MKT 411 MindTap Ch 5-8

Check My Work Calculate the defects per million opportunities (DPMO) given the following: Blake, owner of Blakester's T-shirt Shoppe, keeps track of customer complaints. For each T-shirt sold, there are four possible complaints: T-shirt shrinks, poor quality, design wears off, and doesn't fit right. Each week, Blake calculates the rate of T-shirt "defects" per total T-shirts sold, and then uses this information to determine his company's DPMO. During the past week, his company sold 1200 T-shirts. His company received 22 customer shrinkage complaints, 16 poor quality complaints, 12 design wears off complaints, 8 doesn't fit right complaints. Calculate his firm's DPMO. a. 12,083 b. 69,600 c. 5.8 x 10-6 d. 0.193

a. 12,083

Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,220 6 18,500 a. 14,030 b. 12,660 c. 15,220 d. 13,190

a. 14,030

A company produces 8-pound bags of cat litter; as shown below, it gathered 5 samples with 6 bags in each sample for quality control purposes. The weights of each of the bags are listed below. x̄̄ Bag # of each sample Sample 1 2 3 4 5 6 1 7.98. 8.34 8.02 7.94 8.44 7.68 2 8.33 8.22 8.08 8.51 8.41 8.28 3 7.89 7.77 7.91 8.04 8.00 7.89 4 8.24 8.18 7.83 8.05 7.90 8.16 5 7.87 8.13 7.92 7.99 8.10 7.81 a. 8.06 b. 8.26 c. 7.92 d. 7.97

a. 8.06

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. Bullwhip effect b. Delphi method c. CPFR effect d. Mean deviation

a. Bullwhip effect

Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries b. Flexible enough that it allows different companies with different business models to mold the new ERP system to fit the company's business model c. Fairly inexpensive to purchase and implement d. All of these choices are correct.

a. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries

The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from: a. Exchange of forecasting information b. Sophisticated forecasting algorithms c. Both "Sophisticated forecasting algorithms" and "Exchange of forecasting information" d. None of these choices are correct.

a. Exchange of forecasting information

The Quick Response program, developed in the 1980's, was an offshoot of the following supply chain concept: a. Just-in-Time b. Six Sigma c. Efficient Consumer Response d. Kaisen

a. Just-in-Time

Which of the following is NOT a common module of ERP systems? a. Marketing Resources Management b. Human Resources Management c. Supply Chain Management d. Customer Relationship Management

a. Marketing Resources Management

The ___________ planning horizon is shorter than the aggregate production plan's, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? a. Master production schedule b. Demand time fence c. Material requirements plan d. Capacity Requirements Plan

a. Master production schedule

Cyclical variations are longer than a year and can be influenced by: a. Political factors b. Events such as natural disasters c. Population growth d. Imbalances in supply and demand

a. Political factors

Which one of the following is NOT a type of qualitative forecasting? a. Simple moving average b. Consumer survey c. Jury of executive opinion d. Sales force composite

a. Simple moving average

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. The Level Production Strategy b. The Aggregate Production Strategy c. The Chase Production Strategy d. Mixed Production Strategy

a. The Level Production Strategy

When linear trend forecasts are developed, demand would typically be: a. The dependent variable b. The passive variable c. The lead variable d. The independent variable

a. The dependent variable

A positive error implies that a forecast was? a. Too low b. Too high c. Neither too high or too low d. The sign of an error gives no information as to the direction of the error.

a. Too low

The Malcolm Baldrige National Quality Award recognizes firms for their quality achievements but is only given to U.S. firms a. True b. False

a. True

The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue. a. True b. False

a. True

When lean firms share their best practices with supply chain members, this is referred to as yokoten a. True b. False

a. True

If an item is ordered using its economic order quantity, the annual carrying cost should be: a. equal to the annual ordering cost. b. the square root of the annual ordering cost. c. slightly less than the annual ordering cost. d. twice the annual purchase price. e. None of these choices are correct.

a. equal to the annual ordering cost

Which of the following is a disadvantage of carrying too much inventory? a. it creates an unnecessary waste of scarce resources. b. it leads to higher annual inventory ordering costs. c. it increases the need to purchase items. d. it reduces the need to conduct cycle counts. e. it leads to lower average finished goods inventories.

a. it creates an unnecessary waste of scare resources

Classify the following inventory items as either A, B, or C items using the ABC inventory control system: Item # Annual Sales Unit Cost 1 130 units $4.00 2 400 units 15.30 3 25 units 17.00 4 1,320 units 1.25 5 90 units 2.10 a. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C) b. item 1 (B), item 2 (C), item 3 (B), item 4 (C), item 5 (A) c. item 1 (A), item 2 (B), item 3 (C), item 4 (A), item 5 (B) d. item 1 (B), item 2 (A), item 3 (A), item 4 (C), item 5 (C) e. item 1 (C), item 2 (B), item 3 (C), item 4 (A), item 5 (C)

a. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C)

