MKT 460 Test 2
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:
1.250
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.
200 units
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.
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.
29
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)?
300
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:
40
Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system?
80 percent of the total annual $ usage is accounted for, by 20 percent of the items
A fair trade product refers to one that is manufactured or grown by a disadvantaged producer in a developing country that receives for its goods.
A fair price
Benchmarking is:
A practice where companies attempt to learn and apply the best practices of other companies
Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework?
Certify suppliers as ISO 9001 compliant
Which of the following basic production strategies works best with make-to-order manufacturing firms?
Chase Production Strategy
Which of the following MRP terms represents the parts demanded by a parent?
Component
For a large company with many strategic supplier alliances, what would be the best way to manage them?
Create an alliance board to oversee alliances
Which of the following is NOT a common module of ERP systems?
Customer Relationship Management
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:
Customer relationship management and Human resource management
Independent demand is the:
Demand for a firm's end products
Which of the following is considered a disadvantage of utilizing an ERP system?
ERP systems are very complex and have proven difficult to implement
Why are firms migrating to ERP 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
The acronym ERP is short for:
Enterprise Resource Planning
Which of the following is NOT one of the three basic methods used to calculate the available-to-promise quantities?
Indiscrete available-to-promise
What is the most important output of the MRP?
Planned order releases
Which of the following is NOT an assumption of the economic order quantity (EOQ) model?
Production and use occur simultaneously
The _______________ is used to check the feasibility of the Master Production Schedule.
Rough-Cut capacity plan
Which of the following MRP terms represents a committed order awaiting delivery for a specific period?
Scheduled receipt
The ___________ solution picks all the desired applications from a single vendor for the ERP system.
Single integrator
ISO 14000 may play a role in a firm's.
Supplier certification program
Convincing your supplier to cutting back on packaging, fuel, or electricity is an example of:
Sustainable sourcing
The __________ specifies which end product is to be made, how many are required, and when they need to be completed.
Aggregate production plan
Which of the following keeps the production plan's capacity fixed during the planning horizon?
Aggregrate production plan
Which of the following is true of today's purchasing staff members?
All of the above
Legacy MRP systems had which of the following limitations?
All of these
Successful strategic supplier alliances can result in which of the following?
All of these
Which of the following can be used as a punishment for suppliers that perform poorly?
All of these
Which of the following could be an ethical and environmental certification requirement?
All of these
Which of the following is a trend in ethical and sustainable sourcing?
All of these
The main benefit(s) from benchmarking sourcing practices is/are:
Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies
What inventory factor may be omitted from the basic EOQ derivation because it is a constant?
Annual purchase cost of goods
Leading companies practicing sustainable sourcing and seeking to reduce costs would NOT use which of the following strategies?
Backward integration to purchase suppliers
Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors.
Best-of-breed solution
Which of the following would be considered a dependent demand item?
Bicycle tires used to assemble a bicycle
An advantage/benefit of utilizing an ERP system includes which of the following?
Both A&B
Which of the following results from using the chase production strategy?
Both A&B
The purchasing department at Big Horn Sheep Corporation decided to intentionally increase purchases from small, underdeveloped nations. This decision can be considered:
Ethical Sourcing
Promoting diversity by intentionally buying from small firms or ethnic minority businesses is an example of:
Ethical sourcing
______________ considers the public consequences of organizational buying
Ethical sourcing
Which of the following describes a global RFID challenge?
Globally, the RFID industry does not have its own UHF spectrum allocation
Which of the following is NOT a typical strategy for firms to obtain benchmarking data about other companies?
Hiring former employees from other companies and assessing heir knowledge
The use of environmental supplier certification programs assists companies by which of the following?
Identifying strategic alliance candidates
Which one of the following statements regarding the economic order quantity (EOQ) is true?
If an order quantity is larger than the EOQ, then the annual holding cost will exceed the annual ordering cost.
Some businesses refer to sustainability in terms of supporting the three P's. This stands for:
People, planet, profit
In the ABC Inventory Matrix shown, inventory in area Y suggests:
Inventory that matches sales
Which of the following is a disadvantage of carrying too much inventory?
It creates an unnecessary 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
Sustainability reporting is ______________ for American companies:
Largely a voluntary effort
All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT:
Legislation requiring ethical and sustainable sourcing
In a bill of materials, items at which level are independent demand items?
Level 0
Which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance?
Lowering inventory turnover rates
Lubricants for production equipment which are not parts of the final products are called:
Maintenance, repair and operating suppliers
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?
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 period of few days to a few weeks?
Material requirements plan
Which strategy uses overtime and subcontracting to cope with the high demand periods ?
Mixed Production Strategy
If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the:
Most recent positive ATP
The primary purpose of the basic economic order quantity (EOQ) model is to:
None of the above
Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand?
The Level Production Strategy
Legacy MRP systems typically utilized multiple software packages and databases which caused:
The same information to be stored in multiple locations
One standard which is measured in environmental supplier certification is:
The suppliers' recycled content
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 200 millennium bug
Why do firms assess their sourcing capabilities?
They can gauge their success in improving their own value-enhancing contributions to the firm
Which one of the following is NOT a reason for firms to carry inventory?
To increase production change/setup costs
Sustainable sourcing policies should include which of the following?
Use of renewable energy
In designing an ethical and sustainable strategy a firm might make use of which of the following?
Use performance measures to identify weaknesses
Which of the following terms refers to an act that creates the greatest good for the greatest number of people:
Utilitarianism
Which of the following is TRUE?
VMI stands for Vendor Managed Inventory
A service where key customers ask suppliers to take on the job of store level replenishment planning is called:
Vendor managed inventory
A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as:
Win-win negotiations
The Ethical Trading Initiative (ETI) does NOT include which of the following:
Workers receive a 30 minute break for an 8 hour shift
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:
You order lot size was higher than the EOQ
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
When demand and delivery lead time are known and constant, the reorder point is the ____.
demand during the delivery lead time
If an item is ordered using its economic order quantity, the annual carrying cost should be:
equal to the annual ordering cost
The EOQ model with quantity discounts attempts to determine:
how many units should be ordered