Comprehensive Final Exam SCM

Which of the following statements that might be made by a business executive best expresses the overall philosophy of Total Quality Management? Multiple Choice "We've achieved Six Sigma. That's good enough." "There's always room for improvement." Correct "The workers need to work harder to prevent quality problems." "We never sell defective products to customers."

"There's always room for improvement." Correct

Which of the following statements most clearly expresses a company's commitment to customer success? Multiple Choice "We attempt to meet or exceed the expectations of all of our customers." "We attempt to meet our standards of providing perfect order performance to all of our customers." "We attempt to meet the requirements of our customers." Correct All of these are clear expressions of commitment to customer success.

"We attempt to meet the requirements of our customers." Correct

Bill's glass store needs to ship an order of 10 chandeliers to a builder about 1,000 miles away. The chandeliers cost about $10,000 each, and Bill will be paid upon delivery. Bill plans to ship the order by truck at a cost of $1,000. The delivery will take 10 days. Bill uses a 30 percent annual inventory carrying cost. What will be the approximate total shipping and transit inventory carrying cost of the shipment? Assume 365 days per year. Multiple Choice $633.33 $821.92 $1,000.00 $1,821.92

$1,821.92

Jones Company had sales of $100,000 last week. The company had forecasted that sales would be $120,000. Using exponential smoothing with a smoothing constant of 0.2, what is the forecast for this week's sales? Multiple Choice $124,000 $116,000 Correct $104,000 $112,000

$116,000 Correct

University Bookstore buys women's polo T-shirts from a supplier according to the price schedule shown below. The store sells 500,000 T-shirts each year. The annual carrying cost of T-shirts is 25 percent, and the ordering cost is $40. Quantity per orderUnit price1-2,499$35.00 2,500$32.00 The lowest total annual acquisition cost for the bookstore quantity is closest to: (Due to possible differences in rounding, choose the closest answer.) Multiple Choice $16,018,000 Correct $16,018,708 $17,518,707 $16,258,000 Explanation EOQ @ $35 price = sqrt[(2 × 500,000 × $40)/($35 × .25)] = 2,138 units ICC @ $35 = (2,138/2) × ($35) × (.25) = $9,353.75 Order cost @ $35 price = (500,000/2,138) × $40 = $9,354.54 Product cost @ $35 price = 500,000 × $35 = $17,500,000 Total cost @ $35 price = $17,500,000 + $9,354.54 + $9,353.75 = $17,518,708.29 EOQ @ $32 price = sqrt[(2 × 500,000 × $40)/($32 × .25)] = 2,237 units; however, you must order 2,500 to obtain the $32 price. ICC @ $32 = (2,500/2) × ($32) × (.25) = $10,000 Order cost @ $32 price = (500,000/2,500) × $40 = $8,000 Product cost @ $32 price = 500,000 × $32 = $16,000,000 Total acquisition cost @ $32 price = $16,000,000 + $8,000 + $10,000 = $16,018,000

$16,018,000 Correct

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce 50 units per month. Beginning Inventory: 50 Beginning Workers: 16MonthDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire11,000 21,200 31,500 41,300 Total What is the inventory carrying cost of a chase plan accomplished through hiring and firing? Multiple Choice 0 $200 $1,000 $2,000

$2,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce 50 units per month. Beginning Inventory: 50 Beginning Workers: 16MonthDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire11,000 21,200 31,500 41,300 Total What is the total cost of a chase plan which uses only hiring/firing? Multiple Choice $257,000 Correct $257,400 $257,600 $257,900

$257,000 Correct

For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: Week $Take 1. $250,000 2. $190,000 3. $300,000 4. $280,000 Platinum Nugget uses a three-period weighted moving average to forecast demand, with a t = 0.6, at−1 = 0.3, and at−2 = 0.1. What is the forecast for week 5? Multiple Choice $232,000 $237,000 $277,000 Correct $295,000

$277,000 Correct

Steve's shop sells seashells by the seashore. Steve desires to offer at least a 90 percent in-stock availability of shells for his customers. He sells 40 shells each day on average, with a standard deviation of 20. When he orders replenishments of shells, it typically takes one day for the supplier to deliver, with a standard deviation of one day. If Steve's holding cost is $0.50 per shell per year, how much money will he spend each year in holding costs in order to provide a 90 percent service level? (Pick the number closest to the correct answer.) Multiple Choice $13 $29 Correct $58 $125

$29 Correct

HighLife Corporation has the following information: Average demand = 30 units per day Average lead time = 40 days Item unit cost = $45 for orders of less than 400 units Item unit cost = $40 for orders of 400 units or more Ordering cost = $50 Inventory carrying cost = 15 percent The business year is 300 days. Standard deviation of demand during lead time = 90 Desired service level = 95 percent What is the TAC at $40/unit? (Pick the number closest to the correct answer.) Multiple Choice $351,750 $362,325 Correct $355,840 $362,240

$362,325 Correct

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. Beginning Inventory: 100 Beginning Workers: 25MonthDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire1600 2800 3700 4900 Total3,000 What is the total cost of a CHASE plan (using hiring/firing)? Multiple Choice $379,800 $379,000 $381,100 $380,300 Correct

$380,300 Correct

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. Beginning Inventory: 100 Beginning Workers: 25MonthDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire1600 2800 3700 4900 Total3,000 The total inventory carrying cost of a chase plan is: Multiple Choice $6,000 $4,000 Correct $5,000 $4,500

$4,000 Correct

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: Month123456Hours Needed380280450420520390 What is the total labor cost if Dave relies on part-time employees to meet additional demand? Multiple Choice $43,500 Correct $53,500 $70,500 $77,500

$43,500 Correct

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce 50 units per month. Beginning Inventory: 50 Beginning Workers: 16MonthDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire11,000 21,200 31,500 41,300 Total What is the total inventory carrying cost for the level plan? Multiple Choice 0 $6,000 $8,000 Correct $6,500

$8,000 Correct

Using the data shown below, the forecast for week 5 using an exponential smoothing model is: Week1234Sales165140115200Forecast170168 140.1 Multiple Choice 164.1 Correct 146.1 200.1 Not enough information is given to produce a forecast

164.1 Correct

Suppose that a producer of 50 pound bags of potting soil decides that bag weight variation within a range of +/- 2 pounds will be acceptable to customers. To deliver a six sigma level of quality for this product, the bagging process will need to have a standard deviation not larger than: Multiple Choice 2 pounds 4 pounds 0.33 pounds Correct 0.17 pounds

0.33 pounds Correct The target standard deviation is 4 pounds divided by 12 equals 0.33 pounds

The managers of a production line that fills cereal boxes would like to reach a Six Sigma level of quality in terms of product weight. The desired range of output extends from 10 to 16 ounces. In order to reach Six Sigma quality, what would the maximum standard deviation of output need to be? Multiple Choice 1 ounce 2 ounces 0.5 ounces Correct Not enough information is given to answer the question.

0.5 ounces Correct

A company uses actual demand data to develop its seasonal indices. It has the data shown below for each quarter of the previous two years. Quarter12341234Demand50609080607010090 What is the seasonal index for Quarter 1? Multiple Choice 0.714 0.750 1.25 0.732 Correct Explanation Year 1 average demand = (50 + 60 + 90 + 80)/4 = 70. Year 2 average demand = (60 + 70 + 100 + 90)/4 = 80. Quarter 1 SI for year 1 = 50/70 = 0.714. Q1 SI for year 2 = 60/80 = 0.75. Q1 average SI = 0.732.

0.732 Correct

Alpha Company sold 2,000 widgets yesterday. It had forecasted sales of 1,900 units. Using exponential smoothing with a smoothing constant of 0.6, what is the forecast for today's sales of widgets? Multiple Choice 2,060 1,940 2,040 1,960

1,960

XYZ distribution center receives 1,000 deliveries each day. Arrivals are on time if they are within plus or minus 10 minutes of the targeted arrival. In order to have only 3.4 late or early arrivals per million deliveries, what would the standard deviation of arrival times need to be? Multiple Choice 3.33 minutes 0.83 minutes 1.67 minutes Correct 6.67 minutes

1.67 minutes Correct

Suppose you are positioning "meals ready to eat" (MREs) for humanitarian aid in an area prone to experiencing hurricanes. If a hurricane occurs, the number of MREs that might be demanded by affected residents of the area is normally distributed with a mean of 10,000 and a standard deviation of 500. MREs cost $1 each to purchase and store. In the event of a hurricane, unused MREs are unlikely to be needed again before they spoil, in which case they must be disposed of at a cost of $0.25 per MRE. If during a hurricane there are not enough stored MREs to meet people's needs, then more MREs can be purchased and quickly shipped in to the site at a cost of $8 each. How many MREs should you preposition in anticipation of a hurricane? (Pick the number closest to the correct answer.) Multiple Choice 11,000 10,980 10,520 Correct 10,640

10,520 Correct

An office manager forecasts demand for office stationery by exponential smoothing, with alpha = 0.4. Actual demand two weeks ago (i.e., the week before last) was 12 boxes, but the forecast for that period was only 10. Actual demand last week was seven. What was the forecast for last week? Multiple Choice 10.8 Correct 11.0 11.2 8.2 8.8

10.8 Correct

Using the BOM, if two units of A are needed, how many of K will be required? Assume that there is no on-hand inventory of any items. Multiple Choice 16 34 52 104 Correct

104 Correct

End item A is made by assembling two parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for end item A are 100 units. Units on-hand in inventoryEnd item A50Part B30Part C75Part D100Part E75 What is the net requirement for part C? Multiple Choice 70 units 200 units 125 units Correct 100 units

125 units Correct

Task X is expected to take three days to complete. The maximum (latest) earliest finish date for any predecessors to task X is 10. Therefore, the earliest finish for task X is: Multiple Choice 7 10 13 Correct Cannot determine from the information given

13 Correct

HighLife Corporation has the following information: Average demand = 30 units per day Average lead time = 40 days Item unit cost = $45 for orders of less than 400 units Item unit cost = $40 for orders of 400 units or more Ordering cost = $50 Inventory carrying cost = 15 percent The business year is 300 days. Standard deviation of demand during lead time = 90 Desired service level = 95 percent What is the safety stock that HighLife Corporation should carry for its desired service level of 95 percent? 1.28 standard deviations cover 90 percent 1.65 standard deviations cover 95 percent 1.96 standard deviations cover 97.5 percent Multiple Choice 149 Correct 90 86 112

149 Correct

Jones Company uses widgets as component parts. In a particular week it has gross requirements for 250 units of widgets, beginning inventory of 50 widgets, and scheduled receipts of 350 widgets. Available inventory for the next period is: Multiple Choice 650. 50. 250. 150.

150.

