ISDS FINAL
12. ABC analysis divides on-hand inventory into three classes, generally based upon which of the following? A. annual dollar volume B. the number of units on hand C. unit price D. item quality E. annual demand
A
12. ABC analysis is based upon the principle that: A. there are usually a few critical items, and many items that are less critical. B. an item is critical if its usage is high. C. all items in inventory must be monitored very closely. D. more time should be spent on class "C" items because there are many more of them. E. as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items.
A
18. JIT makes quality cheaper because: A. JIT prevents long runs of defects. B. JIT adds more buffers to the system. C. the cost of low quality can be hidden in inventory. D. B and C E. A, B and C
A
20. How can a reduction of in-transit inventory be encouraged? A. supplier location near plants B. use of trains, not trucks C. low-cost, global suppliers D. high setup costs E. low carrying costs
A
21. What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. blanket order B. drop shipping C. postponement D. advanced shipping notice
A
21. What is the term of shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs? A. Drop shipping B. Postponement C. Vendor-managed inventory D. Direct shipping
A
22. The advantage of having many potential suppliers is their willingness to A. offer lower prices in the short term. B. participate in JIT. C. provide technical expertise. D. provide innovations.
A
A bill of materials for a menu item in a restaurant is also called a A. product specification. B. food bill. C. bill of ingredients. D. recipe.
A
A fast food restaurant is an example of A. low customization and low degree of labor. B. high customization and low degree of labor. C. high customization and high degree of labor. D. low customization and high degree of labor.
A
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A. planning bill B. phantom bill C. modular bill D. component bill E. low-level bill
A
A single-period inventory model is NOT applicable for A. furniture. B. seasonal goods. C. newspapers. D. milk.
A
A system that keeps track of each withdrawal or addition to inventory continuously is A. a perpetual inventory system. B. a continuous inventory system. C. a constant monitoring system. D. a fixed period system.
A
A system that triggers ordering on a uniform time basis is called A. a fixed-period system. B. a fixed-quantity system. C. an EOQ system. D. a reorder point system.
A
One use of inventory is A. to provide a hedge against inflation. B. to tightly synchronize a firm's production with its customers' demand. C. to ensure that item cost is maximized. D. to tightly synchronize production and distribution processes.
A
Supply chain management systems in the grocery industry that tie sales to buying, to inventory, to logistics, and to production are called A. efficient consumer response. B. enterprise resource planning. C. grocery resource planning. D. distribution resource planning.
A
What company has used process flexibility to allow it to become the industry leader at responding to market dynamics by modifying production volume and product mix? A. Honda B. Walmart C. Harley Davidson D. Toyota
A
What does EMV stand for? A. expected monetary value B. expected maintenance volume C. expected machine valuation D. enterprise management valuation
A
What is a concept that results in material being produced only when requested and moved to where it is needed just as it is needed? A. pull system B. requisition system C. push system D. procrastination system
A
What is the act of breaking up an order and running part of it ahead of schedule? A. lot splitting B. operations splitting C. overlapping D. pegging
A
What is transferring a firm's activities that have traditionally been internal to external suppliers? A. outsourcing B. vertical integration C. make-or-buy D. keiretsu network
A
What sends a lot to two different machines for the same operation? A. operations splitting B. pegging C. lot splitting D. overlapping
A
What type of negotiation strategy requires the supplier to open its books to the purchasers? A. Cost-based price model B. Competitive bidding C. Market-based price model
A
Which negotiation strategy bases price on a published, auction, or index price? A. market-based price model B. competitive bidding C. supply-based price model D. cost-based price model
A
Which of the following approaches may use subcontracting to accommodate excess demand? A. following demand with incremental expansion B. leading demand with a one-step expansion C. leading demand with incremental expansion D. Subcontracting should never be used to accommodate excess demand.
A
Which of the following best describes a gross material requirements plan? A. A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start. B. A schedule showing which products are to be manufactured and in what quantities. C. An intermediate-range plan for the scheduling of families of products.
A
Which of the following does NOT belong to ordering costs? A. interest payments B. cost of supplies C. clerical support D. order processing
A
Which of the following is NOT a type of inventory? A. MRP B. raw material C. work-in-process D. finished goods
A
Which of the following is NOT an example of technology's impact on the financial services industry? A. RFID B. electronic funds transfer C. debit cards D. Internet stock trading
A
Which of the following is NOT one of the assumptions of fixed-period systems? A. Lead times are variable. B. The only relevant costs are the ordering and holding costs. C. Items are independent of one another. D. Lead times are known.
A
Which of the following is NOT one of the principles for standard work practice at Toyota? A. Improvements in the system must be made in accordance with the "scientific method," at the highest possible level in the organization. B. Material and service flows are to be simple and direct. C. Work is completely specified as to content, sequence, timing, and outcome. D. Internal and external customer-supplier connections are direct, specifying personnel, methods, timing, and quantity.
