OP2
List the highest level planning to the lowest level of planning:
1. Aggregate Planning 2. Master Production Schedule 3. Material Requirements Planning
Capability Sourcing refers to outsourcing the functions that they do best to trusted key partners.
False
Which is true in regards to a request for proposal and a reverse auction?
In a reverse auction, the buyer establishes a request, sellers then place bids for the amount they are willing to accept.
Which of these acronyms are part of Ch 6 Manufacturing Processes (check all that apply) MTO ETO WIP RBI BEP
MTO ETO WIP BEP
A high-level map or diagram of a supply chain process can be useful to understand how material flows and where inventory is held.
T
A project layout is characterized by a high degree of task ordering.
T
An example of an assemble-to-order firm is Dell Computer.
T
Assemble-to-order means moving the customer order decoupling point from finished goods to components.
T
Break-even analysis can be used to help decide whether to perform a task with a special-purpose machine or with a general-purpose machine.
T
One trade-off illustrated by the product-process matrix is between flexibility and cost.
T
MRP require a very accurate BOM to successfully plan material requirements.
True
The three main inputs to an MRP system are the bill of materials, the master schedule and the inventory records file.
correct True This BOM file is one of the three main inputs to the MRP program. (The other two are the master schedule and the inventory records file.)
An item that can be produced and stocked as a subassembly often uses a _____ bill-of-materials for planning.
modular
Which of the following is an innovative product?
personal computer
Total average value of inventory
the sum of the value (at cost) of the raw material, work-in process, and finished goods inventory
lead time
the time needed to respond to a customer order
The total cost of ownership includes: 1. Procurement costs 2. Disposal costs 3. Engineering design costs
1 and 2
work station cycle time formula
C = total production time/ total units needed per day
assess the supply base
Engaging new and existing vendors
______________ are the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule. Lot sizes Least total cost Demand numbers Economic order quantity
Lot sizes
The step in the planning process down from the master production schedule is called
Material Requirements Planning
Which costs are not part of the Total Cost of Ownership framework? Taxes Opportunity Costs Energy Costs Finance Costs Disposal Costs
Opportunity Costs
Which type of time fence allows for changes to a specific product so long as parts are available? Slushy Frozen Scheduled Liquid
Slushy
Which of the following is a basic type of process structure? - Process matrix - Manual assembly - Process flow diagram - Product matrix - Workcenter
Workcenter
make to order
make a customer's order from raw material
The re-order point is measured in terms of
units quantity
throughput rate
long term average rate of flow through process
The file created by retracing a material requirement upward in the product structure to identify each parent item that created the demand is called a _____ record.
peg
The bill-of-material (BOM) file is also known as a Multiple select question. product structure file. product recipe. assembly instruction. product tree.
product structure file. product tree.
project
remain in a fixed location, equipment is moved to the product
Which of the following is a sourcing term to describe how common an item is and/or how many substitutes may be available?
specificity
If ordering costs and setup costs remain constant then _________ is the easiest method for lot sizing. the lowest total cost method any method the least unit cost method the lot-for-lot method
the lowest total cost method
Using the assembly-line balancing procedure, which of the following is the required cycle time if the production time in minutes per day is 1440 and the required output per day in units is 2000? - 1.388 - 500 - 0.72 - Cannot be determined from the information above - 250
0.72
The master scheduler must consider
1. Never lose sight of the aggregate plan 2. Be involved with customer order promising 3. Trade-off manufacturing, engineering and marketing conflicts
Most retailers estimate that annual inventory carrying costs equals _____ of what is paid for the product
25%
Which of the following is an input to the master production schedule? Bill of materials (BOM) file Inventory records file Exception reports Planned-order schedules None of the above
Bill of materials (BOM) file Inventory records file Exception reports Planned-order schedules correct None of the above
One of the main purposes of a MRP system is which of the following? A. Track inventory levels B. Create productive capacity C. Decrease layers of management D. Develop schedules specifying when each component should be ordered or produced. E. Upgrade manufacturing's professionalism
D. Develop schedules specifying when each component should be ordered or produced.
Which of the following is considered a primary report in an MRP system? A. Planning reports B. Performance reports C. Exception reports D. Planned order schedules E. Cycle counting reports
D. Planned order schedules
In a typical inventory status record which of the following would you not expect to see? A. Scrap allowance B. Order quantity C. Gross requirements D. Planned-order releases E. Lost items
E. Lost items
Which of the following files allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand? A. Planning bill of materials file B. Modular bill of materials file C. Super bill of materials file D. Exception report file E. Peg record file
E. Peg record file
A continuous process indicates production of discrete parts moving from workstation to workstation at a controlled rate.
F
A make-to-order firm will work with the customer to design the product and then make it from purchased materials, parts, and components.
F
A project layout is characterized by a relatively low number of production units in comparison with process and product layout formats.
F
Two common measures to evaluate supply chain efficiency are the consumer price index and the beta flow system.
FALSE
True or false: Finished goods purchased by individuals external to the organization are considered dependent demand items.
False
What is part of an MRP record?