Using the data shown below, the forecast for week 5 using a three-period moving average model is: Week1234Sales165140115200 Multiple Choice 200 155 152 Correct 158

152 Correct

University Bookstore buys women's polo T-shirts from a supplier according to the price schedule shown below. The store sells 500,000 T-shirts each year. The annual carrying cost of T-shirts is 25 percent, and the ordering cost is $40. Quantity per orderUnit price1-2,499$35.00 2,500 or more$32.00 What order quantity would give the bookstore the lowest total acquisition cost? (Due to possible differences in rounding, choose the closest answer.) Multiple Choice 2,139 Incorrect 2,237 2,500 Correct 2,614

2,500 Correct

A company has the data shown in the chart below concerning its forecast performance over the past four time periods. PeriodActual DemandForecastErrorAbsolute Value of ErrorAbsolute Percentage Error134532025 2320 10 3335350 4 340−30 5 35020 Complete the chart and compute the MAD. Multiple Choice 2 20 Correct 10 100

20

Given the project plan shown below, what is the expected completion time for the critical path? Task IDImmediate PredecessorsExpected Duration (days)A-4B-5C-6DA,B,C5ED7FD4GE,F3 Multiple Choice 34 days 21 days Correct 16 days 18 days

21 days Correct

Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assume a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10. What is the ADJUSTED forecast for the next period? Multiple Choice 210.0 210.6 216.6 Correct 216.0

216.6 Correct

The network diagram below shows the five tasks required to complete a project and the associated times for those tasks. What is the earliest completion of the project diagrammed? Multiple Choice 23 weeks 24 weeks Correct 28 weeks 37 weeks

24 weeks Correct

Colson Corp. has planned a simple project with four tasks. The task information for the project is shown below: TaskEstimated DurationImmediate PredecessorsA10 daysNoneB7 daysAC4 daysAD8 daysB,C What is the estimated completion time for the project? Multiple Choice 29 days 25 days Correct 22 days 19 days

25 days Correct

End item A is made by assembling two parts of B and four parts of C. Part C is made from three parts of D and two parts of E. Gross requirements for end item A are 100 units. Units on-hand in inventoryEnd item A50Part B30Part C75Part D100Part E75 What is the gross requirement for part E? Multiple Choice 175 275 375 250

250

A company has average demand of 30 units per day. Lead time from the supplier averages seven days. Assume that the combined standard deviation of demand during lead time has been calculated and is equal to 20 units. One unit costs $10 and the inventory carrying cost is 25 percent. 1 standard deviation covers 84.13% 1.04 standard deviations covers 85% 1.28 standard deviations covers 90% 1.65 standard deviations covers 95% 1.96 standard deviations covers 97.5% 2 standard deviations covers 97.72% 2.33 standard deviations covers 99% 3 standard deviations covers 99.86% 6 standard deviations covers 99.99966% What is the reorder point for the company if it decides on a 99 percent service level? Multiple Choice 243 units 257 units Correct 77 units 210 units

257 units Correct

If beginning inventory is $1,000,000, ending inventory is $1,400,000, sales are $10,000,000, and anticipated sales are $50,000 per day, what is the days of supply? Multiple Choice 28 days Correct 70 days 60 days 32 days

28 days Correct

Given a demand of 19 for the most recent period, use αα = .2 and β =.4 to create a trend-enhanced smoothing-based forecast. Assume that FIT1 = 22 and T1 = 7.83. The correct answer is closest to: Multiple Choice 29.0 Correct 21.4 23.2 31.3

29.0 Correct

A master production schedule shows the beginning inventory is 50 units, the forecast is 80 units, and actual customer orders are 70 units. Using a lot-for-lot rule, what is the MPS quantity for period 1? Multiple Choice 30 Correct 80 70 20

30 Correct

A master production schedule shows the beginning inventory is 200 units, the forecast is 600 units, and the actual customer orders is 500 units. Using a lot-for-lot rule, what is the MPS quantity for period 1? Multiple Choice 400 Correct 300 600 500

400 Correct

The following environmentally responsible process/material matrix was developed for Zanda Corp. Zanda has determined that a score of 50 is its goal at this time, but efforts to lower its score will continue regardless. What is Zanda's current score, and what is your conclusion? MaterialChoiceEnergyChoiceSolidResidueLiquidResidueGaseousResidueResource Extraction32421Manufacture11122Prod./Pkg./Trans.03122Product Use22211Disp./Recycle21333 Multiple Choice 15, (from Manufacture & Prod/Pkg/Trans) and Zanda has met its goals—no further actions are necessary. 47, and Zanda has met its goals—no further actions are necessary. 47, and Zanda has met its goal but should do something about solid residue during extraction. Correct 53, and Zanda has not met its goals.

47, and Zanda has met its goal but should do something about solid residue during extraction. Correct

Jones Corporation is preparing an aggregate production plan for washing machines for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Beginning Inventory: 1,000 Beginning Workers: 10 QuarterDemandRegular ProductionOvertime Ending InventoryWorkers RequiredHireFire14,000 26,000 33,000 47,000 Total20,000 If Jones prefers a level plan, what will be the regular production rate per quarter? Multiple Choice 5,000 units Correct 4,000 units 6,000 units Regular production will vary each month.

5,000 units Correct

General Hospital uses disposable diapers at a rate of 200 per day, with a standard deviation of 20. To place and receive a replenishment of diapers from the third-party logistics provider typically takes three days. The hospital never wants to run out of diapers, so it holds enough safety stock to ensure 99.9 percent availability. Hospital purchasing managers order diapers along with other items every 30 days. It is time to place an order, and there are 800 diapers on hand. How many units should be ordered? (Pick the closest answer.) Multiple Choice 5,800 5,852 Correct 5,252 5,817 Explanation The uncertainty period is 33 days. σddupσddup = (33 × 32)1/2 = 17.23 diapers From the Z table, three standard deviations yields a service level of 99.9 percent. Q = (200/day × 33 days) + (3 × 17.23) − 800 = 5,851.7 => Round to 5,852 to ensure at least a 99.9 percent service level.

5,852 Correct

Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cost of $500. One particular carpet costs $8/yard to produce. Annual demand for this style is 50,000 yards. Bryson Mills produces carpet 200 days per year. The production process is most efficient when 2,000 yards/day are produced. Inventory carrying cost is estimated at 20 percent annually. What should be the production order quantity? Multiple Choice 4,675 yards 5,976 yards Correct 8,750 yards 2,500 yards

5,976 yards Correct

Zanda Corp. has experienced demand in the last four years as shown below. Period (t)Demand (dt)t*dtt2 120201 230604 332969 43815216Total1012032830Average2.530 What is the trend value (b) in the data? (Choose the closest answer.) Multiple Choice 5.6 units/period Correct 2.5 units/period 2.87 units/period −1.25 units/period

5.6 units/period Correct

Using the data below, determine the MAPE. PeriodActual DemandForecastErrorAbsolute Value of ErrorAbsolute Percentage Error134532025 2320 10 3335350 4 340−30 5 35020 Multiple Choice 5.0 percent 7.25 percent 5.99 percent

5.99 percent

At each of its home games, the Washington Check-Kiters football team sells programs that give statistics of the teams involved in the current game's contest. Since each game brings a different visiting team, a program is only of value for one contest, and no returns will be accepted by the supplier. On a per-program basis, the selling price is twice the cost. The target service level that will yield the most profits is: Multiple Choice 33 percent 50 percent Correct 67 percent 75 percent

50 percent Correct

You have a one-time opportunity to buy an item. It costs $50 and sells for $100. It's disposal value equals its salvage value. What is the target service level? Multiple Choice 50 percent Correct 25 percent 80 percent 66.67 percent

50 percent Correct

A master production schedule shows the following information: MPSWeekWeekWeekWeekBeginning inventory = 3001234Forecast1,0001,2001,3001,200Actual customer orders8001,000800700Projected on-hand inventory0000Available to promise MPS Based on the information in the MPS, what is the number of items that is available to promise in week 4? Multiple Choice 1,200 700 500 Correct 1,500

500

A master production schedule shows the beginning inventory is 40 units, the forecast is 100 units, and actual customer orders are 80 units. What is the quantity that is available to promise in period 1? Multiple Choice 40 Incorrect 80 100 60

60

You have a one-time opportunity to buy an item. It costs $20 and sells for $50. It has $4 salvage value if it does not sell. What is the target service level? Multiple Choice 50 percent 65.21 percent Correct 80 percent 66.67 percent

65.21 percent Correct Cso = Unit selling price − Unit cost = $50 − $20 = $30 Cos = Unit cost + Disposal cost − Salvage value = $20 + 0 − $4 = $16 TSL =CsoCso + Cos=$30/($30+$16)= 65.21 percentTSL =CsoCso + Cos=$30/($30+$16)= 65.21 percent

Use the data below. Quarter12341234Demand50609080607010090 A company has forecasted next year's demand to be 400. What is the seasonally adjusted forecast for Quarter 1? (Choose the closest answer.) Multiple Choice 75 71 125 73

73

An MRP record for a motor is shown in the following table. MRP RecordPart Name: MotorLead time = 2 weeksOn-hand inventory = 500Safety stock = 100Order quantity: LFLWeekWeekWeekWeekWeekWeekWeekWeek 12345678Gross Requirements6,0008,00010,00010,00010,0008,0006,0008,000Scheduled Receipts5,6008,000 Available Inventory Net Requirements Planned Order Receipts Planned Order Release What is the planned order release for week 4? rev: 11_04_2019_QC_CS-189070 Multiple Choice 0 10,000 8,000 Correct 6,000

8,000 Correct

Johnson Company has the following data about customer orders for the month of June: Orders Received: 5,000 orders Total Units Ordered: 40,000 units Total Units Delivered: 37,800 Total Orders Delivered Complete: 4,600 What was Johnson's unit fill rate? Multiple Choice 92 percent 94.5 percent Correct 12.5 percent 91 percent

94.5 percent Correct

Refer to the following information. What is the unit fill rate? OrdersUnits Ordered# ofOrderLinesUnits DeliveredLines Delivered CompleteOrder Delivered Complete2,00030,0006,00028,5005,6001,820 Multiple Choice 95 percent Correct 98 percent 92 percent 99 percent Explanation 28,500/30,000 = 95 percent

95 percent Correct

Which of the following is true concerning sales and operations planning? Multiple Choice Once the plan is finalized, it should not be changed during the planning period. There is a specific set of steps all firms should follow in the sales and operations planning process. A benefit of the process is that the firm should achieve high service levels with lower inventory. Correct By keeping the schedule stable, production can be optimized.

A benefit of the process is that the firm should achieve high service levels with lower inventory. Correct

Splitting shipments into individual orders and arranging them for local delivery to customers is: Multiple Choice Stockpiling. Cross-docking. Break-bulk. Correct Reverse logistics.

Break-bulk. Correct

"Design for X" is: A short way to say "design for excellence" An approach that ensures that customers' needs are met A collection of design approaches that address specific areas of supply chain management The same thing as design for manufacture

A collection of design approaches that address specific areas of supply chain management Correct

Which phrase/word best captures what lean is? Multiple Choice A set of effective, well defined tools designed to reduce waste A quantitative methodology for attacking variance A procedure to be used within operation management and supply chain systems A corporate philosophy

A corporate philosophy

The tracking signal will suggest to a manager that: Multiple Choice Demand for an item is changing. There is seasonality in demand. A forecast mode's parameters may need adjustment. Correct All the answers are correct.

A forecast mode's parameters may need adjustment. Correct

Which of the following best describes the effect of an organization's culture on sustainability? Multiple Choice The elements of an organizaton's culture that impact its' performance are readily identified. Organizational culture is less important than it once was due to mergers, downsizing and outsourcing. A healthy, positive organizational culture is critical to long-term success in achieving sustainability goals. Correct Changing an organization's culture is easy if survival is at stake.

A healthy, positive organizational culture is critical to long-term success in achieving sustainability goals. Correct

Demand planning for the intermediate term (tactical plans) would be done using dollar or unit sales for: Multiple Choice A business unit An entire sales network A product family in a region Correct A particular item at a given location

A product family in a region Correct

Outsourcing is often a good choice when: Multiple Choice There are only a few suppliers. A product is in the mature phase of the life cycle. Correct Technology is new. The product is critical to a firm's competitiveness.

A product is in the mature phase of the life cycle. Correct

Zanda Corp. is considering trying to develop a full partnership with a particular supplier. This suggests that the item Zanda buys from the supplier is: Multiple Choice A noncritical part. A "bottleneck" item. A strategically important part. Correct An item appropriate for a "leverage" strategy.

