SJSU BUSS-141 Quiz 3 - Proc and Supply Mgmt

A supplier certification program:

may enable the buyer and seller to lower costs and improve quality.

"C" items in ABC analysis are:

ordered frequently.

Supply chain inventory management involves establishing operational design of the physical flow of goods and services, but does not deal with managing information flows.

False

ISO 14000 which focuses on global purchasing processes is similar to ISO 9000 in management principles.

False

In Kanban systems large raw material inventories are necessary.

False

Any cost associated with having, as opposed to not having, inventory is included in inventory carrying costs, including (1) capital costs, (2) inventory service costs, (3) storage space costs, and (4) inventory risk costs.

True

If there were 400 requests for a particular item in a year and 372 were immediately satisfied, the service coverage would be 372/400 or 93 percent.

True

Reliability is the mathematical probability that a product will function for a stipulated period of time.

True

Kaizen is a Japanese term for continuous improvement.

True

Managing the consumption of services organizationwide:

is difficult because multiple contracts may exist at varying prices and terms with the same suppliers.

ISO 9001:2008 provides a tested framework for a systematic approach to consistently delivering product that satisfies customers' expectations by:

providing a set of standardized requirements a quality system must meet.

Internal failure costs include warranty costs and managerial time handling customer complaints.

False

JIT requires frequent deliveries of relatively small quantities in compliance with quality standards.

True

The real costs of quality:

rise significantly as defects increase in the finished product.

Demand for buttons and zippers at a sportswear manufacturer is an example of:

derived demand.

A sampling technique in which every element in the population has an equal chance of being selected is called:

random sampling.

Anticipation inventories are carried:

to cover a well-defined future need.

A six sigma (6s) approach to quality:

focuses on preventing defects by using data to reduce variation and waste.

It is reasonable to expect a supplier to both improve quality and lower costs.

True

The three main inputs of a material requirements planning (MRP) system are:

a bill of material, a master production schedule, and the inventory record.

What is the difference between JIT and MRP? Provide an example of a firm that has implemented JIT in their manufacturing operation.

JIT and MRP are completely unlike, but are complementary concepts used in materials planning and control. Materials Resource Planning (MRP) is a resource and planning tool that is forward-thinking, and time-phased. It requires more traditional computer-based management system that takes inputs such as the master production schedule, the product structure records, and the inventory status records and determines the gross component requirements over a given time frame. MRP takes into careful consideration the dependencies of components in the production process, mainly by performing a BOM explosion. MRPs have high stability, and since an inventory exists, external failures can sometimes be absorbed. Just In Time (JIT) systems, on the other hand, is based on the philosophy of riddance of waste. It is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. Just-in-time production method is also called the Toyota Production System. JIT is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. When companies use Just in Time manufacturing and inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases are zero. JIT approach can be used in both manufacturing and merchandising companies. JIT requires much more technology and streamlining than MRP. However, JIT is more vulnerable to supply chain failures and external failures than MRP because of higher integration costs and the lack of an inventory. While operating a manufacturing business, it is possible to operate only with MRP, but the case isn't the same with JIT, because it does allow for forward planning, which is a vital planning requirement when running a manufacturing operation. This makes MRP a tool that gives more control, while JIT increases the value of your processes. Dell is a firm that has successfully leveraged JIT in its manufacturing operations. Dell is unique because they have a seamless system of suppliers who have the ability to meet Dell's lead time requirements. Essentially, Dell places the onus on its suppliers to carry inventory for them so that products can be assembled and delivered by Dell promptly. A more traditional example is Toyota. Toyota was one of the first and most successful companies to implement the "supermarket concept" and kanban system. They rely on rapid information flow through Kanbans and a flawless workflow to provide kaizen and eliminate waste.