Gross Requirements, Net Requirements, & Planned Order Receipts
Engage internal sourcing agents
Involving individuals and groups to help set realistic green goals
The inventory records file contains an _____ ______ data segment that contains a detailed description of the item, lead time information, safety stock levels and other records
Item master
If an end item is ________ or _________, the master production schedule may include major sub-assemblies and/or complex components
Large or Expensive
MRP systems seek to achieve which of the following? Minimize lot sizes Determine the number of dependent demand items needed Relieve capacity bottlenecks Provide a yardstick for future improvements Improve on JIT methods
Minimize lot sizes correct Determine the number of dependent demand items needed Relieve capacity bottlenecks Provide a yardstick for future improvements Improve on JIT methods MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item. MRP also provides the schedule specifying when each of these items should be ordered or produced. MRP is based on dependent demand. Dependent demand is caused by the demand for a higher-level item.
What is an example of a Set Up Cost?
Reconfig Machines Driving to the farm every time you want some eggs
A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of material?
Super
A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material? Partial bill-of-material Modular bill-of-material Deluxe bill-of-material Super bill-of-material
Super bill-of-material
The file containing the complete product description, parts listing, quantity needed and product build sequence is called? The peg record The bill-of-material The inventory log The MPS
The bill-of-material
are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.
Time fences
engineer to order
Work with the customer to design and then make the product
manufacturing cell
dedicated area where a group of similar products are produced
A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material?
super
days of supply
the inverse of inventory turns scaled to days
At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as low-level coding system. product part matrix. bill-of-material. time buckets.
time buckets.
When purchasing items that are highly specified and a long contract is desirable, which sourcing process should be used
vendor management theory
If a company has an MRP program that can reflect the exact status of each item in real time, this program is called?
A net change MRP system
If a company has an MRP program that can reflect the exact status of each item in real time, this program is called? A peg record An inventory transaction file A net change MRP system A bill-of-material system
A net change MRP system
A product tree can do which of the following? A. Help to compute component usage B. Reduce product scrap C. Reduce labor overtime D. Reduce regular time labor E. Locate raw material supplies
A. Help to compute component usage
Which of the following is considered a primary report in an MRP system? A. Planned order schedule B. Peg report C. Planning report D. Inventory accuracy report E. Aggregate production plan report
A. Planned order schedule
A BOM file is also called which of the following? A. Product tree B. Stocking plan C. Inventory usage record D. Production parts plan E. Time bucket schedule
A. Product tree
Which is the most challenging kind of supply chain to manage according to Hau Lee? A.)Agile supply chain B.)Efficient supply chain C.)Risk-hedging supply chain D.)Erratic supply chain E.)Responsive supply chain
A.) Agile supply chain
If a company has more units in the master production schedule than the firm customer orders then it is called
Available to promise
Which of the following is an input to the master production schedule (MPS)? A. Inventory records file B. The aggregate plan C. The bill of materials D. The exception report E. Planned order schedules
B. The aggregate plan
Which of the following is/are issues a master scheduler must consider?
Be involved with customer order promising. Trade-off manufacturing, engineering and marketing conflicts. Never lose sight of the aggregate plan.
Which of the following industry types have high expected benefits from the application of MRP? A. Fabricate-to-stock B. Fabricate-to-order C. Assemble-to-stock D. Continuous process E. Service and repair parts
C. Assemble-to-stock
Which of the following is an input file necessary to run an MRP system? A. Exception report B. Computer-aided-design files C. Inventory records file D. Personnel files E. Planned order schedule
C. Inventory records file
inventory turn
COGS / avg. inventory value
In which of the following industry types would MRP provide high benefits? Multiple select question. Engineer-to-order Make-to-order Assemble-to-stock Assemble-to-order
Engineer-to-order Assemble-to-stock Assemble-to-order
What is NOT a lot sizing technique used in MRP systems?
Fixed time costs
A major drawback with lot-for-lot sizing is? Low investment costs High capital investments High setup costs Low setup costs
High setup costs
A bill-of-materials that uses differences in alignment to indicate the order of assembly of components is using which type of structure?
Indented Structure
A material requirements planning system interfaces with the master production schedule, bill-of-materials file and ________ _______ ____
Inventory records file
The ______ ____ ____ lot sizing technique is a dynamic approach that adds ordering and inventory carrying costs for each trial lot size, divides the costs by the number of units, and chooses the lot size with the lowest unit cost
Least unit cost
An item that can be produced and stocked as a subassembly often uses a ______ bit-of-materials for planning
Modular
number of work stations needed formula
Nt = sum of task time (t) / cycle time
Implementing sourcing strategy
Select vendors and products for each business requirement
Efficiency formula
T (sum of time) / NaC (# workstations x cycle time)
The total cost of ownership (TCO) can be categorized into three areas: acquisition costs, ownership costs, and post-ownership costs.
TRUE
The next level in the planning process down from an aggregate plan is called?
The master production schedule
The next level in the planning process down from an aggregate plan is called? Supply coordination Materials requirements planning Demand forecasting The master production schedule
The master production schedule
______ _______ are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule
Time fences
inventory measures
Total average value of inventory Inventory turns Days of supply
A BOM file is often called a product structure file or product tree because it shows how a product is put together.
True
Inventory turn values that are considered good differ by industry and the type of products being handled
True
Logistics is a term that refers to the management functions that support the complete cycle of material flow, from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product.
True
The Master Production Schedule (MPS) is a disaggregation of the aggregate plan that looks ahead a set number of weeks and is often fixed or "frozen" in the short term.
True
True or False: A least total cost lot sizing technique is a dynamic approach that continually looks for an optimal lot size where carrying costs and ordering costs are close to equal
True
True or false: A least total cost lot sizing technique is a dynamic approach that continually looks for an optimal lot size where carrying costs and ordering costs are close to equal.
