SCMA 331 Exam 3 (Chapters 11-16)

under which of the following do planning tasks associated with job assignments, ordering, job scheduling, and dispatching typically fall

A) short-range plans

Which of the following actions is consistent with the use of level scheduling?

A) use inventory to meet demand requirements

The objective of aggregate planning is usually to meet forecast demand while smoothing employment and driving down inventory levels over the planning period. T/F

False

) A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services. t/f

TRUE

Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

TRUE

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months. (T/F)

TRUE

Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

TRUE

DRP is a time-phased stock-replenishment plan for all levels of a distribution network. t/f

TRUE

Finding an ideal mixed strategy is complicated by the huge number of possible strategies. t/f

TRUE

Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.

TRUE

Graphical techniques are easy to understand and use, but are not well-suited for generating optimal strategies. t/f

TRUE

Gross material requirements do not take into account the amount of inventory on hand. t/f

TRUE

If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90. t/f

TRUE

If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G. t/f

TRUE

In general, the lot-for-lot approach should be used whenever economical. t/f

TRUE

In aggregate planning, the amount of overtime and the size of the work force are both adjustable elements of capacity. t/f

True

In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification.

True

When developing an aggregate plan, one of the adjustable elements of capacity is the extent of subcontracting. t/f

True

What is input-output control?

a technique that allows operations personnel to manage facility work flow by tracking work added to a work center and its completed work

Distribution resource planning (DRP) is:

a time-phased stock replenishment plan for all levels of a distribution network

which of the following would NOT be considered (in addition to delivery speed) when choosing a mode of transportation?

all of the above may be considered

which of the following is NOT a concern of suppliers as they prepare to enter into JIT partnerships?

all of the above represent JIT supplier concerns

the 5Ss:

all of these are true

which of the following is the prescribed remedy when the bullwhip effect is caused by shortage gaming?

allocate orders based on past demand

what is a scheduling technique used to achieve an optimum, one to one matching of tasks and resources?

an assignment method

The __________ is a special class of linear programming models that involves assigning tasks or jobs to resources

assigning method

which of the following is NOT one of the seven wastes?

assignment

the short-term scheduling activity called "loading":

assigns jobs to work centers

Enterprise resource planning (ERP):

automates and integrates the majority of business processes

in JIT partnerships, suppliers have several concerns. Which of the following is NOT such a concern?

customers' infrequent engineering changes

) ________ is a continuing reconciliation of inventory with inventory records.

cycle counting

what focuses on developing varying schedules with the minimum number of workers?

cyclical scheduling

because service firms do not acquire goods and services externally, their supply chain management issues are insignificant (t/f)

false

because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced (t/f)

false

cross-sourcing describes the practice of having two suppliers provide every component (t/f)

false

designing distribution networks to meet customer expectations suggest three criteria: rapid response, cost, and service (t/f)

false

improvements in security, especially regarding the millions of shipping containers that enter the US each year, are being held back by the lack of technological advances (t/f)

false

in the disaster risk model, as the probability of a super-event (s) increases, the advantage of utilizing multiple suppliers increases (t/f)

false

once revenue and total logistics cost are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only. (t/f)

false

Which of the following lot-sizing techniques results in the lowest holding costs?

lot-for-lot

________ is a lot-sizing technique that generates exactly what is required to meet the plan

lot-for-lot

What is the lot-sizing technique that generates exactly what was required to meet the plan?

lot-forlot

For which corporate strategy(ies) should supply chain inventory be minimized?

low cost and differentiation

which of the following is a characteristic of lean operations?

low space requirements

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use FEWER suppliers?

lower L, higher C

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers?

lower S, higher U

the _________ decision involves choosing between producing a component or service internally and purchasing it externally

make or buy

In MRP, system nervousness is caused by

management's attempt to continually respond to minor changes in production requirements.

The __________ is the time between the arrival of raw materials and the shipping of finished products

manufacturing cycle time

which sourcing strategy is particularly common when the products being sourced are commodities?

many suppliers

A(n) ________ is the result of the disaggregation of an aggregate plan.

master production schedule

MRP II is accurately described as:

material resource planning.

which of the following is not an effectiveness criterion for scheduling?

maximizing flow time

Drop shipping:

means the supplier will ship directly to the end consumer, rather than to the seller

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

minimum

Bills of material organized by major subassemblies or by product options are called ________.

modular bills

If an assignment problem consists of 6 workers and 7 projects:

one project will not get a worker assigned

if an assignment problem consists of 5 workers and 4 projects:

one worker will not get a project assignment

local optimization is a supply-chain complication best described as

optimizing one's local area without full knowledge of supply chain needs

which of the following is NOT a remedy for the bullwhip effect?

order batching

the transfer of some of what are traditional internal activities and resources of a firm to outside vendors is:

outsourcing

transferring to external vendors a firm's activities that have traditionally been internal is known as ___________

outsourcing

Identify Ohno's Seven Wastes.

overproduction, queues, transportation, inventory, motion, overprocessing, and defective product

which of the following statements does NOT accurately explain what occurs when the number of facilities in a distribution network increases?

response time first decreases, then increases

among which of the following industries are purchasing costs the LOWEST percentage of sales?

restaurants

_________ is the process of sending returned products back up the supply chain for value recovery or disposal

reverse logistics

A(n) ________ model gives satisfactory answers even with substantial variations in its parameters.

robust

the 5Ss developed by the Japanese do NOT include

safety

________ is extra stock that is carried to serve as a buffer

safety stock

____________ determines the order in which jobs should be done at each work center

sequencing

________ is the complement of the probability of a stockout

service level

If a factory wants to cut its current lot size in half, by what proportion must setup cost change?

setup cost must be cut to one fourth its current value

For the lot-sizing technique known as lot-for-lot to be appropriate

setup cost should be relatively small

who is credited with coining the phrase, Inventory is Evil?

shigeo shingo

which one of the following is NOT one of the six sourcing strategies

short term relationships with few supplier

in the sequence of decisions that affect scheduling, _______________ is (are) the immediate follower(s) of the master schedule (or master production schedule)

short-term schedules

A common JIT layout tactic is to minimize distance (t/f)

true

A kanban system requires that the process has little variability in lead time because shortages impact the entire production system. (t/f)

true

Because of the significance of labor in scheduling of services, behavioral and social issues, wage and hour laws, and union contracts all complicate the scheduling process (t/f)

true

Delta uses mathematical short-term scheduling techniques and a high-tech nerve center to manage the rapid rescheduling necessary to cope with weather delays and similar disruptions (t/f)

true

Drop shipping results in time and shipping cost savings (t/f)

true

Finite capacity scheduling provides the user with graphical interactive computing, which is the technique's primary advantage over rule-based scheduling (t/f)

true

Hidden problems are generally uncovered during the process of reducing inventory (t/f)

true

___________ is any deviation from the optimum process that delivers perfect product on time, every time

variability

Which one of the following is not a benefit of JIT implementation?

variability increase

what is the formula for the bullwhip measure?

variance of orders/variance of demand

suppliers are also known as ______________

vendors

__________ is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor

vertical integration

___________ rely on a variety of supplier relationships to provide services on demand

virtual companies

which of the following best describes Vizio's sourcing strategy?

virtual company

Amazon's original concept of operating without inventory has given way to a model in which Amazon is a world-class leader in ________.

warehouse automation and management

Scheduling matches resources to what?

customer demands

Which of the following would most likely fall under the scope of only an operations manager?