A
Which of the following is NOT one of the three components of the Toyota Production System? A. six sigma B. standard work practice C. continuous improvement D. respect for people
A
Which of the following is NOT true about MRP limitations? A. MRP does not tell you that a job needs to be completed on a certain week or day. B. MRP is an excellent tool for product-focused and repetitive facilities, but it has limitations in process (make-to-order) environments. C. MRP does not do detailed scheduling. D. MRP is considered an infinite scheduling technique.
A
Which of the following is not a strategy for improving service productivity? A. Mass customization B. Automation C. Scheduling
A
Which of the following is not an attribute of lean operations? A. Pushing responsibility to the highest level through centralized decision making B. Educating suppliers to accept responsibility for helping meet customer needs C. Eliminating almost all inventory through utilization of JIT
A
Which of the following statements is NOT true about the EOQ? A. The EOQ is preferable when dependent demand exists. B. The EOQ can be used as a lot-sizing technique for MRP systems. C. The EOQ is a statistical technique using averages, whereas the MRP procedure assumes known demand reflected in a master production schedule. D. The EOQ can be a reasonable lot-sizing technique when demand is relatively constant and independent.
A
Which of the following statements is NOT true regarding the process analysis tools? A. Time-function mapping extends value-stream mapping to include suppliers. B. Process mapping is another name for time-function mapping. C. Service blueprinting is designed to help focus on the customer interaction part of the process. D. A process chart is different than a flowchart.
A
Which of the following statements is NOT true? A. Adding flexibility to the production process can be a major competitive advantage. Building flexibility into a production process is usually inexpensive, but difficult. B. The selection of equipment requires considering cost, cash flow, market stability, quality, capacity, and flexibility. C. Selecting the best equipment requires understanding the specific industry and available processes and technology. D. Selection of a particular process strategy requires decisions about equipment and technology.
A
Which of the following statements regarding MRP in services is true? A. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. B. MRP does not work well in services because there is little (or no) dependent demand. C. MRP can be used in services, but only for those that offer little customization.
A
Which of the following types of inventory describes inventory that has been purchased but not processed? A. raw material inventory B. finished-goods inventory C. work-in-process inventory D. maintenance/repair/operating supply inventory
A
Which of the quadrants in the service process matrix has low labor intensity and low customization? A. service factory B. service shop C. mass service D. professional service
A
Which one of the following is not a layout tactic in a Lean environment? A. Fixed equipment B. Minimizing distance C. Work cells for families of products
A
Which one of the following is not a supply-chain strategy? A. Short-term relationship with few suppliers B. Vertical integration C. Negotiation with many suppliers
A
Which one of the following statements is TRUE regarding JIT inventory? A. It is the minimum inventory necessary to keep a perfect system running. B. It is minimized with large lot production. C. It hides variability. D. It exists just in case something goes wrong. E. It increases if setup costs decrease.
A
Which organization has developed principles and standards to be used as guidelines for ethical behavior? A. Institute for Supply Management B. Institute for Purchasing Management C. Institute for Vendor Management D. Institute for Procurement Management
A
13. The two most basic inventory questions answered by the typical inventory model are: A. order quantity and cost of orders. B. timing of orders and order quantity. C. ordering cost and carrying cost. D. timing of orders and cost of orders. E. order quantity and service level.
B
15. What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? A. closed loop system B. time fences C. modular bills D. lot sizing E. time phasing
B
18. Which of the following is FALSE regarding the links between JIT and quality? A. JIT reduces the number of potential sources of error by shrinking queues and lead times. B. JIT increases the cost of obtaining good quality. C. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. D. Inventory hides bad quality, JIT immediately exposes it. E. As quality improves, fewer inventory buffers are needed, in turn, JIT performs better.
B
19. Which of the following is not a goal of JIT partnerships? A. removal of in-plant inventory B. inspect all incoming shipments to ensure zero defects C. removal of in-transit inventory D. removal of unnecessary activities E. All of the above are goals of JIT partnerships.
B
21. What is the term of shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs? A. Vendor-managed inventory B. Drop shipping C. Postponement D. Direct shipping
B
26. One of the similarities between product focus and mass-customization is: A. the use of modules. B. the volume of outputs. C. many departments and many routings. D. the variety of outputs. E. All of the above are similarities.
B
26. Which of the following products is likely to be assembled on a repetitive process line? A. beer B. automobiles C. steel D. custom personal computers E. custom cakes
B
29. Utilization will typically be lower than efficiency because: A. expected output is less than rated capacity. B. effective capacity is less than design capacity. C. expected output is less than actual output. D. effective capacity is greater than design capacity. E. effective capacity equals design capacity.
B
30. Adding a complementary product to what is currently being produced is a demand management strategy used when: A. efficiency exceeds 100 percent. B. the existing product has seasonal or cyclical demand. C. capacity exceeds demand for a product that has stable demand. D. price increases have failed to bring about demand management. E. demand exceeds capacity.