True
Outside of determining parts, components, and materials, MRP provides independent demand for products being produced. a schedule for when each of these should be produced or ordered. a forecast for the next 6 months. the total plan for all capital investments needed.
a schedule for when each of these should be produced or ordered.
The economic order quantity (EOQ) lot sizing technique produces or acquires exactly the amount of product that is needed each time period with none carried over into future periods.
correct False EOQ assumes that parts are used continuously during the period. The lot sizes generated by EOQ do not always cover the entire number of periods. For example, the EOQ might provide the requirements for 4.6 periods (when another EOQ would be needed).
Low level coding in MRP indicates the exact status of each item managed by the system in "real time."
correct False Low-level coding (is where) each item is placed at the lowest level at which it appears in the structure hierarchy.
Grocery stores would traditionally use which type of supply chain?
efficient supply chain
Improved return on assets and generation of cash are ___________ reasons to outsource
financial
little law
flow of items through production process inventory = throughput rate x flow rate
What type of products have low profit margins, long product life, and predictable demand?
functional
Every 2 minutes a bus departs from AVIS. Flow time is 20 minutes. How many buses are in the system at a time?
(1 bus / 2 minutes) x 20 minutes = 10 buses
From the highest level planning at the top to the lowest level planning at the bottom, rank the following. Aggregate planning Master production schedule Material requirements planning
Aggregate planning Master production schedule Material requirements planning
Select all the transportation methods listed below that are considered fast Rail-car Container Ship Airplane Barge Pipeline
Airplane Pipeline
If a company has more units in the master production schedule than firm customer orders, the residual is called? Liquid inventory Available to promise Ready to ship Customer overstock
Available to promise
What is a legitimate reason for inventory?
Decoupling Risk
A(n) _____ _____ _____ system is a computer system that integrates application programs from the functional areas of a firm.
E R P
The placement of which of the following is not determined by production process organization decisions? - Emergency exits - Machines - Workstations - Departments - `Workgroups
Emergency exits
The master production schedule is used to plan
End Items
An _______ ______ ______ system is a computer system that integrate application programs from the functional areas of a firm
Enterprise resource planning
Break-even analysis can only be used in production equipment decision making when dealing solely with fixed costs, not variable costs.
F
Process selection refers to the strategic decision of choosing the volume of output to produce in a manufacturing facility depending upon the way that facility produces.
F
The MRP program performs its analysis from the bottom up of the product structure trees, imploding requirements level by level.
False The MRP program performs its analysis from the top of the product structure downward, calculating requirements level by level.
Which of the following is not a lot sizing technique used in MRP systems? Fixed time costs Economic order quantity Lot-for-lot Least total costs
Fixed time costs
After finding gross requirements, the next step in the MRP explosion process references inventory on hand and scheduled orders to calculate _____ requirements
Net
The bill-of-material file is also known as
Product structure file and Product tree
make to stock
Serve customers "on demand" from finished goods inventory
One program for automatically resupplying customers on a regular basis is __________ _________
continuous replenishment
"Projected available balance" is a term referring to unsold finished goods inventory.
correct False Projected available balance is the amount of inventory (not just unsold finished goods) that is expected as of the end of a period.
A solicitation for a detailed proposal from a vendor is called a ________for _________
request proposal
An estimate of all costs related to the procurement and use of an item is the
total cost of ownership
An estimate of all costs related to the procurerment and use of an item is the
total cost of ownership
True or false: Innovative products have higher profit margins than functional products.
true
True or false: The average aggregate inventory value is valued at cost
true
Which of the following is not a reason why a firm may choose to outsource an activity?
turn variable into fixed costs
assembly line
work processes are arranged according to the progressive steps by which the product is made
Are the inventory turnover and weeks of supply measures related to one another?
yes they are mathematically inverses
Which of the following are parts of the material requirements planning system?
- master production schedule -bill of materials -inventory records
organization of product processes
- project - workcenter (jobshop) - manufacturing cell - assembly line - continuous process
You have just determined the actual number of workstations that will be used on an assembly line to be 6 using the assembly-line balancing procedure. The cycle time of the line is 5 minutes and the sum of all that tasks required on the line is 25 minutes. Which of the following is the correct value for the resulting line's efficiency? - 0.833 - None of these - 0.973 - 0.500 - 0.990
0.833 Using equation 6.5, [25 / (6 x 5)] = 0.833.
Which types of inventory are included in the average aggregate inventory value? 1. Raw material 2. Work-in-process 3. Finished goods 4. Distribution
1 2 3 4
Which of the following is the net requirement using an MRP program if the gross requirement is 1,250 and the inventory on hand is 50? 1,200 1,300 1,150 2,450 None of the above
1,250 - 50 = 1,200. Net requirements are the amounts that are needed week by week in the future over and above what is currently on hand or committed to through an order already released and scheduled.
Green Sourcing steps
1. Assess the opportunity 2. Engage sourcing agents 3. Assess the supply base 4. Develop the sourcing strategy 5. Implement sourcing strategy 6. Institutionalizing the sourcing strategy
250 people/hour 15 min average time in a store how many customers in the store at any given time?
250 ppl/hour x (15/60 mins) - 62.5 customers
Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the six tasks that make up the job are 4, 6, 7, 2, 6, and 5 minutes, and the cycle time is 10 minutes? - 8 - 5 - None of these - 6 - 3
3 (4 + 6 + 7 + 2 + 6 + 5) / 10 = 3.