E) setting inventory levels

A firm wants to develop a level material use schedule based on the following data. What should be the setup cost? Desired lot size: 60 Annual demand: 40,000 Holding cost: $20 per unit per year Daily production rate: 320 Work days per year: 250

$0.45

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%. In addition, the firm currently uses four suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 20%. Supplier management costs during this period are $50,000 per supplier. The financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000. What is the expected monetary value (cost) of the current supplier diversification arrangement?

$415,680

Which of the following priority rules minimizes maximum tardiness?

EDD (Earliest Due Date)

suppose that a product's value is $1000. The manufacturer experiences a holding cost of 2.5% per month. The firm ships the product across country by truck, and it arrives six days later. The shipping cost is $80 per unit. What is the holding cost on each unit shipped? (Assume 30 days per month)

$5.00

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d = 400 per day (250 days per year), p = 4000 units per day, H = $40 per unit per year, and Q = 200 (demand for four hours, half a day).

$7.20

Identify three techniques to control service inventories

(1) good personnel selection, training, and discipline; (2) tight control of incoming shipments; and (3) effective control of all goods leaving the facility

Identify the four types of inventory.

(1) raw material inventory; (2) work-in-process inventory; (3) maintenance/repair/operating supply (MRO) inventory; and (4) finished-goods inventory

a work center had planned outputs of 10, 15, 13, and 20 hours with actual outputs of 12, 14, 13 and 18 hours. What is the cumulative deviation in output?

-1

Eight jobs have been sequenced at a single work center. Total processing time for the eight jobs is 34 hours, and total flow time for the sequence is 85 hours. For this schedule, utilization is ____________ and the average number of jobs in the system is ____________.

.235 or 23.5%; 4.25

If job 5 takes 3, 4, or 5 hours to be completed by workers A, B, and C, respectively, what would the row values for job 5 be after performing step 1A of the assignment method?

0, 1, 2

Suppose that the manager of a company has estimated the probability of a super event sometime during the next five years that will disrupt all suppliers as 0.23%. In addition, the firm currently uses three suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next five years to be 1.4%. What is the probability that all three suppliers will be disrupted at the same time at some point during the next five years?

0.2303%

with cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)

1

What four things are needed to develop an aggregate plan?

1) a logical overall unit for measuring sales and output; (2) a forecast of demand for a reasonable intermediate planning period in aggregate planning terms; (3) a method to determine the relevant costs; (4) a model that combines forecasts and costs so that scheduling decisions can be made for the planning period

what is the value of the bullwhip measure for a company with a standard deviation of demand equal to 20, and a variance of orders equal to 450?

1.125

a work center had actual input of 280 hours and actual output of 270 hours. What is the change in backlog?

10

The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the longest processing time rule, what is the lateness of job A? Job Processing Time (days) Job due date (days) A 20 180 B 30 200 C 10 175 D 16 230 E 18 210

10.0 days

An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C?

115

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?

12.50

Lead time for computers is 5 days with daily demand of 25 and safety stock of 5 computers. If management wants to use 10 kanbans how many computers should each one hold?

13

An order for 110 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements

180

The demand for subassembly S is 110 units. Each S requires 1 T and 2 U. How many Us are required?

220

Lead time cor cakes is 2 days with daily demand of 10 cakes and a safety stock of 1/2 a day. Each container (kanban) holds 1 cake. What is the correct number of kanbans?

25

An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N?

300

Consider the following product structure. If the demand for product A is 50 units, how many units of component E will be needed?

300

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold?

4.16

The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the shortest processing time rule, what is the average completion time? Job Processing Time (days) Job due date (days) A 20 180 B 30 200 C 10 175 D 16 230 E 18 210

47.6 days

Lead time for computers is 7 days with daily demand of 5 computers and a safety stock of 1 day. Each kanban holds 8 computers What is the correct number of kanbans?

5

Consider the following product structure. If the demand for product A is 50 units, how many units of component E will be needed?

50

Each S is 1 T & 2 Us. Each U is 2 Ys and 3 Zs. If you need 110 Ss, how many Zs do you need?

660

a grocery store is trying to find a new supplier for carrots. Its three most important supplier criteria are freshness, lot size, and cost, with factor weights of 0.6, 01, and 0.3 respectively. What would a supplier with ratings of 6, 8, and 10 in the three respective categories score as a weighted total?

7.4

Consider the following product structure. If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed?

70

An industrial producer is searching for a supplier for ball bearings. Its three most important supplier criteria are price, quality and delivery reliability. The firm has decided that quality and delivery reliability should carry the same weight, and that each of them are twice as important as price If the weights sum to 100%, what would a supplier with ratings of 40, 90, and 75 in the three respective categories score as a weighted total?

74

How many Kanbans are needed? Daily demand = 1600pc, LT=2days, SS=0.50day, container size=500 pcs

8

The minimum record accuracy required for successful MRP is approximately which of the following?

99%

What is a reorder point?

A reorder point is the inventory level (point) at which action is taken (an order placed) to replenish the stocked item.

A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $20, and trees sell for $50 what is the service level?

A) .60

) A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level?

A) 41

Which of the following items is mostly likely managed using a single-period order model?

A) Christmas trees

What directly results from disaggregation of an aggregate plan?

A) a master production schedule

2) The fixed-period inventory system requires more safety stock than a fixed-quantity system because:

A) a stockout can occur during the review period as well as during the lead time

Disaggregation:

A) breaks the aggregate plan into greater detail.

Which of the following aggregate planning strategies is a demand option?

A) changing price

Q is to ________ systems as P is to ________ systems

A) fixed quantity, fixed period

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will:

A) increase by about 41%.

) The main trait of a single-period model is that:

A) inventory has limited value after a certain period of time.

The objective of aggregate planning is to meet forecast demand while ________ over the planning period.

A) minimizing cost

Which of the following is a requirement of Q systems?

A) perpetual inventory system

Under which of the following do planning tasks associated with production planning and budgeting, as well as setting employment, inventory, and subcontracting levels, typically fall?

B) intermediate-range plans

To use revenue management strategies, a business should have which combination of costs?

B) low variable and high fixed

What does the POQ interval equal?

EOQ / average demand per period

A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is:

B) one-third as large

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

B) subcontracting

In aggregate planning, which one of the following is not a basic option for altering demand?

B) subcontracting

In the service sector, which of the following aggregate planning strategies might direct your client to a competitor?

B) subcontracting

ABC analysis is based upon the principle that:

B) there are usually a few critical items, and many items that are less critical.

An advantage of the fixed-period inventory system is that:

B) there is no physical count of inventory items when an item is withdrawn.

Industries in which revenue management techniques are easiest to apply are those where:

B) use tends to be predictable, and pricing tends to be variable.