B
A paint company mixes ten different base colors into 3,000 different color options. If the MPS is organized around the ten different base colors, their bills of material are classified as: A. planning B. modular C. Phantom
B
ABC analysis divides an organization's on-hand inventory into three classes based upon A. unit price. B. annual dollar volume. C. the number of units on hand. D. annual demand.
B
Airfreight A. is the best way to transport natural gas. B. is a fast-growing mode of shipping. C. is the oldest means of freight transportation. D. represents about 10% of the tonnage shipped in the United States.
B
Capacity planning in closed-loop MRP does not do which of the following? A. Smooth work center loads B. Adds in additional capacity C. Utilize feedback about workload
B
Effective use of MRP and other dependent demand models does not require which of the following? A. Bill of materials B. Cost of individual components C. Lead times
B
High-volume, low-variety production is best suited for which of the following process strategies? A. process focus B. product focus C. mass customization D. repetitive focus
B
If a load report (resource requirements profile) shows a work center scheduled beyond capacity, then __________. A. the company must add capacity by enlarging the facility B. the work center's load may be smoothed C. the aggregate plan must be revised
B
In many applications, human quality inspectors can be replaced effectively by A. RFID tags. B. vision systems. C. automated storage and retrieval systems. D. FMS.
B
Maximizing local profit or minimizing cost in a supply chain is best described as __________. A. incentives B. local optimization C. the bullwhip effect
B
One fundamental difference between a process chart and a process map is that __________. A. the process chart includes the supply chain, while the process map stays within an organization B. the process chart uses symbols, time, and distance, while the process map is more like a schematic diagram C. the process chart uses a time dimension, while a process map is not time oriented
B
Policies based on ABC analysis might include investing A. the most time and effort verifying the accuracy of records for B items. B. more in supplier development for A items. C. extra care in forecasting for C items. D. more in inventory security for C items.
B
Prior to embarking on supply chain design, operations managers must first consider A. how to select suppliers. B. "make-or-buy" and outsourcing decisions. C. what kind of distribution network to have. D. how to manage supply chain inventory.
B
Strategies for improving productivity in services include __________. A. reduce inventory, reduce waste, reduce rework, reduce material costs B. separation, self-service, automation, and scheduling C. high interaction, mass customization, just-in-time processing, lean production
B
Supply chain managers outsource logistics to meet three goals: A. drive down inventory investment, lower delivery costs, and provide better market response. B. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed. C. lower delivery costs, improve delivery reliability and speed, and provide better market response. D. drive down inventory investment, improve delivery reliability and speed, and provide better market response.
B
The Japanese call the practice of stopping production when a defect occurs A. kaizen. B. jidoka. C. poka-yoke. D. kanban.
B
The __________ is the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. A. bill of material B. master production schedule C. purchase order
B
The approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________. A. few suppliers B. many suppliers C. Keiretsu
B
The most aggressive and risky approach to capacity planning is A. attempts to have an average capacity that straddles demand with incremental expansion. B. leading demand with one-step expansion. C. leading demand with incremental expansion. D. lagging demand with incremental expansion.
B
The objective of inventory management is to A. decouple various parts of the production process. B. strike a balance between inventory investment and customer service. C. take advantage of quantity discounts. D. provide a selection of goods for anticipated customer demand.
B
The technique known as level schedules: A. is based on meeting one week's demand. B. processes many small batches rather than one large batch. C. allows for variance in scheduling between batches.
B
Trucking A. does not play a role in multimodal shipping. B. is increasingly using computers to manage its operations. C. is the least used transportation mode for manufacturing goods. D. is one of the least flexible transportation modes.
B
Virtually every restaurant deals with its suppliers on A. an EOQ basis. B. a JIT basis. C. a production order quantity basis. D. a fixed-period inventory system basis.
B
What is a drawing of the movement of material, product or people? A. AIS B. flowchart C. RFID D. process chart
B
What is an electronically guided and controlled cart used to move materials? A. CNC B. AGV C. AIS D. RFID
B
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. virtual companies B. vertical integration C. horizontal integration D. outsourcing
B
What provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times? A. system nervousness B. closed-loop MRP system C. MRP II D. lot sizing
B
When determining the optimal number of facilities, logistics-related costs do NOT usually include which of the following costs? A. transportation B. purchasing C. inventory D. facility
B
Which of the following approaches makes new capacity a larger increase at the beginning of the period? A. leading demand with incremental expansion B. leading demand with a one-step expansion C. lagging demand with incremental expansion D. attempts to have an average capacity that straddles demand with incremental expansion
B
Which of the following industries is most likely to have low equipment utilization? A. steel manufacturing B. restaurants C. commercial baking D. auto manufacturing E. television manufacturing
B
Which of the following is NOT one of the benefits accrued from a centralized purchasing function? A. Leverage purchase volume for better pricing. B. Increase the duplication of tasks. C. Maintain professional control over the purchasing process. D. Devote more resources to the supplier selection and negotiation process.