Which of the following is the planned-order release using an MRP program if the gross requirement is 670 and the inventory on hand is 600? 670 600 530 70 None of the above
670 600 530 correct 70 None of the above Using net requirements, the program calculates when orders should be received to meet these requirements. This can be a simple process of just scheduling orders to arrive according to the exact net requirements or a more complicated process where requirements are combined for multiple periods. This schedule of when orders should arrive is referred to as "planned-order receipts." Since there is typically a lead time associated with each order, the next step is to find a schedule for when orders are actually released. Offsetting the "planned-order receipts" by the required lead time does this. This schedule is referred to as the "planned-order release." 670 - 600 = 70.
Using the assembly-line balancing procedure, which of the following is the required cycle time in minutes per unit if the daily production time is 480 minutes and the required daily output is 50 units? - 480 - 0.104 - Cannot be determined from the information above - 50 - 9.6
9.6 daily production time (480) / daily output (50)
An MRP system is
A system-driven logic that allows a company to tie the production functions together from a material planning and control view
Which of the following statements best characterizes an MRP system? A system-driven logic that allows a company to tie the production functions together from a material planning and control view. An independent demand system that helps a company to prioritize customer orders based on profit potential. A system that specifies the best transportation mode for inbound materials. A system-driven approach to determine which suppliers are likely meet delivery due dates.
A system-driven logic that allows a company to tie the production functions together from a material planning and control view.
Which of the following is an input file necessary to run an MRP system? A. Bill of materials (BOM) file B. Quality management report C. Exception reports D. Planned-order schedules E. Purchasing contracts
A. Bill of materials (BOM) file
Which of the following industry types will not benefit greatly from the application of MRP? A. Fabricate-to-order B. Assemble-to-stock C. Assemble-to-order D. Manufacture-to-order E. None of the above
A. Fabricate-to-order
Which of the following is most closely related to the reason a firm might implement MRP? A. So they can order the right parts B. So they can order parts sufficient for immediate use C. So they can insure that parts to arrive prior to when they are needed D. To assure appropriate quality levels E. To keep process costs between the LCL and the UCL
A. So they can order the right parts
The inventory turnover ratio used in measuring supply-chain efficiency is found by the ratio of which of the following? A.) Cost of goods sold/Average aggregate inventory value B.) Fixed costs/Variable costs C.)Sales costs/Marketing costs D.)Cost of goods sold/Cost to sell goods E.)Operations flow costs/Suppliers flow costs
A.) Cost of goods sold/Average aggregate inventory value
Which is not true about a Bill of Material (BOM) There is more than one way to create a BOM The BOM has multiple levels Item is coded at the lowest level at which it occurs All of the above are true statements
All of the above are true statements
MRP would provide the highest benefit to assembly processes such as
Appliances, Motors, and Trucks
Which of the following basic types of process structures is one which equipment or work processes are arranged according to the progressive steps by which the product is made? - Manufacturing cell - Assembly line - Project - Workcenter - Continuous process
Assembly line
MRP systems seek to achieve which of the following? A. Minimize lot sizes B. Determine the number of dependent demand items needed C. Relieve capacity bottlenecks D. Provide a yardstick for future improvements E. Improve on JIT methods
B. Determine the number of dependent demand items needed
Which of the following is considered a secondary report in an MRP system? A. Planned order schedule B. Exceptions reports C. Inventory record D. Firm orders from known customers E. Engineering change reports
B. Exceptions reports
Under the lot-for-lot (L4L) lot sizing technique as used in MRP, we would expect which of the following? A. A consistent lag of supply behind demand B. Minimized carrying costs C. Minimized set-up costs D. A just in time management philosophy E. Minimized quality problems
B. Minimized carrying costs
In an MRP program, the program accesses the status segment of an inventory record according to specific periods called which of the following? A. Cubed time units B. Time buckets C. BOM units D. Time modules E. Time lines
B. Time buckets
Which of the following is one of the main purposes of a MRP system? A. Educate personnel in basic work rules B. To determine the amount of materials needed to produce each end item. C. Stimulate the work force D. Decrease labor requirements E. Increase inventory accuracy
B. To determine the amount of materials needed to produce each end item.
A bill-of-material also goes by the acronym ______.
BOM
Which of the following industry types have high expected benefits from the application of MRP? A. Fabricate-to-order B. Hospitals C. Assemble-to-order D. Aircraft manufacturers E. Oil refineries
C. Assemble-to-order
Which of the following is a dynamic lot-sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal? A. Economic Order Quantity B. Lot for lot C. Least total cost D. Least unit cost E. ABC analysis
C. Least total cost
Which of the following can be used for lot sizing in an MRP system? A. Low-level coding B. Time bucket size C. Least unit cost D. Inventory record file E. Peg inventory
C. Least unit cost
We would expect to see which of the following in an MRP system's inventory status file? A. End items produced B. Late/early delivery records C. Scrap parts D. Labor efficiency E. Computer errors
C. Scrap parts
When considering outsourcing, what should firms be sure to avoid? A.)Losing control of non-core activities which don't distinguish the firm B.) Allowing outsourcing to develop into a substitute for innovation C.) Giving the outsourcing partner opportunities to become a strong competitor D.) Allowing employees transferred to the outsourcing partner to rejoin the firm E.) Adverse corporate tax implications of asset transfers to the outsourcing partner
C.) Giving the outsourcing partner opportunities to become a strong competitor
assemble to order
Combine a number of preassembled modules to meet a customer's specifications
The location for a manufacturing operation is often ____ focused, while the location for services operations is often ___ focused.
