MKT 411 Test 2

You are the Marketing Manager for Trek mountain bikes, and are trying to best plan inventory. You are most likely dealing with a ___ demand pattern for your products: A. Lumpy B. Seasonal C. Terminating D. Perpetual

B. Seasonal ??

Within a business system, the set of activities that starts with sending a sales quotation and ends with the company receiving payment is: A. Currency Cycle B. Accounts Receivable C. Quote to Cash D. Disbursement to Liquidity

C. Quote to Cash

Using the data set below, what would be the forecast for period 4 using a three period moving average: (Choose the closest answer.) a. 11,883 b. 14,008 c. 12,244 d. 11,500

a. 11,883

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

a. Bicycle tires used to assemble a bicycle

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

a. Crosby

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

a. Customer relationship management and Human resource management

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. Ergonomic conditions b. New competition c. Supplier quality d. Emerging markets

a. Ergonomic conditions

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

a. Historical data

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

a. The dependent variable

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

a. Keiretsu Networks

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

a. Pareto Charts

Which one of the following is NOT a type of qualitative forecasting? a. Simple moving average b. Jury of executive opinion c. Sales force composite d. Consumer survey

a. Simple moving average

The _________ solution picks all the desired applications from a single vendor for the ERP system. a. Single integrator b. Premier application c. Elite integrator d. Best-of-breed

a. Single integrator

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

a. To increase production change/setup costs

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

a. True

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

a. True

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

a. True

Random variations in a Time Series component are due to: a. Unpredictable events b. Inaccurate responses of the expert participants c. Using a large value for the exponential smoothing constant d. Population growth

a. Unpredictable events

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

a. Your order lot size was higher than the EOQ

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

a. equal to the annual ordering cost

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

b. 1.250

Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.) a. 13,190 b. 14,030 c. 15,220 d. 12,660

b. 14,030

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

b. 49

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

b. 5 parts

Based on the information in the data set below, what is the mean squared error (accurate to 1 decimal)? a. 10.0 b. 8.0 c. 0.8 d. 1.00

b. 8.0

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

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

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

b. Bullwhip effect

A company sells eggs in boxes with 12 cartons and 12 eggs in each carton, thus there are 144 eggs in each box. The organization wants to construct a P-chart to track the proportion of broken eggs in each sample (shown below). If the company used one box of eggs in each sample in the dataset below, what would be the centerline, upper control limit (UCL), and lower control limit (LCL) for the appropriate P-chart? (Use z = 3.) Choose the closest answer. a. Centerline = 0.50, UCL = 0.625, LCL = 0.375 b. Centerline = 0.025, UCL = 0.64, LCL = 0 c. Centerline = 0.30, UCL = 0.70, LCL = 0 d. Centerline = 0.083, UCL = 0.152, LCL = 0.014

b. Centerline = 0.025, UCL = 0.64, LCL = 0

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

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

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

b. Exchange of forecasting information

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

b. False

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

b. False

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

b. False -They are raw materials/components, WIP, finished goods, and MRO (maintenance, repair and operation goods)

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

b. Ford

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

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

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

b. Industrial housekeeping

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

b. It creates an unnecessary waste of scarce resources

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

b. Kanban System

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

b. Most recent positive ATP

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

b. Shingo

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

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

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

b. The same information to be stored in multiple locations

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

b. Too low

Using the data set below, what would be the forecast for period 5 using a four period weighted moving average? The weights for each period are 0.05, 0.15, 0.30, and 0.50 from the oldest period to the most recent period, respectively. (Choose the closest answer.) a. 13,105 b. 12,820 c. 13,710 d. 14,610

c. 13,710

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

c. 246 units

Complete the following MRP record and provide the planned order releases for Week 1. Lead time is 2 weeks. Safety stock is 3. Use LFL lot sizes. a. 26 b. 34 c. 29 d. 14

c. 29

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

c. 40

A company produces 8-pound bags of cat litter; as shown below, it gathered 5 samples with 6 bags in each sample for quality control purposes. The weights of each of the bags are listed below. a. 7.92 b. 8.26 c. 8.06 d. 7.97

c. 8.06

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

c. Aggregate production plan

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

c. Best-of-breed solution

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

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

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

c. ERP systems tie together a variety of specialized systems

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

c. Just-in-Time

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

c. Lack of communication within an organization

Which strategy uses overtime and subcontracting to cope with the high demand periods? a. The Level Production Strategy b. The Chase Production Strategy c. Mixed Production Strategy d. The Aggregate Production Strategy

c. Mixed Production Strategy

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

c. Poka-yoke

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

c. Production and use occur simultaneously

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

c. Stockouts

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

c. The year 2000 millennium bug

Classify the following inventory items as either A, B, or C items using the ABC inventory control system. a. item 1 (B), item 2 (A), item 3 (A), item 4 (C), item 5 (C) b. item 1 (C), item 2 (B), item 3 (C), item 4 (A), item 5 (C) c. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C) d. item 1 (B), item 2 (C), item 3 (B), item 4 (C), item 5 (A) e. item 1 (A), item 2 (B), item 3 (C), item 4 (A), item 5 (B)

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

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

d. 12,083

A forecasting method has produced the following data over the past 5 months shown in the data set. What is the mean absolute deviation (accurate to 1 decimals)? a. -1.2 b. 10.0 c. 2.0 d. 2.4

d. 2.4

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

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

Calculate the final discrete available-to-promise quantity for Week 1 using the following table.Weeks1234MPSBI = 3010101510Committed Customer Orders2052515ATP:D a. ATP1 = 0 b. ATP1 = 20 c. ATP1 = 15 d. ATP1 = 10

d. ATP1= 10

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

d. All of these choices are correct

Which of the following is a benefit of CPFR? a. Integrates planning, forecasting and logistics activities b. Uses joint planning and promotions management c. Provides an analysis of key performance metrics d. All of these choices are correct.

d. All of these choices are correct

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

d. All of these choices are correct

An important outcome of statistical process control is: a. Firms can take corrective actions before process variabilities get out of control b. Firms can visually monitor process performance c. Firms can minimize total inventory cost d. Both "Firms can take corrective actions before process variabilities get out of control" & "Firms can visually monitor process performance" e. None of these choices are correct.

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

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

d. Chase Production Strategy

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

d. Imbalances in supply and demand

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. Mixed Production Strategy b. The Chase Production Strategy c. The Aggregate Production Strategy d. The Level Production Strategy

d. The Level Production Strategy

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

d. Marketing Resources Management

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

d. Master production schedule

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

d. Material requirements plan

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

d. Political factors

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

d. Qualitative forecasting

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

d. Supplier lead times

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

d. Trend Variations

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

e. 200 units

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

e. 300

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

e. none of these choices are correct (the primary purpose is to identify the optimal number of product units to order. If achieved, a company can minimize its costs for buying, delivering, and storing units)