B
Which of the following is an advantage of ERP? A. Data fields do not have to be defined identically across the entire enterprise. B. It creates commonality of databases. C. It is simple enough that companies have an easy time adjusting to it. D. It is very inexpensive to purchase.
B
Which of the following is not a key benefit of MRP? A. Faster response to market changes B. Quality increases C. Improved response to customers
B
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. Lean Operations B. Toyota Production System C. Just-in-Time
B
Which of the following lot-sizing techniques results in the lowest holding costs? A. EOQ B. lot-for-lot C. POQ D. the quantity discount model E. Wagner-Whitin algorithm
B
Which of the following mitigation tactics is NOT designed to reduce the risk of information loss or distortion? A. training of supply chain partners on the proper interpretations and use of information B. alternate sourcing C. redundant databases D. secure IT systems
B
Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities? A. increased customer satisfaction B. decreased total logistics cost C. quicker response D. increased facility costs
B
Which of the following statements is NOT true about MRP? A. MRP uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements. B. MRP is an independent demand technique used in a production environment. C. MRP provides a clean structure for dependent demand. D. MRP has evolved as the basis for Enterprise Resource Planning.
B
Which of the following statements is NOT true regarding production technologies? A. Vision systems combine video cameras and computer technology and are often used in inspection roles. B. Flexible manufacturing systems and computer-integrated manufacturing are increasing the distinction between low-volume/high-variety and high-volume/low-variety production. C. CNC is machinery with its own computer and memory. D. Robots are mechanical devices that use electronic impulses to activate motors and switches.
B
Which of the following statements is NOT true regarding the bullwhip effect? A. Inaccurate information results in distortions and fluctuations, causing what is known as the bullwhip effect. B. The bullwhip effect occurs as order are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence. C. Bullwhip fluctuations in the supply chain increase the costs associated with inventory, transportation, shipping and receiving. D. Bullwhip fluctuations in the supply chain decrease customer service and profitability.
B
Which of the following statements is NOT true? A. A closed-loop supply chain prepares for returns prior to product introduction. B. A closed-loop supply chain is a designed to optimize only reverse flows. C. Reverse logistics involves the processes of sending returned products back up the supply chain for resale, repair, reuse, remanufacture, recycling, or disposal. D. "Closed-loop supply chain" is sometimes used as a synonym for "reverse logistics."
B
Which of the following statements is NOT true? A. Demand for items is dependent when the relationship between the items can be determined. B. For any product, some components of that product are independent demand items. C. For any product for which a schedule can be established, dependent techniques should be used. D. Less inventory frees up capital and floor space for other uses.
B
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing enhances technological skills. B. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. C. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. D. Cross-sourcing describes suppliers who become part of a company coalition.
B
Which of the following statements regarding the gross material requirements plan is false? A. It shows when an item must be ordered or when production must be started B. It includes inventory on hand C. It combines a master production schedule with the time-phased schedule
B
Which of the following words means continuous improvement in Japanese? A. poka-yoke B. kaizen C. sensei D. Kanban
B
Which one of the following is a concern expressed by suppliers who are in partnership with JIT organizations? A. Having too many customers B. Having limited ability to respond to changes in product and quality C. Large lot sizes
B
With regard to the cost-based price model negotiation strategy, which of the following is true? A. Potential suppliers each submit quotations as to price, delivery, and so on. B. Prices are based upon supplier costs. C. Prices float based on what the customer is willing to pay. D. Prices are based in some way upon market standards agreed to by both supplier and purchaser.
B
11. A firm's probability of a stockout for a popular item is 2%. Given this information, what is its service level for this popular item? A. 4% B. 2% C. 98% D. 96%
C
13. Which of the following statements regarding the production order quantity model is TRUE? A. It minimizes inventory. B. It applies only to items produced in the firm's own production departments. C. It relaxes the assumption that all the order quantity is received at one time. D. It minimizes the total production costs. E. It relaxes the assumption that the demand rate is constant.
C
18. Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A. distant relationships with skepticism B. distant relationships with trust C. close relationships with trust D. close relationships with skepticism E. none of the above
C
22. Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. horizontal integration B. virtual companies C. keiretsu networks D. joint ventures
C
23. Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing describes suppliers who become part of a company coalition. B. Cross-sourcing enhances technological skills. C. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. D. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor.
C
24. Which of the following industries has the highest supply chain cost as a percentage of sales? A. automobile B. restaurants C. petroleum D. metals
C
24. Which of the following statements is NOT one of the response strategy decisions? A. low setup time B. fast transportation C. gather and communicate market research data D. use buffer stocks to ensure speedy supply
C
27. Product-focused processes: A. allow more customization, but are not very efficient. B. are profitable because customers demand flexibility, not specialization. C. tend to have long, continuous production runs. D. apply only to service firms, not to manufacturers. E. are processes that accommodate a variety of products or customer groups.