Cycle counting:

B) eliminates annual inventory adjustments.

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

B) increased by less than 50%.

Which of these aggregate planning strategies is a capacity option?

B) using part-time workers

) ________ is a method for dividing on-hand inventory into three classifications based on annual dollar

ABC analysis

________ is an approach to determine the quantity and timing of production for the intermediate future.

Aggregate planning

Dependent demand and independent demand items differ in that:

All of the above are true.

Which of the following statements regarding the gross material requirements plan is TRUE?

All of the above are true.

According to the global company profile, Amazon.com's advantage in inventory management comes from its almost fanatical use of economic order quantity and safety stock calculations.(T/F)

Answer: FALSE

What does the use of the shortest processing time sequencing rule generally produce?

B and D (maximum utilization and minimum average flow time)

A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost ________ per year in total annual inventory (holding and setup) costs.

B) $800

A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, and in period 2, demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1? (Assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour.)

B) 125

A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order:

B) 200 units per order.

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

B) 245

An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is TRUE?

B) Fourteen is the reorder point, and 100 is the order quantity.

Which of the following statements regarding the production order quantity model is TRUE?

B) It relaxes the assumption that all the order quantity is received at one time

Which of the following statements regarding Amazon.com is FALSE?

B) The company was founded as, and still is, a "virtual" retailer with no inventory.

Which of these is among the demand options of aggregate planning?

B) back-ordering during high-demand periods

Which choice below best describes the counterseasonal product demand option?

B) developing a mix of products that smoothes out their demands

Five jobs are waiting to be processed. Their processing times and due dates are given below Using the earliest due date dispatching rule, in which order should the jobs be processes? Job Processing Time (days) Job due date (days) A 4 7 B 2 4 C 8 11 D 3 5 15-18 Copyright © 2014 Pearson Education, Inc. E 5 8

B, D, A, E, C

All EXCEPT which of the following statements about ABC analysis are true?

D) ABC analysis suggests that all items require the same high degree of control

In the quantity discount model, the cost of acquiring goods (product cost) is not a factor in determining lot size.(T/F)

False

In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately

False

Which of these statements about the production order quantity model is FALSE?

D) All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.

In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

False

In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5 per unit per month, what is the economic order quantity?

C) 141

One of the demand options of aggregate planning is to vary the workforce by hiring or layoffs. t/f

False

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. What is the standard deviation of demand during lead time?

C) 154 units

Using LPT priority would result in what sequence for Jobs A, B, C, and D if their process times are 4, 6, 5, and 2 respectively?

BCAD

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $600. What is the inventory carrying cost per unit per year for this item?

C) $3.00

A firm practices a pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and layoff cost is $5 per unit. Over the next year, what will be the sum of hiring and layoff costs?

C) $7,500

Suppose that papers for a newspaper stand cost $0.40 and sell for $0.80. They currently have no salvage value. If the stand owner is able to find an outlet that would provide a salvage value of $0.10, what would be the increase in service level?

C) .07

A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?

C) 110

) If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, a 90 percent service level will require how much safety stock?

C) 13 units

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem?

C) 184

What is the typical time horizon for aggregate planning?

C) 3 to 18 months

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires how much safety stock?

C) 49 units

Which of the following statements about aggregate planning is TRUE?

C) A pure chase strategy allows lower inventories when compared to a pure level scheduling.

) Which of the following statements regarding control of service inventories is TRUE?

C) Effective control of all goods leaving the facility is one applicable technique

Which of the following statements regarding aggregate planning is TRUE?

C) Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon.

Which of the following is NOT one of the four things needed for aggregate planning?

C) a mathematical model that will minimize costs over the intermediate planning period

Which of the following characteristics makes revenue management UNATTRACTIVE to organizations that have perishable inventory?

C) capacity is easily changed

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* = (sqroot) 2DS/H

C) is one-half of the economic order quantity.

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period), it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that:

C) level production of 420 units per day is below the January requirement

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services?

C) little flexibility in worker hours to decrease the burden on management

Top executives tend to focus their attention on which type of forecasts

C) long-range

Frito-Lay uses aggregate planning to match capacity with demand because of the ______ associated with its specialized process

C) low variable cost and high fixed cost

Which of the following is NOT an advantage of level scheduling?

C) matching production exactly with sales

In level scheduling, what is kept uniform from month to month?

C) production/workforce levels

Which of the following aggregate planning options is NOT associated with manipulation of product or service demand?

C) subcontracting

The two most basic inventory questions answered by the typical inventory model are:

C) timing of orders and order quantity.

Most inventory models attempt to minimize:

C) total inventory-based costs.

Five welding jobs are waiting to be processed. Their processing times and due dates are given below. Using the critical ratio dispatching rule, in which order should the jobs be processed? All dates are specified as days from today. Job Processing Time (days) Job due date (days) A 4 7 B 2 4 C 8 11 D 3 5 E 5 11

C, D, A, B, E

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

E) Cannot be determined without lead time data.

The EOQ model is best suited for items whose demand is dependent on other products.

False

Which of the following statements regarding aggregate planning in services is FALSE?

E) Level scheduling is far more common than using a chase strategy.

) Revenue management is MOST likely to be used in which one of the following situations?

E) an airline attempting to fill "perishable" seats at maximum revenue

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

E) annual dollar volume

An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following?

E) facility capacity

Which of the following is NOT an input to S&OP?

E) master production schedule

The ________ strategy sets production equal to forecasted demand.

Chase

What is a method of input-output control that uses a system of cards to limit the amount of work at a work center and also to control lead time and monitor backlog?

ConWIP cards

______________ cards are used to control the amount of work in a work center, aiding input-output control.

ConWIP cards

a work center is interested in limiting work in process by not allowing production to start again until the current batch is finished. the best solution likely involves:

ConWIP cards

A bakery wants to determine how many trays of doughnuts it should prepare each day. Demand is normal with a mean of 5 trays and standard deviation of 1 tray. If the owner wants a service level of at least 95%, how many trays should he prepare (rounded to the nearest whole tray)? Assume doughnuts have no salvage value after the day is complete.

D) 7

Which of the following statements about ABC analysis is FALSE?

D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

Which of the following statements about the basic EOQ model is FALSE?

D) If annual demand were to double, the EOQ would also double.

Which choice best describes level scheduling?

D) Inventory goes up or down to buffer the difference between demand and production

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* = (sqroot) 2DS/H

D) Production and use can occur simultaneously

Which of the following statements about quantity discounts is FALSE?

D) The larger the annual demand, the less attractive a discount schedule will be.

If demand is not uniform and constant, then stockout risks can be controlled by:

D) adding safety stock.

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months?

D) aggregate planning

Revenue (or yield) management is best described as:

D) allocation of scarce resources to customers at prices that will maximize revenue.

Among the advantages of cycle counting is that it:

D) allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory.

Which of the following aggregate planning strategies is a capacity option?

D) changing inventory levels

The purpose of safety stock is to:

D) control the likelihood of a stockout due to variable demand and/or lead time

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy?

