SCM 304 - All Quiz Questions

Suppose you log in to Amazon and want to buy a product. Amazon says "Order now and we will deliver once it's in stock". This is an example of Available to Deliver (ATD). True False

False

Switching cost is the cost to switch from a collaborative to a transactional relationship True False

False

Switching cost is the cost to switch from a collaborative to a transactional relationship True False

False

The Hours of Service regulation was recently relaxed in the US to allow drivers longer hours True False

False

The Six Sigma concept was first developed by Motorola, and Six Sigma refers to the variation that exists within ± three standard deviations of the process average. True False

False

The bigger the batch is, the more efficient the operational process will be, thus it will always be better for a company to produce in bigger batches. True False

False

The greater the inventory turns, the better the performance of a company in managing its inventory. Greater days of supply also indicates better performance. True False

False

The more a business is seasonal, the more inventories are usually built based on a pull system True False

False

Outsourcing is a major challenge to operations because: More and more operations are performed internally Automation and technology are increasing Fewer and fewer operations are performed internally All outsourcing takes place offshore

Fewer and fewer operations are performed internally

We can judge a company's inventory performance on its inventory turns by comparing it to the industry average or the inventory turns of its main competitors. True False

True

Science-based understanding of a process leads to improved: gut feel intuition art consistency and predictability tribal knowledge

consistency and predictability

If you are currently making a high-tech product, you are more likely to retain critical skills and/or technology if you: reduce your IP protection conduct a spend analysis continue to make the product internally decide to buy the product from a supplier

continue to make the product internally

Setting overall values, direction, and goals is a component of: corporate strategy business unit strategy order winners functional strategy

corporate strategy

In make-versus-buy analyses, people sometimes focus too much on cost because many of the other factors are: have no direct or indirect cost associated with them hard to remember hard to quantify not as important

hard to quantify

The 3 primary inputs to MRP are: Procurement, Operations, Logistics MPS, BOM, Inventory Records S&OP, MPS, BOM MPS, Product Development, Inventory Records

MPS, BOM, Inventory Records

For collaborative relationships to be effective, the most important characteristic that the buyer and supplier must share is: favorite sports team trust suspicion friendship club membership

trust

Pure Chase strategies are always feasible True False

False

Qualitative and Quantitative forecasting techniques are very rarely used together True False

False

Fill rates can be calculated as an item fill rate, line fill rate, and order fill rate. For the same PO, the three fill rates must be the same. True False

False

Random variation can be forecasted True False

False

Supplier audits must precede every periodic supplier scorecard True False

False

A company has three orders, 400 lbs each, for three different customers. It is $0.13 per pound to ship direct, or $0.08 per pound for shipments of greater than 1000 lbs with a $50 fee for each stop. What will the company pay if they decide to ship the three orders as a consolidated shipment? $144 $258 $246 $156

$246

A 4,000 pound coil of steel is produced by using 160,000 gallons of water as one input. What is the material productivity? 0.025 gallons of water per pound of steel 40 pounds of steel per gallon of water 0.025 pounds of steel per gallon of water 40 gallons of water per pound of steel

0.025 pounds of steel per gallon of water

If you begin with On-Hand Inventory of 100 widgets, have Scheduled Receipts of 100 widgets, no Safety Stock requirements, and Gross Requirements for 450 widgets, what are your Net Requirements? 0 widgets 50 widgets 200 widgets 250 widgets

250 widgets

Suppose clerk A takes 5 seconds to finish data entry for one order, what is the capacity of clerk A? 5 orders per minute 12 seconds per order 5 seconds per order 12 orders per minute

12 orders per minute

LTL shipments are usually at least how many pounds? 250 pounds 5,000 pounds 150 pounds 1,000 pounds

150 pounds

Forecasts for individual items tend to be more accurate than that for groups of items True False

False

Suppose a process consists of 3 tasks: Task A, Task B, and Task C. Task A can produce 20 units per hour. Task B can produce 30 unites per hour. Task Can produce 15 units per hour. Which is the cycle time of Task B in this process? 2 minutes per unit 3 minutes per unit 4 minutes per unit 9 minutes per unit

2 minutes per unit

20 widgets were produced by a machine in an hour. Unfortunately, 10 of the widgets did not pass quality control (were not acceptable) and were scrapped (thrown in the trash). The machine's rated capacity is 50 widgets per hour. What was the capacity utilization of this machine during this hour? 10 widgets 33% 20 widgets 20%

20%

Typically, what percentage of your customers account for most of your revenues and profits? 50% 10% 20% 90% 80%

20%

It is currently Jan 1. There are 4000 widgets on hand. Demand for Jan., Feb., and Mar., is 2000, 4000, and 6000 widgets respectively. We need to end March with 4000 widgets on hand. Which of the following monthly production plans is correct and most representative of a chase strategy? 3000, 5000, 7000 4500, 4500, 6000 2000, 4000, 6000 4000, 4000, 4000 5000, 5000, 5000 3000, 3000, 3000