If at the end of the year, the cost of revenue = $2,500, total revenue = $12,000 and inventory value = $2,000, the inventory turnover ratio would be: a. 0.208 b. 1.250 c. 0.800 d. 0.375 e. 2.667

b. 1.250

The __________ specifies which end product is to be made, how many are required, and when they need to be completed. a. Master production schedule b. Aggregate production plan c. Super bill of materials d. Bill of material

b. Aggergate production plan

Which of the following would be considered a dependent demand item? a. Televisions b. Bicycle tires used to assemble a bicycle c. Retail customers d. Furniture

b. Bicycle tired used to assemble a bicycle

Why are firms migrating to ERP systems? a. ERP systems are successful with two-dimensional processes b. ERP systems tie together a variety of specialized systems c. ERP systems are inexpensive to implement d. ERP systems are easy to implement, particularly in large organizations

b. ERP systems tie together a variety of specialized systems

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. Supplier quality b. Ergonomic conditions c. Emerging markets d. New competition

b. Ergonomic conditions

Lean production, JIT, and Six Sigma quality mean the same thing a. True b. False

b. False

The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock a. True b. False

b. False

The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods. a. True b. False

b. False

Inaccurate forecasts can result in negative outcomes like: a. High inventory costs and increased profits b. Imbalances in supply and demand c. Low inventory costs and stockouts d. Material shortages and decreased costs of obsolescence

b. Imbalances in supply and demand

Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a: a. Semaphore System b. Kanban System c. TQM Network d. Keiretsu Network

b. Kanban System

According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Top management becomes overcommitted to the point where they constantly encourage the employees during implementation b. Lack of communication within an organization c. Organizations tend to spend too much time and money training their employees on the new system d. All of these choices are correct.

b. Lack of communication within an organization

The cost of a product is $5, and the carrying cost rate is 20%; the cost of processing an order is $45 and the annual demand is 1000. What is the economic order quantity (EOQ)? a. 20 b. 25 c. 200 d. 300 e. 5

d. 300

The following is a term that refers to error or mistake proofing: a. Muda b. Poka-yoke c. Kanban d. Kaizen

b. Poka-yoke

Which person was a key figure in developing the Toyota Production System and also developed the concept of poka-yoke? a. Ohno b. Shingo c. Toyoda d. Deming

b. Shingo

Legacy MRP systems typically utilized multiple software packages and databases which caused: a. Planned order releases b. The same information to be stored in multiple locations c. Data integrity d. The system to crash often

b. The same information to be stored in multiple locations

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that: a. Your order size was lower than the EOQ b. Your order lot size was higher than the EOQ c. Your order lot size was equal to the EOQ d. Nothing because there is insufficient information to discern where the EOQ would be.

b. Your order lot size was higher than the EOQ

Using the data set below, what would be the forecast for period 4 using a three period moving average: (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 15,750 5 20,500 6 18,500 a. 11,500 b. 12,244 c. 11,883 d. 14,008

c. 11,883

A forecasting method has produced the following data over the past 5 months shown in the data set. What is the mean absolute deviation (accurate to 1 decimals)? Month Actual Forecast 1 12 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 2.0 b. -1.2 c. 2.4 d. 10.0

c. 2.4

When demand and delivery lead time are known and constant, daily demand = 8, purchase lead time = 5 days, and the purchase price = $20/unit, then the reorder point is: a. 32. b. 56. c. 40. d. 13. e. 2.

c. 40

Based on the information in the data set below, what is the mean squared error (accurate to 1 decimal)? Month Actual Forecast 1 12 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 0.8 b. 1.00 c. 8.0 d. 10.0 Hide Feedback

c. 8.0

An advantage/benefit of utilizing an ERP system includes which of the following? a. ERP systems are designed to take advantage of Internet technology b. ERP systems enable the firm to automate some of the steps of a manufacturing process c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process" d. None of these choices are correct.

c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process"

Which of the following basic production strategies works best with make-to-order manufacturing firms? a. Level Production Strategy b. Mixed production Strategy c. Chase Production Strategy d. Capacity Production Strategy

c. Chase Production Strategy

Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: a. Operating systems and Internet browsing b. Computer assisted drawing and Photo enhancing c. Customer relationship management and Human resource management d. All of these choices are correct.