C
A job shop is an example of __________. A. a specialized process B. a repetitive process C. an intermittent process
C
A supply chain ends with A. suppliers. B. distributors. C. a satisfied customer. D. manufacturers.
C
A system that triggers ordering on a uniform time basis is called a _______. A. a fixed-quantity system B. a reorder point system C. a fixed-period system
C
A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called __________. A. an AGV system B. a computer numeric control system C. a flexible manufacturing system
C
Airfreight A. is the oldest means of freight transportation. B. represents about 10% of the tonnage shipped in the United States. C. is a fast-growing mode of shipping. D. is the best way to transport natural gas.
C
Characteristics of JIT partnerships with respect to suppliers include: A. frequent competitive bidding. B. pursuit of vertical integration to reduce number of suppliers. C. supporting suppliers so they become or remain price competitive.
C
Cycle counting __________. A. assumes that the most frequently used item must be counted more frequently B. provides a measure of inventory turnover C. is a process by which inventory records are verified for accuracy
C
Distortion in MRP systems can be minimized when safety stock is held at the __________. A. work-in-process level B. any inventory point C. raw material level
C
Firms making many different final products use __________ to facilitate production scheduling. A. planning bills B. phantom bills C. modular bills
C
How do pharmacies implement lean operations to ensure that customers will always receive their medications upon demand? A. They hold a large amount of safety stock for all of their drugs. B. They locate no further than 10 miles away from their suppliers. C. They develop community networks as backup systems. D. They pay a premium for 60-minute delivery from their suppliers.
C
How has McDonald's driven seconds out of the production process to be able to produce made-to-order hamburgers in 45 seconds? A. It changed its core management philosophy. B. It altered its order-entry procedures. C. It reconfigured its kitchen layout. D. It invented a stove that can cook hamburger meat in 22 seconds.
C
In manufacturing, excess capacity can be used to A. do fewer setups, shorten production runs, and drive down inventory costs. B. do more setups, lengthen production runs, and drive down inventory costs. C. do more setups, shorten production runs, and drive down inventory costs. D. do fewer setups, lengthen production runs, and drive down inventory costs.
C
In the mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except __________. A. standardization B. automation C. Customization
C
Inventory reduction via JIT is an effective tool for identifying A. setup costs. B. inefficiencies in warehouse layout. C. causes of variability. D. holding costs.
C
The 5Ss developed by the Japanese do NOT include A. standardize. B. sort/segregate. C. safety. D. simplify/straighten.
C
The difference between the basic Economic Order Quantity (EOQ) model and the production order quantity model is that _______. A. the economic order quantity model does not require the assumption of known, constant lead time B. the production order quantity model does not require the assumption of a known, constant demand C. the production order quantity model does not require the assumption of instantaneous delivery
C
The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. This scenario is a prime example of A. the bullwhip effect. B. drop shipping. C. postponement. D. vendor-managed inventory.
C
The list of the 5Ss supports lean production by __________. A. reducing inventory, in the "standardize" item B. increasing variability through standardization, in the "standardize" item C. identifying non-value items and removing them, in the "sort/segregate" item
C
The operations manager has two important tools available to deal with MRP system nervousness. Those tools are A. buckets with back flush. B. net and gross requirements. C. time fences and pegging. D. pseudo bills and kits.
C
The production order quantity model _______. A. results in larger average inventory than an equivalent EOQ model B. assumes instantaneous delivery C. is appropriate when units are produced and sold simultaneously
C
The trucking industry is establishing technologies, which let shippers and truckers find each other in order to ________. A. find the most efficient routes B. regulate pricing C. improve logistics efficiency
C
What is a flowchart with time added on the horizontal axis? A. CNC B. service blueprinting C. process mapping D. process chart
C
What is a lot-sizing technique that orders the quantity needed during a predetermined time between orders? A. part period balancing B. EOQ C. POQ D. Wagner-Whitin
C
What is a supply chain designed to optimize both forward and reverse flows? A. open-loop supply chain B. reverse-loop supply chain C. closed-loop supply chain D. bullwhip-loop supply chain
C
What is a system for ordering items that have little or no value at the end of a sales period? A. production order quantity model B. EOQ C. single-period inventory model D. ROP
C
What is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders? A. MRP B. CIM C. ERP D. BOM
C
What is the fundamental rethinking of business processes to bring about dramatic improvements in performance? A. process design B. process analysis C. process redesign D. process strategy
C
What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A. Economic order quantity B. Part period balancing C. Lot-for-lot
C
What types of processes are often neglected with regard to process re-design? A. Reengineered processes B. Expensive processes C. Cross-functional processes D. Automated processes
C
Which of the following activities does NOT need to be virtually eliminated for a lean organization? A. inventory B. inspection C. cross-training D. material handling
C
Which of the following allows a segment of the master schedule to be designated as "not to be rescheduled?" A. pegging B. system nervousness C. time fence D. freeze point
C
Which of the following attributes is NOT for lean operations? A. Develop worker flexibility. B. Empower employees. C. Build processes that increase variability. D. Develop collaborative partnerships with suppliers.