A strategically important part. Correct

Computer-controlled systems that use robots for materials handling activities are: Multiple Choice RFID. AS/RS. Correct Unitization. Value-added systems.

AS/RS. Correct

As technology and cultures evolve, the best approach for operations managers is to: Multiple Choice Adapt their business models. Correct Work harder. Retire. Make their processes more efficient.

Adapt their business models. Correct

Your company needs to ship 10 heart pacemakers that cost $10,000 each from Indianapolis, Indiana, to Miami, Florida. Which transportation mode should you use? Multiple Choice Water. Air. Correct Rail. Truck.

Air.

The following table shows capacity requirements data for making tabletops. Processingtime per unit = 10 minutesDay 1Day 2Day 3Day 4Day 5Planned order releases (units)4046405450Processing load (hours) Available capacity (hours)88888 Which of the following is TRUE? Multiple Choice Overtime is needed in day 1. Capacity exactly meets demand in day 5. All of the excess demand in days 4 and 5 can be shifted to day 3. Correct New machines are needed.

All of the excess demand in days 4 and 5 can be shifted to day 3. Correct

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true? Multiple Choice Jones will have higher investment in plant and equipment. Jones will have higher hiring and firing costs. Jones will have lower inventory carrying costs. All of the selections are true.

All of the selections are true.

Which of the following could cause a firm to initiate changes in a product's value proposition? Multiple Choice A close competitor introduces an enticing new feature in their product Declining sales of one of your product families for three consecutive quarters A fast-growing consumer demographic responds to lifestyle appeals in preference to product appeals All of these Correct None of these

All of these Correct

Where in a project schedule is a good place to plan a buffer? Multiple Choice Immediately after a highly uncertain task. Where scarce resources are needed. At the end of the project. All of these are good places to plan buffers.

All of these are good places to plan buffers.

Which of the following might a company try to do to reduce the total amount of safety stock it holds? Multiple Choice Implement and use ABC analysis of inventory items. Attempt to reduce variation in supplier lead times. Implement demand management approaches. All of these selections.

All of these selections.

Project manager Bill Jones has determined that task R has a high variation between "best case" and "worst case" estimated durations. Task R is probably a good candidate for: Multiple Choice Close monitoring and frequent status reporting. Buffering. Contingency planning. All of these.

All of these.

Which of the following factors should be considered when one designs a forecasting process? Multiple Choice Time horizon for planning. Level of detail for planning. Availability of data. All the answers are correct.

All the answers are correct.

Zanda Company is looking for a requirements planning system to help plan replenishment of its finished goods throughout its network of distribution centers. The type of system Zanda should consider is known as: Multiple Choice CRP. DRP. Correct MRP. ERP.

DRP. Correct

Factors contributing to the success of a TQM effort do not include: Multiple Choice An existing crisis A charismatic leader An uncomplicated product Correct Trust between labor and management

An uncomplicated product Correct

Inventory levels: Multiple Choice Are not affected by the choice of transportation mode. Are higher when rail rather than truck transportation is used. Correct Increase when air rather than truck transportation is used. Are not affected by the number of warehouses used.

Are higher when rail rather than truck transportation is used. Correct

What might a company do to reduce the amount of cycle stock it holds? Multiple Choice Attempt to reduce supplier lead time. Always take advantage of supplier quantity discounts. Attempt to reduce demand variation. Attempt to reduce order costs.

Attempt to reduce order costs.

A detailed description of an "end item" along with a list of all of its raw materials, parts, and subassemblies is shown in a: Multiple Choice MPS. Planning horizon. BOM. Correct DRP.

BOM

A company has determined the ideal number of locations by looking at the trade-offs described in the text. It decides to open more distribution centers than this "ideal." This decision would most likely result in ___________ and __________. Multiple Choice Poorer service to customers and higher cost Better service to customers and lower cost Better service to customers and higher cost Correct Poorer service to customers and lower cost

Better service to customers and higher cost Correct

Stainless steel is an important raw material for an appliance company. Steel accounts for a high level of spend and is critical to customer satisfaction. Further, only three suppliers worldwide can produce steel to meet the company's quality standards. Which is appropriate in this situation? Multiple Choice Using electronic catalogs for steel. Finding substitute materials. Using competition to select suppliers. Building collaborative partnerships with suppliers.

Building collaborative partnerships with suppliers.

When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as: Multiple Choice Buffering. Bullwhip effect. Correct Pareto effect. Supplier-managed inventory.

Bullwhip effect. Correct

The forward pass in a critical path algorithm involves: Multiple Choice Calculating the late finish and late start for each task. Calculating the late finish and the earliest possible start times for each task. Calculating the earliest possible start and finish times for each task. Correct Calculating the earliest possible start and late start for each task.

Calculating the earliest possible start and finish times for each task. Correct

An online auction used for sourcing: Multiple Choice Typically drives prices up as suppliers compete against each other. Is used in situations similar to negotiation. Can hurt supplier relationships. Correct Can only consider price.

Can hurt supplier relationships. Correct

Sustainability: Multiple Choice Focuses primarily on increasing environmental compliance. Can lower a company's total cost. Correct Does not include worker safety. Focuses only on social issues.

Can lower a company's total cost. Correct

With respect to the following operating service characteristics of the modes of transportation, which combination is INCORRECTLY specified? Multiple Choice Speed: air is best; pipeline is worst. Availability: truck is best; pipeline is worst. Capability: pipeline is best; water is worst. Correct Dependability: pipeline is best; air is worst.

Capability: pipeline is best; water is worst. Correct

Which of the following is NOT one of the costs considered in aggregate production planning? Multiple Choice Subcontracting cost. Capital equipment cost. Correct Inventory cost. Firing (layoff) cost.

Capital equipment cost. Correct

A specific analysis of the total greenhouse gases caused directly or indirectly by a product is called: Multiple Choice Carbon footprinting. Correct Life cycle waste assessment matrix. Life cycle analysis. Cap and trade.

Carbon footprinting. Correct

Significant changes in an MPS quantity several weeks into the planning horizon can: Multiple Choice Make the MRP more accurate. Cause inconsistencies in the MRP. Correct Reduce stockouts. Increase safety stock.

Cause inconsistencies in the MRP. Correct

Which of the following statements most accurately describes the outcome of using a simple moving average model to forecast demand that has a strong trend? Multiple Choice Using more periods in the moving average calculation will produce better forecasts. Moving average models require less historical data than exponential smoothing models. Moving averages must be weighted in order to accurately predict a trend. Changes in forecasts produced by a moving average model will lag behind changes in demand.

Changes in forecasts produced by a moving average model will lag behind changes in demand.

In recent years some companies have begun to work closely with their customers and/or suppliers by sharing information to develop demand plans and execute those plans. The procedure they are following is known as: Multiple Choice Coordinated foreplanning of requirements. Joint planning of demand forecasts. Collaborative planning, forecasting, and replenishment. Correct Conjoint analysis and forecasting.

Collaborative planning, forecasting, and replenishment. Correct

Jones Company promised a customer that the customer would receive at least 98 percent of all items ordered. In fact, the customer received 95 percent of the items. This is an example of which "gap" in the customer satisfaction model? Multiple Choice Performance gap Knowledge gap Standards gap Communications gap

Communications gap

3PLs: Multiple Choice Typically only operate fulfillment centers. Consolidate storage and shipments across customers. Correct Increase supply chain risk. Have minimal investment in information systems.

Consolidate storage and shipments across customers. Correct

Zanda Corporation's CEO watched in amazement and frustration as workers handled and loaded individual products onto trucks. She felt handling the individual items was very cumbersome. She should investigate the possibility of: Multiple Choice Using RFID. Containerization. Correct AS/RS. Private transportation.

Containerization. Correct

Zanadu Corp. produces several different colors of a product on a single production line. It used to take several hours to switch colors, but now Zanadu has found a way to prepare for changing colors in a few minutes. This was most likely accomplished by: Multiple Choice TAKT time flow balancing. Implementing andon lights. Converting internal to external setups. Correct Converting external to internal setups.

Converting internal to external setups. Correct

Stockouts are very costly for a medical device company. The logistics manager has decided to hold more inventory to reduce stockouts. This is an example of: Multiple Choice Cost-to-cost trade-offs. Market consolidation strategy. Value density. Cost-to-service trade-offs.

Cost-to-service trade-offs.

Zanda Corp. decided to use a more expensive mode of transportation to deliver orders to customers. This decision was likely made after an examination of: Multiple Choice Cost-to-cost trade-offs. Consolidation strategies. Product availability problems. Cost-to-service trade-offs. Correct

Cost-to-service trade-offs. Correct

In a Cost of Quality analysis, "failure costs" refers to: Multiple Choice Costs associated with defects Correct Costs of not achieving goals Costs of not considering customer needs Costs associated with mistakes

Costs associated with defects Correct

Spending more money to speed up a project is known as: Multiple Choice Speeding. Crashing. Correct Splurging. Pinching.

Crashing. Correct

The focus of the first step in the DMAIC process is on: Multiple Choice Process variability. Cost. Critical-to-quality characteristics. Correct Problem solving.

Critical-to-quality characteristics. Correct

The longest lead-time path in the BOM is the: Multiple Choice Time bucket. Planning horizon. Time window. Cumulative lead time.

Cumulative lead time.

Which customer management approach requires a comprehensive supply chain perspective on the part of operations executives? Multiple Choice Customer success Correct Customer satisfaction Customer service Customer happiness

Customer success Correct

TB MC Qu. 16-31 The expectation of integrity... The expectation of integrity in fulfilling obligations is held by which stakeholder group? Multiple Choice Customers Correct Workers Suppliers Investors

Customers Correct

Which of the following is NOT often associated with supplier-managed inventory (SMI) arrangements? Multiple Choice Long-term commitments from both parties. Supplier representative located at the customer site. Customers recommend to suppliers how they should schedule production. Correct Supplier places replenishment orders. All of these are typically associated with SMI.

Customers recommend to suppliers how they should schedule production. Correct

The network diagram below shows the five tasks required to complete a project and the associated times for those tasks. Which task has the greatest amount of slack? Multiple Choice A B C D Correct E

D

Nearly all projects seem to go through the same phases in the following sequence: Multiple Choice Planning, definition, execution, and completion Definition, planning, delivering, and closing Definition, planning, execution, and completion Correct Selection, planning, delivering, and completion

Definition, planning, execution, and completion Correct

What is the relationship between demand management and demand forecasting? Multiple Choice The two planning activities are managed independently. Demand management plans are usually an input to demand forecasting. Correct Demand management is done by operations managers, while demand forecasting is done by marketing managers. All the answers are correct.

Demand management plans are usually an input to demand forecasting. Correct

When buying from suppliers, what decisions do supply managers make that potentially impact quality? Multiple Choice Design of manufacturing and service processes Design of contracts and associated incentives and penalties Correct Design of packaging Design of product prototyping procedures

Design of contracts and associated incentives and penalties Correct

Recycling is a critical consideration during which stage of the product life cycle? Multiple Choice Usage Disposal Correct Packaging/transportation Extraction

Disposal Correct

What is the defining objective of lean? Multiple Choice Eliminating waste and its causes Correct Reducing process variance Producing a product that a customer will want Reducing cost

Eliminating waste and its causes Correct

Which of the following is NOT one of the principles associated with lean/just-in-time production? Multiple Choice Encourage use of unique components. Correct Specify value for each specific product. Pursue perfection. Let the customer pull value from the producer.

