products typically want price reductions and/or faster or more reliable delivery. Quality is important, but a mature product typically will have demonstrated adequate quality by this point.
The price for a product must fall within a certain range for a supplier to be considered by potential customers. This condition is known as an order: A. Premise B. Winner C. Confirmation D. Qualifier
D. Qualifier The Rationale is Order qualifiers are those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace. Order winners are characteristics that would cause a firm's customers to choose them over the competition, and can be considered competitive advantages.
Which of the following entities or conditions impacts customer demand as a standard that consumers and companies require of any product? A. Competition B. Convenience C. Delivery D. Quality
D. Quality The rationale is In today's market, quality is an order qualifier and a requirement to do business. Products and services need to meet or exceed customer expectations.
Which manufacturer would be most likely to use a chase strategy? A. Compression socks manufacturer. B. Paint manufacturer. C. Seasonal glassware manufacturer. D. Seasonal ice cream candy bar manufacturer.
D. Seasonal ice cream candy bar manufacturer. The seasonal ice cream candy bar manufacturer sells perishable products that also have distinct seasonality. Because perishable products cannot be produced long in advance of need, they cannot use a level strategy and may need to use a chase strategy.
For the purposes of production planning, product families should be established on the basis of. A. The availability of materials B. Market Segments C. The availability of equipment D. Similarities in manufacturing process.
D. Similarities in manufacturing process. Manufacturing needs to know what products share the same manufacturing processes Market segments are how marketing might group its markets or customers. The availability of materials and machinery, affect production capacity but are not the basis for establishing product families.
What term is used for a distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting? A. Distribution Channel B. Marketing channel C. Sales channel D. Transaction Channel
D. Transaction Channel A transaction channel is a distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting.
Which of the following is a possible root cause of time series forecast bias? A. Insufficient data B. Differences between sales and demand C. Errors in monitoring the forecast D. Trend changes
D. Trend changes
A calculated value that can signal the quality or validity of a forecast when it is in doubt is known as: A. mean absolute deviation. B. a smoothing factor. C. bias. D. a tracking signal.
D. a tracking signal. A tracking signal is the ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. It is used to signal when the validity of the forecasting model might be in doubt.
If the opening inventory is 100 units, sales are 500 units, and the ending inventory should be 200 units, what will manufacturing produce? A 600 Units B 400 Units C 300 Units D 500 Units
A 600 Units The equation for determining the production quantity is as follows: Total Production = Total Forecast + Backorders + Ending Inventory - Opening Inventory = 500 units + 0 units + 200 units - 100 units = 600 units.
Which of the following methods often is employed to make high-variety, low-volume manufacturing operate in a repetitive mode? A Cellular manufacturing B Project production C Flow manufacturing D Process layout
A Cellular manufacturing Cellular manufacturing is a process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell. The ease of changeover makes it ideal for high-variety, low-volume products. The other answers are incorrect, as they refer to processes that are more specialized or less flexible and thus unsuited for this purpose.
Which production planning method maintains a stable inventory level while varying production to meet demand? A Chase production method B Level loading method C Critical path method D Critical chain method
A Chase production method The chase production method seeks to keep inventory levels stable while varying production levels based on demand. This method typically has higher costs associated with varying staffing and overtime.
Which of the following terms refers to a form of manufacturing in which the jobs pass through the functional departments in lots and each lot may have a different routing? A Intermittent B Project C Repetitive D Flow
A Intermittent Intermittent production is a form of manufacturing in which the jobs pass through the functional departments in lots and each lot may have a different routing. Meanwhile, flow is a form of manufacturing in which work flows from one workstation to another in a nearly constant rate and with no delays. Project production is a manufacturing process in which each unit or small group of units is managed by a project team created especially for that purpose. Repetitive manufacturing consists of the repeated production of the same discrete products of families of products.