c. Customer relationship management and Human resource management

Quantitative forecasts use mathematical techniques that are based on: a. Surveys b. Sales force knowledge of the market c. Historical data d. Expert opinions

c. Historical data

The Five-Ss refer to: a. Overspending habits b. Robust evaluation techniques c. Industrial housekeeping d. Keiretsu relationships

c. Industrial housekeeping

Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Kanban Networks b. Jidoka Networks c. Keiretsu Networks d. Kaizen Networks

c. Keiretsu Networks

Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or subassemblies over time period of few days to a few weeks? a. Master production schedule b. Rough-cut capacity plan c. Material requirements plan d. Resource requirements plan

c. Material requirements plan

Which strategy uses overtime and subcontracting to cope with the high demand periods? a. The Chase Production Strategy b. The Aggregate Production Strategy c. Mixed Production Strategy d. The Level Production Strategy

c. Mixed Production Strategy

If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the: a. Master Production Schedule b. Beginning inventory c. Most recent positive ATP d. Bill of materials

c. Most recent positive ATP

Which of the following is NOT an assumption of the economic order quantity (EOQ) model? a. Quantity discounts are not possible. b. Lead time is known and constant. c. Production and use occur simultaneously. d. Demand is known, constant, and independent. e. The only variable costs are setup cost and holding cost.

c. Production and use occur simultaneously

When there is not a lot of currently relevant data available it is generally best to use: a. Simple moving average forecasting b. Time series forecasting c. Qualitative forecasting d. Naive forecasting

c. Qualitative forecasting

The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. Elite integrator b. Best-of-breed c. Single integrator d. Premier application

c. Single integrator

In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. a. The bullwhip effect b. Price reductions c. Stockouts d. Excess stock

c. Stockouts

While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? a. The trend for companies to eliminate their supply chain partners b. The increased use of email during the 1990's c. The year 2000 millennium bug d. All of these choices are correct.

c. The year 200 millennium bug

Which one of the following is NOT a reason for firms to carry inventory? a. To meet variations in product demand b. To allow for production scheduling flexibility c. To increase production change/setup costs d. To maintain independence of operations e. To take advantage of quantity discounts

c. To increase production change/setup costs

Complete the following MRP record and provide the planned order releases for Week 1. Lead time is 2 weeks. Safety stock is 3. Use LFL lot sizes. Part X. Week 1 2 3 4 Gross Req. 32 16 34 40 Scheduled Recpt 10 Proj on-hand inv. 46 Planned order releases a. 26 b. 34 c. 14 d. 29

d. 29

Using the data set below, what would be the forecast for period 5 using a four period weighted moving average? The weights for each period are 0.05, 0.15, 0.30, and 0.50 from the oldest period to the most recent period, respectively. (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,220 6 18,500 a. 14,610 b. 12,820 c. 13,105 d. 13,710

d. 13,710

Use the information below to calculate the number of orders per year when using the EOQ: Annual demand for an item is 43,000 units The cost to place an order is $200 The per unit cost of the item is $50.00 The annual holding rate is 35% Choose the closest answer. a. 123 b. 202 c. 81 d. 49

d. 49

Calculate the inventory container size required given the following: Demand rate = 10 parts per hour, Safety stock required = 16%Number of containers = 14, Time to cycle through entire system = 6 hours a. 2 parts b. 3 parts c. 4 parts d. 5 parts

d. 5 parts

A company that produces 8 pound bags of cat litter gathered 5 samples of 6 bags each. The weights of each bags' contents are listed below. What would you plot on the x̄ chart for sample 2? Bag # of each sample Sample 1 2 3 4 5 6 1 7.98 8.34 8.02 7.94 8.44 7.68 2 8.33 8.22 8.08 8.51 8.41 8.28 3 7.89 7.77 7.91 8.04 8.00 7.89 4 8.24 8.18 7.83 8.05 7.90 8.16 5 7.87 8.13 7.92 7.99 8.10 7.81 a. 8.130 b. All of the following numbers: 8.33, 8.22, 8.08, 8.51, 8.41, 8.28 c. All of the following numbers: 8.34, 8.22, 7.77, 8.18, 8.13 d. 8.305

d. 8.305

Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? a. 20 percent of the items account for 80 percent of the tasks. b. 80 percent of the unit cost accounts for 20 percent of the items. c. 80 percent of the items account for 20 percent of the groups. d. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items. e. None of these choices are correct.

d. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items

Calculate the final discrete available-to-promise quantity for Week 1 using the following table. Weeks 1 2 3 4 MPS BI=30 CCOs 20 5 25 15 ATP:D a. ATP1 = 0 b. ATP1 = 15 c. ATP1 = 20 d. ATP1 = 10

d. ATP1 = 10

Which of the following is a benefit of CPFR? a. Provides an analysis of key performance metrics b. Uses joint planning and promotions management c. Integrates planning, forecasting and logistics activities d. All of these choices are correct.

