MGT 405 Final MSU Denver - Cho

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An order quantity which was calculated by the EOQ formula is always the best order size under any quantity discount. (T/F)

False. Not any discount, if the discount is 90% obviously that will surpass EOQ

Accepting a price discount for ordering larger quantities leads to lower levels of anticipation inventory. (T/F)

False. Ordering large quantities would directly heighten the anticipation inventory

Total quality management (TQM) is a philosophy in the system of management focused on short-term success through statistical process control. (T/F)

False. Plan, do check, act

FOB destination means a buyer in the destination pays for transportation. (T/F)

False. Seller pays S+H

Qualifying sources is an example of a post- transaction cost phase in the total cost of ownership model. (T/F)

False. To be true it would be a "pre-transaction"

Before JIT gained popularity in 1980s, VMI and crossdocking were popular practices for supply chain management. (T/F)

False. VMI & Crossdocking were after

In value engineering and value analysis, value can be expressed as: Price / Cost. (T/F)

False. Value = Function / Cost

ISO 9000 focuses on compliance with environmental sustainability. (T/F)

False. Would be correct if it were quality sustainability ISO 4000 = environmental sustainability

Jidoka is a Japanese term for continuous improvement. (T/F)

False. Jidoka: authority to stop process Kaizan: continuous improvement

In a manufacturing company, direct costs are mostly factory overhead. (T/F)

False. They are mostly "variable costs". "Indirect cost" would make this correct

Internal failure costs include the costs of inspection, testing, and measuring product or service quality. (T/F)

False. Would be True if it were Operational Failiure Costs

A freight bill refers to the document that proves shipment in ownership. (T/F)

Freight Bill : carrier's invoice Bill of lading: proof of shipment and ownership Freight claim: for financials costs from shipment loss and damage

Although associated with a number of factors, the learning curve normally is most closely identified with the analysis of direct labor costs.

True

Compared to motor carriers, rail is better suited for hauling large volume. (T/F)

True

External failure costs include warranty costs and managerial time handling customer complaints. (T/F)

True

In the control chart, a process is deemed to be under control when sample estimates such as sample means and variances are between the upper control limit and lower control limit. (T/F)

True

Logistics is the management of inventory in motion and at rest. (T/F)

True

Prices may not be directly related to costs in market-approach pricing. (T/F)

True

Quality function deployment (QFD) is a comprehensive quality system that seeks to translate customer requirements into technical specifications. (T/F)

True

Target costing me result in a company- wide cost reductions in design to cost, manufacture to cost, and purchased to cost. (T/F)

True

The six sigma approach to quality uses the five-step methodology of: define, measure, analyzed, improve, and control. (T/F)

True

The total cost of ownership or lifecycle costing can be used to justify the acquisition of expensive equipment on the basis of lower operating costs over the life of the asset. (T/F)

True

Transportation costs increase as moving distance in quantity (load) increase. (T/F)

True

When planning a negotiation strategy, if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap, the negotiator must determine if the gap can be closed. (T/F)

True

Competitive bidding is an effective way to obtain a satisfactory price for items bought. (T/F)

True.

In FOB destination, freight collect, a buyer pays for shipping. (T/F)

True. With freight collect, buyer pays S+H

Target costing starts with: A) the selling price of an organization's end product minus the operating profit to establish the target cost. B) the suppliers price, and works to determine the selling price of the buying organizations and product or service. C) the suppliers price, and works to determine the supplier's true cost structure. D) the buyers lowest reasonable price target, and works to a negotiated price agreed on by the buyer and the supplier. E) the selling price of an organization's end product minus actual manufacturing, overhead, and materials costs to determine operating profit.

A) the selling price of an organization's end product minus the operating profit to establish the target cost.

If the delivery date is some months or years away and if there is substantial chance of price escalation, a supplier may feel that there is far too much risk of loss to agree to sell under a: A) firm-fixed-price plus incentive fee (FFPIF) B) firm-fixed-price (FFP) C) cost-no-fee (CNF) D) cost-plus-fixed-fee (CPFF) E) cost-plus-incentive-fee (CPIF)

B) firm-fixed-price (FFP)

Organizations operating under a just-in-time system, prefer to ship by: A) rail B) boat C) truck D) intermodal carriers

C) truck

Rail is the most flexible mode of transportation. (T/F)

False. Least = Pipeline Most = Truck

In most cases, a metropolitan distance is shorter than a euclidian distance. (T/F)

False. Metropolitan = long way Euclidian = direct

Among all the costs of quality, an internal failure cost is highest. (T/F)

False External costs are the highest

Deming Prize is a national award in the US given to excellent quality practitioners. (T/F)

False This is a Japanese award

Value engineering (VE) and value analysis (VA) use the same methods, but VA is performed in the design stage and VE this performed in the redesign stage. (T/F)

False Value Engineering (VE) = Design stage Value Analysis (VA) = Redesign stage

Governments play no role in establishing prices or regulating how buyers and sellers are allowed to behave in agreeing on prices. (T/F)

False.

Indirect costs can be specifically and accurately assigned to a given unit of production or a specific identifiable task performed by a service provider. (T/F)

False. "Direct costs" would make this phrase correct

An escalator clause provides for an increase, but not a decrease, in price if costs change. (T/F)

False. Escalator clauses can increase and decrease

Hedging is a way to set trade discounts. (T/F)

False. Hedging is a way to offset risk

In portfolio analysis, bottleneck items are characterized by high risk and high value. (T/F)

False. High risk but not high value

The position of strength assessment focuses exclusively on the other party in the negotiation. (T/F)

False. It's not exclusive to one party


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