In order to be sustainable in terms of financial returns, what should an organization focus on? A Providing competitive and stable return on investments while protecting company assets B Lowering all variable costs as much as possible in the short term C Pursuing profits from new sources, even if the company is not well equipped to serve a new customer D Increasing costs charged to downstream members of the supply chain
A Providing competitive and stable return on investments while protecting company assets Sustainability in financial returns entails providing competitive and stable return on investments while protecting company assets. Lowering all variable costs in the short term may incur larger long-term costs that are financially damaging. Charging more to downstream members of the supply chain may cause the customer base to shrink and the company to lose money long-term. Chasing profits from customers that the company is not well equipped to service may lead to increased setup costs or costly contract breaches if the company cannot perform in ways that they have contractually agreed to.
Given the existence of forecasting error, what are manufacturers using in order to create more accurate production schedules and targets? A. Actual demand data from supply chain partners B. Previous years' targets and goals C. Greater market analysis D. Improved manufacturing methods
A. Actual demand data from supply chain partners Because of issues with forecasting, organizations are working to become less reliant on forecasts and more reliant on actual demand information provided by their downstream supply chain partners. This effectively means that organizations are moving toward a pull structure and away from a push structure.
What is the term for an extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream? A. Bullwhip Effect B. Supply chain variation. C. Forecast disconnects D. Market response effect
A. Bullwhip Effect The bullwhip effect is a situation in which a small change in demand downstream in the supply chain - for example, by failing to communicate demand or promotion information - generates an extreme change in the supply position upstream.
Which is the best way listed to reduce material-handling costs for B2B customers who normally sell one to three pallets of units in a given order cycle? A. Change the unit load size and order increment requirement to equal the number of units that can fit on a single pallet.. B. Change the minimum order size to be the number of units to fill one pallet and allow any number of unites to be ordered above this amount. C. Use cross-docking to immediately build unit loads for all B@B customers upon receipt of finished goods. D. Set the unit load size and order increment requirement to equal one full truckload of pallets.
A. Change the unit load size and order increment requirement to equal the number of units that can fit on a single pallet.. The rationale is If B2B customers can order only in full pallet increments, this will reduce the amount of material handling for you and for them. For example, the customer will be able to unload the delivery using a forklift rather than manual labor, which would be the case if they ordered, say, a pallet and a half of goods, which is what could occur if only the minimum order size were specified. Since the customers generally sell between one and three pallets per order period, requiring orders of full truckloads would necessitate that some of these pallets being moved into storage and then moved out over time, so this would increase their material-handling costs. Cross-docking may reduce the organization's material-handling costs, but it would not affect the customer's material-handling costs.
A supplier produces for countries around the globe. If only domestic customers are considered in demand management, what will the resulting outcome likely be? A. Demand will be understated. B. Demand will be overstated. C. Demand will be unaffected. D. Not enough information exists to comment.
A. Demand will be understated. When both domestic and international demand are present, ignoring international demand will result in understated requirements.
What is a challenge associated with the process of implementing collaborative planning, forecasting, and replenishment (CPFR)? A. Discontinuation of business practices that may be seen as successful B. Decreased levels of customer service C. Decreased sales revenue D. Supply chain fragmentation across organizational boundaries
A. Discontinuation of business practices that may be seen as successful One of the challenges is the discontinuation of businesses practices that may be seen as successful. CPFR typically results in increased sales revenue, supply chain integration across organizational boundaries, and improved customer service levels.
What term is used for the distribution route, from raw materials through consumption, along which products travel? A. Distribution channel B. Transaction Channel. C. Marketing Channel. D. Logistics channel
A. Distribution channel. The rationale is A distribution channel is the distribution route, from raw materials through consumption, along which products travel.
What is the term for a distinctive characteristic of a good or service that may be provided by an option, an accessory, or an attachment? A. Feature B. Portfolio C. Variable D. Standard
A. Feature A feature is a distinctive characteristic of a good or service that may be provided by an option, an accessory, or an attachment.
Dependent demand relates to which of the following elements? A. Gross component requirements B. Order quantities C. Forecast error D. Throughput time
A. Gross component requirements The planned order for an independent demand item becomes the gross requirements for its dependent components.
