Review for Final Exam
If annual demand is 1,600 units, the ordering cost is $100 per order and the holding cost is $2.00 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?
400
Logistics accounts for about what percent of the U.S. gross domestic product?
About 8-9 percent
Which of the following is the set of all cost components that make up the fixed-order quantity total annual cost (TC) function?
Annual holding cost, annual ordering cost, annual purchase cost
Which of the four costs relevant to aggregate production planning is the most difficult to accurately measure?
Backordering costs
List at least three of the four costs relevant to the aggregate production plan.
Basic production costs, costs associated with changes in the production rate, inventory-holding costs, and backordering costs
Which of the following is usually included as an inventory holding cost?
Breakage
In the agriculture industry, migrant workers are commonly employed to pick crops ready for harvest. They are hired as needed and are laid off once the crops are picked. This approach is made necessary by the realities of the industry. Which production planning strategy would this best be an example of?
Chase strategy
To support the manufacture of desktop computers for its customers, Dell needs to order all the parts that go into the computer, such as hard drives, motherboards, and memory modules. Obviously the demand for these items is driven by the production schedule for the computers. What is the term used to describe demand for these parts?
Dependent demand
Which of the following types of supply chains is most suited for commodity products
Efficient Supply Chain
What mode of transportation is involved in the movement of the greatest number of products?
Highway (truck).
Nonvalue added activities in a process I) increase the flowtime II) increase the cost of production III) decrease the flowtime IV) decrease the cost of production
I and II only
What is the term used to refer to inventory while in distribution—that is, being moved within the supply chain?
In-transit inventory
Which of the following states the long-term relationship between the inventory, throughput, and flow time in a production system that is in steady state?
Little's Law
Process capability indices for machines A and B are 1.8 and 1.2 respectively. Which of the machines is likely to produce lower proportion of defectives? A. Machine A B. Machine B C. Process capability index has no influence on the proportion of defectives produced by a machine.
Machine A
If you are a Quality Manager which of the following would you prefer the most? A. Machine with high process variance and product with narrow specification limits B. Machine with low process variance and product with wide specification limits C. Machine made in Brazil and product designed in Chile D. Machine made in Chile and product designed in Brazil E. none of the above
Machine with low process variance and product with wide specification limits
Major operations and supply planning activities can be grouped into categories based on the relevant time range of the activity. What time range category does sales and operations planning fit into?
Medium range
What is the term for a more complex production strategy that combines approaches from more than one basis strategy?
Mixed strategy
3PL refers to
Outsourcing of logistics operations to one or more outside firms
What mode of transportation is limited to specialized products such as liquids and gases?
Pipeline
What category of planning covers a period from a day to six months, with daily or weekly time increments?
Short range planning
If you are a Quality Manager which of the following would you prefer the most?
The specification limits are outside ± 3s for the process
Which of the following is an advantage of the level strategy for aggregate operations planning?
There is a smooth flow throughout the production system
Some manufacturing firms contract with an outside company to manage the firm's logistics functions. What is the general term for a firm that provides such services?
Third-party logistics (3PL) company
What phrase refers to the idea that all steps in supply chain processes that deliver goods and services to the customer should create value?
Value chain
Factor rating method used in location decisions refers to
a numerical method which is used to evaluate the suitability of different locations taking into consideration various factors used in the evaluation
Location decision for profit oriented service firms
affects both costs and revenues
MRP is a technique designed to manage
dependent demand items
Total Quality Management (TQM) means that quality is the responsibility of
everyone in the firm
Bullwhip effect refers to
increasing variability in the demand as seen by the upstream firms in a supply chain
Sales and operations planning is a technique used to balance the supply and demand of
items at the aggregate level
A firm should be willing to consider outsourcing everything except
its core competencies
Lower control limit in a p-chart A. should be equal to zero B. can be less than zero C. should always be more than zero D. none of the above
none of the above
Cellular manufacturing concept refers to
reorganization of a the factory into clusters of machines, with each cluster dedicated to manufacture of similar set of customer orders
Cross-Docking refers to
warehouse space requirements are reduced by synchronized and simultaneous handling of inbound and outbound shipments