Supply Chain Exam #1

Which of the following would most likely be considered a dependent demand item?

A Bicycle Tire Used To Assemble A Bicycle

The planning function that determines the need to replenish finished product inventory at branch warehouses, when there are multiple warehouses in the network is called what?

Distribution Requirements Planning (DRP)

A quantitative decision model based on the trade-off between annual inventory carrying costs and annual ordering costs is known as what?

Economic Order Quantity (EOQ)

Companies in the service industry cannot maintain inventory of services, however, they can maintain inventory of "___________ ____________" which are used during the service being provided.

Facilitating Products

A Bin System is a type of inventory system in which inventory is only order for a one-time stocking.

False

Costs which cannot be traced directly to the volume of units being produced are known as variable costs.

False

The true value of CPFR comes from the sophisticated forecasting algorithms that provide companies with highly accurate forecasts, rather than from the exchange of forecasting information.

False

The number of quantity of each component or material needed to produce a single unit of the parent item is known as?

Planning Factor

A certain supply chain is made up of the following companies: 1. Raw Material Supplier 2. Intermediate Supplier (who converts the raw material into semi-finished item) 3. Manufacturer 4. Wholesaler/Distributor 5. Retailer Given the supply chain above, who is considered the second tier supplier of the manufacturer?

Raw Material Supplier

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?

Reverse Logistics

To determine if it is possible to actually execute and complete the Master Production Schedule as planned, you would used which of the following?

Rough-Cut Capacity Planning

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?

Strategic Stock

Material Requirements Planning (MRP) requires all of the following EXCEPT?

The Rough-cut Capacity Planning information

When supply chain planner talks about using the BOM to do an MRP Explosion, they are talking about.

The process of converting a parent item's planned order release into component gross requirements

A forecast is an estimate of future demand and provides the basis for supply planning decisions.

True

What is the term for the type of inventory system that issues an order whenever a withdrawal is made form inventory, and the replenishment order quantity is equal to the quantity withdrawn from inventory?

Base Stock Level System

The process of combining statistical forecasting techniques and judgement to construct demand estimates for products or services is known as?

Demand Planning

Material Requirements Planning (MRP) is used to

Determine what materials you need to make the finished product and when to order them

In the Level Production Strategy, capacity is adjusted to match demand in an effort to handle the fluctuating demand pattern.

False

One common Cause-and-Effect Forecasting Model is?

Multiple Regression

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?

Radio Frequency Identification

The key disadvantages of Material Requirements Planning (MRP) system include, loss of visibility, and the fact that it ignores capacity and shop floor conditions.

True

Dependent demand items are generally forecasted based on market conditions and.or historical sales and usage data.

False

Companies hold a supply of inventory for all of the following reasons EXCEPT?

Increasing production change/setup costs

The detailed plan that shows the exact end items (i.e., finished products) to be produced in a specific time frame is known as what?

Master Production Schedule (MPS)

The following are ALL common qualitative forecasting models EXCEPT?

Naive Forecasting

Which one of the following would be considered an inventory holding or carrying cost?

Insurance costs

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

True

The absence of communication and collaboration among companies in a supply chain creates individual supply chain participates to second-guess what is happening with ordering patterns, therefore potentially over-react, creating the bullwhip effect.

True

The foundational elements of Supply Chain Management are, integration, Supply Chain Management, Logistics Management, and Operations Management.

True

The two main reasons that companies implement Supply Chain Management are to (1) achieve cost savings and (2) better coordinate resources.

True

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

False

If you felt that recent demand trends were more significant, and thus should be emphasized more in formulating a forecast, then in forecasting demand for the upcoming demand period, you would probably favor using a simple moving average over the conventional weighted moving average.

False

In a Fixed-Order Quantity System, inventory levels are only checked/reviewed in pre-determined time intervals and may therefore require you to maintain higher levels of safety stock.

False

Simple Moving Average is a Time Series Forecasting Model which works well when the actual demand is either trending up of down over a long period of time.

False

The Inventory Turnover Ratio shows how many times a firm turns over its inventory in an accounting period, and higher inventory turnover is generally viewed as negative.

False

The four broad categories of inventory are raw materials, work-in-process, semi-finished goods, and finished goods.

False

The lowest inventory level at which at new replenishment order must be placed to avoid a stockout is known as the "Breakeven Point".

False

The most commonly used forecasting accuracy measures are the Mean Multiple Regression (MMR), and Mean Absolute Percentage Error (MAPE).

False

Which of the following statements is FALSE?

It is not generally recommended to sue both quantitative and qualitative forecasting methods.

Warehousing, Customer Relationship Management, and International Trade are all important functional areas that are most closely related to?

Logistics & Transportation

___________________, such as lubricants for machines, are used in the production process, but do not become part of the final product.

Maintenance, repair, and operating supplies

Which of the following is not part of the supply chain planning hierarchy?

Modified Manufacturing Plan (MMP)

Why would a company want to use ABC analysis when managing their inventory?

So they can focus their limited resources on the items that have the highest inventory value

Enterprise Resource Planning (ERP) Systems allow supply chain members to share information so that scarce resources can be fully utilized to meet demand, while also minimizing supply chain inventories.

True

Which of the following is a Long Range supply chain plan?

Aggregate Production Plan

What is the name of engineering document that shows all component parts and materials which make up the final product?

Bill of Material (BOM)

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the?

Bullwhip effect

The business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demands is known as.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

Which of the following terms used in MRP represents the parts demanded by a parent?

Component