C
Which of the following does NOT belong to holding costs? A. insurance on inventory B. storage costs C. order processing D. pilferage, scrap, and obsolescence
C
Which of the following is NOT a production technology that enhances production and productivity? A. vision systems B. process control C. service blueprinting D. automatic identification systems
C
Which of the following is NOT an example of a kaizen event at San Francisco General Hospital? A. Reducing average wait time in the Urgent Care Center B. Utilizing 5S protocol and standard work practices for the preperation process C. Increasing the number of outpatients seen per week D. Reducing the number of minutes it takes from when a patient is wheeled into operating room until first incision is made
C
Which of the following is NOT one of Taiichi Ohno's seven wastes? A. motion B. queues C. energy D. transportation
C
Which of the following is NOT one of the benefits in MRP? A. better response to customer orders as the result of improved adherence to schedules B. faster response to market changes C. increased inventory levels D. improved utilization of facilities and labor
C
Which of the following is NOT true about reverse logistics as compared to foward logistics? A. Forecasting is more uncertain. B. Distribution costs are less directly visible. C. Speed is often very important. D. Pricing is dependent on many factors.
C
Which of the following is a step towards integrating MRP and finite capacity? A. Using pegging B. Using time fences C. Using smaller buckets
C
Which of the following is an aspect of environmental risk in supply-chain management? A. Raw material availability B. Secure financial transactions C. Political issues
C
Which of the following is an example of technology's impact on wholesale/retail trade industry? A. automatic toll booths B. automatic teller machines C. bar-coded data D. interactive TV
C
Which of the following is not a concern of the supply chain? A. Credit and cash transfers B. Warehousing and inventory levels C. Maintenance scheduling
C
Which of the following is not a goal of Lean Partnerships? A. Removal of receiving activities B. Removal of in-plant inventory C. Removal of engineering changes
C
Which of the following lot-sizing techniques is likely to prove the most complex to use? A. periodic order quantity (POQ) B. economic order quantity (EOQ) C. Wagner-Whitin D. lot-for-lot
C
Which of the following mitigation tactics could reduce economic risk? A. franchising and licensing B. multiple transportation modes and warehouses C. purchasing contracts that address price fluctuations D. subcontractors on retainer
C
Which of the following should be higher in P systems than Q systems? A. Order size B. Demand C. Safety stock
C
Which of the following statement is NOT true? A. The service level is the complement of the probability of a stockout. B. Probabilistic models relax the assumption that demand for a product is constant and certain. C. Having certain demand raises the possibility of a stockout. D. Probabilistic models are a real-world adjustment because demand and lead time will not always be known and constant.
C
Which of the following statements is NOT true regarding channel assembly? A. Channel assembly postpones final assembly of a product so the distribution channel can assemble it. B. Channel assembly represents one way to implement postponement. C. Channel assembly sends individual components, modules, and finished products, to the distributor. D. Channel assembly treats distributors more as manufacturing partners than as distributors.
C
Which of the following statements is NOT true? A. A supply chain includes suppliers, manufacturers and/or service providers, and distributors, wholesalers, and/or retailers who deliver the product and/or service to the final customer. B. Supply chain management describes the coordination of all supply chain activities, starting with raw materials, and ending with a satisfied customer. C. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. D. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer.
C
Which of the following statements is NOT true? A. Packaging and logistics are important distribution decisions, because the manufacturer is usually held responsible for breakages and serviceability. B. An effective supplier management program and an effective distribution management program may make the difference between supply chain success and failure. C. Finding the optimal number of facilities represents a critical and static decision. D. Top-notch supply chain performance requires good downstream management, just as it does good upstream management.
C
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. B. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. C. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. D. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. E. All of the above are true.
C
Which of the following statements regarding a pull system is TRUE? A. Work is pulled to the downstream stations before it is actually needed. B. Large lots are pulled from upstream stations. C. Problems become more obvious. D. Manufacturing cycle time is increased. E. None of the above is true of a pull system.
C
Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? A. Negotiating with many suppliers B. Vertical integration C. Long-term partnering with a few suppliers
C
Which of the quadrants in the service process matrix has high labor intensity and high customization? A. service factory B. service shop C. professional service D. mass service
C
Which of these conditions is not necessary for the economic order quantity model to be valid? A. The item has a constant order cost. B. The item has a constant lead time. C. The item has a constant purchase price.