Which of the following is true of a business plan? A. It is stated in terms of monetary units and grouped by product family. B. It is stated in terms of monetary units and detailed by product. C. It is stated in terms of units and grouped by distribution channel. D. It is stated in terms of units and grouped by manufacturing site
A. It is stated in terms of monetary units and grouped by product family. The rationale is A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow.
A group of products with similar characteristics, often used in production planning, is known as a: A. Product family B. Product portfolio C. Phantom bill of material D. Planning bill of material
A. Product family A product family is a group of products with similar characteristics, often used in production planning (or sales and operations planning).
Which of the four Ps influences how physical distribution planning and execution addresses product volume, location of demand, and demand fluctuations? A. Promotion B. Price. C. Product D. Place
A. Promotion Promotion influences product volume, location of demand, and demand fluctuations. Product is incorrect because it is associated with such issues as order-winning and order-qualifying characteristics. Price is incorrect because it is associated with such issues as inventory costs. Place is incorrect because it is associated with such issues as market geography and distribution or sales channels.
A company has developed a new, innovative product that is taking over the market. Early sales consume everything the company can produce, but things have started to slow down. Both production and sales continue to grow. What are the typical challenges that would be expected in this growth phase of the product's life? A. Quality and delivery B. Design and availability C. Price and delivery D Design and quality
A. Quality and delivery In the growth phase of a product, rapid expansion and increased production often lead to degradation in quality and delivery.
Which of the following terms refers to a systematic approach to identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain? A. Risk Management B. Buffer Management C. Producers Risk D. Safety factor calculation
A. Risk Management The rationale is Risk management is a systematic approach to identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain.
A company producing lawn mowers, with peak selling periods during the year, would likely use which of the following forecast methods? A. Seasonality B. Trend C. Extrinsic D. Moving average
A. Seasonality Seasonality is a repetitive pattern of demand from year to year (or other repeating time interval) with some periods considerably higher than others. Items such as lawn mowers and snow blowers are subject to seasonal demand.
A company is seeking to design a new product as a low-cost manufacturer. Which of the following design methods brings product and process design groups together to achieve this objective? A. Simultaneous engineering B. Collaborative planning, forecasting, and replenishment C. Quality function deployment D. Lean six sigma
A. Simultaneous engineering Simultaneous engineering is a concept that refers to the participation of all the functional areas of the firm in the product design activity. Suppliers and customers are often also included.
How is a strategic plan different from a business plan? A. Strategic plan contains the company's vision, mission statement, goals and objectives. B. Strategic plan seeks to define priorities. C. Strategic plan is tactical in nature. D. Strategic plan contains a capacity resource plan.
A. Strategic plan contains the company's vision, mission statement, goals and objectives. The rationale is A strategic plan contains the company's vision, mission statement, goals, and objectives. A business plan is a statement of long-term strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statement.
Which of the following is an advantage of simultaneous engineering? A. The product design is worked on at the same time that the process design takes place. B. The process requires fewer resources and lowers the cost of design. C. The product design is a success even if a profit cannot be made. D. Multiple designers work on the design at the same time, producing multiple options to consider.
A. The product design is worked on at the same time that the process design takes place. Product design and process design work hand-in-hand to achieve the design objectives and to produce the product for the lowest possible cost.
Which is true about the components of demand? A. The seasonal index estimates how much demand during the season will be above or below the average. B. Seasonality always occurs in summer, fall, winter, and spring. D. A trend is demand that fluctuates based on the time of the year, week, or day. D. Random variation is constant from period to period by definition.
A. The seasonal index estimates how much demand during the season will be above or below the average. Seasonality fluctuates based on the time of the year, week, or day (i.e., not a trend), and not just during the seasons of the year. While random variation averages out over time, period-to-period variation is not uniform. However, it is true that a seasonal index estimates how much demand during the season might fluctuate.
What flows downstream toward the customer in the transaction channel? A. Title to goods B. Goods C. Cash for sales. D. Nothing other than cash for returns.
A. Title to goods While the distribution channel handles physical distribution, the transaction channel handles the related transactions, which include both payment of funds up the channel and transfer of ownership down the channel. Transfer of ownership is accomplished by transferring the title to the goods to the next party.