D) lay off workers to match the 200-unit difference

Which of the following is NOT one of the four main types of inventory?

D) safety stock inventory

What is the effort to plan the coordination of demand forecasts with functional areas of the firm and its supply chain?

D) sales and operations planning

The proper quantity of safety stock is typically determined by:

D) setting the level of safety stock so that a given stockout risk is not exceeded.

) A disadvantage of the fixed-period inventory system is that:

D) since there is no count of inventory during the review period, a stockout is possible

) Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

D) the transportation method

An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes which of the following?

D) the transportation method

Which of the following would NOT generally be a motive for a firm to hold inventories

D) to minimize holding costs

What is the primary purpose of the basic economic order quantity model shown below? Q* = (sqroot) 2DS/H

D) to minimize the sum of setup cost and holding cost

Aggregate planning would entail which of the following production aspects at BMW for a 12-month period?

D) total number of cars to produce

Which of the following is NOT consistent with level scheduling?

D) varying production levels and/or work force to meet demand requirements

Which of the following aggregate planning strategies is known to lower employee morale?

D) varying work force size by hiring or layoffs

Five jobs are waiting to be processed. Their processing times and due dates are given below. Using the shortest processing time dispatching rule, in which order should the jobs be processed? Job Processing Time (days) Job due date (days) A 4 7 B 7 4 C 8 11 D 3 5 E 5 8

D, A, E, B, C

When quantity discounts are allowed, the cost-minimizing order quantity:

E) minimizes the sum of holding, ordering, and product costs.

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be?

E) more than 40

The aggregate planning process usually includes dispatching of individual jobs (T/F)

False

Which category of inventory holding costs has a much higher percentage than average for rapid-change industries such as PCs and cell phones?

E) pilferage, scrap, and obsolescence

Aggregate planning for service firms that provide intangible output deals mainly with:

E) planning for human resource requirements and managing demand.

Which of the following aggregate planning options attempts to manipulate product or service demand?

E) price cuts

Which of the following statements about the basic EOQ model is TRUE?

E) All of the above statements are true

Which of the following should be higher in P systems than Q systems?

E) safety stock

Service level is: A) the probability of stocking out. B) the probability of not stocking out. C) something that should be minimized in retail. D) calculated as the cost of a shortage divided by (the cost of shortage + the cost of overage) for single-period models. E) B and D

E) B and D

What is a time-phased stock-replenishment plan for all levels of the supply chain?

DRP

If a safety stock problem includes parameters for average daily demand, standard deviation of demand, and lead time, then ________ is variable and ________ is constant.

Demand; lead time

________ is the process of breaking the aggregate plan into greater detail.

Disaggregation

What is disaggregation?

Disaggregation is the process of breaking the aggregate plan into greater detail.

) What is the difference between P and Q inventory systems? A) order size B) order spacing C) maximum service level D) lead time length E) A and B

E) A and B

Which of the following is consistent with a pure chase strategy?

E) All of the above are consistent with a pure chase strategy

Which of the following is an element of inventory holding costs?

E) All of the above are elements of inventory holding costs

Which of the following is a function of inventory?

E) All of the above are functions of inventory.

Which of the following statements regarding the reorder point is TRUE?

E) All of the above are true

A(n) ________ system is packaged business software that automates and integrates the majority of business processes, shares common data and practices across the entire enterprise, and produces information in a real-time environment

ERP

What plans the enterprise resources to take, make, ship, and account for customer orders?

ERP

Which of the following is TRUE regarding the POQ lot-sizing method?

Each order quantity is recalculated at the time of the order release.

"Phantom bills" are bills of material for subassemblies that do not exist in reality.

FALSE

By convention, the top level in a product structure is designated level 1.

FALSE

In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ. t/f

FALSE

MRP can be effective only if very accurate lot sizes are calculated in advance. t/f

FALSE

Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.

FALSE

The level scheduling strategy allows lower inventories than the pure chase strategy. t/f

FALSE

Which of the following is an advantage of the FCFS dispatching rule when used in services?

FCFS seems fair to customers

What is finite capacity scheduling (FCS)

FCS is computerized short-term scheduling that overcomes the disadvantages of rule based systems by providing the user with graphical interactive computing

) Plans for new product development generally fall within the scope of aggregate planning. (T/F)

False

A dependent demand item is so called because its demand is dependent on customer preferences t/f

False

ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.

False

Advertising and promotion are methods of manipulating product or service supply in aggregate planning. t/f

False

At the economic order quantity, holding costs are equal to product costs.

False

Because service firms do not inventory their output, a pure chase strategy is not appropriate. t/f

False

Cycle counting is an inventory control technique exclusively used for cyclical items.

False

Even though a firm may have a low cost strategy, supply-chain can select suppliers primarily on response or differentiation (t/f)

False

Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management (T/F)

False

Work-in-process inventory is devoted to maintenance, repair, and operating materials.(T/F)

False

Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

Flase

____________ are planning charts used to schedule resources and allocate time.

Gantt charts

________ for developing aggregate plans work with a few variables at a time and are easy to understand and use.

Graphical techniques

What is a fixed-period system?

It is a system in which inventory orders are made at regular time intervals

Which of the following is FALSE concerning enterprise resource planning (ERP)?

It is inexpensive to implement

a manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action?

It picked the supplier that offered the lowest price based on quantity discounts

which of the following is FALSE regarding the links between JIT and quality?

JIT increases the cost of obtaining good quality

JIT Makes quality cheaper because

JIT prevents long runs of defects

Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory?

Just-in-Time (JIT)

______________ is a japanese term that describes suppliers who become part of a company coalition

Keiretsu

) In the EOQ model, for a given level of demand, annual holding cost is larger as the order quantity is ________.

Larger

) ________ is the time between placement and receipt of an order.

Lead time

________ maintains a constant output rate, or work force level, over the planning horizon.

Level scheduling

Wheeled Coach uses ________ as the catalyst for low inventory, high quality, tight schedules, and accurate records.

MRP

________ is a dependent demand technique that uses a bill of material, inventory, expected receipts, and a master production schedule to determine material requirements.

MRP

A significant weakness of MRP is:

MRP assumes unlimited capacity

________ is a system that allows, with MRP in place, inventory data to be augmented by other resource variables.

Material requirements planning II or material resource planning or MRP II

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors , then the bills of material are classified as which of the following?

Modular

Firms making many different final products use ________ to facilitate production scheduling.

Modular bills

Which of the following statements best compares modular bills and phantom bills?

Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried

A manufacturing plant averaged $740 of raw materials, $230 of work-in-process inventory, and $1030 of finished goods inventory during the month. If the cost of goods sold this month amounted to $10,000, what is the inventory turnover for the month?

Monthly inventory turnover = monthly COGS/Inventory Investment = $10,000/($740 + $230 + $1030) = 5

________ are the result of adjusting gross requirements for inventory on hand and scheduled receipts.

Net material requirements (or Net requirements plans)

Which of the following is an illustration of employee empowerment? (t/f)

No one knows the job better than those who do it

In ABC analysis, "A" items are the most tightly controlled.

