Supply Chain Chapters 1-4 Quiz Questions

the lowest inventory level at which a new order must be placed to avoid a stockout is known as the reorder point a. true b. false

a. true

Compute the sales forecast for the month of January using the 5-month simple moving average forecasting technique and the following data: Monthly sales for RUOK company for the last 6 months are as follows: Month Units July. 135000 August. 165000 September 120000 October 135000 November 150000 December. 180000

150,000

Calculate the Mean Absolute Deviation (MAD) for the months of January through April using the following data: Month. Actual Sales. Forecast JAN. 1000. 600 FEB . 1600. 2500 MAR. 2000. 1500 APR. 1800. 2000

500

When a supply chain planner talks about using the BOM to do an MRP Explosion, they are talking about? a. the process of converting a parent item's planned order releases into component gross requirements b. the demand for final products that are affected by trends, seasonal patterns, and general market conditions c. relating gross requirements for a component part to the planned order releases of the parent item d. when the supplier will use value analysis and disassemble the part to see how it's made

a. the process of converting a parent item's planned order releases into component gross requirements

To determine the Reorder Point, calculate the demand during lead time a. true b. false

a. true

Mean Absolute Deviation (MAD) is a measure of forecast bias. MAD indicates the tendency of a forecast to be consistently higher or lower than actual demand a. True b. False

b. False

In the absence of any other information or visibility, individual supply chain participants can begin second-guessing what is happening with ordering patterns, and potentially start over-reacting. This is known as? a. Running sum of forecast errors b. bullwhip effect c. forecast bias d. tracking signal

b. bullwhip effect

Poor communication and inaccurate forecasts along the supply chain can results in the? a. carbonaro effect b. bullwhip effect c. doppler effect d. delphi effect

b. bullwhip effect

Inventory costs which are independent of the output quantity are called? a. direct costs b. fixed costs c. variable costs d. carrying costs

b. fixed costs

A company that is adjusting the production rate and capacity to exactly match demand by increasing and decreasing labor, materials, or necessary resources as needed, is using which basic production strategy? a. hybrid production b. minimal production c. chase production d. level production e. full capacity production

c. chase production

The business model that consists of producing finished products on the basis of anticipated demand is? a. just-in-time b. assemble-to-order c. make-to-order d. make-to-stock

d. make-to-stock

Cause-and-Effect Models can have multiple independent variables a. True b. False

a. True

Companies that adjust the production rate and capacity to exactly match demand by increasing or decreasing labor, materials, or necessary resources, is using the Chase Production Strategy a. True b. False

a. True

Which of the following is a Long-Range supply chain plan? a. aggregate production plan b. materials requirements plan c. capacity requirements plan d. master capacity plan

a. aggregate production plan

What is the term for the type of inventory system that issues an order whenever a withdrawal is made from inventory, and the replenishment order quantity is equal to the quantity withdrawn from inventory? a. base stock level system b. bin system c. single-period inventory system d. ABC system

a. base stock level system

Which of the following is NOT a time series forecasting technique? a. historical analogy b. weighted moving average c. simple moving average d. naive forecast

a. historical analogy

Companies today are focused on vertical integration encompassing the ownership and coordination of all supply chain activities while also outsourcing their core competencies a. True b. False

b. False

If you choose to pick up your desired Enterprise Resource Planning (ERP) applications from the top vendor of each individual application, you are using the single approach to selecting your ERP system a. True b. False

b. False

A supply chain consists of...? a. product flow and payment flow b. suppliers, manufacturers, and customers facilitated through the use of logistics c. suppliers and customers d. suppliers, manufacturers, and customers

b. suppliers, manufacturers, and customers facilitated through the use of logistics

The goals of Supply Chain Management are to? a. increase customer satisfaction through increased inventory and reduced operating expenses b. increase customer satisfaction while increasing inventory and operating expenses c. increase customer satisfaction while reducing inventory and operating expenses

c. increase customer satisfaction while reducing inventory and operating expenses