A company losing market share due to price competition should incorporate which of the following techniques? A. Value Chain analysis B. Activity-Based Costing C. Subcontracting D. Hoshin Planning
A. Value Chain Analysis The rationale is Value chain analysis is an examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer.
Forecasts are usually: A. incorrect. B. within a reasonable percentage. C. overstated. D. based on historical data.
A. incorrect. Forecasts attempt to look into the unknown future and, except by sheer luck, will be wrong to some degree. Errors are inevitable and must be expected and planned for.
Forecast deviation per period is 12, -8, 15, 17, -22, and -3 units for each of the prior periods, respectively. What is the mean absolute deviation for these periods? A.12.83 B. 3.33 C. 2.57 D. 1.83
A.12.83 To calculate the mean absolute deviation, first remove the plus and minus signs from each deviation and sum these absolute values: 12 units + 8 units + 15 units + 17 units + 22 units + 3 units = 77 units. Next divide by the number of periods, or 6: 77/6 = 12.83 (rounded).
Which of the following shipments is most likely to be subject to governmental safety regulations related to shipping and handling through a supply chain? A. Milk B. Flu Vaccines C. Acetylene D. Papayas
Acetylene Rationale is Due to the flammable nature of acetylene, it may be considered a hazardous material that must comply with governmental safety regulations for shipping and handling. Perishables like milk and papayas or pharmaceuticals such as flu vaccines may require the use of cold chain shipping technology to maintain storage within an acceptable temperature range to avoid spoilage, but they are less likely to be subject to safety regulations because they do not pose similar risks during shipment.
How does advanced planning and scheduling (APS) software differ from other planning systems? A APS includes the planning processes of production planning, master production scheduling, and capacity requirements planning. B APS simultaneously plans and schedules production based on available materials, lab C APS combines enterprise resources planning with complex spreadsheet workbooks. D APS runs in real time in parallel to other system processes.
B APS simultaneously plans and schedules production based on available materials, lab APS simultaneously plans and schedules production based on available materials, labor, and plant capacity.
In a make-to-stock strategy, when are orders for products typically received? A Before the product can be engineered, produced, and made available for sale B After the product is in inventory and available for sale C After the product can be assembled and made available for sale D Before the product is produced, placed in inventory, and made available for sale
B After the product is in inventory and available for sale In a make-to-stock environment, orders are expected to be filled from existing inventory and immediately available for shipment.
In a make-to-order strategy, when are orders for products typically received? A Before the product can be engineered, produced, and made available for sale B Before the product is produced, placed in inventory, and made available for sale C Before the product can be assembled and made available for sale D After the product is in inventory and available for sale
B Before the product is produced, placed in inventory, and made available for sale In a make-to-order environment, orders are the signal to manufacturing to produce a product, and therefore they must be received before the product can be produced, placed in inventory, and made available for sale.
Delivery lead time in an engineer-to-order environment includes which of the following elements? A Assemble, ship B Design, purchase, manufacture, assemble, ship C Purchase, manufacture, assemble, ship D Manufacture, assemble, ship
B Design, purchase, manufacture, assemble, ship Delivery lead time is the time from the receipt of a customer order to the delivery of the product. Since this is engineer-to-order, the receipt of the order would initiate the design phase.
Which of the following areas in the UN Global Compact contains the principle calling for the elimination of discrimination in respect of employment and occupation? A Human Rights B Labour C Environment D Anti-Corruption
B Labour Principle 6, which is located within the Labour area of the UN Global Compact, calls for the elimination of discrimination in respect of employment and occupation.
In a conventional manufacturing planning and control environment, which of the following objectives often conflict? A Minimize production costs and decrease product variety. B Meet customer service targets and decrease inventory investment. C Minimize production costs and increase the length of production runs. D Meet customer service targets and minimize delivery lead times.
B Meet customer service targets and decrease inventory investment. In order to meet fluctuations in customer needs, you need inventory. However, storing inventory can be costly and inefficient. Therefore, a manufacturing environment will need to balance these two potentially conflicting objectives.