Encourage use of unique components. Correct

Software that consolidates all of the business planning systems and data throughout an organization is: Multiple Choice MPS. MRP. DRP. ERP.

ERP.

Negotiation is typically used when: Multiple Choice Price is the most important factor. There are many equally qualified suppliers who are willing to compete. Early supplier involvement is needed in new product development. Correct There are standard product specifications that are clear and complete.

Early supplier involvement is needed in new product development. Correct

The increasing size of container ships is being driven by: Multiple Choice Economies of scale. Correct Total cost of ownership. Market consolidation. Economies of distance

Economies of scale. Correct

Customer relationship management attempts to: Multiple Choice Ensure the development of customer success for customers. Ensure the development of strategically appropriate relationships with customers. Correct Meet the expectations of customers. Use technology to replace human interaction with customers.

Ensure the development of strategically appropriate relationships with customers.

When people and profit intersect, from a sustainability perspective, which of the following areas is most impacted? Multiple Choice Bearability Equitability Correct Sustainability Viability

Equitability Correct

John Jones is a plant manager. He believes his plant is guilty of "waste of overproduction." Which of the following symptoms might he have observed that led to this belief? Multiple Choice Idle equipment. Excess inventory. Correct High customer returns of products. All of these.

Excess inventory. Correct

Typically the resources required during a project's life are greatest in which stage of its life? Multiple Choice Planning Definition Completion Execution

Execution

Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is: Multiple Choice Regression. Executive judgment. Correct Time series. Moving average. Exponential smoothing.

Executive judgment. Correct

The Global Reporting Initiative (GRI) produces a sustainability reporting framework to enable greater organizational transparency. Which of the following is not one of the criteria followed by GRI? Multiple Choice Product and service labeling Investment and procurement practices Equal remuneration for women and men Emissions, effluents and waste Executive political affiliations

Executive political affiliations

Demand-driven MRP: Multiple Choice Compares materials and capacity requirements within a single firm. Extends planning across the supply chain. Correct Focuses on distribution planning. Is also called advanced planning and scheduling.

Extends planning across the supply chain. Correct

The focus of an aggregate production plan, in general, is on all of the following EXCEPT: Multiple Choice The intermediate-term future. Product lines. Facilities and capital equipment. Correct Inventory levels.

Facilities and capital equipment. Correct

If a company spends more on prevention, what would be the expected impact on other costs of quality? Multiple Choice Appraisal costs will go up. Failure costs will go down. Correct Failure costs will go up. Other costs will be unaffected.

Failure costs will go down. Correct

What is the name of the social movement that seeks to help agricultural producers in developing countries by improving business conditions and promoting sustainability? Multiple Choice Fair Trade Correct Fair Labor Association Free Farm Advocacy Ethical Consumer

Fair Trade Correct

___________ inventory is the costliest form of inventory one can hold. Multiple Choice Finished goods Correct Raw materials Components Work-in-process

Finished goods Correct

From an operations standpoint, sustainability means that: Multiple Choice The firm must improve how it manages its people resources since these are important to the long-term survival of the firm. A company should focus its efforts on reducing pollution. Firms should pursue profit without damaging the environment or the well-being of future generations. Correct Profit is not an important goal.

Firms should pursue profit without damaging the environment or the well-being of future generations. Correct

The network diagram below shows the five tasks required to complete a project and the associated times for those tasks. What is the latest start date for task C? Multiple Choice Two weeks Seven weeks Six weeks Five weeks

Five weeks

When a process is automated: Multiple Choice Low-wage jobs increase Fixed costs increase Correct Quality always improves

Fixed costs increase Correct

One function of distribution centers (DC) is "consolidation." This means that the warehouse/distribution center is used to: Multiple Choice Group small inbound loads into larger outbound loads. Correct Collect products/packaging materials that are sent back for disassembly, reclamation, or disposal. Hold inventory to buffer the system from variability in either supply or demand. Hold inventory needed because of seasonal requirements.

Group small inbound loads into larger outbound loads. Correct

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the hybrid plan: Multiple Choice Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan. Correct Has higher hiring/layoff cost than the chase plan and higher inventory carrying cost than the level plan. Has lower inventory carrying cost than the chase plan and higher hiring/layoff cost than the level plan. None of these selections. Explanation The hybrid plan will have lower hiring/layoff and overtime expenses than the chase plan but will have higher inventory carrying costs. The hybrid plan will have higher hiring/layoff and overtime costs than the level plan but will have lower inventory carrying costs.

Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

A company's supplier for a critical part was selected based on the lowest purchase price. Six months later, the company's warranty costs began to rise because of defective parts. The company has experienced: Multiple Choice Reduced sustainability. Higher total costs of ownership. Correct Problems with availability of resources. Higher levels of spend analysis.

Higher total costs of ownership. Correct

All of the following can increase supply chain risk except: Multiple Choice Using a supplier that is having financial difficulty. Holding higher levels of inventory of critical materials. Correct A company in Canada using suppliers in Thailand. Single sourcing.

Holding higher levels of inventory of critical materials. Correct

Which of the following is (are) advantage(s) of full partnerships with suppliers, as compared to traditional adversarial relationships?I. They help reduce uncertainties for both buyer and supplier.II. The full partnership is easier to establish and maintain than other relationships, so more suppliers can be dealt with.III. The full partnership assures the lowest material price. Multiple Choice I only Correct II only III only I and II only

I only Correct

In examining the data below, the manager exclaimed that he was very happy to see no bias in the forecasts. How would you respond to the manager? PeriodActual DemandForecastErrorAbsolute Value of ErrorAbsolute Percentage Error134532025 2320 10 3335350 4 340−30 5 35020 Multiple Choice You are correct. I'm sorry, but there is a slight negative bias. I'm sorry, but there appears to be a slight positive bias. Correct There is no way to estimate bias with the given information.

I'm sorry, but there appears to be a slight positive bias. Correct

Which two of the following areas does lean/just-in-time production focus its attention on?I. CostII. QualityIII. VarianceIV. Waste Multiple Choice I and III II and IV I and II III and IV

III and IV

Which of the following environmental initiatives/programs deals most specifically with the firm's environmental management system? Multiple Choice LEED certification Responsible Care ISO 14000 Correct The Kyoto Protocol

ISO 14000 Correct

A company that had been using single sourcing decided to add a second supplier for one of its key raw materials. Which supply management goal does this BEST accomplish? Multiple Choice Fostering sustainability. Reducing total costs. Identifying, assessing, and mitigating supply chain risk. Correct Accessing technology and innovation.

Identifying, assessing, and mitigating supply chain risk. Correct

Floor space used to store items to be inspected belongs to which of the following elements of a process? Activities Inputs/outputs/flows Process structure Management policies

Inputs/outputs/flows

Sales and Operations Planning focuses on what time frame? Multiple Choice Very short, immediate plans Intermediate range planning Correct Long term Plans All of the above

Intermediate range planning Correct

Smart phones communicating with each other and being used to collect, exchange, and analyze data is an example of which of the following developments? Multiple Choice Cyber Security. Artificial Intelligence. Smart Computing. Internet of Things.

Internet of Things.

Modules that plug into cars and enable insurance companies to monitor their customer's driving habits are using which of the following developments? Multiple Choice Artificial Intelligence. Internet of Things. Correct Cyber Security. Smart Computing.

Internet of Things. Correct

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true? Multiple Choice Inventory will fluctuate significantly during the year. Correct The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year. It will be difficult to keep the workforce size stable. The firm must make sure that its maximum capacity is at least as high as the heaviest demand period.

Inventory will fluctuate significantly during the year. Correct

Supply management: Multiple Choice Only focuses on direct materials that are used in a company's products. Is essential for an organization to attain its strategic objectives. Correct Is only involved with supplier selection. Should always strive for the lowest purchase price. Explanation Supply management plays a strategic role in an organization.

Is essential for an organization to attain its strategic objectives. Correct

Which of the following statements most accurately represents the challenge of being environmentally sustainable? Multiple Choice Being environmentally responsible is a matter of complying with government regulations. It is not easy to be environmentally responsible since the trade-offs between choices are not always clear. Correct The choices facing the firm are clear, and the obvious candidates for improvement can be easily identified. Demands for environmental responsibility are driven by forces that can mostly be ignored.

It is not easy to be environmentally responsible since the trade-offs between choices are not always clear. Correct

When calculating a reorder point (ROP), which of the following factors WOULD NOT affect the calculation? Multiple Choice Item's EOQ.Correct Delivery lead time. Demand during the delivery lead time. Standard deviation of demand during delivery lead time. All of these would affect the ROP.

Item's EOQ.Correct

How does lean systems thinking in operations management relate to sustainability? Multiple Choice Its focus on improving product quality. Its focus on delivering products to customers faster. Its focus on reducing waste of all types. Correct Its focus on product innovation.

Its focus on reducing waste of all types. Correct

In the lean systems approach, as a system improves, it should have ____________ inventory on hand. Multiple Choice More The same amount of Less Correct Twice the amount of

Less Correct

An end item A is made by assembling four of component B and one of component C. Component B is made from two of part D and four of part E. Within the bill of materials, component B is considered to be: Multiple Choice Level 0. Level 1. Correct Level 2. Level 3.

Level 1. Correct

End item A is made by assembling two of part B and three of part C. Part C is made from two of component D and two of component E. Component D is considered to be a: Multiple Choice Level 0 input. Level 1 input. Level 2 input. Correct Level 3 input.

Level 2 input. Correct

Which of the following approaches provides management with an appropriate tool for assessing the full impact from creation to disposal of a product? Multiple Choice Cost of quality analysis Total cost of ownership Trade-off analysis Life cycle assessment

Life cycle assessment

A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries. What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables? Multiple Choice Local, close to its production plant when possible. Correct National, using suppliers within each country. Global, using the same suppliers across the world. Low-cost country sourcing.

Local, close to its production plant when possible. Correct

Which of the following is NOT a benefit of outsourcing? Multiple Choice Greater flexibility to change technology Better access to market information Lower supply management costs Correct Less capital needed for investment

Lower supply management costs Correct

The quantities of end items to be completed in each time period into the future is shown in a(n): Multiple Choice MRP. MPS. Correct BOM. ERP.

MPS. Correct

If shorter lead times are also typically the most reliable, then which market orientation is likely to provide more reliable order fulfillment? Multiple Choice Engineer to order Assemble to order Make to order Make to stock

Make to stock

Which of the following are not considered a relevant aggregate planning cost? Multiple Choice Lost sales cost Inventory holding cost Management and supervisory training cost Correct Subcontracting cost

Management and supervisory training cost Correct

The TQM view of organizational structure states that: Multiple Choice Employees must support management decisions. Management must support employees. Correct Customers want quality products. Middle management must support and enforce top management decisions.

Management must support employees. Correct

Lean systems applications have found the most acceptance and adoption in: Multiple Choice Service firms. Entire supply chains. Design activities. Manufacturing firms.

Manufacturing firms.

The Williams Co. combines all of its orders going to Tokyo, Japan, during the month into a single shipment. This is an example of: Multiple Choice Market area consolidation. Correct Pooled delivery consolidation. Economies of distance. Scheduled delivery consolidation.

Market area consolidation. Correct

The primary purpose of an MRP system is to: Multiple Choice Develop forecasts. Plan transportation and deliveries. Schedule personnel. Match supply and demand.

Match supply and demand.

What is the possible impact of lean systems, if taken to its extreme, on supply chain risk? Multiple Choice No impact - they are not related Positive impact - lean reduces risk Negative impact - lean increases risk Correct Yet to be determined - the data is not yet in

Negative impact - lean increases risk Correct

Given the data below, what is the bias of these forecasts? PeriodActual DemandForecast DemandErrorAbsolute Value of Error18001,100 300 2 1,000200 31,400 −100 Multiple Choice Positive. Incorrect Negative. Correct There is no bias.

