BUS 140 Final

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors is an example of backward integration. True False

False

A sequence of kanbans pushes material through the manufacturing process. True False

False

ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used. True False

False

Customer demand will always remain an unknown, so it is not considered a source of variability. True False

False

Due to the risks involved, subcontracting is not an adjustable element of capacity in developing aggregate plans. True False

False

In the production order quantity (POQ) model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a larger production/order quantity than in an otherwise identical EOQ problem. True False

False

In the simple EOQ model, if the carrying cost (= holding cost) were to double, the EOQ would also double. True False

False

Process-oriented layouts typically have low levels of work-in-process inventory. True False

False

Safety stock in inventory systems depends only on the average demand during the lead time. True False

False

The biggest advantage of a product layout is its flexibility to handle a varied product mix. True False

False

The dominant problem associated with the fixed-position layout is that workers are fixed in position, and they cannot be reassigned. True False

False

The number of kanbans decreases as safety stock is increased. True False

False

The supply chain management technique to designate one member to monitor and manage inventory is called VMI (Vendor managed inventory). True False

False

When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply. True False

False

Work-in-process inventory is devoted to maintenance, repair, and operating materials. True False

False

Workforce levels are always held constant while developing aggregate plans. True False

False

The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating. True False

True

The product-oriented layout's main objective is to equalize the task time for each station. True False

True

The service level is the probability that demand will not be greater than supply during lead time; it is the complement of the probability of a stockout. True False

True

The strategies of aggregate planning are broadly divided into demand options and capacity options. True False

True

Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate. True False

True

When the service level increases, the cost of safety stock increases. True False

True

Work cell layout refers to a special arrangement of machinery and equipment to focus on production of a single product or group of related products. True False

True

Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers. True False

True

Product storage is an example of waste in the sense that no value is added. True False

True

Reducing setup costs reduces lot size and reduces average inventory. True False

True

Retail inventory that is unaccounted for between receipt and time of sale is known as shrinkage. True False

True

Servicescape refers to the physical surrounding in which the service is delivered. True Fals

True

The 5Ss—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self-discipline—are important to lean production because they act as a means to reduce waste. True False

True

The concept of customizing in a warehouse layout incorporates value-added activities in warehouses. True False

True

A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities totaling 16 minutes of work. The factory operates 750 minutes per day. What is the required cycle time for this assembly line? 1.5 minutes 4.26 minutes 5,500 minutes 0.5 minutes 2 minutes

1.5 minutes

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? daily demand = 400 per day (250 days per year), daily production = 4000 units per day, H = $40 per unit per year, and Q = 200 $25.20 $15.60 Correct! $7.20 $18.00 $3.60

Correct! $7.20

A bakery uses 5 kanban containers that each holds 3 cakes. Daily demand is 10 cakes and safety stock is 5 cakes. What is the lead time? 1/2 day 8 days 3 days Correct! 1 day 5 days

Correct! 1 day

A certain type of computer costs $1,000, and the annual holding cost is 20% of the value of the item. Annual demand is 1,000 units, and the order cost is $40 per order. What is the economic order quantity? 10 36 Correct! 20 8 16

Correct! 20

A work cell is scheduled to build 120 digital light processor (DLP) assemblies each week. These assemblies are later installed into home theater projection systems. The work cell has 7.5 hours of productive work each day, six days per week. What is takt time for this cell? 18.6 minutes 36.2 minutes 30 minutes Correct! 22.5 minutes 12 minutes

Correct! 22.5 minutes

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be (rounded to the closest integer) ? (Z-value of the normal distribution is 1.65) 21 30 55 15 Correct! 37

Correct! 37

The following data are pulled from a recent Walsh Manufacturing annual report. Assets Raw material inventory $120,000 Work-in-process inventory $50,0005 Finished goods inventory $300,000 Property, plant & equipment $500,000 Other assets $200,000 Total assets $1,170,000 Condensed Income Statement Revenue $2,000,000 Cost of goods sold $600,000 Other expenses $1,000,000 Net income $400,000 What is inventory percentage? (Percent invested in inventory) 46.0% 20.5% Correct! 40.2% 25.7% 32.8%

Correct! 40.2%

In the example above in Question#5, what is Weeks of supply? 32.7 Correct! 40.7 25.6 16 35.5