True

A(n) ________ is a bill of material for components, usually subassemblies, that exist only temporarily; they are never inventoried.

Phantom bill of material

A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified?

Pseudo and planning

________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Raw material

Lead time for one of Montegut Manufacturing's fastest moving products is 4 days. Demand during this period averages 100 units per day. What would be an appropriate re-order point?

Re-order point = demand during lead time = 100 units/day × 4 days = 400 units.

________ involves capacity decisions that determine the allocation of resources to maximize revenue or yield.

Revenue management (or Yield management)

Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Sigma before work center Delta. According to Johnson's rule, what sequence of jobs will minimize the completion time for all jobs? Job Sigma Delta R 40 10 S 25 30 T 50 20 U 35 35 V 55 15

S-U-T-V-R

the ________ is a set of processes, metrics, and best practices developed by the Supply Chain Council.

SCOR model

a process used to reduce set up time is

SMED

Which of the following dispatching rules tends to minimize job flow time?

SPT: shortest processing time

Which of the following is NOT one of the five parts of the Supply Chain Operations Reference (SCOR)

Sell

Which of the following statements regarding MRP in services is TRUE?

Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling.

Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of dependent inventory models. t/f

TRUE

MRP is an excellent tool for scheduling components with variable lead times. t/f

TRUE

MRP is generally practiced on items with dependent demand (t/f)

TRUE

Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon. t/f

TRUE

Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts. t/f

TRUE

Reduced inventory levels and faster response to market changes are both benefits of MRP. t/f

TRUE

Smoothing a resource requirements profile to stay within capacity limits may increase setup costs. t/f

TRUE

Techniques for controlling the cost of labor in services include accurate scheduling of labor hours to assure quick response to customer demand, on-call labor for unexpected demand, flexibility of labor skills for reallocation of available labor, and flexibility in rate of output or hours of work to meet changing demand.

TRUE

The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

TRUE

The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used. t/f

TRUE

The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems. t/f

TRUE

The time-phased product structure, unlike the bill of material, adds the concept of lead times t/f

TRUE

The transportation method of linear programming is an optimizing approach to aggregate planning. t/f

TRUE

Time fences divide that segment of the master schedule that can be revised from that section that is "not to be rescheduled." t/f

TRUE

Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy. (T/F)

TRUE

When safety stock is deemed absolutely necessary, the usual policy is to build it into (increase) the inventory requirement of the MRP logic. t/f

TRUE

Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?

The process must adhere to stringent quality control standards

Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering?

The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly

Define service level

The service level is the probability that demand will not be greater than supply during lead time; it is the complement of the probability of a stockout

What allows a segment of the master schedule to be designated as "not to be rescheduled"?

Time Fence

________ are a way of allowing a segment of the master schedule to be designated as "not to be rescheduled."

Time fences

the great east japan earthquake of 2011 was centered off of the pacific coast of which region of Japan?

Tohoku

Which of the following statements regarding lot-sizing is TRUE?

Too much concern with lot-sizing results in false accuracy.

TPS stands for ________.

Toyota Production System

What does TPS stand for?

Toyota Production System

which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices?

Toyota Production System (TPS)

A major challenge in inventory management is to maintain a balance between inventory investment and customer service (T/F)

True

Aggregate planning in manufacturing ties organizational strategic goals to a production plan (T/F)

True

Disaggregation is the process of breaking the aggregate plan into greater detail; one example of this detail is the master production schedule. t/f

True

If setup costs are reduced by substantial reductions in setup time, the production order quantity is also reduced.

True

In the production order quantity (POQ) model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a larger production/order quantity than in an otherwise identical EOQ problem.

True

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs (T/F)

True

One advantage of cycle counting is that it maintains accurate inventory records.

True

One function of inventory is to take advantage of quantity discounts. (T/F)

True

One motive for using demand-influencing aggregate planning options is to create uses for excess capacity within an organization. (t/f)

True

One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.(T/F)

True

One question that operations managers must answer when generating an aggregate plan is whether prices or other factors should be changed to influence demand. T/F

True

Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers (t/f)

True

Retail inventory that is unaccounted for between receipt and time of sale is known as shrinkage.

True

The fixed-period inventory model can have a stockout during the review period as well as during the lead time, which is why fixed-period systems require more safety stock than fixed-quantity systems.

True

The reorder point is the inventory level at which action is taken to replenish the stocked item. (T/F)

True

The strategies of aggregate planning are broadly divided into demand options and capacity options. t/f

True

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers, but it may also reduce quality levels. t/f

True

Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Alpha before work center Beta. According to Johnson's rule, which job should be scheduled first in the sequence? Job Alpha Beta R 20 10 S 25 35 T 50 20 U 15 35 V 55 75

U

Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Alpha before work center Beta. According to Johnson's rule, what is the optimum sequence of jobs and the minimum time for completion of all jobs? Job Alpha Beta R 20 10 S 25 35 T 50 20 U 15 35 V 55 75

U-S-V-T-R; 200

________ is a capacity option that works especially well in the service sector where labor needs are relatively unskilled.

Using part-time workers

It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 As?

Week 4, 40 As

Which of the following statements regarding Wheeled Coach is FALSE?

Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

Which of the following is NOT REQUIRED information to obtain to conduct the factor weighting technique in a supplier selection analysis?

a qualitative scale on which to rate suppliers

Which of the following best describes a gross material requirements plan?

a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

JIT has an internal focus while lean production begins with an external focus on

customers

Consider the disaster risk decision tree model Using the notation from the model, what is the expected monetary value (cost) of choosing two suppliers?

[1-P(2)] x 2C + P(2) x (L + 2C)

Which of the following is an aid used to monitor jobs in progress

a Gantt schedule chart

Low-level coding means that:

a component item is coded at the lowest level at which it appears in the BOM structure

Which one of the following scenarios represents the use of a kanban to reduce inventories?

a customer work center signals to the supplier workstation that more parts are needed

the assignment method is:

a form of linear programming for optimally assigning tasks or jobs to resources

vertical integration appears particularly advantageous when the organization has:

a large market share

which of the following would NOT be subject to negotiation between a buyer and supplier?

all of the above could be negotiated

which of the following distribution systems offers speed and reliability when emergency supplies are needed overseas?

airfreight

Capacity planning in closed-loop MRP:

all of the above

Just in Time systems make demands on layouts, including the need for:

all of the above

which of the following devices represents an opportunity for the technology to improve security of container shipments?

all of the above

which of the following is not a goal of JIT partnerships?

all of the above

lean operations are known for their

all of the above are attributes of lean operations

Which of the following is a limitation of rules-based dispatching systems?

all of the above are limitations

Which of the following is TRUE regarding the steps to reducing setup times?

all of the above are true

Which of the following statement is TRUE regarding the 2011 Tohoku earthquake and tsunami?

all of the above are true

in supply chain management, ethical issues:

all of the above are true

the bullwhip effect:

all of the above are true

outsourcing:

all of the above are true of outsourcing

____________ scheduling begins with the due date and schedules the final operation first and the other job steps in reverse order

backward

a fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following?