Cost, Revenue/Profit/Customer
develop the sourcing strategy
Cultivate quantitative and qualitative criteria to evaluate the sourcing process
Which of the following are sources of demand for products in a material requirements planning system?
Customer orders from sales personnel. Inter-department transactions.
Which of the following is a dynamic lot-sizing technique that adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost? A. Economic order quantity B. Lot-for-lot C. Least total cost D. Least unit cost E. Inventory item averaging
D. Least unit cost
Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) to arm's length relationships (outsource)? A.) Cost B.) Location C.) Investment D.) Coordination E.) Control
D.) Coordination
One of the main purposes of a MRP system is which of the following? Track inventory levels Create productive capacity Decrease layers of management Develop schedules specifying when each component should be ordered or produced. Upgrade manufacturing's professionalism
Develop schedules specifying when each component should be ordered or produced. MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item. MRP also provides the schedule specifying when each of these items should be ordered or produced.
Logistics involves which of the following management functions?
Distribution of finished product Purchase of production materials Planning of work-in-process Shipping of final goods
Which of the following is not a production activity report generated by MRP? A. Exception report B. Planning report C. Performance control report D. Planned-order schedules E. Bill of materials report
E. Bill of materials report
Which of the following is an input to the master production schedule? A. Prototype products from product development B. Aggregate component schedule C. Peg reports D. Exception reports E. Forecasts of random demand from customers
E. Forecasts of random demand from customers
Which of the following is a dynamic lot-sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot size in which these are most nearly equal? A. Kanban B. Just-in-time system C. MRP D. Least unit cost E. Least total cost
E. Least total cost
Which of the following is not a lot sizing technique used in MRP systems? A. Lot-for-lot (L4L) B. Economic order quantity (EOQ) C. Least total cost (LTC) D. Least unit cost (LUC) E. Warehouse loading factor (WLF)
E. Warehouse loading factor (WLF)
Which is the correct equation used to calculate economic order quantity (EOQ)? EOQ= √(2HS/D) EOQ= √(2DS/H) EOQ= √(2DH/S) EOQ= √(DS/H)
EOQ= √(2DS/H)
The closer the customer is to the customer order decoupling point, the longer it takes the customer to receive the product.
F
The essential issue in satisfying customers in the make-to-stock environment is to balance the cost of the finished item against the willingness of the consumer to pay for it.
F
The time needed to respond to a customer's order is called the customer response time.
F
Work-center layouts allocate dissimilar machines into cells to work on products that have dissimilar processing requirements.
F
Firms producing functional products are forced to introduce a steady stream of innovations in order to survive.
FALSE
Which of the following is not considered a major work flow structure? - Work Center - Project - Fabrication - Assembly line - Continuous Flow
Fabrication
A firm's core competency should always be considered a candidate for outsourcing to improve performance.
False
An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value
False
In a MTO manufacturing process, the product volumes are usually high and the customization is also high.
False
The Factor Rating Method is a calculation of where to place a distribution center given the distances and volumes between sources and destinations.
False
The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but does not include any of the costs related to disposing of the item after it is no longer useful.
False
True of False: Finished goods purchased by individuals external to the organization are considered dependent demand items.
False
Using a modular bill-of-materials will complex the scheduling and control and also makes it difficult to forecast the use of different modules.
False
MRP stands for Manufacturing Requirements Planning.
False Material Requirements Planning (MRP)
Time fences are described as
Frozen, Slushy, or Liquid
Which of the following is/are a part of an MRP record? Multiple select question. Scheduled repairs Raw material receipts Gross requirements Net requirements Planned order receipts
Gross requirements Net requirements Planned order receipts
Which of the following activities should not be outsourced?
Immature technology Complex computer software Specialized research and development Activities that have lots back-and-forth exchange of information
Which of the following is an organizationally-driven reason for outsourcing? A.) Improve effectiveness by focusing on what the firm does best B.) Turn fixed costs into variable costs C.) Reduce costs through lowered cost structure and increased flexibility D.) Improve risk management Improve credibility and image by associating with superior providers E.) Improve effectiveness by focusing on what the firm does best
Improve effectiveness by focusing on what the firm does best
A bill-of-materials that uses differences in alignment to indicate the order of assembly of components is using which type of structure? Uneven structure Duplicate structure Component structure Indented structure
Indented structure
What are the sources of demand for products in a material requirements planning system?
Inter-department transactions, customer orders from sales personnel, and orders for specific components needed in repair
Which of the following are sources of demand for products in a material requirements planning system? Multiple select question. Inter-department transactions. Customer orders that have been canceled. Customer orders from sales personnel. The master production schedule.
Inter-department transactions. Customer orders from sales personnel.
An EOQ lot sizing technique will try to minimize the sum of which of the following costs given a fairly constant demand
Inventory holding and setup
When changes occur because of stock receipts and disbursements, scrap losses, wrong parts and canceled orders, the real-time file capturing these changes is called the:
Inventory transactions file
the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule.
Least total cost
Setting planned orders to match the net requirements exactly is what type of lot sizing technique? EOQ Least total costs Least unit costs Lot-for-lot
Lot-for-lot
Which of the following is true about MRP? Multiple select question. MRP is not used for dependent demand items. MRP is used to determine the number of parts, components, and other materials needed to produce a product. MRP is the highest level of planning in most organizations. MRP is an acronym for Material Requirements Planning.