d. All of these are correct

Which of the following is an example of how lean programs can help to protect the environment? a. Parts made from recycled materials b. Using rubber from used tires in auto parts c. Batch size reduction to reduce plastics d. All of these choices are correct.

d. All of these are correct

Legacy MRP systems had which of the following limitations? a. The systems were designed to perform a very specific operational function b. The systems needed continuous modifications c. The systems were not user-friendly d. All of these choices are correct

d. All of these choices are correct

Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. Elite integrator solution b. Premier application solution c. Multi-modular solution d. Best-of-breed solution

d. Best-of-breed solution

An important outcome of statistical process control is: a. Firms can minimize total inventory cost b. Firms can visually monitor process performance c. Firms can take corrective actions before process variabilities get out of control d. Both "Firms can take corrective actions before process variabilities get out of control" & "Firms can visually monitor process performance" e. None of these choices are correct.

d. Both "Firms can take corrective actions before process variabilities get out of control" & "Firms can visually monitor process performance"

A company sells eggs in boxes with 12 cartons and 12 eggs in each carton, thus there are 144 eggs in each box. The organization wants to construct a P-chart to track the proportion of broken eggs in each sample (shown below). If the company used one box of eggs in each sample in the dataset below, what would be the centerline, upper control limit (UCL), and lower control limit (LCL) for the appropriate P-chart? (Use z = 3.) Choose the closest answer. Sample Egg Sample Egg Sample Egg 1 3 8 6 15 5 2 5 9 4 16 0 3 3 10 9 17 2 4 4 11 2 18 6 5 2 12 6 19 2 6 4 13 5 20 1 7 2 14 1 TOTAL 72 a. Centerline = 0.083, UCL = 0.152, LCL = 0.014 b. Centerline = 0.50, UCL = 0.625, LCL = 0.375 c. Centerline = 0.30, UCL = 0.70, LCL = 0 d. Centerline = 0.025, UCL = 0.64, LCL = 0

d. Centerline = 0.025, UCL = 0.64, LCL = 0

Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves? a. Deming b. Baldrige c. Juran d. Crosby

d. Crosby

Which company probably played the largest role in the development of the Toyota Production System? a. Boeing b. General Motors c. Chrysler d. Ford

d. Ford

Which of the following is NOT consistent with the lean philosophy? a. Developing a culture of continuous improvement within the organization b. Positioning WIP inventories near each processing center c. Cross-training employees to increase processing flexibility d. Increasing batch sizes to take advantage of economies of scale

d. Increasing batch sizes to take advantage of economies of scale

Which tool is useful for presenting data in an organized fashion, indicating process problems from most to least severe: a. Fishbone Diagrams b. Cause-and-Effect Diagrams c. Check Sheets d. Pareto Charts

d. Pareto Charts

According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT: a. Making organizational and procedural changes b. Trust between supply chain partners c. Cost d. Supplier lead times

d. Supplier lead times

Which of the following is TRUE regarding the EOQ figure below? *figure* a. A lot size of G has an annual total cost of about C. b. Curve J represents the annual ordering cost, and curve L represents the annual holding cost. c. At lot size H both holding costs and ordering costs exceed the annual total cost. d. The EOQ is at lot size G, and curve K is the annual holding cost curve.

d. The EOQ is at lot size G, and curve L is the annual holding cost curve

Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series? a. Seasonal Variations b. Cyclical Variations c. Random Variations d. Trend Variations

d. Trend Variations

Random variations in a Time Series component are due to: a. Population growth b. Using a large value for the exponential smoothing constant c. Inaccurate responses of the expert participants d. Unpredictable events

d. Unpredictable events

Which of the following is true under the Periodic Review System? a. the only uncertainty is the magnitude of demand during the delivery lead time b. there are no discrepancies between physical inventory and the stock record c. it is more expensive to administer compared to the Continuous Review System d. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system e. a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

d. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

The College Bookstore sells a unique calculator to college students. The demand for this calculator has a normal distribution with an average daily demand of 20 units and a standard deviation of 4 units per day. The lead time for this calculator is 9 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 20 units b. 180 units c. 420 units d. 80 units e. 200 units

e. 200 units

The College Bookstore sells a unique calculator to college students. The demand for this calculator is constant at 20 units per day. The lead time for this calculator is variable at an average of 9 days with a standard deviation of 2 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 182 units b. 26 units c. 226 units d. 46 units e. 246 units

e. 246 units

The primary purpose of the basic economic order quantity (EOQ) model is to: a. Calculate the optimum safety stock level b. Calculate the reorder point, so that replenishments take place at the proper time c. Maximize the customer service level d. Minimize the sum of purchase cost and holding cost e. None of these choices are correct.

e. None of these choices are correct