backward integration

A list of quantities of components, ingredients, and materials required to make a product

bill of material

A list of quantities of components, ingredients, and materials required to make a product is:

bill of materials

________ are the time units in a material requirements planning (MRP) system

buckets

which of the following attributes is NOT for lean?

build processes that increase variability

what two voices do lean processes listen to?

customer & process

the correct sequence from longest to smallest duration scheduling is:

capacity planning, aggregate planning, master schedule, short-term scheduling

What does the Japanese word kanban mean?

card

Which of the following is NOT tracked by scheduling optimization systems used in retail stores?

cars parked in the parking lot

the US ____________ program, designed to stimulate the economy and improve fuel efficiency, produced an unintended bullwhip effect in the automobile industry

cash for clunkers

inventory reduction via JIT is an effective tool for identifying

causes of variability

_________ postpones final assembly of a product so the distribution channel can assemble it

channel assembly

Which of the following is NOT a potential cause of the bullwhip effect?

channel coordination

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT?

close relationships with trust

what term describes a supply chain that is designed to optimize both forward and reverse flows?

closed loop supply chain

A(n) ________ provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times.

closed-loop MRP system

what type of negotiating strategy requires the supplier to open its books to the purchasers?

cost based price model

what are the three classic types of negotiation strategies?

cost based price model, market based price model, and competitive bidding

Effective use of MRP and other dependent demand models does not require which of the following?

cost of individual components

Developing a mix of ________ products is a widely used demand smoothing technique.

counterseasonal

What is the priority rule that sequences jobs using the smallest ratio of due date from today to processing time?

critical ratio

____________ describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other

cross-sourcing

which of the following describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other?

cross-sourcing

which of the following is NOT a lean quality tactic?

cross-train workers to add flexibility

which activities does NOT need to be virtually eliminated for a lean organization?

cross-training

When demand is constant and lead time is variable, the safety stock computation requires three inputs: the value of Z, ________, and the standard deviation of lead time.

daily demand

What technique does the text use to determine the best number of suppliers to manage disaster risk?

decision tree

Inventory that separates various parts of the production process performs a(n) ________ function.

decoupling

which of the following statements regarding scheduling at Delta Airlines is FALSE?

delta's rapid rescheduling promotes air safety and limits traveler inconvenience, but has not resulted in money savings for delta

In the production order quantity model, the fraction of inventory that is used immediately and not stored is represented by the ratio of ________.

demand rate to production rate

Local optimization, incentives, and large lots all contribute to __________ about what is really occurring in the supply chain

distortions of information

___________ management focuses on the outbound flow of products

distribution

supply chain managers outsource logistics to meet what three goals?

drive down inventory investment; lower delivery costs; improve delivery reliability and speed

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing which of the following?

drop shipping

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing which of the following?

drop shipping

in what type of auction does a buyer initiate the process by submitting a description of the desired product or service?

dutch

a reverse auction is also known as a

dutch auction

___________ is the term describing purchasing facilitated through the internet

e-procurement

because most services cannot be inventories, there is little place for JIT to help service organizations achieve competitive advantage (t/f)

false

EDD stands for what?

earliest due date

If safety stock is desired, it should be built into which portion of MRP?

either C or D

Define EDI

electronic data interchange is a standardized data-transmittal format for computerized communications between organizations

which of the following is NOT a source of variability?

employees, machines, and suppliers produce units that conform to standards

which of the following is NOT one of Taiichi Ohno's seven wastes?

energy

the __________ model adds objectivity to decision making when selecting suppliers

factor weighting

Customer demand will always remain an unknown, so it is not considered a source of variability (t/f)

false

Earliest due date is a shop floor dispatching (sequencing) rule that relates the time available to complete a job to the amount of work left to be completed (t/f)

false

Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making. (t/f)

false

In a JIT system, product inspection adds value by identifying defective items (t/f)

false

Increasing inventory exposes variability in production processes (t/f)

false

JIT brings about competitive advantage by faster response to the customer regardless of cost (t/f)

false

JIT systems carry inventory just in case something goes wrong (t/f)

false

Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers and part vertical integration (t/f)

false

Level scheduling means producing at a constant rate, regardless of customer demands. (t/f)

false

Scheduling optimization systems used in retail stores typically track customer traffic in 4 hour time increments (t/f)

false

TPS stands for Total Production Streamlining (t/f)

false

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from suppliers toward retailers (t/f)

false

The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk (t/f)

false

The number of kanbans decreases as safety stock is increased. (t/f)

false

The quality management tool called poka-yoke is not relevant to JIT systems. (t/f)

false

The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans (t/f)

false

Unfortunately, not many supply chain metrics exist that can be effectively used to evaluate performance within a company and for its supply chain partners (t/f)

false

With level schedules, a few large batches, rather than frequent small batches, are processed. (t/f)

false

a bullwhip measure value greater than zero indicates that the bullwhip effect exists (t/f)

false

a firm that employs a response strategy should minimize inventory throughout the supply chain (t/f)

false

a push system means providing the next station with exactly what is needed when it is needed (t/f)

false

as the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines (t/f)

false

process-focused facilities and repetitive facilities generate forward-looking schedules, but process=focused facilities do this with JIT and kanban while repetitive facilities generally use MRP (t/f)

false

short-term scheduling is important to efficiency and to cost reduction, but its impact is not of strategic importance (t/f)

false

supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms (t/f)

false

the critical ratio sequencing rule prioritizes the jobs based on the importance or value of the customers who have placed the orders (t/f)

false

the factor weighting model is an attempt to add subjectivity to decision making when selecting among suppliers (t/f)

false

the supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site (t/f)

false

vertical integration, whether forward or backward, requires the firm to become more specialized (t/f)

false

waterways are an attractive distribution system when speed is more important than shipping cost (t/f)

false

when using the factor weighting approach, most companies will use the same list of criteria and the same criteria weights (t/f)

false

when using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply (t/f)

false

with forward scheduling, jobs are scheduled as late as possible within the time allowed by the customer due dates (t/f)

false

with the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality (t/f)

false

typically, a more expensive shipping option is:

faster with a lower holding cost

A recent advance in short-term scheduling that makes use of expert systems and simulation in solving dynamic scheduling problems is:

finite capacity scheduling

___________ uses computerized short-term scheduling to overcome the disadvantages of rule-based systems by providing the user with interactive computing and graphical output

finite capacity scheduling

which of the following considers process capacity when scheduling?

finite loading

Orders are processed in the sequence in which they arrive if (the) _________________ rule sequences the jobs

first come, first served

the priority rule that appears fair to customers in service systems is _______________

first come, first served

which one of the following is NOT a layout tactic in a JIT environment?

fixed equipment

A(n) ________ system triggers inventory ordering on a uniform time frequency.

fixed-period (or P)

what are several advantages of shipping by truck

flexibility, on time behavior, no damage, paperwork in order, and low cost

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of:

forward integration

short-term schedules are prepared:

from master schedules, which are derived from aggregate plans

what value of the bullwhip measure would indicate that the bullwhip effect exists?