MRP is used to determine the number of parts, components, and other materials needed to produce a product. MRP is an acronym for Material Requirements Planning.
A ___ requirement is the amount needed when the projected available balance plus the scheduled receipts in a period are not sufficient to cover the ____ requirements
Net, gross
When safety stock is needed, what is reduced by the safety stock? Projected available balance Forecast for last period On-hand balance Demand from sales
On-hand balance
Lot sizes are the part quantities issued in the planned order receipt and planned _____ _______ sections of an MRP schedule
Order Release
The file created by retracing a material requirement upward in the product structure to identify each parent item that created the demand is called a _____ record
Peg
Which of the following files allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand? Planning bill of materials file Modular bill of materials file Super bill of materials file Exception report file Peg record file
Planning bill of materials file Modular bill of materials file Super bill of materials file Exception report file correct Peg record file The MRP program allows the creation of a peg record file either separately or as part of the inventory record file. Pegging requirements allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand.
Projected balance, the amount of inventory expected at the end of a period, is calculated using which equation? Projected available balance = sum of on-hand inventory + gross requirements - scheduled receipts + planned orders Projected available balance = sum of on-hand inventory + gross requirements - scheduled receipts - planned orders Projected available balance = sum of on-hand inventory + gross requirements + scheduled receipts - planned orders Projected available balance = sum of on-hand inventory - gross requirements + scheduled receipts + planned orders
Projected available balance = sum of on-hand inventory - gross requirements + scheduled receipts + planned orders
The Bullwhip Effect can be prevented if companies all along the value stream: Always buy in bulk at reduced prices Replenish stock with smaller volumes more frequently Coordinate and communicate orders and demand forecasts Avoid placing orders
Replenish stock with smaller volumes more frequently. Coordinate and communicate orders and demand forecasts.
The first step in the MRP explosion process is? Retrieve the gross requirements for end items from the master schedule. Place part orders for net requirements. Calculate the lead times for all products that have been schedule on the master schedule. Identify the inventory on hand for all parts.
Retrieve the gross requirements for end items from the master schedule.
In a typical inventory status record which of the following would you not expect to see? Scrap allowance Order quantity Gross requirements Planned-order releases Lost items
Scrap allowance Order quantity Gross requirements Planned-order releases correct Lost items The inventory status file is kept up to date by posting inventory transactions as they occur. These changes occur because of stock receipts and disbursements, scrap losses, wrong parts, canceled orders, and so forth.
An EOQ lot sizing technique will try to balance the sum of which of the following costs given a fairly constant demand? Multiple select question. Marketing Transportation Setup Holding costs
Setup Holding costs
Shorter cycle time and better risk management are ___________ reasons to outsource
Shorter cycle time and better risk management
Which type of time fence allows for changes to a specific product so long as parts are available?
Slushy
When balancing an assembly line, which of the following is not a way to reduce the longest task time below the required workstation cycle time? - Split the task between two workstations - Use a more skilled worker - Speed up the assembly line transfer mechanism - Upgrade the equipment - Assign a roaming helper to support the line
Speed up the assembly line transfer mechanism
What is NOT a part of the material requirements planning system?
Supplier Delivery Schedule
Which of the following is NOT a part of the material requirements planning system? Master production schedule Supplier delivery schedule Bill-of-materials Inventory records
Supplier delivery schedule
A general-purpose machine is less capable than a special-purpose machine in certain tasks but can perform a broader variety of tasks.
T
Engineer-to-order firms will work with the customer to design the product and then make it from purchased materials, parts, and components.
T
One difference between an assembly line process flow and a continuous process flow is that on the assembly line the flow is discrete rather than continuous.
T
One methodology used to evaluate equipment investment decisions where the investment entails an initial investment, fixed costs, and variable costs is break-even analysis.
T
Process selection refers to the strategic decision of selecting which kind of production processes to use to produce a product or provide a service.
T
The closer the customer is to the customer order decoupling point, the more quickly the customer receives the product.
T
The essential issue in satisfying customers in the make-to-stock environment is to balance the level of finished inventory against the level of service to the customer.
T
The focus in the make-to-stock environment is on providing finished goods where and when the customers want them.
T
The product-process matrix shows the relationship between process structures and product volume and variety characteristics.
T
The term "assembly line" refers to progressive assembly linked by some material handling device.
T
The volume requirements for the product are one determinant of the choice of which process structure to select.
T
According to Little's Law, which of the following can be used to estimate work-in-process inventory? - Process velocity/Flow time - Value added time/Process velocity - Process time/Cycle time - Throughput rate times Flow time - Set up time/Throughput rate
Throughput rate times Flow time
Which of the following is/are issues a master scheduler must consider? Multiple select question. Trade-off manufacturing, engineering and marketing conflicts. Be involved with customer order promising. The firms financing plans. Never lose sight of the aggregate plan. Adjust the raw material supply schedule as needed.
Trade-off manufacturing, engineering and marketing conflicts. Be involved with customer order promising. Never lose sight of the aggregate plan.
A process that places all identical parts at the same level in the bills-of-materials simplifies computations. This process is known as low level coding.