Which type of legal risk refers to the misuse of intellectual property? A Compliance B Patent infringement C Bribery and corruption D Contract
B Patent infringement Trademark or patent infringement refers to the misuse of intellectual property or using a trademark without authorization. It may result in financial and legal damages.
Manufacturing lead time represents the: A time from the receipt of a customer order to the delivery of the product. B total time required to manufacture an item, exclusive of lower-level purchasing lead time. C longest planned length of time to accomplish the activity in question. D total lead time required to obtain a purchased item.
B total time required to manufacture an item, exclusive of lower-level purchasing lead time. Manufacturing lead time represents the total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory. Included are order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time.
An organization had a forecast for June of 125 units but 140 units actually sold. What is the exponential smoothing forecast for July if the alpha smoothing constant is 0.2? A. 137 units B. 128 units C. 130 units D. 53 units
B. 128 units New Forecast = α × Latest Demand + (1 - α) × Previous Forecast = (0.2 × 140) + ((1 - 0.2) × 125) = 128
Which observation about forecast preparation is most accurate? A. Forecasts used at the operational level should be in dollars. B. Circumstances relating to demand data should be recorded. C. Seasonality should never be removed until after forecasting is complete. D. Demand forecasts need to use past sales as their basis.
B. Circumstances relating to demand data should be recorded. Recording circumstances around data is a way of determining if wide variations from the forecast error are attributable to anomalies, which is important in analyzing forecast error. One would never remove seasonality in forecasts used in master production scheduling, but one would in sales and operations planning. Forecasts should be based on demand and not sales, and while forecasts based on monetary units are used in business planning, manufacturing needs forecasts in terms of physical units.
Which basic production planning strategy will build inventory and avoid the costs of excess capacity? A. Product-Based strategy. B. Level Production Strategy C. Chase Strategy D. Demand Matching strategy
B. Level Production Strategy Chase and demand matching strategies are the same, and do not build inventory because they are designed with the capacity and flexibility to match variations in demand over time. Meanwhile, a product-based strategy is not a production strategy. Therefore, level production strategy is the correct answer.
How can the objectives of marketing be met while also considering other stakeholder objectives? A. Marketing and production objectives can be met with lower inventories. B. Marketing and production objectives can be met with higher inventories. C. Marketing and finance objectives can be met with Higher inventories. D. Marketing and finance objectives can be met with lower inventories.
B. Marketing and production objectives can be met with higher inventories. The rationale is Both marketing and production objectives can be met with higher inventories. The other answers are incorrect because high inventory investment that will increase costs is of concern to finance; low inventories do not support marketing or production objectives; and marketing prefers higher inventories.
Two companies offer comparable products with relatively similar quality and pricing, but one company dramatically leads the market due to its after-sales support. This is an example of: A. Order follow-up B. Order winner C. Order survey D. Order qualifier
B. Order Winner. The rationale is After-sales support often separates competitors, when customers know that one company stands behind its products while the other is only interested in the initial sale.
The competitive characteristics that persuade a customer to choose one company's products over those of another company are called: A. Order qualifiers B. Order Winners C. Specifications. D. Low price
B. Order Winners The rationale is Order winners are special product and service attributes desired by the customer that enable companies to beat the competition. A lower price is always welcome, however it is not the only aspect of company choice. Order qualifiers are characteristics a product or service must have to be considered. Specifications are, of course, necessary; however, any supplier or source would have to meet specifications. Order winners are what set one company above its competitors.
Which are primary activities in manufacturing planning and control? A. Sales support, demand management, and purchasing. B. Production planning and inventory management. C. Inventory management and cost information. D. Sales support and cost information.
B. Production planning and inventory management. MPC is a method of determining how to prioritize the use of available resources to best satisfy customer demand. These resources include materials and available equipment and worker capacity. Inventory management and cost information is incorrect because cost information is not an activity (though it is an input to manufacturing planning and control). Sales support is not a major activity of MPC, though sales does provide important data used in MPC.
Which of the following is true of variable costs? A. They are expenses that do not vary with the production volume. B. They are operating costs that vary directly with a change of one unit in the production volume. C. They are increases in the price of a standardized good/service over a specific period of time. D. They are persistently rising general price levels brought about by rising input costs.