2000, 4000, 6000

Suppose average inventory for a firm is $1,350,000. The company has calculated that its inventory carrying cost is $283,500. What is the percentage of inventory holding costs for this company? 22% 25% 20% 21%

21%

Freight forwarders specialize in operating freight vehicles True False

False

In a continuous review model, annual demand is 3,650 units. Assuming 365 days per year, and a lead time of 3 days, what is the reorder point? 30 days 30 units 40 days 40 units

30 units

Annual demand for a widget is 16,000 units, the cost per unit is $0.60, cost to order is $30, Inventory holding rate is 16%, lead time is one week. Use the EOQ model to calculate the optimal order quantity. 3162 widgets 3508 widgets 3381 widgets 3266 widgets

3162 widgets

The average demand for an item is 1,000 units a month. The stocks are checked every three months and lead time is constant at one month. A safety stock of 328 units is required. If there are 1,000 units in stock when you review the inventory, how many units should you order? 3228 items 3128 items 3328 items 3028 items

3328 items

Following is the volume of widgets sold by one company from January to June: Jan (345), Feb (350), Mar (365), Apr (370), May (395), Jun (393). Now we want to forecast the sales volume for July by using the moving average methodology. How many widgets are we expecting in July sales if we use the most recent three months sales to forecast? 381 386 376 389

386

It is currently Jan 1. There are 4000 widgets on hand. Demand for Jan., Feb., and Mar., is 2000, 4000, and 6000 widgets respectively. We need to end March with 4000 widgets on hand. Which of the following monthly production plans is correct and most representative of a level strategy? 4000, 4000, 4000 3000, 3000, 3000 5000, 5000, 5000 3000, 5000, 7000 2000, 4000, 6000 4500, 4500, 6000

4000, 4000, 4000

Suppose clerk A enter 12 orders per minute to, what is the cycle time of clerk A? 5 seconds per order 12 seconds per order 5 orders per minute 12 orders per minute

5 seconds per order

For most companies, purchased goods and services usually account for at least what % of every revenue dollar? 75% 50% 90% 25%

50%

Purchased capacity = 10,000 widgets per 8 hour shift. Scrap rate = 2,000 widgets per shift. Actual output = 4,000 widgets per shift. Efficiency = 60% 37.5% 50% 40% 75% 30%

50%

A product occupies 20 cubic inches. 24 products are packaged per carton. The carton size is 860 cubic inches. 75 cartons are loaded on a pallet. The pallet can hold 64,500 cubic inches. What is the overall efficiency for this example? 56% 35% 20% 86% 30%

56%

Suppose a process consists of 3 tasks: Task A, Task B, and Task C. Task A has a cycle time of 1 minute. Task B has a cycle time of 6 minutes. Task C has a cycle time of 2 minutes. What is the system cycle time? 9 minutes 1 minute 2 minutes 6 minutes 3 minutes

6 minutes

What will be the number of widgets in the Planned Order Release if the Net Requirement is 56 widgets but the minimum order quantity is 24 widgets, order multiple is 12 widgets, and maximum order quantity is 96 widgets? 96 24 60 72 56 68

60

Air is usually the fastest mode, but only for shipments exceeding: 300 miles 600 miles 450 miles 150 miles

600 miles

What % of US domestic freight is carried by trucks? 70% 90% 25% 50%

70%

A worker was paid for an 8 hour shift but did not perform work for 1 hour during the shift. What was the worker's labor utilization? 87.5% 12.5% 8 hours 100% 1 hour

87.5%

In negotiations, preparation should account for what % of your total effort? 90% 50% 25% 0% 80%

90%

Which of the following lists transportation capacity from lowest to highest? Truck, air, rail water Rail, truck, air, water Air, truck, rail, water Truck, rail, air, water Air, rail, truck, water Rail, air, truck, water

Air, truck, rail, water

What are the main differences between RFQ and RFP? Suppliers will quote exactly according to specifications in RFQ while suppliers suggest solutions with corresponding quotes in RFP. RFQ bids are easier to evaluate while RFP bids are more difficult to evaluate. Some of the items mentioned. RFQ usually uses simple specifications while RFP usually uses complex specifications. All of items mentioned.

All of items mentioned

You are assigned to work on a packaging design project for some critical parts. If you are going to lead the project, what are some important actions you should take to prepare for the project kick off? Schedule a visit to the shipping department to check their needs on loading the package onto trailers. Schedule a visit to the warehouse to check the physical shelf and storage condition. Schedule a visit to the quality department to work out what parts of the product need the most protection. Some of the actions mentioned. All of the actions mentioned. Schedule a visit to manufacturing to work out the most efficient way to open and load the package.