Negative. Correct

Which of the following is NOT included in the information about the inventory records file for an item? Multiple Choice Safety stock Preferred order quantity Net requirements Correct Lead time

Net requirements Correct

Falcon Enterprises has four orders to be shipped to different customers located in Houston, Texas. The weights of the respective orders are 4,000 pounds, 5,000 pounds, 8,000 pounds, and 6,000 pounds. The cost to ship each order individually is $12 per 100 pounds. The shipments can be consolidated into a single order for a cost of $10 per 100 pounds with an additional charge of $200 per stop. Should the shipments be consolidated? Multiple Choice It does not matter; the cost is the same. No, the cost is $340 higher with consolidation. Correct Yes, the cost is $700 lower with consolidation. No, the cost is $700 higher with consolidation.

No, the cost is $340 higher with consolidation. Correct Explanation Nonconsolidated cost = [(4000 + 5000 + 8000 + 6000)/100] × $12 = $2,760. Consolidated cost = {[(4000 + 5000 + 8000 + 6000)/100] × $10} + (4 stops × $200/stop) = $3,100. Consolidation is more expensive by $340.

Floor cleaning supplies for an elementary school would be considered: Multiple Choice Leverage. Noncritical. Correct Strategic. Bottleneck.

Noncritical. Correct

Which of the following statements is most true regarding ISO 9000? Multiple Choice ISO 9000 was designed specifically for the electronics industry ISO 9000 is a quality award given by the U.S. government ISO 9000 tells management specifically how to ensure quality None of these statements is true.

None of these statements is true.

In determining the number of facility locations, the lowest total cost is typically: Multiple Choice Not the lowest cost of either transportation or inventory. Correct The lowest cost of either transportation or inventory. Not related to transportation or inventory. Difficult to generalize.

Not the lowest cost of either transportation or inventory. Correct

A service strategy that allows customers many different options for ordering and fulfillment of purchases is known as: Multiple Choice Customer success. Omni-channel. Correct Flexible purchasing. Customer convenience.

Omni-channel. Correct

Given the project plan shown below, what is the latest start for Task B? Task IDImmediate PredecessorsExpected Duration (days)A-4B-5C-6DA,B,C5ED7FD4GE,F3 Multiple Choice Zero days (must start immediately) One day Correct Two days Three days

One day Correct

John Jones of Jones Corporation determined that the cost related to processing an invoice from a supplier was approximately $100 per invoice. This cost is an example of: Multiple Choice Inventory holding (or carrying) cost. Inventory investment. Wasted expense. Order cost.

Order cost.

Given the following information for the last two months, which fill rate measure showed the greatest improvement? MonthOrdersUnits Ordered# of Order LinesUnits DeliveredLines Delivered CompleteOrder Delivered Complete12,00030,0006,00028,5005,6001,82022,50025,0008,00022,0007,0002,400 Multiple Choice Unit fill rate Line fill rate Order fill rate Correct None of the fill rates improved Explanation Unit fillLine fillOrder fillMonth 128,500/30,000 = .955,600/6,000 = .931,820/2,000 = .91Month 222,000/25,000 = .887,000/8,000 = .88

Order fill rate Correct

Which of the following is NOT an input to an MRP system? Multiple Choice Order releases. Correct Actual orders. Inventory receipts. Bill of materials.

Order releases.

Suppose a chief supply chain officer takes the total of all purchasing managers' annual salaries and divides this number by the number of purchase orders placed in a year. This calculation would provide insight into what kind of inventory cost? Multiple Choice Purchasing costs Ordering costs Correct Holding costs System management costs

Ordering costs Correct

Which of the following sustainability issues has a significant impact on supply chain relationships? Multiple Choice Government regulations and tariffs Organizational culture Correct Common usage of lean systems Location

Organizational culture Correct

An initial step in implementing lean is: Multiple Choice Lower the break-even point so smaller quantities can be economically produced. Outsource any non-core activity that can be done more efficiently by a supplier than by the firm. Correct Increase the contribution margin of product being sold. Empower Kaizen teams to improve specific processes/activities.

Outsource any non-core activity that can be done more efficiently by a supplier than by the firm. Correct

Over which stage of the product's life cycle does operations management have the greatest amount of direct control? Multiple Choice Extraction Packaging/transportation Correct Disposal Usage

Packaging/transportation Correct

The ABC analysis used for analyzing inventory is an example of: Multiple Choice Safety stock calculation. Regression analysis. Pareto's law. Correct Inventory carrying cost.

Pareto's law. Correct

The "triple bottom line" suggests that efforts should be devoted to assessing the impact of activities on: Multiple Choice Profit, planet, processes. People, profit, processes. People, planet, profit. Correct Profit, profit, profit.

People, planet, profit. Correct

Which of the following is not typically considered a component driver of demand? Multiple Choice Seasonality Trend Perturbation Correct Autocorrelation

Perturbation Correct

Materials requirements planning (MRP) systems are used primarily to: Multiple Choice Plan orders. Correct Plan lead time. Plan amounts of end items to produce. Plan distribution. Explanation MRP is a system for planning the ordering of materials.

Plan orders. Correct

Which of the following is NOT an input into the MRP? Multiple Choice Bill of materials Inventory records file Master production schedule Planned order release

Planned order release

Which of the following pieces of information is NOT contained in an MRP secondary report? Multiple Choice Cost. Inventory levels. Schedule attainment. Planned order releases.

Planned order releases.

A project manager usually has the greatest ability to affect social and technical success factors of a project in what stage of the project? Multiple Choice Planning Correct Execution Completion A project manager has equal ability to affect success factors across all stages.

Planning Correct

The entire time period covered by the MPS is the: Multiple Choice Time bucket. Cumulative lead time. Planning horizon. Correct Production schedule.

Planning horizon. Correct

MRP is a process that would be most applicable in which situation? Multiple Choice Planning requirements for repair parts for production equipment in a manufacturing plant. Planning requirements for safety stocks of finished goods in a distribution center. Planning requirements for bicycle seats in a bicycle production plant. Correct None of these.

Planning requirements for bicycle seats in a bicycle production plant. Correct

A standard electrical plug fits into an outlet in only one way because one of the two prongs is larger than the other. This ensures that people will insert the plug properly to create a grounded circuit. This is an example of: Multiple Choice Cause-and-effect analysis. Kanban. Poka-yoke. Correct A benefit of Pareto analysis.

Poka-yoke. Correct

A company decides to reduce its number of distribution centers (logistically postpone). This decision would result in ___________ or __________. Multiple Choice Poorer service to customers or higher transportation cost Correct Better service to customers or less transportation cost Better service to customers or higher transportation cost Confusion for customers or for the company

Poorer service to customers or higher transportation cost Correct

A method for estimating the impacts of uncertainty on project tasks is: Multiple Choice Rule of thumb estimates. Best case estimates. Probabilistic task duration estimates. Correct Risk-weighted estimates.

Probabilistic task duration estimates. Correct

Competitive bidding should be used when: Multiple Choice There is only one qualified supplier. Product innovation is more important than price. The spend is small. Product specifications are known and clear.

Product specifications are known and clear.

Which of the following would benefit the most from MRP? Multiple Choice Gasoline production. Building of a new bridge. Production of vacuum cleaners. Correct Production of aluminum soft drink cans.

Production of vacuum cleaners. Correct

Which of the following statements is true of projects? Multiple Choice Projects usually involve greater unknowns and uncertainty than repeated routine operations do. Correct Projects are usually more important than repeated routine operations. Once a project plan is made, it is impossible to simultaneously improve the speed, quality, and cost of a project. Technological factors are almost always more important than social factors in affecting project success.

Projects usually involve greater unknowns and uncertainty than repeated routine operations do. Correct

McGreen Burger Shop sells about two burgers per minute. Although the cook can cook up to 10 burgers per minute, he starts to cook another burger only after the salesperson removes a burger from the ramp. The ramp is large enough to hold only five burgers and keep them warm until a sale is made. This is an example of a: Multiple Choice Pull system. Correct Push system. Group technology. Poka-yoke.

Pull system. Correct

A legally binding document that signals to a supplier that goods and services are needed is a(n): Multiple Choice Purchase requisition. Electronic data interchange. Purchase order. Correct Supplier relationship management document.

Purchase order. Correct

Zanda Corp. has decided that it needs a project team to implement a new ERP system. It wants the system implemented as soon as possible. Given this criterion, Zanda should choose a: Multiple Choice Matrix organizational structure. Pure project structure. Correct Functional project structure. Line and staff organization structure.

Pure project structure. Correct

Stu Johnson, CEO of Johnson, Inc., attended a seminar on Total Quality Management. Which of the following is NOT something he is likely to have learned at that seminar? Multiple Choice Some aspects of quality are difficult to measure because they depend on customers' judgments. Quality is primarily the responsibility of operations management. Correct Quality results from design as well as operations and delivery. Cross-functional teams are important in TQM decision making. He is likely to have learned all of these things.

Quality is primarily the responsibility of operations management. Correct

Johnson Corp. has so strongly embraced the lean philosophy that it wants to apply the approach to all processes in the organization. Doing this may actually have the most severe negative impact on: Multiple Choice Radical product innovation. Correct Incremental product innovation. TAKT time. All of these.

Radical product innovation. Correct

Capacity requirements planning does all of the following EXCEPT: Multiple Choice Determine if a work center has the capacity to implement the MRP plan. Use planned order releases and scheduled receipts to estimate work center loads. Develop a load profile. Recalculate the MRP plan.

Recalculate the MRP plan.

Most of the tools and techniques used in lean systems seek to: Multiple Choice Reduce variability from the system. Correct Reduce the operator's discretion. Improve product quality. None of these.

Reduce variability from the system. Correct

If a tangible good or service performs the promised function dependably, we say that it has high: Multiple Choice Conformance. Durability. Reliability. Correct Perceived quality.

Reliability. Correct Explanation Reliability is the length of time (or number of instances) a product performs as planned before a failure occurs.

A production kanban authorizes a worker to: Multiple Choice Add an empty bin. Withdraw a standard lot of a specific item. Withdraw any item he feels is needed. Replenish an empty bin.

Replenish an empty bin.

Which of the following is NOT a basic activity type in processes? Delay Operation Reporting Correct Storage

Reporting

Which of the following environmental initiatives/programs is an example of an industry-specific program aimed at improving environmental performance? Multiple Choice LEED certification Responsible Care Correct The Kyoto Protocol ISO 14000

Responsible Care Correct

All of the following are safety and security regulations EXCEPT: Multiple Choice C-TPAT. Restrictions on truck driver hours. Restrictions on who can form a logistics company. Correct Controls on hazardous materials transportation.

Restrictions on who can form a logistics company. Correct

Returned products are generally handled at a warehouse that provides: Multiple Choice Stockpiling. Cross-docking. Production support. Reverse logistics support.

Reverse logistics support.

Each month the sales and operations team at Johnson Company meets to develop plans for each of the next six months. This process is known as: Multiple Choice Collaborative planning and forecasting. Rolling planning horizons. Correct Unconstrained planning. Continuous planning.

Rolling planning horizons. Correct

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences? Multiple Choice Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts. Correct Sales prefers many product variations; operations prefers few variations. Sales emphasizes revenue; operations emphasizes cost minimization. Sales prefers rapid response; operations prefers stable production schedules.

Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts. Correct

All of the following represent external failure cost EXCEPT the cost of: Multiple Choice Scrapping defective raw material. Correct Repairing items covered by warranty. Replacing defective items found by customers. Loss of goodwill and reputation.