B. They are operating costs that vary directly with a change of one unit in the production volume.
The function of recognizing all demands for goods and services to support the marketplace is called: A. demand chain management. B. demand management. C. demand forecasting. D. demand planning.
B. demand management. Demand management is the function of recognizing all demands for goods and services to support the marketplace.
A large organization that maintains manufacturing, distribution, marketing, and retail operations wants to track key performance indicators (KPIs) to measure overall organizational performance. Which tool would be best suited for the desired tracking? A Blockchain B United Nations Global Compact C Balanced scorecard D SCOR model
C Balanced scorecard The balanced scorecard can be used to evaluate organizational or supply chain performance. The SCOR model is tailored specifically to supply chain management, which is part of the organizational processes, but would not give a clear picture of overall performance. The United Nations Global Compact and blockchain are not tools tailored to tracking KPIs.
Which S&OP meeting addresses disagreements from different functional areas regarding the sales and operations plans? A Pre-sales and operations planning meeting B Demand planning meeting C Executive meeting D Supply planning meeting
C Executive meeting The executive meeting is used to address any disagreements that arise during the S&OP process that were not reconciled during previous steps.
Which is a characteristic of the production plan? A It works with families of products. B It cannot be used for order promising or capable-to-promise. C It is a plan that both the production and sales and marketing departments agree to. D It facilitates forecasting.
C It is a plan that both the production and sales and marketing departments agree to. The master production schedule uses the sales and operation planning process as a primary input in the form of the agreed-upon production plan. The APICS Dictionary, 15th edition, states within its definition of master scheduling that "the sum of the master production schedules for the items within the product family must equal the production plan for that family." The MPS is where this agreed-upon plan between the production and sales and marketing departments is put into effect. The other answers are incorrect because forecasts are an input to the MPS; the MPS plans at the end-item level, not the product family level; and the MPS is used for order promising. Note: While the S&OP process does work with families of products, the agreed-to production plan that results from this process is at the specific item level, not product families. The Production Plan quantities for the specific items scheduled should equal the quantities planned at the product family level. That is the only role the families of products plays in developing the production plan, but it is not a characteristic of an actual production plan.
A fashion house has forecasted the next season's colors and styles. Distribution plans have been drawn up that will send the majority of heavier items (e.g., sweaters) to distributors in colder regions, while a larger quantity of t-shirts and lighter fabric garments will be distributed in warmer regions. This is an example of what kind of manufacturing environment? A Engineer-to-order B Assemble-to-order C Make-to-stock D Make-to-order
C Make-to-stock A make-to-stock environment relies on forecasting not only for supply and production but also for distribution, ensuring that appropriate products are distributed to the right locations. An assemble-to-order environment relies on forecasting for supply and component production, but from that point it uses actual orders for assembly and distribution. The point where push becomes pull is then wherever actual orders dictate activity rather than relying on forecasts
An organization is pursuing a product differentiation strategy. Which is a production environment that could accommodate this strategy while also minimizing related inventories of components and/or finished goods? A Decoupling B Cellular layout C Postponement D Make-to-stock
C Postponement Product differentiation as a strategy seeks to create unique product characteristics or selling points that differ from those of competitors. Postponement, a subtype of an assemble-to-order production environment, is a product design or supply chain strategy that deliberately delays final differentiation (assembly, production, packaging, tagging, etc.) until the latest possible time in the process. This shifts product differentiation closer to the consumer to reduce the anticipatory risk, eliminating excess inventory in the form of finished goods in the supply chain. Note that neither decoupling nor cellular layouts are terms that refer to a production environment.
What is the risk posed to an organization by measuring too many key performance indicators (KPIs)? A Oversimplification of performance B Goals not being tracked C Slowed decision making D Slower production times
C Slowed decision making Tracking too many KPIs can complicate tracking and slow decision making down. Measuring KPIs should not affect production times. Goals not being tracked and or oversimplification of performance are risks of tracking too few KPIs.