All of the actions mentioned.

Which of the following facilitates display of process status? 5S All of the answers listed Andon Kanban None of the answers listed

All of the answers listed

Why do companies tend to produce products or offer services in batches/lots? All of the answers mentioned are correct To minimize setup time and maximize running time. To achieve operational efficiency as well as labor efficiency. There is a learning curve for companies to become more efficient in producing products or providing services in batches.

All of the answers mentioned are correct

What are the elements of "Focus Forecasting"? Pick the best combination All of the answers mentioned are elements of "Focus Forecasting" Evaluate each method and combination of methods Try out various forecast models using old data (forecast versus actual)

All of the answers mentioned are elements of "Focus Forecasting"

To eliminate wastes, which of the following methodologies can be adopted? All of the answers mentioned can be used to reduce wastes Continuous Improvement Quality at the source JIT production and material flow Kanban production control system 5S Minimized setup times

All of the answers mentioned can be used to reduce wastes

Should Cost models enable better Understanding of what is required to produce the item All of the items listed Understanding of supplier margins Understanding of supplier costs Identification of cost reduction opportunities

All of the items listed

f a supplier has mostly yellow scores on a scorecard, their performance is Bad if most other suppliers have green scores Good if the industry benchmark performance is worse Good if most other suppliers have red scores Bad if the industry benchmark performance is better All of the items listed

All of the items listed

Logistics activities include: Return Goods Handling and Reverse Logistics Customer Service and Order Processing Traffic and Transportation Material Handling and Packaging Parts and Service Support Some of the items mentioned All of the items mentioned

All of the items mentioned

On your first day as a procurement specialist, you are given a task to source "Fly Ash". If you are unfamiliar with fly ash, what are the possible actions you could take? Some of the items mentioned. Google search for new potential suppliers around the world. All of the items mentioned Check with the quality department on the technical specifications of "Fly Ash". Check if there are any existing suppliers by reviewing historic POs. Do some research on what "Fly Ash" is.

All of the items mentioned

Accredited to Edward Deming, PDCA includes the following components: Plan - define the problem Do - implement and collect data Check - study and analyze All of the items mentioned are components of PDCA Act - if successful, follow the new standard

All of the items mentioned are components of PDCA

To develop potential suppliers, what could you do? Form a cross-functional development team to improve a supplier's capabilities All of the items mentioned are possible actions. Take an equity stake in a supplier Award incremental new business Use more lenient terms and conditions.

All of the items mentioned are possible actions.

You are given a task to evaluate three potential suppliers. What are the possible actions you could take? Ask an independent third party organization to issue a supplier risk evaluation report. Make some field visits to each supplier to evaluate more details. All of the items mentioned are possible actions. Check the historic quality inspection reports on each supplier if the supplier has done business with your company before. Pull some financial figures of each supplier from Bloomberg to evaluate their financial risks.

All of the items mentioned are possible actions.

Which of the following items can be taken into account when considering inventory ordering decisions? How much to order and when to order Maximum inventory levels Customer service level Minimum inventory levels Some of the items mentioned can be taken into account All of the items mentioned can be taken into account

All of the items mentioned can be taken into account

In today's world, transportation enables longer, more complex supply chains because: All of these factors enable longer, more complex supply chains Ships are no longer dependent on wind power Land transportation is no longer dependent on animal power Danger from thieves and pirates has decreased Infrastructure is much improved and more reliable

All of these factors enable longer, more complex supply chains

Supply chains are found in: Hospitality Military Sports Teams Manufacturing All of these have supply chains

All of these have supply chains

A thorough spend analysis should consider all the company's business units because: All of these items It might be possible to standardize similar but different items purchased in different business units Prices paid for identical items might differ across business units Some business units might have good spending practices that can help improve other business units

All of these items

Which of the following are elements of the Total Cost Concept in Supply Chain? Purchase Cost Operating Cost Transaction Cost Salvage Cost All of these items are part of Total Cost

All of these items are part of Total Cost

Most packages are tested repeatedly before they can actually be put into mass production. Why are pretests important for packaging design? Packaging testing is conducted to ensure: All of these items should be tested. Safety. Ease of opening and closing. Durability. Compliance with regulations.

All of these items should be tested.