True
Which of the following is not a type of time fence described in the text? Variable Frozen Slushy Liquid
Variable
Which two product characteristics help determine the appropriate manufacturing process Volume demanded (high or low) Specifications (detailed or simple) Customization (unique or standard) Value of Finished Goods
Volume demanded (high or low) Customization (unique or standard)
lean manufacturing
a means of achieving high levels of customer service with minimal inventory investment
Least unit cost provides _________ as an advantage when taking variable ordering costs and setup costs into account. a shorter computation a simple return on investment a quick reference a more complete analysis
a more complete analysis
Problem 6-17 Some tasks and the order in which they must be performed according to their assembly requirements are shown in the following table. These are to be combined into workstations to create an assembly line. The assembly line operates 13 hours per day. The output requirement is 1,800 units per day. (TASK) (b/4) (TIME) A — 20 G C 13 B A 7 H D 8 C A 14 I E 7 D B 16 J F, G 9 E B 15 K H, I 6 F C 14 L J, K 4 a. What is the workstation cycle time? b. balance the line using the longest task time based on the 1,800-unit forecast, stating which tasks would be done in each workstation. c. What is the efficiency of your line balance? (Round your answer to 1 decimal place.) d. After production was started, Marketing realized that they understated demand and must increase output to 1,900 units. There are two options: reduce cycle time or work overtime. Please identify the following:
a. 26 seconds per unit b. c. 85.3 d. reduce cycle time to 25 (13 x 3600)/1900 = 25 overtime 43 minutes ((1900-1800) x 26 sec) = 2600 sec / 60 sec = 43 minutes
Which type of supply chain strategy is aimed at being responsive and flexible to customer needs and hedges against pooled inventory and other capacity resources?
agile supply chains
continuous process
assembly line only the flow is continuous such as with liquids
What is the first step in the process for green sourcing?
assess the opportunity
If a company has more units in the master production schedule than firm customer orders, the residual is called?
available to promise
An assembly line is to operate eight hours per day with a desired output of 300 units per day. The following table contains information on this product's task times and precedence relationships: TASK TIME b/4 A 50 — B 40 A C 45 A D 25 A E 60 B, C F 35 C, D G 25 E, F H 50 G b. What is the required workstation cycle time to meet the desired output rate? (Round your answer to the nearest whole number.) c. Balance this line using the longest task time. (Leave no cells blank - be certain to enter "0" wherever required.) d. What is the efficiency of your line balance, assuming it is running at the cycle time determined in part b? (Round your answer to 1 decimal place.)
b. Workstation cycle time 96 correct seconds per unit c. Work Station Task Idle Time I A-C 1 II B-D 31 III E-F 1 IV G-H 21 d. Efficiency 85.9 %
MRP systems tend to work best in companies where products are made in _____ using the same productive equipment.
batches
MRP systems tend to work best in companies where products are made in_____________, using the same productive equipment.
batches
Lumpiness, or the tendency for uneven production, further down the creation sequence is cause by items being withdrawn from inventory in single items. not possible with an ERP system in place. caused by items being withdrawn from inventory in lots.
caused by items being withdrawn from inventory in lots.
Which of the following is not a major characteristic to be considered when structuring an outsourcing relationship?
collaboration
Which of the following is an input file necessary to run an MRP system? Bill of materials (BOM) file Quality management report Exception reports Planned-order schedules Purchasing contracts
correct Bill of materials (BOM) file Quality management report Exception reports Planned-order schedules Purchasing contracts
In a net change MRP program, a change in one item will result in a completely new inventory plan and schedule for every item in the master production schedule.
correct False Net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in "real time" the exact status of each item managed by the system.
An input to the material requirements planning (MRP) system is an exception report.
correct False This BOM file is one of the three main inputs to the MRP program. (The other two are the master schedule and the inventory records file.)
A product tree can do which of the following? Help to compute component usage Reduce product scrap Reduce labor overtime Reduce regular time labor Locate raw material supplies
correct Help to compute component usage Reduce product scrap Reduce labor overtime Reduce regular time labor Locate raw material supplies The BOM file is often called the product structure file or product tree because it shows how a product is put together. It contains the information to identify each item and the quantity used per unit of the item of which it is a part.
A BOM file is also called which of the following?
correct Product tree Stocking plan Inventory usage record Production parts plan Time bucket schedule The BOM file is often called the product structure file or product tree because it shows how a product is put together.
A master production schedule is an input to a material requirements planning (MRP) system.
correct True Generally, the master schedule deals with end items and is a major input to the MRP process.
A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations.
correct True Lot-for-lot (L4L) is the most common technique. It: • Sets planned orders to exactly match the net requirements. • Produces exactly what is needed each week with none carried over into future periods. • Minimizes carrying cost. • Does not take into account setup costs or capacity limitations.
MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item.
correct True MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item.
MRP is based on dependent demand
correct True MRP is based on dependent demand. Dependent demand is caused by the demand for a higher-level item. Tires, wheels, and engines are dependent demand items based on the demand for automobiles, for example.
MRP provides the schedule specifying when each part and component of an end item should be ordered or produced.
correct True MRP provides the schedule specifying when each of these items should be ordered or produced.
Time fences are periods of time having some specified level of opportunity for the customer to make changes.
correct True Management defines time fences as periods of time having some specified level of opportunity for the customer to make changes.
Net change MRP systems are "activity" driven.
correct True Net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in "real time" the exact status of each item managed by the system.
The master production schedule states the number of items to be produced during specific time periods.
correct True The master production schedule states the number of items to be produced during specific time periods.
The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to become more "lumpy."
correct True The requirements of dependent demand items tend to become more and more lumpy as we go farther down into the product creation sequence.