Scrapping defective raw material. Correct

The demand for housing is characterized by a regular pattern of increasing to a peak, then falling. When the demand reaches a low point, it then repeats the pattern. This pattern usually takes place over a three- to five-year period. This is an example of which type of demand pattern? Multiple Choice Autocorrelation Seasonality and cycles Correct Step change Trend

Seasonality and cycles Correct

The capability to resist and recover from supply chain disruptions is: Multiple Choice Supply chain risk. Total cost of ownership. Supply chain resilience. Correct Sustainability

Supply chain resilience. Correct

Footprinting is an example of which of the following elements of the 5-S program? Multiple Choice Seiri/Sort/Clear out Seiton/Straighten/Configure Correct Seiso/Scrub/Clean and check Seiketsu/Systematize/Confirm

Seiton/Straighten/Configure Correct

Which of the following is NOT an activity of integrated logistics management? Multiple Choice Transportation management. Selecting raw material suppliers. Correct Order processing. Determining the number and locations of warehouses.

Selecting raw material suppliers. Correct

Squeaky Klean, a small consumer products company, purchases custom-designed plastic bottles for its cleaning products that are made at a single plant in Cleveland, Ohio. To make these bottles, specialized tooling must be purchased at a high cost and installed at a supplier's plant. Its sourcing strategy for bottles should be to: Multiple Choice Use three or more suppliers. Dual source. Single source. Correct Insource bottle production.

Single source. Correct

Phil Bord is a CEO for a large auto manufacturer and is interested in improving the product quality. Phil had overheard his friend mention Six Sigma. Considering that Phil has no idea what Six Sigma is, what are some key points to help Phil out? Multiple Choice Six sigma quality means that he would have exactly half as many quality defects as he would have with three sigma quality. To achieve truly world-class quality and performance, we need to focus on individual employee job functions. Six sigma quality is the result of a well-defined and structured process. Correct All of these.

Six sigma quality is the result of a well-defined and structured process. Correct

"Crashing" in a project refers to: Multiple Choice Deciding to terminate a project. Attempting to reduce the project scope. Extending the deadline for completion of the project. Speeding up an activity.

Speeding up an activity.

Which approach is likely to be used for leverage purchases? Multiple Choice Purchasing cards Vendor-managed inventory Using executive champions Standardizing purchases

Standardizing purchases

Senior management thought customers expected a rate of at least 96 percent for on-time delivery. However, senior management established a standard of 94 percent. The difference is the: Multiple Choice Satisfaction gap. Performance gap. Standards gap. Correct Knowledge gap.

Standards gap. Correct

A comprehensive system, facilitated by software, that manages the firm's interactions with its supply base is: Multiple Choice Supplier certification. Supplier scorecard. Supplier relationship management. Correct Collaborative planning, forecasting, and replenishment.

Supplier relationship management. Correct

Constant changing of the master schedule and the resulting changes in the requirements for components is referred to as: Multiple Choice Master schedule dynamics. System nervousness. Correct Bad planning. MRP failure.

System nervousness. Correct

Achieving the goal of producing at the output rate that matches the rate of customer demand is the goal of: Multiple Choice Jidoka. Poka-yoke. Total productive maintenance. TAKT time flow balancing.

TAKT time flow balancing.

Colson Corp. has planned a simple project with four tasks. The task information for the project is shown below: TaskEstimated DurationImmediate PredecessorsA10 daysNoneB7 daysAC4 daysAD8 daysB,C Does any task have slack? If so, how much? Multiple Choice None of the tasks have slack. Task B has three days of slack. Task C has four days of slack. Task D has two days of slack. Task C has three days of slack.

Task C has three days of slack.

As lean systems thinking is implemented, the amount of training that employees receive: Multiple Choice Tends to be about the same as with other manufacturing philosophies. Tends to increase. Correct Tends to be reduced dramatically, replaced instead by continuous improvement. Is focused exclusively on statistical process control.

Tends to increase. Correct

A company has decided to outsource the production of key components for its main product to suppliers. What effect will this have on the product's bill of materials? Multiple Choice None. The bill of materials will be wider. The bill of materials will be deeper. The bill of materials will be flatter.

The bill of materials will be flatter.

Qualitative factors that should be assessed when making an insourcing/outsourcing decision include all of the following EXCEPT: Multiple Choice Compatibility of the supplier's organizational culture and values with your company The importance assigned to the supplier's location The skills and knowledge of the supplier's management team The costs incurred at the start of the contract

The costs incurred at the start of the contract

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true? Multiple Choice Inventory will fluctuate significantly during the year. The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year. It will be easy to keep the workforce size stable. The firm likely will have higher capital investment than if it followed a level plan.

The firm likely will have higher capital investment than if it followed a level plan.

Zanda Corp. has always operated within one country. It is contemplating opening production facilities in another country. Zanda should realize: Multiple Choice Production processes used domestically should work well in a different country. The same business model that is used domestically should apply to the foreign country. The means of motivating the workforce domestically may not work well in a different country. Correct The technology used domestically is often

The means of motivating the workforce domestically may not work well in a different country. Correct

An MPS shows: Multiple Choice The change orders that are required. The quantities of end items to be completed in each time period. Correct The number of each type of part that is needed to make the final product. The scheduled releases for all parts and components.

The quantities of end items to be completed in each time period. Correct

Some consider any level of quality short of perfection to be unacceptable. However, managers who must set quality targets should consider: Multiple Choice The quality level required by ISO 9000 The relative costs of failure, prevention, and appraisal Correct The fact that six sigma is a universally accepted standard The effects of product quality on stock prices.

The relative costs of failure, prevention, and appraisal Correct

Johnson Manufacturing has decided to consolidate its warehouses and reduce the number of locations from 12 to four. However, Johnson desires to maintain the same service level in terms of the risks of running out of stock in attempting to meet customer demand. As a result, Johnson can expect that: Multiple Choice The time to fill customer orders will decrease. The required safety stock will increase by approximately 73 percent. The required safety stock will decline by approximately 42 percent. The required safety stock will decline by approximately 58 percent.

The required safety stock will decline by approximately 58 percent.

Texas Manufacturing has decided to triple the number of distribution centers it operates around North America in order to locate inventories within 500 miles of each major city. What effects should they expect? Multiple Choice The time to fill customer orders will increase. Inventory holding costs will triple. Total operating costs for the distribution centers will decrease. The required safety stock will increase.

The required safety stock will increase.

Which of the following is true about the use of weighted scoring models for supplier selection? Multiple Choice Once developed, the model weights should never change. The supply management department should determine the weights. The highest-scoring supplier should always be selected to receive the business. There is a good deal of subjectivity in developing and using the model.

There is a good deal of subjectivity in developing and using the model.

Which of the following phrases BEST defines the concept of sustainability, as set out by the United Nations Brundtland Commission: Multiple Choice To foster an environment that satisfies the requirements of the triple bottom line—namely people, profit, and the planet—the keys to our future survival. To ensure that business and the community work together to preserve limited resources while also ensuring that business is appropriately rewarded for its efforts. To reduce, minimize, and ideally eliminate pollution, thus preserving the planet and its resources for the benefit of not only today's generation but also the future. To meet the needs of the present without compromising the ability of future generations to meet their needs.

To meet the needs of the present without compromising the ability of future generations to meet their needs.

The sum of all product- and logistics-related costs is: Multiple Choice Total landed costs. Correct Total cost of ownership. Cost-to-cost trade-offs. Cost-to-service trade-offs.

Total landed costs. Correct

Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate? Multiple Choice Total number of computers (laptops and desktops) to be sold next month. Total number of laptops to be sold next month. Total number of desktops to be sold next year. Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16x DVD drive to be sold next year.

Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16x DVD drive to be sold next year.

Products are received, sorted, sequenced, and selected into loads at a: Multiple Choice Stockpiling center. Product support warehouse. Transshipment point. Correct Reverse logistics center. Explanation Products are received, sorted, sequenced, and selected into loads at a transshipment center.

Transshipment point. Correct

Which of the following transportation modes has relatively low fixed costs but high variable costs? Multiple Choice Pipeline. Air. Rail. Truck.

Truck.

Which of the following is NOT a good reason to terminate (kill) a project? Multiple Choice Consistent budget and schedule overruns. Changing organizational priorities. Uncertainty regarding the project's outcomes. Correct Wrong resources assigned to the project.

Uncertainty regarding the project's outcomes. Correct

Advanced planning and scheduling systems: Multiple Choice Use a similar logic to the logic used in MRP. Correct Consolidate all business planning systems and data throughout an organization. Integrate materials and capacity planning into one system. All of these.

Use a similar logic to the logic used in MRP. Correct

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to: Multiple Choice Use multiple sourcing. Correct Increase efficiencies. Build partnerships. Consolidate purchases.

Use multiple sourcing. Correct

Distribution requirements planning: Multiple Choice Uses logic that starts at the manufacturing plant and works forward toward the customer. Includes only firm orders in its calculations. Uses logic similar to MRP, beginning at the point closest to the customer. Correct Is normally not included as a module in ERP software.

Uses logic similar to MRP, beginning at the point closest to the customer. Correct

Which aspect of the business model is most affected by the recent advent of such companies as Fresh Now, M Tailor, Blue Apron, or Starbuck's Reserve? Multiple Choice Value Proposition. Correct Environment. Capabilities. Key customer.

Value Proposition. Correct

Which of the following is an important belief found in lean cultures? Multiple Choice Inventory is to be reduced. Cost must be reduced. Management must be done through the use of appropriate tools and procedures. Waste is a symptom.

Waste is a symptom.

Which of the following is not uncovered during an analysis of supply market intelligence? Multiple Choice The number of potential suppliers. Which of the company's current purchases are from which supplier. Correct The number of other buyers. The potential level of supply chain risk.

Which of the company's current purchases are from which supplier. Correct

A batch of Raisin Bran that has been made at Kellogg's but not yet packaged in its final cereal box would be an example of what type of inventory? Multiple Choice Raw material Work in process Correct Finished goods Maintenance, repair, and operating supplies (MRO)

Work in process Correct

A primary reason for using global suppliers is to: Multiple Choice Improve sustainability. Reduce transportation costs. Take advantage of free trade agreements. Work with the same suppliers in many different regions of the world. Correct

Work with the same suppliers in many different regions of the world. Correct

What is the center of gravity according to the following information? Retail LocationX CoordinateY CoordinateShipments/YearA5510500B3040800C75301000 Multiple Choice X = 55, Y = 29.1. Correct X = 14.4, Y = 28.8. X = 53.3, Y = 26.7. X = 160, Y = 80. Explanation X Coordinate = [(55 × 500) + (30 × 800) + (75 × 1000)]/(500 + 800 + 1000) = 55 Y Coordinate = [(10 × 500) + (40 × 800) + (30 × 1000)]/(500 + 800 + 1000) = 29.1

X = 55, Y = 29.1. Correct

A company finds the following information about its customers and their locations: LocationX coordinateY coordinateWeight shippedA2090400,000 lb.B9575200,000 lb.C6030600,000 lb. The center of gravity is: Multiple Choice X* = 52.5; Y* = 57.5. Correct X* = 58.33; Y* = 65. X* = 56.66; Y* = 61.66. Cannot be determined.

X* = 52.5; Y* = 57.5. Correct

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true? Multiple Choice Zanda will have higher investment in plant and equipment. Zanda will have higher hiring and firing costs. Zanda will have higher inventory carrying costs. Correct Zanda will have higher overtime costs.