Which of the following are TRUE regarding Six Sigma? It includes a focus on financial results It was developed by Motorola in the 1980's It can use both basic and advanced statistical tools It builds upon the base of an effective TQM program All of these statements are true regarding Six Sigma

All of these statements are true regarding Six Sigma

The ______ characterizes the largest difference between the two Amazon facilities featured in the two videos. Presence of a WMS Amount of automation Order packing activity Number of scans performed Interior color scheme Speed of conveyors

Amount of automation

Which of the following are current operations challenges? Operations are increasingly outsourced domestically only. All of the answers mentioned are challenges Automation/Technology Localization

Automation/Technology

Which of the following strategies typically leads to the cheapest per unit cost assuming that full utilization is realized? Lagging Small chunk Leading Big chunk

Big chunk

Which sourcing category provides for the least opportunity to reduce cost? Bottleneck Leverage Critical Routine

Bottleneck

The Roman Empire's best known contribution to the advancement of logistics is: Training its army with logistics knowledge Planning food supplies to support war efforts Building permanent roads for better transportation Building ships for better international trading

Building permanent roads for better transportation

You are asked to purchase mobile handling equipment for your company. One strategy is to buy from different suppliers to get the lowest possible price on each single piece of equipment. As a trained supply chain professional from MSU, what are you going to do? Buy from different brands with different price ranges so you can have a balanced equipment portfolio. Follow the strategy to get the lowest possible prices from many suppliers to save purchase costs. Buy from fewer brands for the ease-of-maintenance and simplicity in daily operations. Push for smaller unit loads so that mobile handling equipment is not necessary.

Buy from fewer brands for the ease-of-maintenance and simplicity in daily operations.

Long term forecasting is most needed for Demand forecasting Inventory management Scheduling labor Lean Purchasing raw materials Capacity planning

Capacity planning

Total cost can be broken down into acquisition cost, ownership cost, and post-ownership cost. Which of the following items would likely attract more attention on post-ownership cost when they are purchased? Cars Office supplies None of the items mentioned Raw materials Groceries

Cars

What is the major source of synergy that Procurement provides to mergers and acquisitions? Consolidation of buying power Consolidation of transformation processes Increased Procurement focus Increased size of Procurement headcount Consolidation of freight Consolidation of seller power

Consolidation of buying power

Which of the following is in the correct order from least constrained to most constrained? Functional Strategy, Business Unit Strategy, Corporate Strategy Corporate Strategy, Business Unit Strategy, Functional Strategy Corporate Strategy, Functional Strategy, Business Unit Strategy Business Unit Strategy, Functional Strategy, Corporate Strategy Business Unit Strategy, Corporate Strategy, Functional Strategy

Corporate Strategy, Business Unit Strategy, Functional Strategy

Which of the following is NOT a functional strategy? Supply Chain Finance Corporate culture Marketing

Corporate culture

Which of the following is NOT a functional strategy? Finance Corporate culture Supply Chain Marketing

Corporate culture

Lean and Six Sigma are only useful in the Supply Chain function. True False

False

Level is based on pull and Chase is based on push True False

False

Which of the following will increase the Bullwhip Effect? The number of tiers / echelons is reduced Customer demand variability is greater Marketing promotion is reduced Unknown POS information is made available to all Lead time is reduced Unknown tier / echelon information is made available to all

Customer demand variability is greater

Talent is a major challenge in procurement because: Demand for procurement people has declined so now there are too many applicants Procurement people are paid too highly Procurement people are not talented People don't want to work in procurement because it's boring and not challenging Demand for procurement people continues to increase but there is not enough supply

Demand for procurement people continues to increase but there is not enough supply

Maverick buying occurs when legal agents of a company decide to use company money to buy something True False

False

For the three major categories of goods that are purchased, what is their rank order in typical price per unit, from lowest to highest? Indirect, Direct, Strategic Direct, Indirect, Strategic Strategic, Direct, Indirect Strategic, Indirect, Direct

Direct, Indirect, Strategic

Continuous and Machine-Paced processes are always more efficient than Job Shop and Worker-Paced Lines. True False

False

Batch flow is better than single-piece flow in which situation? Individual items are easy to transport between operations Quicker throughput is desired Quality problems need to be spotted quickly Extra inventory is desired

Extra inventory is desired

As a procurement agent, which of the following terms are most favorable for your company? FOB origin, net 90 FOB destination, net 60 FOB destination, net 90 FOB origin, net 60

FOB destination, net 90

"Cubed out" loads usually required more bracing and dunnage than "weighed out" loads. True False

False

A decrease in total cost can never be achieved if a company decides to pay a higher price True False

False

A packaging company strives to use environmentally friendly materials. However, the production of some materials causes pollution. Only the pollution concern is an environmental issue. True False

False

API is an acronym for Accurate Physical Inventory True False

False

An item has many competing suppliers but is expensive. If you wish to minimize inventory by implementing JIT delivery and Kanban ordering with a supplier, you should form a transactional relationship with a supplier True False

False

B2B (Business-to-Business) companies are less likely than B2C (Business-to-Consumer) companies to focus on customer success True False

False

Both indirect materials and direct materials are required for production so both will have equal importance when measured by fill rates. True False

False

Causal modelling means modelling the future demand based on past demand True False

False

If your supply chain strategy requires hedging, you will probably need a lot of support from: Marketing Human Resources Engineering Finance

Finance

Which of these statements is true regarding value? For a given price, increasing quality will decrease value. If both quality and price increase at the same rate, value will increase. Value = Quality / Inputs For a given level of quality, increasing price will lower value. All of these statements are true.