greater than 1

which of the following is a concern expressed by suppliers in JIT partnerships?

having limited ability to respond to changes in product and quality

which of the following is NOT a key direct benefit from effective internal or external scheduling?

higher quality

The primary trade-off in transportation mode analysis involves evaluating ____________ against the cost of shipping.

holding cost

virtual companies are also known as _______________

hollow corporations or network companies

The list of 5Ss, although it looks like a housekeeping directive, supports lean production by:

identifying non-value items and removing them, in the sort/segregate category.

the phrase that describes the process use with the first step in a 5S program is:

if in doubt, throw it out

When suppliers are encouraged to locate near manufacturing plants, the goal of the JIT partnership is to reduce __________ inventory

in transit

If the goals of JIT partnerships are met, which of the following is a result?

in transit inventory falls as suppliers are located closer to facilities

Kanban is associated with all EXCEPT which of the following?

increased material handling

Which of the following is NOT a key benefit of MRP?

increased quality

Which MRP lot-sizing technique should be considered to be the goal (i.e., the technique of choice under ideal conditions)?

lot-for-lot

which of the following is not a goal of JIT partnerships?

inspect all incoming shipments to ensure zero defects

the ___________ is an organization that has developed principles and standards for ethical supply management conduct

institute for supply management

what are two alternative names for process-focused facilities?

intermittent and job shop facilities

Excess bags of basic commodities such as flour and sugar that are stored in a restaurants kitchen represent which of the following wastes?

inventory

what three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network?

inventory costs, transportation costs, and facility costs

the term "loading"

is the process of assigning jobs to work/processing centers

e-procurement:

is the same thing as internet purchasing

which one of the following statements is TRUE regarding JIT inventory?

it is the minimum inventory necessary to keep a perfect system running

the japanese call the practice of stopping production when a defect occurs:

jidoka

forward scheduling is the scheduling of:

jobs as soon as the requirements are known

When a set of jobs must pass through two workstations whose sequence is fixed, ____________ is the sequencing rule most commonly applied.

johnson's rule

an approach to sequencing that can handle the situation where jobs must pass through two or more work centers in a fixed sequence is ____________

johnson's rule

When Daimier and BMW pooled resources to develop standardized auto components, the sourcing strategy could best b e described by which of the following?

joint venture

___________ is the minimum inventory necessary to keep a perfect system running

just in time inventory

which of the following words means continuous improvement in japanese?

kaizen

The cook is a fast-food restaurant knows that 2 hamburger patties and an order of fries should be started for each car that is waiting in line. This is best an example of:

kanban

____________ is the japanese word for card that has come to mean "signma"

kanban

Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called?

keiretsu

The japanese concept of a company coalition of suppliers is

keiretsu

which of the following would not typically be considered as part of a manufacturing firm's supply chain?

landscaping contractors

characteristics of just in time partnerships do NOT include:

large lot sizes to save on setup costs and to gain quantity discounts

_________________ allows manufacturing work cells and offices to be easily rearranged

layout flexibility

which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants?

lean operations

Which critical ratio value implies that a job is already late?

less than 1

what value of the bullwhip measure would indicate that a dampening scenario exists?

less than 1

which of the following is not an advantage of the "few suppliers" sourcing strategy

less vulnerable trade secrets

By convention, what is the top level in a product structure?

level 0

_____________ involves scheduling products so that each day's production meets the demand for that day

level schedules

A(n) ________ can illustrate whether a work center has been scheduled beyond its capacity.

load report or resource requirements profile

_____________ is the assignment of jobs to work or processing centers

loading

Which of the following is NOT an opportunity for effective management in the supply chain?

local optimization

Identify three common occurrences that contribute to distortions of information about what is really occurring in the supply chain.

local optimization, incentives, and large lots

______ is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.

logistics management

What lot-sizing technique is generally preferred when inventory holding costs are extremely high?

lot-for-lot

What is the process of tracing upward in the bill of material from the component to the parent item in order to determine the cause for the component requirement?

pegging

Which lot-sizing technique orders the quantity needed during a predetermined time between orders?

periodic order quantity

A hotel room that goes unrented, a dental appointment that no patient booked, and an airline seat that went unsold, are all examples of ________ in services.

perishable inventory

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of which of the following?

postponement

___________ involves delaying any modifications or customization to the product as long as possible in the production process

postponement

what is the practice of keeping a product generic as long as possible before customizing?

postponement

what is the objective of scheduling?

prioritize and allocate demand to available facilities

__________ determine the sequence of jobs in process-oriented facilities

priority rules

Which of the following statements regarding a pull system is true?

problems become more obvious

which of the following best describes vertical integration?

produce goods or services previously purchased

Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is NOT part of JIT? They:

produce in long production runs to reduce the impact of setup costs

which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy?

product development skills

In MRP, the number of units projected to be available at the beginning of each time period refers to:

projected on hand.

the institute for supply management:

published the principles and standards for ethical supply management conduct

A(n) _______ is a concept that results in material being produced only when requested and moved to where it is needed just as it is needed

pull system

what concept results in mat'l produced only as needed just as it is needed

pull system

Which of the following is generally found in most lean environments?

pull systems

Distortion in MRP systems can be minimized when safety stock is held at the:

purchased component or raw material level & finished goods level

in most manufacturing industries, which of the following would likely represent the largest cost to the firm?

purchasing

warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions?

purchasing

what is e-procurement?

purchasing facilitated through the internet

Which of the following is NOT an attribute of lean operations?

pushing responsibility to the highest level possible through centralized decision making

identify three common features of contracts between buyers and suppliers

quantity discounts, buybacks, revenue sharing

by which distribution system is more than 90 percent of US coal shipped?

railroads

designing distribution networks to meet customer expectations suggests what three criteria?

rapid response, product choice, and service

which of the following is NOT a typical benefit of centralized purchasing?

reduce lead times

which of the following is an advantage of the postponement technique?

reduction in inventory investment

which of the following characteristics is not common to all four of Darden Restaurants' supply channels?

refrigeration

In a quantity discount problem, if the savings in annual product cost is smaller than the increase in the sum of annual setup cost and annual holding cost, the discount should be ________.

rejected or refused

which one of the following is a characteristic of a JIT partnership?

removal of incoming inspection

which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver?

require overnight deliver

Which of the following dispatching rules ordinarily gives the best results when the criterion is lowest time for completion of the full sequence of jobs?

shortest processing time (SPT)

The 5S category ________ includes analysis to improve workflow and reduce wasted motion.

simplify/straighten or simplify

TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney is an example of which of the following?

single-stage control of replinishment

which of the following is NOT a condition that favors the success of vertical integration?

small market share

the first step in implementing a 5S program is

sort (seiri)

Sequencing (or dispatching)

specifies the order in which jobs should be done at each center

which of the following is NOT true about reverse logistics as compared to forward logistics?

speed is often very important

while freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes?

speed of shipment

All EXCEPT which of the following are "opportunities" in managing the integrated supply chain?