Computing the quantity of each component that goes into a finished product can be done by expanding (or exploding) each item in a product structure file and summing at all levels.
correct True To compute the amount of each item needed at the lower levels, each item would need to be expanded ("exploded") and summed. A more efficient procedure is to store parts data in simple single-level lists. That is, each item and component is listed showing only its parent and the number of units needed per unit of its parent.
What term describes the annual cost for a company to produce the good or services provided to customers?
cost of goods sold
costs of goods sold is also known as
cost of revenue
Level 0 items during the explosion process are typically referred to as _____ items, or gross requirements.
end
The master production schedule is used to plan raw materials. end items. supply parts. rework.
end items.
True or false: Sourcing activities remain the same regardless of what is being purchased.
false
What term is used to describe a practice where a customer makes a large purchase in response to a promotion or price cut?
forward buying
Staple products that customers buy in a wide range of retail outlets are known as __________ products.
functional
Strategic sourcing is focused on the ________ needs of a business.
immediate
What type of products have a life cycle of just a few months?
innovative
Using complex lot-sizing techniques, larger lot sizes can cause an increase in __________, complicating plant logistics. inventory setup costs supplier costs demand
inventory
Weeks of supply is a measure of how many weeks' worth of __________ is in the system at a particular point in time
inventory
Customer order decoupling point
inventory is positioned to allow entities in the supply chain to operate independently
A material requirements planning system interfaces with the master production schedule, bill-of-materials file and __________
inventory records file.
A material requirements planning system interfaces with the master production schedule, bill-of-materials file and __________. product demand. inventory records file. forecasted sales. customer purchase order.
inventory records file.
When changes occur because of stock receipts and disbursements, scrap losses, wrong parts and canceled orders, the real-time file capturing these changes is called the peg record file. bill-of-material file. inventory transactions file. inventory backlog file.
inventory transactions file.
The ratio of cost of good sold to average inventory value is known as
inventory turnover
The inventory records file contains information such as Multiple select question. item description. list of authorized suppliers. lead time. planned order releases. safety stock.
item description. lead time. planned order releases. safety stock.
The _____ _____ _____ method is a dynamic approach that adds ordering and inventory carrying costs for each trial lot size, divides the costs by the number of units, and chooses the lot size with the lowest unit cost.
least unit cost
One of the limitations with least total coast (LTC) is the influence by the size of the manufacturing site. length of the planning horizon. number of parts ordered. selection of suppliers.
length of the planning horizon.
What term refers to the management functions that support the complete cycle of material flow?
logistics
are the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule. Economic order quantity
lot sizes
A generic pizza box that can be used by multiple pizza shops is an example of a product with ____________ specificity
low
A process that places all identical parts at the same level in the bills-of-materials simplifies computations. This process is known as
low level coding
The master production schedule typically deals with end items, but can be broken down to __________ if the item is large or expensive. inexpensive components work-in-process major subassemblies single use
major subassemblies
inventory
material held by arm for future use
After finding gross requirements, the next step in the MRP explosion process references inventory on hand and scheduled orders to calculate _____ requirements.
net
The ultimate goal of any MRP lot sizing approach is to balance the setup or _____ costs and the _____ costs associated with meeting the net requirements generated by the MRP planning process.
order holding
the ultimate goal of any MRP lot sizing approach is to balance the setup or _______________ costs and the ______________costs associated with meeting the net requirements generated by the MRP planning process.
order, holding
Which of the following would be located on the MPS plan? Multiple select question. vehicle engine purchased for a production line. pens ordered from an office supply company. pen caps ordered by a pen manufacturer from a supplier. a new vehicle purchased from an automotive dealer.
pens ordered from an office supply company. a new vehicle purchased from an automotive dealer.
Some benefits of an ERP system are Multiple select question. quality management can develop inspection points for products during manufacturing. manufacturing knows about orders as soon as they are entered. human resources knows how many employees to schedule. sales can track all the details of an order.
quality management can develop inspection points for products during manufacturing. manufacturing knows about orders as soon as they are entered. sales can track all the details of an order.
Which sourcing process is used for complex items where there are a number of potential vendors?
request for proposal
Which type of supplier relationship should be used when there is a standardized interface between adjacent tasks?
required coordination
A product with high demand uncertainty and low supply uncertainty would utilize which type of supply chain?
responsive
The EOQ is the Quantity where the ___ costs equal the ___ costs.
set-up order
Workcenter (job shop)
similar equipment or functions are grouped together
Which type of time fence allows for changes to a specific product so long as parts are available
slushy
Production process
source, make, deliver
What term describes the development and management of supplier relationships?
strategic sourcing
time between plane takeoffs can be at least 3 minutes. after take off, run time is 45 seconds. planes wait an average of 4 minutes and 15 seconds. on average there are 15 planes taking of per hours. How many planes are on the runway at once?
throughput rate: 15 planes/hour flow time: 4 min 15 sec + 45 sec -> 5 minutes inventory: 15 planes/hour x (5 min/60) = 1.25 planes
_____ _____ are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.
time fences
At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as
time buckets
Little's Law provides a convenient way to calculate WIP inventory with this equation: Inventory = Throughput time x Flow time. What is Flow Time? WIP Inventoy average rate that items come out of the process time for a single unit to go end-to-end Cycle time
time for a single unit to go end-to-end
flow time
time for one unit to get through a process
production process mapping
useful to understand how material flow and inventory is held