For a given level of quality, increasing price will lower value.

Independent demands are obtained from ________, and dependent demands are generated from ________. MRP; Forecasting MRP; MPS Forecasting; MRP Capacity planning; Forecasting MPS; MRP

Forecasting; MRP

In a procurement context, FOB is an acronym for: First Owner Bid Friends Of Bill Free On Board Firm's Own Buyer

Free On Board

Which of the following statements about EOQ is correct? If ordering cost goes up, EOQ will go up. If product price goes down, EOQ will go down. If inventory carrying cost goes up, EOQ will go up. If demand goes up, EOQ will go down.

If ordering cost goes up, EOQ will go up.

Cost-to-Service trade-offs are very common in logistics because: Customers are never willing to pay more for improved service Improved service is free Improved service often costs more Customer are always willing to pay more for improved service Reduced costs are usually more important than improved customer service

Improved service often costs more

Increasing the number of suppliers to receive bid packages: Increases competition and increases complexity Decreases competition and increases complexity Increases competition and decreases complexity Has no effect on competition or complexity Decreases competition and decreases complexity

Increases competition and increases complexity

In general, the tradability of goods has been: Increasing over time Increased by countries enacting trade barriers and high tariffs Stagnant over time Reduced by the advent of cheap transportation and faster communications Decreasing over time

Increasing over time

Advancements in communications have enabled better logistics because: The arrival times of ocean freighters can be more accurately predicted Information about orders and shipments can be transmitted, received, and tracked in real time Modern armies can now evaluate threats more quickly Hand delivering a message is not secure enough

Information about orders and shipments can be transmitted, received, and tracked in real time

Which of the following is true regarding process Inputs and Resources? Inputs and Resources are both transformed Inputs are transformed; Resources help with the transformation An Input in one process could never be considered as a Resource in another process Resources are transformed; Inputs help with the transformation Inputs and Resources are never confused with each other

Inputs are transformed; Resources help with the transformation

The Bullwhip effect has the largest effect on which of the following supply chain costs? Transportation costs Inventory carrying costs Manufacturing costs Labor costs Material handling costs Procurement costs

Inventory carrying costs

Two common measures to evaluate inventory performance are: Inventory amount and safety stock level Inventory turns and days of supply Safety stock level and days of supply Inventory turns and safety stock level

Inventory turns and days of supply

JIT is one of the core concepts pioneered by many Japanese car manufacturers. But in recent years, some companies are gradually backing off from JIT. What are the possible reasons for this? JIT has lost its attraction for car manufacturers. JIT might result in higher logistics costs due to the constraints placed on load sizes and delivery time windows. JIT concept is not flexible and agile in car assembling. JIT was proved to not be very efficient in production.

JIT might result in higher logistics costs due to the constraints placed on load sizes and delivery time windows.

Which of the following types of products usually has the shortest OTD? Make to stock Engineer to order Assemble to order Make to order

Make to stock

Of the 7 deadly wastes, which represents the biggest opportunity for improvement in Material Handling? Material Movement Dunnage Packaging Processing Overproduction

Material Movement

In many parts of the world, trucks are considered the most flexible transportation mode because: Most businesses and people have ready access to roads Trucks can carry more types of cargo than rail or water Most people know how to drive Trucks have a tight turning radius Accessorial service costs are high

Most businesses and people have ready access to roads

If there isn't much material to store but high control over the material is needed, the best option is a Private warehouse Contract warehouse Multi-client warehouse Public warehouse Cross-dock facility

Multi-client warehouse

What are the properties of a normal distributed or "bell-shaped" curve? 99.9999% of the data fall within (plus/minus) 3 standard deviations within the average None of the answers mentioned are properties of a normal distribution 95% of data fall within (plus/minus) 1 standard deviations within the average 99.73% of the data fall within (plus/minus) 6 standard deviations within the average

None of the answers mentioned are properties of a normal distribution

Which of the following are guaranteed to reduce labor costs and improve productivity? Narrow aisle forklifts ASRS RFID None of the items listed AGV

None of the items listed

Supply Chain Management comprises which three major disciplines? Analytics, simulation, modeling Operations, manufacturing, service Procurement, purchasing, supply management Operations, logistics, procurement Shipping, receiving, returns

Operations, logistics, procurement

Which of the following logistics processes is customer facing? Integrated logistics management Order processing Network Design Transportation management Warehouse management Inventory management

Order processing

Which of the following is the benefit of ordering in larger and less frequent batches? Ordering cost is high. Ordering cost is less. Holding cost is high. Holding cost is low.

