MKT 411 exam 2 quizzes

The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock

False

Random variations in a time series component are due to: -Inaccurate responses of the expert participants -Unpredictable events -Population growth -Using a large value for the exponential smoothing constant

Unpredictable events

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

to increase production change/setup costs

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

equal to the annual ordering cost

Inaccurate forecasts can results in negatives outcomes like: -High inventory costs and increased profits -Imbalances in supply and demand -Material shortages and decreased costs of obsolescence -Low inventory costs and stockouts

imbalances in supply and demand

Quantitative forecasts use mathematical techniques that are based on: -Historical data -Sales force knowledge of the market -Expert opinions -Surveys

Historical data

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

300

Which of the following would be considered a dependent demand item? -Bicycle tires used to assemble a bicycle -Televisions -Furniture -Retail customers

Bicycle tires used to assemble a bicycle

Which of the following basic production strategies works best with make-to-order manufacturing firms? -Mixed production Strategy -Chase Production Strategy -Level Production Strategy -Capacity Production Strategy

Chase production strategy

Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: -Computer assisted drawing and Photo enhancing -Operating systems and Internet browsing -Customer relationship management and Human resource management -All of these choices are correct.

Customer relationship management and human resource management

The real value of collaborative planning, forecasting and replenishment (CPFR) comes from: -Exchange of forecasting information -Sophisticated forecasting algorithms -Both "Sophisticated forecasting algorithms" and "Exchange of forecasting information" -None of these choices are correct.

Exchange of forecasting information

Which of the following is NOT a common module of ERP systems? -Marketing Resources Management -Human Resources Management -Supply Chain Management -Customer Relationship Management

Marketing resources management

The ______ planning horizon is shorter than the aggregate production plans, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? -Material requirements plan -Demand time fence -Master production schedule -Capacity Requirements Plan

Master production schedule

The ______ specifies which end product is to be made, how many are required, and when they need to be completed -Bill of material -Aggregate production plan -Super bill of materials -Master production schedule

Masterproductionschedule

Which of the following is NOT an assumption of the economic order quantity (EOQ) model? -The only variable costs are setup cost and holding cost. -Quantity discounts are not possible. -Demand is known, constant, and independent. -Lead time is known and constant. -Production and use occur simultaneously.

Production and use occur simultaneously

Which one of the following is not a type of qualitative forecasting? -Simple moving average -Sales force composite -Jury of executive opinion -Consumer survey

Simple moving average

A positive error implies that a forecast was? -Too low -Too high -Neither too high or too low -The sign of an error gives no information as to the direction of the error.

Too low

Your company is conducting forecasting that revolves around population growth in large citifies. This type of forecasting can be referred to as what component of a time series. -Cyclical Variations -Trend Variations -Seasonal Variations -Random Variations

Trend variations

Legacy MRP systems had which of the following limitations? -All of these choices are correct -The systems needed continuous modifications -the systems were designed to perform a very specific operational function -the systems were not user-friendly

All of these choices are correct

Using the ________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. -Multi-modular solution -Best-of-breed solution -Elite integrator solution -Premier application solution

Best-of breed solution

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

False

If an available-to-ptomise (ATP) for any period is negative, the deficit must be subtracted from the: -Most recent positive ATP -Bill of materials -Beginning inventory -Master Production Schedule

Most recent positive ATP

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? -Mixed Production Strategy -The Chase Production Strategy -The Level Production Strategy -The Aggregate Production Strategy

The level production strategy

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

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

Which of the following is a benefit of CPFR? -all of these choices - integrates planning, forecasting and logistics activities, provides an analysis of key performances metrics, uses joint planning and promotions management

all of these choices

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

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

The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue

True

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

Both "ERP systems are designed to take advantage too Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process"

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: -Delphi method -Mean deviation -Bullwhip effect -CPFR effect

Bullwhip effect

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

ERP systems tie together a variety of specialized systems

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

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

All of the following many influence demand and should be considered when developing a forecast EXCEPT -New competition -Emerging markets -Ergonomic condition -Supplier quality

Ergonomic condition

Which of the following is a disadvantage of carrying too much inventory? -It increases the need to purchase items. -It leads to higher annual inventory ordering costs. -It reduces the need to conduct cycle counts. -It leads to lower average finished goods inventories. -It creates an unnecessary waste of scarce resources.

It creates an unncessary waste of scarce resources

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

Lack of communication within an organization

Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/ or subassemblies over time period of a few days to a few weeks? -Resource requirements plan -Master production schedule -Rough-cut capacity plan -Material requirements plan

Material requirements plan

Which strategy uses overtime and subcontracting to cope with the high demand periods -Mixed Production Strategy -The Aggregate Production Strategy -The Level Production Strategy -The Chase Production Strategy

Mixed production strategy

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

NONE OF THESE CHOICES ARE CORRECT

When there is not a lot of currently relevant data available it is generally best to use: -Qualitative forecasting -Simple moving average forecasting -Time series forecasting -Naive forecasting

Qualitative forecasting

The _______ solution picks all the desired applications from a single vendor for the ERP system -Elite integrator -Single integrator -Premier application -Best-of-breed

Single integrator

In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. -Stockouts -The bullwhip effect -Price reductions -Excess stock

Stockouts

According to the textbook the top three challenges for CPFR implementation include all of the following except: -Costs -Supplier lead times -Trust between supply chain partners -Making organizational and procedural changes

Supplier lead times

When liner trend forecasts are developed, demand would typically be: -The passive variable -The lead variable -The independent variable -The dependent variable

The dependent variable

Legacy MRP systems typically utilized multiple software packages and databases which causes: -The system to crash often -Planned order releases -Data integrity -The same information to be stored in multiple locations

The same information to be stored in multiple locations

While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? -The year 2000 millennium bug -The trend for companies to eliminate their supply chain partners -The increased use of email during the 1990's -All of these choices are correct.

The year 2000 millennium bug

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

Your order lot size was higher than the EOQ

Cyclical variations are longer than a year and can be influenced by: -Political factors -Imbalances in supply and demand -Events such as natural disasters Population growth

political factors