Correct! 40.7

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 600 units. What is the maximum inventory for this problem? 430 300 Correct! 480 360 550

Correct! 480

Lead time for cakes is 2 days with daily demand of 10 cakes and a safety stock of ½ a day. Each container (kanban) holds 5 cakes. What is the correct number of kanbans? 25 Correct! 5 1 4 10

Correct! 5

The assumptions of the production order quantity model are met in a situation where annual demand is 50,000 units, setup cost is $20, holding cost is $10 per unit per year, the daily demand rate is 20 and the daily production rate is 100. What is the production order quantity for this problem? 800 250 25 400 Correct! 500

Correct! 500

An assembly line is assigned as follows. Station 1- task A, B, and C. Station 2- task D. Station 3- task E and F. The task times are 7, 3, 2, 9, 4, and 5 minutes respective to A, B, C, D, E, and F. Calculate the efficiency. (Assume that there is no precedence relationships between the tasks, i.e. they can be performed in any order 76.7% Correct! 83.3% 80.5% 65.5% 92.0%

Correct! 83.3%

Which one of the following scenarios represents the use of a kanban to reduce inventories? A supervisor tells the operators to stay busy and start producing parts for next month. Correct! A "customer" work center signals to the "supplier" workstation that more parts are needed. A "supplier" work center signals the downstream workstation that a batch has been completed. An operator asks the next station's operator to help him fix his machine. A supervisor signals to several work centers that the production rate should be changed.

Correct! A "customer" work center signals to the "supplier" workstation that more parts are needed.

All EXCEPT which of the following statements about ABC analysis are true? ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume. ABC analysis suggests that there are the critical few and the trivial many inventory items. In ABC analysis, inventory may be categorized by measures other than dollar volume. ABC analysis is an application of the Pareto principle. Correct! ABC analysis suggests that all items require the same high degree of control.

Correct! ABC analysis suggests that all items require the same high degree of control.

Which of the following statements regarding the reorder point is TRUE? A shorter lead time implies a smaller reorder point. The reorder point is larger than d × L if safety stock is present. The reorder point is that quantity that triggers an action to restock an item. Correct! All choices are true. There is a reorder point even if lead time and demand during lead time are constant.

Correct! All choices are true.

A manufacturer took the following actions to reduce inventory. Which of these is generally NOT accepted as a JIT action? Correct! It picked the supplier that offered the lowest price based on quantity discounts. It required deliveries directly to the point of use. It worked to reduce the company's in-transit inventory. It produced in ever smaller lots. It used a pull system to move inventory.

Correct! It picked the supplier that offered the lowest price based on quantity discounts.

Which of the followings regarding the production order quantity model is TRUE? Correct! It relaxes the assumption that all the order quantity is received at one time. It applies only to items produced in the firm's own production departments. It relaxes the assumption that the demand rate is constant. It minimizes the total production costs. It minimizes inventory.

Correct! It relaxes the assumption that all the order quantity is received at one time.

Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? Correct! Lean operations Toyota Production System (TPS) Just-in-time (JIT) Material requirements planning (MRP) kanban

Correct! Lean operations

Which of the following statements regarding a pull system is TRUE? Manufacturing cycle time is increased. Work is pulled to the downstream stations before it is actually needed. None of these choices. Large lots are pulled from upstream stations. Correct! Problems become more obvious.

Correct! Problems become more obvious.

If a factory wants to cut its current lot size in half, by what proportion must setup cost change? Setup cost must quadruple from its current value. Correct! Setup cost must be cut to one fourth its current value. Setup cost must double from its current value. Cannot be determined. Setup cost must also be cut in half from its current value.

Correct! Setup cost must be cut to one fourth its current value.

Which of the following is NOT a source of variability? Correct! Suppliers deliver units conforming to standards. Drawings or specifications are incomplete. Customer demand is unknown. Engineering drawings are inaccurate. Employees, machines, and suppliers produce units late.

Correct! Suppliers deliver units conforming to standards.

What is the primary reason why retailers tend to locate high-draw items around the periphery of the store? More shelf space for those popular items is available around the periphery. Correct! This arrangement will help to maximize customer exposure to other items in the store. It is easier to put large advertisement signs on the outside walls right next to the items. There will be less congestion of customers than there would be in the middle. This arrangement allows customers to travel through the store as quickly as possible.