Ordering cost is less

In using the Hub and Spoke concept for network design, sometimes certain customers actually suffer from deteriorated service levels due to the longer distance travelled from the Hub. Why is this concept still widely and popularly used in many companies? Other network designs don't allow for much flexibility so companies tend to use Hub and Spoke. Hub and Spoke designs increase the number of available routes. Overall, companies can expect decent cost savings as a result of reduced number of warehouses and reduced number of routes. By using Hub and Spoke, companies can better service key customers while ignoring those small customers who are far away to make better profits.

Overall, companies can expect decent cost savings as a result of reduced number of warehouses and reduced number of routes.

Which of the following 7 Deadly Wastes does not apply to warehousing? Pull Andon Overproduction Kaizen Correction Levelling

Overproduction

Which of the following processes likely is the most product-focused? Spa Paper Mill Apparel Sewing Purchasing Unique Items Machine Shop

Paper Mill

Which of the following lists transportation shipping cost per unit from lowest to highest? Water, pipeline, rail, truck, air Pipeline, truck, water, rail, air Water, rail, pipeline, truck, air Water, truck, pipeline, rail, air Pipeline, water, rail, truck, air Pipeline, rail, water, truck, air

Pipeline, water, rail, truck, air

In Time series forecasting, it's usually a good idea to first: Calculate an average Ask salespeople what they will sell Ensure you have capacity and raw materials Build a casual model Learn Excel Plot the data

Plot the data

Every day, UPS (a logistics service provider) receives thousands of parcels from their customers. To ship these parcels to their destinations, UPS will sometimes consolidate shipments from different shippers to the same destination on the same plane. This is an example of: Sharing capacity Consolidation by market area Pooled delivery Recovery Scheduled delivery

Pooled delivery

To adapt to different power cable plug requirements in different countries, a laptop manufacturer might not complete the final assembling and packaging until the product is in the local distribution center. This is a typical example of logistics value add through: Flexibility Lean management Agility Postponement

Postponement

The field of Operations Research grew largely out of World War II. True False

True

DMAIC is important in Six Sigma. Which one of the following is one of the actions in the "Improve" phase? Process redesign Using Pareto tools to analyze root cause Value stream mapping for the current process Correct the measurement system Documenting Standard Operations Procedures

Process redesign

Product Design has heavy influence over cost because Procurement and suppliers help reduce costs Product design makes decisions that determine the overall cost structure Material is 50% of the cost Product design is 5% of the cost Product designers are from the dark side

Product design makes decisions that determine the overall cost structure

Which of the following is one of Deming's 14 points? Promote slogans Depend on inspection to control quality Institute management Source on price only Promote pride in workmanship

Promote pride in workmanship

Which of the following descriptions of future logistics challenges is the most appropriate? Properly handling hazardous materials is a top security issue. The ultimate mission of logistics is to ensure goods are delivered to customers so logistics doesn't need to consider profit margin issues. A surplus of drivers in trucking companies is creating talent management issues. Outsourcing typically means less logistics activities for a firm.

Properly handling hazardous materials is a top security issue.

Kanbans regulate material flow because they help Prevent defects Push the right amount of material Pull the right amount of material Plan capacity Forecast

Pull the right amount of material

Transportation normally has the biggest share in total logistics cost. True False

True

Warehouses are typically focused on efficiency because they are trying to: Add utility Reduce costs All of the items listed Increase quality

Reduce costs

Since suppliers are sometimes dominated by a powerful buyer such as Walmart, what are the possible actions you could take as a supplier? It is doomed to be a lose-lose situation so don't waste time negotiating. Keep silent and walk away from the negotiation. Ask for a blue Walmart greeter vest and a nametag. Remain calm, and bargain with solid data while exploring weaknesses in Walmart's position.

Remain calm, and bargain with solid data while exploring weaknesses in Walmart's position.

When companies add big chunk capacity, what is the biggest danger? Too much raw material gets ordered and they encounter excess inventory Not enough raw material gets ordered and they encounter many stoppages Sales didn't materialize as forecasts had predicted The new machine have poor quality The new machines have poor efficiency Sales materialized in excess of what forecasts had predicted

Sales didn't materialize as forecasts had predicted

Multiple airline codes tied to one plane is an example of Sharing capacity Joint ventures Acquisitions Subcontracting Outsourcing

Sharing capacity

Lost sales is representative of which type of cost? Overtime Shortage Subcontracting Holding Inventory Fire/Layoff Regular Production

Shortage

Which of the following is a causal forecasting method? Multiple linear regression All of the answers are causal forecasting methods. Some of the answers are causal forecasting methods. Weighted moving average Multiple nonlinear regression Simple linear regression

Some of the answers are causal forecasting methods.