Zanda will have higher inventory carrying costs. Correct

The goal of total productive maintenance is: Multiple Choice To fix equipment breakdowns before they happen. Incorrect Rigorous equipment design and upkeep. Disciplined adherence to operating procedures. Zero unplanned downtime.

Zero unplanned downtime.

A technology that produces prototypes quickly without the cost of production tooling is: 3D printing CAD/CAE VOC Group technology

3D printing Correct

A company must make 400 units per day. The company has one 12-hour shift. What is the efficiency if the total time to complete all tasks is 23 minutes and the company is using 18 workstations? Multiple Choice 22 percent 71 percent Correct 50 percent 88 percent

71 percent Correct

Which of the following products is most likely to require an assemble to order market orientation? Multiple Choice An upholstered sofa Correct A mobile phone Shampoo A race car

An upholstered sofa Correct

A restaurant chain that assembles meals at a centralized facility is using: Multiple Choice Group technology Back-office processes Correct A service factory A fixed-position layout

Back-office processes Correct

A project team interested in identifying and correcting potential quality problems in a product design would find which one of the following tools most useful? QFD FMEA Value analysis DFM

FMEA

Which of the following is considered a "process-related" competitive priority? Flexibility Quality Cost All of these

Flexibility

In line balancing, the relationships between among tasks in a process is are shown in a: Multiple Choice Followers diagram Precedence diagram Correct Service blueprint Product families diagram

Precedence diagram Correct

A common goal when designing a functional layout is to: Multiple Choice Ensure materials arrive on schedule. Reduce the time and cost of moving people and materials between departments. Correct Avoid downtime at any workstation. Balance the flow of materials through the process.

Reduce the time and cost of moving people and materials between departments. Correct

A company must make 800 units per day. The company has two eight-hour shifts. What is the efficiency if the total time to complete all tasks is 11 minutes and the company is using 15 workstations? Multiple Choice 94 percent 33 percent 83 percent 61 percent

61 percent Explanation The takt time is the [time available]/customer demand, which is [2 shifts per day × 8 hours per shift × 60 minutes per hour]/800 units = 1.2 minutes. The efficiency is [Sum of all task times/(Actual workstations × takt time)] × 100, which is [(11 minutes)/(15 workstations x 1.2 minutes)] × 100 = 61%.

Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality? Durability Reliability Performance Conformance

Conformance

Which is false with respect to a process structure? Multiple Choice It is the same across an entire supply chain Correct Determines how inputs, activities, flows, and outputs are organized Different structures have different capabilities The selection of a process structure should consider competitive priorities

It is the same across an entire supply chain Correct

Operations managers view innovation as a "funnel" because: Small ideas grow to become broad new strategies It often takes many new ideas to yield a few really good innovations Correct Good innovators invest in as many new projects as they can afford Innovation means launching many new products so that the market can sort out the winners and losers

It often takes many new ideas to yield a few really good innovations Correct

_______________ transform product specifications and new process technology into a new or revised production system. Multiple Choice New process design and development projects Correct New product design and development projects Concurrent engineering projects Operations management projects

New process design and development projects

A disadvantage of "component standardization" is that it: Increases development time. Increases development cost. Increases the difficulty of inventory management. None of these are disadvantages.

None of these are disadvantages.

Which of the following statements is true regarding innovation portfolio planning? Each innovation project should be evaluated on its own merits, independent of other projects a firm is pursuing Product enhancement projects typically require greater resource investments than platform development projects do Operations managers play different roles on different types of innovation projects In order to be fair, all innovation projects should be assessed using the same metrics

Operations managers play different roles on different types of innovation projects

Which of the following statements about operations management processes is NOT true? Inputs to operations management processes can be materials, people, and/or information. Outputs of operations management processes are always tangible goods. Operations management processes involve transformation of inputs into valuable outputs. Design of operations processes should reflect what customers want.

Outputs of operations management processes are always tangible goods. Outputs of operations management processes can be services.

Which of the following factors is NOT a major change driver that supply chain managers are concerned about? Technology changes Regulatory changes Global political changes Supply chain managers are concerned about all of these changes.

Supply chain managers are concerned about all of these changes. Supply chain managers also track market changes, including social issues such as sustainability.

Under which component of the business model would people and culture fall? Key customer Value proposition Environment System capabilities

System Capabilities

Operations management is: The management of production. The management of services. The management of processes. The management of physicians.

The management of processes. "Processes" comprehends all of the aspects of operations management. The other answers are just possible components of operations management.

Jones Manufacturing sells a part to Lear Corporation. Lear puts this part into a radio, which Lear then sells to Ford. From Ford's point of view, Jones Manufacturing is a(n) __________ supplier. Echelon 1 Echelon 2 Tier 1 Tier 2

Tier 2 A supplier's supplier is known as a Tier 2 supplier.

What is the takt time in minutes if 500 units are needed per day? The company has two eight-hour shifts per day. Multiple Choice 0.5 minutes 62.5 minutes 31.3 minutes 1.9 minutes

1.9 minutes Explanation The takt time is the [time available]/customer demand. In this case [2 shifts per day × 8 hours per shift × 60 minutes per hour]/500 units = 1.9 minutes.

Which product is likely to use a fixed-position layout in its production process? Multiple Choice A refrigerator Customized equipment A commercial airplane Correct A mobile phone

A commercial airplane Correct

"Crowdsourcing" is: Multiple Choice A way to design products that satisfy the largest number of people A way to get ideas or services from a large number of sources, usually online Correct Not used for process innovation, mostly only for product innovation A way to identify and hire the best and brightest new employees

A way to get ideas or services from a large number of sources, usually online Correct

An example of a short-term capacity increase decision is: Adding specialized labor. Installing new equipment. Adding new facilities. Adding low-skilled labor.

Adding low-skilled labor.

Which of the following is NOT true about "order qualifiers"? These are product traits that must meet a certain level in order for the product to even be considered by customers. The firm must perform acceptably on these traits, usually at least as well as competitors' offerings. Order qualifier traits may include availability, price, and conformance quality. All of the items are true.

All of the items are true.

Which of the following groups is NOT likely to be stakeholders for operations in a local bank? Customers Regulators Employees All of these are likely to be stakeholders

All of these are likely to be stakeholders A bank must consider the needs of its customers and employees, while also complying with government and other regulators.

Which of the following statements is a reason why operations management is important? Efficient and productive operations drive the economic well-being of nations. Operations management is responsible for much of the value created by organizations. Operations management is a key source of competitive differentiation among firms. All of these are reasons why operations management is important.

All of these are reasons why operations management is important. Operations management affects both macroeconomic and individual firm outcomes.

Which of the following statements is true regarding product/process innovation? Multiple Choice Innovation projects are operational processes. Product and process development activities are usually closely linked. Product/process design is a part of the resource/technology supply chain. All of these statements are true.

All of these statements are true.

Growth of the supply chain management perspective in operations management results from the advent of: Technology and infrastructure advances. Collaborative networks. A focus on core capabilities. All of these.

All of these. In addition to the three listed alternatives, reduction in trade barriers also contributed to growth of the supply chain perspective.

An advantage of "early supplier involvement" is that it: Multiple Choice Generally leads to higher-quality products. Decreases time to launch new products. Avoids supply problems once the product is launched. All of these. Correct

All of these. Correct

In process improvement projects, why should we focus our efforts on those processes that consume the most resources (e.g., labor, space, capital, etc.)? Because those are the processes most visible to the customer Because those are the processes that use our firm's core capabilities Because that is where we get "the most bang for our buck." All of these

Because that is where we get "the most bang for our buck."

A system that enables 3D modeling and evaluation of product designs without the cost of producing physical parts is: 3D printing CAD/CAE QFD Group technology

CAD/CAE Correct

Which of the following would not be considered an automating technology? Multiple Choice Internet of Things (IoT) Drones Mobile apps CPFR

CPFR

Wanda Corp. currently uses a job shop process. It wants to maintain the advantages of this but increase efficiency. Wanda should investigate: Multiple Choice Cellular manufacturing. Correct Job shop processes. Mass customization. Project process.

Cellular manufacturing. Correct

The stage of a product/process innovation in which managers determine the target values of product attributes, volume, and price is: Multiple Choice Product and market testing. Product and process planning. Detailed design and development. Concept development. Correct

Concept development. Correct

The degree to which the product meets its' design specifications is called: Multiple Choice Performance quality Aesthetic quality Conformance quality Correct Perceived quality Total quality

Conformance quality Correct

In its promotional material for bed linens, Scarsdale Corporation states that all sheets and pillowcases sold to customers should have and actually do have a thread count of exactly 600 threads per inch. Scarsdale is apparently emphasizing: Multiple Choice Design quality. Conformance quality. Correct Product quality. Reliability. Total quality management.

Conformance quality. Correct

Jones Company has a make to order orientation. It most likely does NOT use: Multiple Choice Continuous process structure. Correct Cellular manufacturing process structure. Job shop process structure. Batch process structure.

Continuous process structure. Correct

Suppose that you are the general manager of a hotel. For which of the following issues would you first seek help from an operations manager in your firm? Our prices seem to be too high. Customers' complaints are rising. We need a new insurance policy. We are running out of cash.

Customers' complaints are rising. Although operations managers might be asked to get involved with any of these issues, customer complaints are probably due to ineffective processes, a primary operations management responsibility.

Xanadu Inc. has a project team interested in reducing the projected production cost of a new product. The team would find which one of the following tools most useful? QFD FMEA DFM CAD/CAE

DFM

Suppose you learn that a process has a very long waiting time. Which of the following would decrease the waiting time? Decrease utilization. Increase the coefficient of variation of job arrival times. Increase the coefficient of variation of job processing times. None of these would decrease waiting time.

Decrease utilization.

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following basic activity types in a process? Operation Delay Storage You are not in a process activity.

Delay

Which of the following is NOT a component of the business model? Key customer Value proposition Desired outcome statement Correct System capabilities

Desired outcome statement

You are an upper-level manager in a firm. You believe that corporate objectives are not effectively disseminated throughout the organization and that line-level managers do not take them into account in their decision making. Which of the following would best help you to try to correct this problem? Hold a series of supervisory manager meetings. Establish metric-based performance measures. Evaluate personality indicators to ensure inter-departmental worker compatibility. Evaluate and increase manager salaries and benefits.

Establish metric-based performance measures.

Which of the following is NOT one of the processes included in operations management? Design Finance Produce Deliver

Finance Design, supply, produce, and deliver are operations management processes. Finance is not.

"When operational capabilities are consistent with and supportive of the value proposition and the outcomes desired by key customers" - this statement best describes the concept of: Execution. Flexibility. Strategic planning. Fit.

Fit

Ensuring that all the right people, equipment, and materials arrive on time is especially challenging when using which layout? Multiple Choice Fixed-position layout Correct Functional layout Service factory layout Product layout

Fixed-position layout Correct

An electronics firm produces smart phones for sale to the worldwide market. One of the most crucial process-related competitive operational priorities for this firm is: Aesthetics Cyber security Flexibility Durability

Flexibility Flexibility is important because of the short life cycle of a current model and the rapid progression of technology. Cyber security is handled by the ultimate customer's network vendor. Aesthetics and Durability are product-related characteristics, not process-related characteristics.

The three elements of Value Proposition, Key Customers, and Capabilities operate within an environment. Which of the following is NOT part of that environment? Competition Regulation Technology Founder's ideology

Founder's ideology

A college of business building that has classrooms on the first floor, faculty offices on the second floor, and graduate assistance offices on the third floor has which type of layout? Multiple Choice Fixed-position Functional Correct Product Cellular

Functional Correct

What kinds of questions does an operations manager who is responsible for strategic-level planning address? Which employees should work the day shift tomorrow? How should this process be organized? How many manufacturing plants should the company operate? Should we make this part or buy it?