standardization

_________ involves reducing the number of variations in materials and components as an aid to cost management

standardization

forward scheduling:

starts the schedule as soon as the job requirements are known

Which of the following is not characteristic of a TPS employee?

strict job classifications

In the disaster risk decision tree model, a(n) ____________ disrupts all suppliers simultaneously.

super-event

of the four stages of supplier selection, the stage at which the factor weighting approach would be used is ___________

supplier evaluation

what are the four stages of supplier selection?

supplier evaluation, supplier development, negotiations, and contracting

Identify the 9 major categories of supply chain risk

supplier failure to deliver, supplier quality failures, logistics delays or damage, distribution, information loss or distortion, political, economic, natural catastrophes, theft/vandalism/terrorism

how can a reduction of in transit inventory be encouraged?

supplier location near plants

__________ describes the coordination of all supply chain activities, starting with raw materials and ending with a satisfied customer

supply chain management

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one- time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?

the bullwhip effect

which of the following is NOT an element of the disaster risk decision tree model?

the buyer's financial loss incurred in a supply cycle if supplier i were disrupted

A material requirements plan contains information with regard to all of the following EXCEPT:

the capacity needed to provide the projected output rate.

Which one of the following statements is TRUE about the kanban system?

the customer workstation signals to the supplier workstation when production is needed

Which of the following is TRUE regarding services scheduling?

the emphasis is on staffing levels, not materials

which of the following elements of the factor weighting technique in supplier selection analysis does NOT contain a certain degree of subjectivity

the formula used to calculate the total weighted score for each supplier

a disadvantage of the "few suppliers" sourcing strategy is:

the high cost of changing partners

A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans?

the meat department stocking up on turkeys before thanksgiving

distribution management focuses on which of the following?

the outbound flow of products

the number of kanbans should be qual to which of the following?

the ratio of (demand during lead time + safety stock) to container size

Three jobs are to be assigned to three machines. Cost for each job-machine combination appears in the table below. Perform the first two steps of the assignment method (subtract the smallest number in each row and subtract the smallest number in each column; then cover with straight lines). At this point in the problem-solving process: Machine A Machine B Machine C Job 1 1 14 6 Job 2 8 10 11 Job 3 9 12 7

the row for Job 1 contains the values 5, 6, and 0

if the variance of orders of a manufacturer equals 800, and the variance of orders of its supplier equals 750, what is happening at this part of the supply chain?

the supplier is providing a dampening (anti-bullwhip) effect

Suppose that in month 1, both the retailer and the wholesaler in a supply chain ordered 20,000 units. Then in month 2, the retailer decreases its order size by 1000 units. If the wholesaler then decreases its order size in month 2 by 700 units, which of the following is TRUE?

the wholesaler is providing a dampening (anti-bullwhip) effect

If a load report (resource requirements profile) shows a work center scheduled beyond capacity:

the work center's load may be smoothed by such tactics as operations splitting or lot splitting

Demand for a given item is said to be dependent if:

there is a clearly identifiable parent.

what term is used to describe the outsourcing of logistics?

third party logistics

What is one of the tools that is particularly useful in reducing system nervousness in an MRP system?

time fences

manufacturing cycle time is best defined as the

time from raw materials receipt to finished product exit

Flow time represents the time:

to complete an order, including time spent in processing and in waiting

which of the following is not an advantage of a virtual company

total control over every aspect of the organization

average completion time for a schedule sequence at a work center is the ratio of:

total flow time to the number of jobs

What does TPS stand for?

toyota production system

Handling material more than once is an example of the waste called ________.

transportation

as the number of facilities increase, total logistics costs tend to follow a curve that first declines, then rises. Why?

transportation costs first decline steeply, then rise, while facility and inventory costs always rise

In manufacturing scheduling, physical inventories of goods can buffer variations in demand, but service scheduling normally lacks that buffer because services are generally consumed at the same time they are delivered (t/f)

true

JIT suppliers have concerns that the JIT firms demands for small lot sizes are simply a way of transferring holding cost from the JIT firm to the suppliers. (t/f)

true

Johnson's rule sequences a set of jobs through two different machines or work centers in the same order (t/f)

true

Many suppliers feel that having a variety of customers is better than being tied to long-term contracts with one customer. (t/f)

true

Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors (t/f)

true

Product storage is an example of waste in the sense that no value is added (t/f)

true

TPS stands for Toyota Production System (t/f)

true

The Toyota Production System requires that activities have built-in, automatic tests to signal problems. (t/f)

true

The bullwhip effect can occur when orders decrease as well as when they increase (t/f)

true

The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating. (t/f)

true

Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories (t/f)

true

Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate (t/f)

true

Waste is anything that does not add value from the consumer's perspective (t/f)

true

a blanket order is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship (t/f)

true

a fast-food retailer that acquired a spice manufacturer would be practicing backward integration (t/f)

true

a scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met (t/f)

true

benchmark firms ave driven down costs of supply chain performance (t/f)

true

channel assembly, which sends components and modules to by assembled by a distributor, treats these distributors as manufacturing partners (t/f)

true

choosing suppliers simply based on the lowest bid has become a somewhat rare approach (t/f)

true

cross training is a common JIT layout tactic to improve flexibility (t/f)

true

dispatching rules are typically judged by four effectiveness criteria: average completion time, utilization, average number of jobs in the system, and average job lateness (t/f)

true

firms often use multiple suppliers for important components to mitigate the risks of total supply disruption (t/f)

true

in services, the scheduling emphasis is usually on staffing levels, not materials (t/f)

true

logistics management can provide a competitive advantage through improved customer service (t/f)

true

one classic type of negotiation strategy is the market-based price model (t/f)

true

one criterion for developing effective schedules is minimizing completion time (t/f)

true

one goal of JIT partnerships is the removal of in plant inventory by delivery in small lots directly to the using department as needed (t/f)

true

operations managers are finding online auctions a fertile area for disposing of discontinued inventory (t/f)

true

savings in the supply chain exert more leverage as the firm's net profit margin decreases (t/f)

true

the 5S's - sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self discipline- are important to lean production because they act as a means to reduce waste (t/f)

true

the benefits of effective scheduling include lower cost, faster throughput, and dependable delivery (t/f)

true

the bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain (t/f)

true

the objective of the make or buy decision is to help identify the products and services that can be obtained externally (t/f)

true

the overarching solution to the bullwhip effect is simply for supply chain members to share information and work together (t/f)

true

the primary trade-off in transportation mode analysis involves evaluating holding cost against the cost of shipping (t/f)

true

when implemented as a comprehensive operations strategy, JIT, TPS, and lean systems sustain competitive advantage and result in increased overall returns (t/f)

true

while the prices that consumers pay are often inflexible, a significant number of final prices paid in business-to-business transactions are negotiated (t/f)

true

which of the following is NOT a lean inventory tactic

use a push system to move inventory

there are two jobs to be assigned to two workers. the profit for worker A on job 1 is $5 and on job 2 is $8. The profit for worker B on job 1 is $10 and on job 2 is $12. How should the work be divided using the assignment method?

worker A assigned to job 2 and worker B assigned to job 1