Which of the following are elements of inventory holding cost? All of the answers are elements of inventory holding cost Cost of Capital Some of the answers are elements of inventory holding cost. Marketing and advertising expenses Taxes and storage Insurance and obsolescence

Some of the answers are elements of inventory holding cost.

Which one of the following is Muda? Processes that customers are willing to pay for Minimal inventory Some of the answers mentioned are Muda Unnecessary moving of materials, machinery and workers Overproduction Excessive waiting time All of the answers mentioned are Muda

Some of the answers mentioned are Muda

What are the key processes of a Weighted Factor Analysis? Where necessary, break critical factors into sub-factors. Some of the processes mentioned. Have a cross-functional team define and weight the critical factors. Assign weights all by yourself based on the historic performance of each supplier. Score each supplier bid on each criteria and multiply by factor weights.

Some of the processes mentioned.

Shippers' associations are similar to freight forwarders except they are not-for-profit. True False

True

For the three major categories of goods that are purchased, what is their rank order in typical volume/quantity, from lowest to highest? Direct, Indirect, Strategic Strategic, Indirect, Direct Indirect, Direct, Strategic Indirect, Strategic, Direct

Strategic, Indirect, Direct

For the three major categories of goods that are purchased, what is their rank order in typical volume/quantity, from lowest to highest? Indirect, Strategic, Direct Strategic, Indirect, Direct Indirect, Direct, Strategic Direct, Indirect, Strategic

Strategic, Indirect, Direct

The strategic procurement perspective on supplier margins is that they should be Sufficient to enable supplier profitability, long-term survival, and development Public knowledge available to competing suppliers Negotiated to a bare minimum Non-existent Equally shared with the buying firm

Sufficient to enable supplier profitability, long-term survival, and development

In evaluating bid responses, you need to carefully consider the payment terms vs. purchase prices. Suppose you have two suppliers offering the exact same product, but with different payment terms: Supplier A quotes $30/unit, Net 30 Days; Supplier B quotes $30.33/unit, Net 90 Days. Which supplier would you choose (assume 7% Annual Cost of Capital)? Supplier B Supplier A Cannot tell based on the information given Supplier A and Supplier B are equivalent

Supplier B

MSU opens its bid for suppliers who can supply clothes with MSU logos. The clothes have to be received no later than Dec 23rd of this year. Supplier A has a 90% probability to deliver the clothes before the deadline while supplier B has a 95% probability to deliver before the deadline. Supplier A's trucks don't support the cross docking operations at the receiving warehouse while Supplier B's trucks perfectly support cross docking. In this situation, which supplier will you choose if their quotations are otherwise the same? Supplier A Supplier B Supplier A and Supplier B are equivalent Cannot tell based on the given information.

Supplier B

Supplier scorecards often utilize a form of weighted factor analysis True False

True

The Marketing viewpoint of procurement is analogous to Push and the Procurement viewpoint is analogous to Pull True False

True

All else being equal, the longer the transit time, the greater the inventory True False

True

Both blocking and starving can result in reduced operational efficiency. True False

True

Continuous flow is product focused. True False

True

Developing a Bill of Materials is an example of the interaction between supply chain and engineering. True False

True

Forecasts are one of the basic inputs to Planning True False

True

In contrast to Time Series forecasting which uses past demand data to predict future demand, Causal Models attempt to predict future demand as a function of other factors. True False

True

Local optimization occurs when companies look out for their own best interest, not the interest of their supply chain partners. True False

True

Near-term forecasts tend to be more accurate than long-term forecasts True False

True

Order cycle is the time between recognition of need until the product is delivered and ready for use. True False

True

Outsourcing is a part of Strategic Sourcing True False

True

There are various advantages for companies to use multiple source suppliers (competitive bidding) compared with a single source supplier, what is likely the most important reason/motivation of a company to use competitive bidding? Usually results in better performance to deliverables such as lower price Bids are usually sealed Suppliers prefer not to be single-sourced Bids are easier to compare and evaluate Can be multiple rounds

Usually results in better performance to deliverables such as lower price

What are the 3 main components of Supply Chain Strategy? Speed, Reliability, Availability Value Proposition, Critical Customer, Capabilities Quality, Cost, Timeliness Flexibility, Innovation, Sustainability Order Winners, Order Qualifiers, Order Losers

Value Proposition, Critical Customer, Capabilities

Which of the following is a situation where we are likely to use a Periodic Review Model to manage inventory level? Inventory level is known so we can rely on the known inventory level to periodically review inventory Vendors make regular routine visits to count and refill their products Reorder point is calculated to achieve total minimized inventory costs High-volume direct material that is critical to production

Vendors make regular routine visits to count and refill their products

The term "Supply Chain": Is consistently applied by all organizations Was coined in 1982 by Booz Allen Hamilton consultants Has been commonly used since ancient times Is widely understood by the general population