Which of the following is NOT a Benefit of Supply Chain Management? a. increased revenue b. improved customer service c. increased inventory d. lower costs e. better asset utilization

c. increased inventory

________________ measures the size of the forecast error in units. It is calculated as the average of the unsigned errors over a specified period of time (Fill-in-the-blank with one of the terms below) a. running sum of forecast errors b. mean absolute percent error c. mean squared error d. mean absolute deviation

d. mean absolute deviation

What part of supply chain management deals with the process of moving goods specifically from the point of consumption back to the point of origin for repair, reclamation, remanufacture, recycling, or disposal? a. distribution b. forward logistics c. freight forwarding d. reverse logistics

d. reverse logistics

When creating a quantitative forecast, if you detect a repeating pattern of demand data from year to year with some periods of considerably higher demand than others. This is known as what type of variation? a. trend variation b. random variation c. cyclical variation d. seasonal variation

d. seasonal variation

Independent demand is demand for an item that is unrelated to the demand for other items, such as a finished product, a spare part, or a service part a. True b. False

a. True

It was intense global competition that led manufacturers to adopt Supply Chain Management (SCM) and other practices such as Just-in-Time (JIT) a. True b. False

a. True

The key disadvantage of the Materials Requirements Planning (MRP) system include; loss of visibility, and the fact that MRP ignores capacity and shop floor conditions a. True b. False

a. True

Which of the following is described as an informational system connecting all the functional areas and operations of an organization via common software infrastructure and database? a. enterprise requirement planning system b. resource requirements planning system c. distribution requirements planning system d. advanced planning and scheduling system

a. enterprise requirement planning system

The goal of supply chain planning is to balance supply and demand in a way that realizes the financial and service objectives of the company a. true b. false

a. true

The lowest inventory level at which a new order must be placed to avoid a stockout is known as? a. reorder point b. cycle stock c. safety stock d. periodic review system

a. reorder point

A type of inventory system in which inventory is only ordered for one-time stocking is known as? a. single period inventory model b. base stock level system c. ABC system d. Bin system

a. single period inventory model

Based on the diagram, which of the following correctly identifies the Manufacturer's Tier 1 supply chain partner(s)? supplier a --> supplier b --> supplier c --> manufacturer --> customer c --> customer b --> customer a a. supplier a only b. supplier c and customer c c. all the suppliers and customers shown are tier 1 supply chain partners d. supplier a and customer a e. customer a only

b. supplier c and customer c

Which one of the following is NOT one of the four reasons to hold inventory? a. to buffer against uncertainty in demand and/or supply b. to avoid obsolescence c. to decouple supply from demand d. to decouple dependencies in the supply chain

b. to avoid obsolescence

What is the name of the engineering document that shows all component parts and materials which make up the final product? a. Bill of goods (BOG) b. Bill of lading (BOL) c. Bill of materials (BOM) d. Bill of resources (BOR)

c. Bill of materials (BOM)

As the supply chain continues to evolve, it's critical for companies to...? a. increase inventory levels throughout the supply chain b. outsource their core competencies to trading partners that they can trust c. outsource their non-core competencies to trading partners that they can trust

c. outsource their non-core competencies to trading partners that they can trust

Which inventory stock level is inventory that is already out in the market being held by wholesalers, distributors, retailers, and even consumers. The ownership of this inventory has been transferred to the trading partners, but may still influence decisions the company makes regarding how they manage and control their internal inventory a. safety stock b. strategic stock c. pipeline stock d. cycle stock

c. pipeline stock

What technology stores information on a small electronic device which can be attached to an object and read from up to several feet away, without the need for direct line-of-site? a. 2D barcode b. synchronization c. radio frequency identification d. debundling

c. radio frequency identification

Which of the following MRP terms represents a committed order awaiting delivery for a specific period? a. time bucket b. net requirements c. scheduled receipt d. projected on-hand inventory

c. scheduled receipt

Which of the following statements is TRUE? a. logistics and supply chain management are synonymous terms (i.e., they mean the same thing) b. purchasing is seen as the final and most difficult step in the supply chain c. strategic partnerships are seen as one of the foundations of supply chain management d. supply chain management was invented by the auto manufacturing industry

c. strategic partnerships are seen as one of the foundations of supply chain management

What type of inventory is used; to take advantage of a price discount, to take advantage of a business opportunity, or for life cycle changes? a. pipeline inventory b. cycle stock c. strategic stock d. safety stock

c. strategic stock