Correct! This arrangement will help to maximize customer exposure to other items in the store.

The fixed-position layout would be MOST appropriate in which of the following settings? a casual dining restaurant a fast-food restaurant a washing machine assembly line a doctor's office Correct! a cruise ship assembly facility

Correct! a cruise ship assembly facility

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months? strategic planning job scheduling material requirements planning Correct! aggregate planning enterprise resource planning

Correct! aggregate planning

Revenue management is MOST likely to be used in which one of the following situations? a fast-food restaurant with wide demand fluctuations during the day a shipping company that can change its fleet size easily a firm with a good counterseasonal product mix a dental clinic that wants to fill its appointment book Correct! an airline attempting to fill "perishable" seats at maximum revenue

Correct! an airline attempting to fill "perishable" seats at maximum revenue

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? Correct! backward integration forward integration current transformation job expansion horizontal integration

Correct! backward integration

Which of the following reduces product handling, inventory, and facility costs, but requires both (1) tight scheduling and (2) accurate inbound product information? phantom-docking Correct! cross-docking ASRS customizing random stocking

Correct! cross-docking

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing which of the following? channel assembly passing the buck Correct! drop shipping postponement float reduction

Correct! drop shipping

An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following? overtime work inventory levels production rates labor levels Correct! facility capacity

Correct! facility capacity

The concept of customizing in a warehouse layout: is possible, but it causes serious loss of oversight of the quality function. is theoretically sound, but several years away in practice. cannot be considered seriously in today's high efficiency factories. Correct! incorporates value-added activities in warehouses. locates stock wherever there is an open location.

Correct! incorporates value-added activities in warehouses.

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period), it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that: level production is approximately 1000 units per day. the January requirement is below level production of 420 units. level production is approximately 420 units per month. the firm must hire workers between December and January. Correct! level production of 420 units per day is below the January requirement.

Correct! level production of 420 units per day is below the January requirement.

The central problem in product-oriented layout planning is: maximizing equipment utilization. minimizing material handling within workstations. minimizing labor movement between workstations. equalizing the space allocated to the different workstations. Correct! minimizing the imbalance in the workloads among workstations.

Correct! minimizing the imbalance in the workloads among workstations.

Which one of the following is a characteristic of a JIT partnership? active pursuit of vertical integration third-party logistics never used maximal product specifications imposed on supplier Correct! removal of incoming inspection frequent deliveries in large lot quantities

Correct! removal of incoming inspection

Which of the following is NOT one of the four main types of inventory? Correct! safety stock inventory maintenance/repair/operating supply inventory work-in-process inventory raw material inventory finished-goods inventory

Correct! safety stock inventory

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following? vendor-managed inventory postponement CPFR double marginalization Correct! the bullwhip effect

Correct! the bullwhip effect

A disadvantage of the "few suppliers" sourcing strategy is: the lack of cost savings for customers and suppliers. Correct! the high cost of changing partners. possible violations of the Sherman Antitrust Act. the risk of not being ready for technological change. the suppliers are less likely to understand the broad objectives of the procuring firm and the end

Correct! the high cost of changing partners.

Which of the following would NOT generally be a motive for a firm to hold inventories? to hedge against inflation to take advantage of quantity discounts Correct! to minimize holding costs to decouple various parts of the production process to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand

Correct! to minimize holding costs

A manufacturer that acquires one of its key product distributors would be practicing forward integration. True False

True

A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes a work cell layout type. True False

True

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months. True False

True

Cross-docking processes items as they are received, rather than placing them in storage. True False

True

Hidden problems are generally uncovered during the process of reducing inventory. True False

True

In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification. True False

True

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal to annual carrying costs. True False

True

Lean Operations specifically focuses on the elimination of waste through a focus on exactly what the customer wants. True False

True

Many Suppliers sourcing strategy is particularly common when the products being sourced are commodities. True False

True

One guideline for a retail layout is to locate high-draw items around the periphery of the store. True False

True

One of the major advantages of process-oriented layouts is: small work-in-process inventories. high equipment utilization. large work-in-process inventories. Correct! flexibility in equipment and labor assignment. smooth and continuous flow of work.

flexibility in equipment and labor assignment.