Was coined in 1982 by Booz Allen Hamilton consultants

Which of the following lists transportation modes from most to least fuel efficient per ton-mile? Water, truck, rail, air Water, rail, truck, air Rail, water, truck, air Truck, water, rail, air

Water, rail, truck, air

In a network design project, you led the preparation stage by checking how many activities of the supply chain are outsourced, where the key customers are located, the possible fastest response time to urgent orders, and how information can be shared internally and externally to the network. Does this seem like a valid approach? Cannot decide based on the information given. Yes No

Yes

You should not add a supplier to your list of bidders unless: They are owned by your brother-in-law or other close relative You offer them favorable terms and conditions since they are a new supplier You have an equity stake in them You are comfortable awarding them the business if they win the bidding They completely filled out their self-questionnaire

You are comfortable awarding them the business if they win the bidding

Amplification of demand fluctuations up the supply chain are called the "bullwhip effect" because: bullwhips are commonly used to motivate supply chain workers a large movement in the handle of a bullwhip causes a small movement on free end of the whip it was first observed in the 1800s in the buggy whip industry a small movement in the handle of a bullwhip causes a large movement on free end of the whip

a small movement in the handle of a bullwhip causes a large movement on free end of the whip

In what type of company do you see practices that represent the dark side of procurement? only in large companies all types of companies only in domestic companies only in foreign companies only in small companies

all types of companies

If your delivery time is so slow that customers will not buy your goods, you will likely experience: cost-to-cost tradeoff cost savings bargain hunters bankruptcy

bankruptcy

In most companies today, the focus of procurement has evolved to: ISM lowest total cost best value lowest price

best value

What type of analysis can tell us at what volume it might be more cost-effective to make vs. buy? price should cost break-even amortization spend

break-even

Because warehouse operations tend to be repetitive in nature, physically demanding, and sometimes dangerous, workforce motivation can be especially: physical challenging cerebral easy

challenging

The criticality and importance of stockouts and fill rates are determined by the: ratings agency supply chain analyst customer shipper retailer

customer

In the formula for Capacity, time appears in the _____. In the formula for Cycle Time, time appears in the ______. numerator; denominator denominator; numerator numerator; numerator denominator; denominator

denominator; numerator

Which of the following products has the highest tradability? diamonds lumber dirt grain iron ore

diamonds

The principle that the cost per unit travelled decreases as distance moved increases, is known as: economy of scale economy of scope economy of distance transportation economics

economy of distance

Which of the following is TRUE regarding forecasts? forecasts are unaffected by uncertainty forecasts can be qualitative or quantitative but never both forecast error rates are always low forecasting is never perfect historical data should never be used

forecasting is never perfect

The concept of process knowledge tells us that understanding is required before ______ can take place. improvement effectiveness efficiency quality

improvement

Since fixed costs are typically amortized over production volumes in a make-versus-buy analysis, fixed costs per unit will: decrease if volumes decrease increase if volumes decrease are not dependent on volume increases or decreases increase if volumes increase

increase if volumes decrease

External capacity alternatives in order from outsourcing to sharing capacity to acquisitions are increasing in: reputational risk quality and risk flexibility investment and risk

investment and risk

Smart procurement agents approach most negotiations as what type of potential relationship? long-term warranty claim motivated one-time-only high-power

long-term

S&OP attempts to balance many objectives between functions, including ______ who typically prefer fewer products, and _____ who typically prefer many product varieties. operations; marketing finance; operations operations; finance marketing; operations finance; marketing

operations; marketing

If you have too many of these, customers will avoid your firm. order losers order qualifiers order winners order-to-delivery

order losers

Properly executed Andon decreases Muda because it makes the business look Lean prevents defects from moving upstream decreases excess inventory decreases lead times prevents defects from moving downstream

prevents defects from moving downstream

Efficiency is usually measured as either: effectiveness or quality cycle time or bottlenecks productivity or utilization utilization or system cycle time

productivity or utilization

Effective supply chain coordination will usually reduce all of the following EXCEPT: profits bullwhip effect local optimization poor decision making risk

profits

Since material handling usually takes place within a building, it is classified as what type of movement? long-distance zero-distance short-distance micro-distance medium-distance

short-distance

Using only one supply source for a justifiable reason is known as: competitive bidding foolishness single sourcing the best solution

single sourcing

During the industrial revolution, firms grew in: labor relations and workplace safety efficiency and effectiveness family-ownership size and complexity

size and complexity

The main competitive priorities of Amazon and Patagonia, respectively, are: cost and quality timeliness and sustainability innovation and cost sustainability and risk

timeliness and sustainability

To develop your value proposition, it is important to offer items that your customers value, but you must also consider: their market demographics their literacy key metrics what they are willing to pay for

what they are willing to pay for

Which of the following is NOT a coordinating contract? sales rebate quantity discount wholesale price quantity flexibility

wholesale price