A manufacturer is unable to meet a customer's demand with their current in-house capacity and strategy. Assuming that there are no secret and minimal proprietary design factors, to which strategy could they turn to meet demand while neither incurring greater inventory costs nor reducing their own capacity? A Redesigning the product B Partnering with a competitor C Subcontracting D Adding overtime shifts
C Subcontracting Subcontracting provides the opportunity to meet demand in excess of capacity without undue changes in capacity or staffing levels. There is no excess inventory cost, because supply should always meet the minimum level of demand. However, purchasing and then reselling products or services to fulfill the remaining demand will tend to result in lower profit margins. There may also be quality issues.
Which of the following statements characterizes a job shop environment? A Work center load is predictable. B Kanban is the most appropriate scheduling method. C Work centers are organized by function. D Routings for all products are the same.
C Work centers are organized by function. In a job shop plant, the different methods and equipment for producing inventory are separated into departments. Production jobs pass serially through each department as detailed in the production order routing. Production is intermittent in a job shop, not predictable. The products in a job shop are often make-to-order with very different routings. Kanban is better fit to a continuous production environment.
A key design factor for today's manufacturers might include taking product back at the end of its life cycle to dispose of properly. This would be an example of: A energy efficiency. B global warming. C sustainability. D anti-corruption.
C sustainability. Sustainability includes activities that provide present benefit without compromising the needs of future generations.
What term is used for an error in which actual demand is consistently above or below the forecast demand? A. Cumulative demand variance B. Forecast error C. Bias D. Random variation
C. Bias Bias is a consistent deviation from the mean in one direction, either high or low.
Sales and operations planning is focused on which of the following objectives? A. Making recommendations to release replenishment orders for material and rescheduling existing orders to align with the master schedule B. Converting the master production schedule into requirements for key resources C. Bringing together all the plans for the business into one integrated set of plans D. Stating what the company plans to produce in terms of specific configurations, quantities, and dates
C. Bringing together all the plans for the business into one integrated set of plans The sales and operations planning process brings together all the plans for the business (sales, marketing, development, manufacturing, sourcing, financial) into one integrated set of plans.
How is a business plan different from a strategic plan? A. Business plan is tactical in nature B. Business plan receives input from the sales and operations plan C. Business plan focuses on the long range financial objectives of a company. D. Business plan is a near-term projection of a company's financials.
C. Business plan focuses on the long range financial objectives of a company. The rationale is A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow. A strategic plan contains the company's vision, mission statement, goals, and objectives.
Which of the following entities or conditions impacts demand by providing expectations that products will be sold at a fair price, that higher quality is required, that delivery lead time is negligible, that before- and after-sales service is available, and that products and their volumes are flexible? A. Sales and Marketing B. Competition C. Customers D. Customs
C. Customers
What sources of demand are considered when performing demand planning? A. Demand from the sales forecast only B. Demand from internal customer orders only C. Demand from all sources D. Demand from external customer orders only
C. Demand from all sources Demand planning is the recognition of demand from all sources, including forecasted demand and actual orders from internal and external customers.
Managing consignment inventory is an essential function in which of the following processes? A. Sales and operations planning (S&OP) B. Capacity management C. Demand management D. Forecasting
C. Demand management Demand management is the function of recognizing and managing all demands for products, including managing consigned inventory in customers' locations.
Demand management includes which of the following activities? A. Taking orders, making delivery promises, shipping orders, and following up to ensure that delivery takes place B. Forecasting, determining safety stock, quoting new orders, and shipping product C. Forecasting, order processing, making delivery promises, and interfacing with the marketplace D. Order processing, making delivery promises, shipping product, and following up to ensure that delivery takes place
C. Forecasting, order processing, making delivery promises, and interfacing with the marketplace Demand management includes forecasting, order processing, making delivery promises, and interfacing with the marketplace.
Which of the following entities or conditions impacts customer demand through regulations in areas such as safety, liability, taxes, or the environment? A. Quality B. Competition C. Government. D. Economy
C. Government. The rationale is Governments establish regulations that can greatly impact market demand for products due to a number of resulting factors.