C
Which service strategy describes structuring services so customers must go where the service is offered? A. Structure B. Modules C. Separation D. Focus
C
Which statement best represents the impact of technology advancements for service and manufacturing industries? A. Technology advancements have increased labor hours in service and manufacturing industries B. Technology advancements have not improved productivity in service industries C. Technology advancements have improved productivity in service and manufacturing industries D. Technology advancements have not improved productivity in manufacturing industries
C
13. What is the primary purpose of the basic economic order quantity model shown below? Q* = 2DSH A. to maximize the customer service level B. to minimize the sum of carrying cost and holding cost C. to calculate the optimum safety stock D. to minimize the sum of setup cost and holding cost E. to calculate the reorder point, so that replenishments take place at the proper time
D
14. What is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders? A. MRP B. SCM C. EIS D. ERP
D
15. Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. B. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. C. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. D. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. E. All of the above are true.
D
16. By convention, what is the top level in a product structure? A. level 1 B. level 100 C. level T D. level 0 E. level 10
D
17. Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? A. Toyota Production System (TPS) B. Lean operations C. kanban D. Just-in-time (JIT) E. Material requirements planning (MRP)
D
22. What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. virtual companies B. horizontal integration C. outsourcing D. vertical integration
D
23. The use of effective contracts with penalties could reduce which form of supply chain risk? A. Distribution B. Supplier failure to deliver C. Logistic delays or damages D. All of the above
D
26. An assembly line is an example of a: A. line process. B. product-focused process. C. process-focused process. D. repetitive process. E. specialized process.
D
A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. e-procurement. B. single stage control of replenishment. C. postponement. D. vendor-managed inventory.
D
Inventory control models assume that demand for an item is A. always independent on the demand for other items. B. always dependent on the demand for other items. C. identical to the demand for other items. D. either independent of or dependent on the demand for other items.
D
The advantage of having few suppliers is to A. pursue low cost. B. take advantage of diseconomies of scale. C. look for short-term attributes. D. form a long-term relationship.
D
The advantage of having many potential suppliers is their willingness to A. provide innovations. B. provide technical expertise. C. participate in JIT. D. offer lower prices in the short term.
D
Three criteria for designing distribution networks to meet customer expectations are: A. low cost, rapid response and product choice. B. rapid response, low cost, and service. C. low cost, product choice and service. D. rapid response, product choice, and service.
D
To reduce the risks from vertical integration, firms may choose to develop some form of formal collaboration known as A. cross sourcing. B. channel assembly. C. vendor managed inventory. D. a joint venture.
D
What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. postponement B. advanced shipping notice C. drop shipping D. blanket order
D
What is a report showing the resource requirements in a work center for all work currently assigned there as well as all planned and expected orders? A. MRP II report B. pegging report C. closed-loop report D. load report
D
What is a time-phased stock-replenishment plan for all levels of the supply chain? A. BOM B. MRP II C. MRP D. DRP
D
What is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders? A. SCM B. EIS C. MRP D. ERP
D
What is the ability to respond with little penalty in time, cost, or customer value? A. mass customization B. repetitive process C. postponement D. flexibility
D
What is the cost to prepare a machine or process for production? A. holding cost B. preparation cost C. ordering cost D. setup cost
D
What is the lot-sizing technique that generates exactly what was required to meet the plan? A. periodic order quantity B. economic order quantity C. Wagner-Whitin D. lot-for-lot
D
What is the primary method in which airlines adjust to short-term fluctuations in customer demand? A. changes in inventory B. postponement of service C. denial of service D. personnel availability
D
Which of the following could reduce distribution risk? A. cross-country diversification B. use multiple suppliers C. secure IT systems D. careful selection, monitoring and effective contracts with penalties
D
Which of the following could reduce distribution risk? A. secure IT systems B. use multiple suppliers C. cross-country diversification D. careful selection, monitoring and effective contracts with penalties
D
Which of the following industries has the highest supply chain cost as a percentage of sales? A. automobile B. metals C. restaurants D. petroleum
D
Which of the following is NOT a tool for process analysis and design? A. flowchart B. process chart C. process mapping D. Pareto chart
D
Which of the following is NOT an example of an advancement of service technology? A. Retinal security scanners at airports B. Automatic teller machines (ATMs) at banks C. Electronic check-in/check-out at hotels D. All of the above are examples of advancements of service technology
D
Which of the following is a requirement to be able to compute expected monetary value? A. each state of nature is equally likely to occur B. the probability of each decision alternative is known C. each decision alternative needs at least two states of nature D. the probability of each state of nature is known
D
Which of the following is the first stage of supplier selection? A. negotiations B. supplier development C. contracting D. supplier evaluation
D
Which of the following statements about DRP is NOT true? A. DRP stands for "distribution resource planning." B. DRP procedures and logic are analogous to MRP. C. Lead times are considered in DRP. D. DRP pushes inventory through the system.