How many manufacturing plants should the company operate? Strategic planning deals with long-term issues (years) at a business level, including making changes to a physical network of facilities.

What is the first step in conducting value engineering/value analysis? Estimate the value of each function in a product. Identify the functional purposes of a product. Compare the importance and cost of each function. Ask suppliers to provide cost information.

Identify the functional purposes of a product.

Process thinking causes managers to address critical process elements, including: If you don't like the outcome, focus on the people. Processes are guidelines to thinking about to best staff activities. Processes drive measurement. If you don't like the outcome, change the process.

If you don't like the outcome, change the process.

The primary difference between integrated/concurrent engineering development and functional/sequential development is: Integrated development spends more money up front in order to save money in later stages. Correct Sequential development is more thorough in addressing development steps. In sequential development, multiple functions comanage design and testing. Integrated development usually leads to higher sustaining and warranty costs.

Integrated development spends more money up front in order to save money in later stages. Correct

The connection of products and machines for sharing data with other devices is: Multiple Choice Enterprise resource planning (ERP) Internet of Things (IoT) Correct Unmanned autonomous vehicles (UAV) Radio frequency identification (RFID)

Internet of Things (IoT) Correct

Which of the following is NOT considered a key characteristic of a core capability: It is based on factors that are rare or unique to the firm. It is hard to imitate. It does not need to be extendable to many market opportunities. There are few substitutes for it.

It does not need to be extendable to many market opportunities.

Which of the following statements best describes "process thinking"? It is a way to manage thought processes to make better decisions. It is a way to view business as a system of interrelated activities. It is a way to approach work systematically. It is a way to categorize elements of work activities.

It is a way to view business as a system of interrelated activities. Process thinking looks at all operations as systems of activities that are related by material, information, and people flows, and by shared resources.

A hospital emergency room would most likely be classified as a: Multiple Choice Job shop Correct Batch process Repetitive process Continuous process

Job shop Correct

Compared to a functional layout, cellular layouts have: Multiple Choice Less work-in-process inventory. Correct More complexity in scheduling. More frequent setups. Lower efficiency.

Less work-in-process inventory. Correct

Internal operations managers work with what function to coordinate inbound and outbound flows of materials and information? Finance Purchasing Marketing Logistics

Logistics Logistics operations managers focus on managing orders and inventories into and out of a company's facilities.

Which functional activities are the most closely related to operations managers' attempts to manage the flow of materials and information in a firm? Finance, accounting, and supply management Logistics, finance, and supply management Logistics, supply, and customer management Customer, finance, and logistics management

Logistics, supply, and customer management Supply management, logistics management, and customer management are the functions most directly related to the flows of both materials and information. Finance and accounting are primarily about managing capital and reporting information.

Sequential product development projects are likely to have ____________ development costs and ____________ development times than concurrent engineering product development projects. Multiple Choice Higher; longer Higher; shorter Lower; longer Correct Lower; shorter

Lower; longer Correct

Decision making regarding customers and products is often led by the: CEO Board of Directors Marketing Management Financial Managers

Marketing Management

3D printing is most likely to be used when the process structure is: Multiple Choice Cellular manufacturing Repetitive process Mass customization Correct Continuous process

Mass customization Correct

Stitch Fix, an online company that provides personal shopping services for clothing based on each customer's style and budget, is an example of: Multiple Choice Cellular manufacturing Mass customization Correct A service factory A continuous process

Mass customization Correct

The stage of the product life cycle in which process innovation becomes an important way to increase efficiencies is: Multiple Choice Launch Growth Maturity Correct

Maturity

Subcontracting is typically considered at what time horizon when doing capacity planning? Short-term Medium-term Long-term It is not part of the capacity planning process.

Medium-term

In conducting a failure modes and effects analysis, the following data were developed for three modesMode 1: Severity = 5, Occurrence = 2, and Undetectability = 7Mode 2: Severity = 3, Occurrence = 6, and Undetectability = 5Mode 3: Severity = 7, Occurrence = 2, and Undetectability = 4Which has the highest risk? Mode 1 Mode 2 Correct Mode 3 Mode 1 and Mode 2 are equal in having highest risk

Mode 2 Correct Explanation Mode 1: 5 × 2 × 7 = 70. Mode 2: 3 × 6 × 5 = 90. Mode 3: 7 × 2 × 4 = 56

While there is overlap between operations management and supply chain management, the two are different in that: Operations management focuses on production, supply chain management focuses on supply and logistics. Operations management focuses on tangible goods, supply chain management focuses on services. Operations management focuses on processes, supply chain management focuses on relationships and flows. All of these.

Operations management focuses on processes, supply chain management focuses on relationships and flows. The key distinction is that supply chain management focuses on relationships and flows, whereas operations management focuses on processes.

A company with a number of physically separate plants has a centralized tool room. This tool room in the past has been responsible for emergency repairs. Whenever equipment (e.g., a spindle, boring machine, transfer line) in one of these separate plants breaks down, the affected items are brought to the tool room, where they are repaired. In some cases, the breakdowns affect production schedules. In other cases, the breakdowns are more annoying but do not adversely affect schedules. Complicating the operations in the tool room is the fact that many of the plans for the equipment are incomplete or out-of-date, thus resulting in "make from sample"; requests (the broken part is provided and the tool room is asked to make the replacement piece just like the broken part). It is difficult to predict what equipment will break down and when. Furthermore, the company owns a wide variety of equipment. What are the order winners and order qualifiers in this scenario? Order WinnersOrder QualifiersA.Cost,QualitySpeed,FlexibilityB.Flexibility,QualitySpeed,CostC.Speed,CostFlexibility,QualityD.Speed,FlexibilityQuality,Cost Multiple Choice Option A Option B Option C Option D

Option D

A process having the same activity being performed by two or more resources simultaneously is said to have what kind of structure? Serial Parallel Helping Flexible

Parallel

Two dimensions of product quality are hard to measure objectively and are therefore subject to subjective assessment. One of those subjective dimensions is: Multiple Choice Reliability Perceived quality Correct Support Features

Perceived quality Correct

Which of the following attributes is directly related to fitness for consumption by a customer? Transaction Price Timeliness Performance Availability

Performance

Xanadu makes HD televisions. It claims that its HD televisions have the clearest picture clarity in the industry. Xanadu is emphasizing which dimension of quality? Reliability Performance Features Conformance

Performance

Within the supply chain and operations management system, the value proposition is most effectively communicated to the rest of the organization through which of the following mechanisms? Performance measures Mission statements Management mandates Corporate slogans and promotional materials.

Performance measures

One of the major challenges with a job shop process is that: Multiple Choice Employees become bored from doing the same task over and over again Planning and scheduling are difficult Correct Many activities must be outsourced to a variety of different suppliers It is very costly to stop production

Planning and scheduling are difficult Correct

Every organization operates which of the following types of supply chains? Product and tangible goods supply chains. Information and personnel supply chains. Direct and indirect supply chains. Product and resource/technology supply chains.

Product and resource/technology supply chains. Product supply chains manage flows of goods and services. Resource/technology supply chains manage acquisitions and flows of equipment, facilities, workers, product designs, and so on.

Which of the following is the most appropriate definition of a core capability? A set of products unique to a firm. Technical capabilities of a firm. Incorrect Reputation. Production/design processes unique to the firm.

Production/design processes unique to the firm.

Which of the following statements is false? Multiple ChoiceQuality dimensions are easy to measure for tangible goods, while they are difficult to measure for services.Correct Many dimensions of service quality are similar to the dimensions of quality for tangible goods. Some firms still have a poor understanding of quality and quality management. All of these are false.

Quality dimensions are easy to measure for tangible goods, while they are difficult to measure for services.Correct

Fundamental areas of management in supply chain operations management include: Quality, Inventories, and Processes. People, Equipment, and Money. Markets, Processes, and Sales. Lean Systems, Quality, and Flexibility.

Quality, Inventories, and Processes. These groups work together to identify and fulfill customers' needs.

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck? Step 1: 500 chips/hour Step 2: 250 chips/hour Step 3: 200 chips/hour Step 4: 550 chips/hour Step 1 Step 2 Step 3 Step 4

Step 3

Different levels of planning in supply chain operations management include: General and detailed planning. Strategic, tactical, and operational planning. Long-term and short-term planning. Logistical, operational, and procurement planning.

Strategic, tactical, and operational planning.

Operations managers answer questions of what, how, when, where, and who by defining both the ___________ and _____________ aspects of the operations management system. Financing and capacity Marketing and delivery Structural and infrastructural Production and accounting

Structural and infrastructural Structural and infrastructural aspects of operations management must be defined to answer questions of what, how, when, where, and who.

Joe Jones was asked to undertake a project to determine the resources and capacity his firm would need in the next three to 10 years. These types of decisions are considered to be: Infrastructural aspects of operations management. Positional aspects of operations management. Assessment aspects of operations management. Structural aspects of operations management.

Structural aspects of operations management. Resources and capacity are among the structural decisions.

A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process: Inputs, outputs, and flows. Activities. Management metrics. Structure.

Structure. The structure limits the process capabilities.

In line balancing, takt time is the time: Multiple Choice Needed to change over a process between different types of products It takes a product to go through the entire process That is the maximum allowable time at each workstation based on customer demand Correct Required for the entire product fulfillment process

That is the maximum allowable time at each workstation based on customer demand Correct

To an operations manager, the "key customer" is: The person who buys a product. The person who has the greatest impact on design, sales, and growth opportunities for the product. The Echelon 1 customer. The person who uses the product.

The person who has the greatest impact on design, sales, and growth opportunities for the product.

A supplier of materials used in manufactured goods is a member of: A union The product supply chain The resource/technology supply chain The tier 2 supply chain

The product supply chain Material suppliers provide items that go into finished products. Resource/technology suppliers provide knowledge or physical assets (e.g., equipment) that are used to accomplish product transformations.

The main purpose of quality function deployment (QFD) is: To base product and process design decisions more directly on what the customer thinks is important. To clearly identify the functional groups within the organization that have a direct influence on quality. To expand the quality function and eliminate the need for statistical process control. To set up a plan for the deployment of statistical quality control tools throughout the organization.

To base product and process design decisions more directly on what the customer thinks is important.

What is the primary objective of line balancing? Multiple Choice To minimize the travel time between workstations To match output rates with actual demand Correct To minimize materials handling costs To group similar activities together

To match output rates with actual demand Correct

XYZ Corporation is using customer interviews and surveys to gather perceptions regarding new product concepts. This approach is known as: Multiple Choice Quality function deployment. Beta testing. Voice of the customer. Correct Failure modes and effects analysis.

Voice of the customer. Correct

Which of the following is NOT considered to be part of the service process matrix? Multiple Choice Customization Volume Customer interaction Labor intensity

Volume

Corporate strategic planning involves decisions related to: What businesses should we be in? What specific product- and market-based initiatives and goals should we establish? What measures should we use to control strategic initiatives? All of these.

What businesses should we be in? Corporate strategic planning is very broad and relates to what businesses the company should be involved in.

Internal questions that may be addressed in a SWOT analysis include: What obstacles do we face? What trends are we well positioned to take advantage of? What do we do better than anyone else? What changes in technology will affect us?

What do we do better than anyone else?

Which of the following is NOT a drawback to a product layout? Multiple Choice Lack of flexibility to change product features A problem at any workstation can stop the entire production line Work-in-process inventory is typically very high Correct The potential for employee boredom

Work-in-process inventory is typically very high