A manufacturer looks to differentiate itself from competitors by filling custom orders quickly. As a result, it places orders on shorter notice than many competitors. Given that, what is the best way to segment its suppliers? A. Level of innovation B. Customization versus standardization C. Lead times D. Supplier capabilities
C. Lead times Given the short notice for orders, the best segmentation method would be based on lead times.
Which observation about forecasting is most accurate? A. Forecasted historical data equals the actual units shipped in the period. B. Bias is normal and expected in a forecast. C. One should forecast only independent demand items. D. Product family forecasts are built up from individual product forecasts
C. One should forecast only independent demand items Only independent demand items are forecasted, not dependent demand items. In addition, a normal property of a good forecast is that it is not biased; product family forecasts are made first and then individual product forecasts are produced later, rather than the other way around. Forecast historical data should use demand estimates rather than actual units shipped, which is an incomplete way to estimate demand.
Customers' minimum requirements based on price, quality, delivery, and so forth are called: A. Specifications B. Customer-Defined attributes C. Order qualifiers D. Order Winners
C. Order Qualifiers The rationale is Attributes such as price, quality, and delivery are considered in today's world to be qualifiers to compete.
Characteristics that encourage customers to choose one product or service over another are called: A. Customer Preferences B. Order prefences. C. Order Winners D. Order Qualifiers.
C. Order Winners The rational is Order winners are characteristics (e.g., a capability or quality) that cause customers to choose a firm's goods or services over those of its competitors. They can be considered a competitive advantage of the firm.
What is the key output of the sales and operations planning process? A. Material Requirements plan B. Master Schedule C. Production Plan D. Rough-cut Capacity plan
C. Production Plan The production plan is the agreed-upon plan that comes from the sales and operations planning process, specifically the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family (group of products, items, options, features, and so on).
Which is a major objective of materials management? A. Provide cost information for management decisions. B. Provide sufficient equitable employment. C. Provide the required level of customer service. D. Support cost accounting by decreasing inventory turns.
C. Provide the required level of customer service. The rationale is The two primary objectives of materials management are to provide the desired level of customer service and to make the best use of company resources. The other answers are incorrect because, although materials management may result in employment, it is not a primary objective; materials management would rather increase, not decrease, inventory turns; and cost information is an output of production reporting, not an objective of materials management.
Which of the following terms pertains to the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally? A. Strategic Planning B. Supplier relationship Management. C. Supply Chain management D. Supplier Partnership
C. Supply Chain Management. The rationale is supply chain management is the management process that oversees all of the stated activities related to supply chain.
A lawn tractor manufacturer is determining how to market a new line of commercial mowers. What should the company consider when looking at the product marketing tool in the four Ps? A. Where the mower should be sold and at what lead times. B. Sales incentives for salespersons and retailers. C. The mower attributes that will result in order qualifiers and winners. D. The break-even point, above which the company will turn a profit.
C. The mower attributes that will result in order qualifiers and winners. The attributes of the mower that will result in order qualifiers and winners describes the product tool of the four Ps. The break-even point refers to the price tool of the four Ps. The sales locations and lead times refer to the place tool. Sales incentives for salespersons and retailers refer to the promotion tool.
Which channel of distribution is concerned with the transfer of ownership, specifically negotiation, selling, and contracting? A. Transportation B. Logistics. C. Transactions. D. Distribution
C. Transactions. The transaction channel is concerned with the transfer of ownership including the activities of negotiation, selling, and contracting.
The shared perception of the organization's future, or what the organization will achieve, is known as its: A. Sales and operations plan B. Strategic plan C. Vision D. Mission
C. Vision The rationale is An organization's vision describes the organization as it would appear in a future successful state. The strategic plan defines which actions will be taken by an organization to support its mission and achieve its goals. The mission statement is a short statement of why an organization exists (i.e., it outlines the organization's purpose for existing). Sales and operations planning is related to an organization's ability to match its supply with demand.
A company is debating whether to add production capacity or outsource the additional volume. The process they must go through is called a: A. core competency evaluation. B. capital expenditure request. C. make-or buy decision. D. total cost decision.
C. make-or buy decision. A make-or buy decision is the act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