D
Which of the following statements about quantity discounts is FALSE? A. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. B. In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available. C. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. D. The larger the annual demand, the less attractive a discount schedule will be. E. The smaller the ordering cost, the less attractive a discount schedule will be.
D
Which of the following statements is NOT true about DRP? A. The goal of a DRP system is small and frequent replenishment within the bounds of economical ordering and shipping. B. When dependent techniques are used in the supply chain, they are called distribution resource planning (DRP). C. Effective use of DRP requires an integrated information system to rapidly convey planned order releases from one level to the next. D. The DRP procedure starts with the forecast at the supplier level.
D
Which of the following statements is NOT true about a fixed-period system? A. The disadvantage of the fixed-period system is that because there is no tally of inventory during the review period, there is the possibility of a stockout during this time. B. The advantage of the fixed-period system is that there is no physical count of inventory items after an item is withdrawn. C. A fixed-period system is appropriate when vendors make routine visits to customers to take fresh orders or when purchasers want to combine orders to save ordering and transportation costs. D. A fixed-period system is also called "continuous review."
D
Which of the following statements is NOT true regarding ERP? A. ERP usually provides financial and human resource management information. B. ERP allows companies share a common database and business practices throughout the enterprise. C. The objective of an ERP system is to coordinate a firm's whole business. D. ERP promises slow, but accurate, information.
D
Which of the following statements is NOT true regarding process redesign? A. Process redesign is also called process reengineering. B. Process redesign also focuses on those activities that cross functional lines. C. Effective process redesign works only if the basic process and its objectives are reexamined. D. Process redesign is also called process reinvention.
D
Which of the following statements is true regarding lean sustainability? A. Lean requires examining the systems in which the firm and its stakeholders operate. B. Sustainability is focused on only the immediate process and system. C. Lean drives out waste because waste has adverse affects on the environment, while sustainability drives out waste because waste adds nothing for the customer D. Lean and sustainability both seek to maximize resource and economic efficiency.
D
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. joint ventures B. horizontal integration C. virtual companies D. keiretsu networks
D
Which of the following tools means tracing upward in the BOM from the component to the parent item? A. bucketing B. time fencing C. system nervousness D. pegging
D
11. The purpose of safety stock is to: A. protect the firm from a sudden decrease in demand. B. eliminate the likelihood of a stockout due to erroneous inventory tally. C. replace failed units with good ones. D. eliminate the possibility of a stockout. E. control the likelihood of a stockout due to variable demand and/or lead time.
E
16. Low-level coding means that: A. a final item has only a few levels in the BOM structure. B. the code being used is the code for the lowest level in the BOM structure. C. the lowest-paid staff member in the production department performs the coding. D. the top level of the BOM is below level zero and that BOMs are not organized around the finished product. E. a component item is coded at the lowest level at which it appears in the BOM structure.
E
17. Which of the following is NOT a source of variability? A. Engineering drawings are inaccurate. B. Customer demand is unknown. C. Drawings or specifications are incomplete. D. Employees, machines, and suppliers produce units late. E. Employees, machines, and suppliers produce units that conform to standards.
E
17. Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? A. Just-in-time (JIT) B. Material requirements planning (MRP) C. kanban D. Toyota Production System (TPS) E. Lean operations
E
19. Characteristics of just-in-time partnerships do NOT include: A. produce with zero defects. B. focus on core competencies. C. removal of in-transit inventory. D. long-term contracts. E. large lot sizes to save on setup costs and to gain quantity discounts.
E
20. If a factory wants to cut its current lot size in half, by what proportion must setup cost change? A. Cannot be determined. B. Setup cost must quadruple from its current value. C. Setup cost must also be cut in half from its current value. D. Setup cost must double from its current value. E. Setup cost must be cut to one fourth its current value.
E
Which of the following phrases best describes process focus? A. high fixed costs, low variable costs B. Finished goods are usually made to a forecast and stored. C. Operators are less broadly skilled. D. low inventory E. low volume, high variety
E
Which one of the following is a characteristic of a JIT partnership? A. frequent deliveries in large lot quantities B. active pursuit of vertical integration C. maximal product specifications imposed on supplier D. third-party logistics never used E. removal of incoming inspection
E
Which one of the following statements is TRUE about the kanban system? A. The quantities in the containers are usually large to reduce setup costs. B. It is associated with a push system. C. The supplier workstation signals the customer workstation as soon as a batch is completed. D. It is useful to smooth operations when numerous quality problems occur. E. The customer workstation signals to the supplier workstation when production is needed.
E
16. MRP can be effective only if very accurate lot sizes are calculated in advance. True False
F
20. Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage. True False
F
28. Utilization is the number of units a facility can hold, receive, store, or produce in a period of time. True False
F
Price changes are useful for matching the level of demand to the capacity of a facility True False
T