Supply Chain Final

A company is planning for its financing needs and uses the basic fixed-order quantity inventory model. Which of the following is the total cost (TC) of the inventory given an annual demand of 10,000, setup cost of $32, a holding cost per unit per year of $4, an EOQ of 400 units, and a cost per unit of inventory of $150? A. $1,501,600 B. $1,498,200 C. $500,687 D. $499,313 E. None of these

A. $1,501,600

A company is planning for its financing needs and uses the basic fixed-order quantity inventory model. Which of the following is the total cost (TC) of the inventory given an annual demand of 10,000, setup cost of $32, a holding cost per unit per year of $4, an EOQ of 400 units, and a cost per unit of inventory of $150? A. $1,501,600 B. $1,498,200 C. $500,687 D. $499,313 E. None of these

A. $1,501,600 TC= DC + (D/Q)S + (Q/2)H where D=demand; C= cost per unit; Q=order quantity; S=Setup cost; H= Holding cost

Which of the following are related to lean production? A. A philosophy of waste elimination B. Lean consumption C. Never running out of inventory D. The Wahei-Subaru method E. Full use of capacity

A. A philosophy of waste elimination

Typically, which is the most challenging kind of supply chain to manage? A. Agile supply chain B. Efficient supply chain C. Risk-hedging supply chain D. Erratic supply chain E. Responsive supply chain

A. Agile supply chain

Which of the following is not included as an inventory holding cost? A. Annualized cost of materials B. Handling C. Insurance D. Pilferage E. Storage facilities

A. Annualized cost of materials

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following are hidden costs that should be included in the analysis? A. Becoming less responsive to the customer B. Supplier costs C. Taxes D. Construction costs E. Product life cycle costs

A. Becoming less responsive to the customer

An example of a trading bloc is which of the following? A. Central American Free Trade Agreement countries B. Free trade zones C. ISO-9000 companies D. American Production and Inventory Control Society E. Wal-Mart and its suppliers

A. Central American Free Trade Agreement countries

The inventory turnover ratio used in measuring supply chain efficiency is found by the ratio of which of the following? A. Cost of goods sold/Average aggregate inventory value B. Fixed costs/Variable costs C. Sales costs/Marketing costs D. Cost of goods sold/Cost to sell goods E. Operations flow costs/Suppliers flow costs

A. Cost of goods sold/Average aggregate inventory value

In designing a lean production facility layout a designer should do which of the following? A. Design for work flow balance B. Locate flexible workstations off line C. Link operations through a push system D. Balance capacity using job shop analysis E. Always keep operations on a single floor of the factory

A. Design for work flow balance

Which of the following are fixed-order quantity inventory models? A. Economic order quantity model B. The ABC model C. Periodic replenishment model D. Cycle counting model E. P model

A. Economic order quantity model

When using the supply chain uncertainty framework to classify supply chains, a supply chain for functional products with a stable supply process is called which of the following? A. Efficient B. Forward looking C. Agile D. Risk hedging E. Responsive

A. Efficient

To develop a lean manufacturing system a firm might do which of the following? A. Eliminate anything that does not add value for the customer B. Standardize product configurations C. Process design with product design D. Adopt a kaizen philosophy E. Implement top-down management controls

A. Eliminate anything that does not add value for the customer

To implement lean production schedules a firm would do which of the following? A. Have excess capacity B. Force demand C. Hire a consultant D. Bottom-up management E. Implement kanban groups

A. Have excess capacity

Very few products are moved without at least part of their journey being by which mode of transportation? A. Highway B. Rail C. Water D. Pipeline E. Air

A. Highway

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following costs should be excluded from the analysis? A. Historical costs B. Inbound distribution costs C. Land D. Construction E. Regional costs

A. Historical costs

Which of the following is an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does best B. Turn fixed costs into variable costs C. Reduce costs through lowered cost structure and increased flexibility D. Improve risk management E. Improve credibility and image by associating with superior providers

A. Improve effectiveness by focusing on what the firm does best

When implementing a lean production system a stabilized schedule is achieved using which of the following? A. Level scheduling B. Demand pull C. Freeze window D. Reduced lot sizes E. Bottom-round management

A. Level scheduling

In a lean production system we expect to see which of the following? A. No extra inventory B. Extra inventory of critical parts held "just-in-case" C. More parts and fewer standardized product configurations D. Managers being held responsible for quality of the work turned out E. Closer management-labor relationships

A. No extra inventory

Which of the following is a criterion that influences manufacturing plant or warehouse facility location decisions? A. Proximity to customers B. Corporate policy C. Competitor's locations D. Competitive advantage E. Host community politics

A. Proximity to customers

Acquisition costs include which of the following costs? A. Quality costs B. Maintenance and repair costs C. Environmental costs D. Supply chain costs E. Customer dissatisfaction costs

A. Quality costs

Group technology (GT) is credited with which of the following benefits? A. Reducing waiting time between process operations B. Improving inventory discipline C. Reducing required workforce skills D. Improved labor relations E. Improved small group functioning

A. Reducing waiting time between process operations

Not among the factors related to infrastructure in making facility location decisions is which of the following? A. Satisfactory hotel accommodations B. Adequate air transportation C. Energy requirements D. Telecommunications requirements E. Willingness of local government to invest in infrastructure upgrades

A. Satisfactory hotel accommodations

Which of the following is an improvement-driven reason for outsourcing? A. Shorten cycle time B. Improve effectiveness by focusing on what the firm does best C. Increase product and service value by improving response to customer needs D. Turn fixed costs into variable costs E. Reduce costs through a lower cost structure

A. Shorten cycle time

The centroid method for plant location uses which of the following data? A. Volume of goods to be shipped between existing points B. Inbound transportation costs C. Transport times between facilities D. Correlation matrix of existing facilities E. Probabilities and payoffs

A. Volume of goods to be shipped between existing points

A company wants to determine where they should locate a new warehouse. They have two existing production plants (i.e., Plant A and Plant B) that will ship units of a product to this warehouse. Plant A is located at the (X, Y) coordinates of (50, 100) and will have volume of shipping of 250 units a day. Plant B is located at the (X,Y) coordinates of (150, 200) and will have a volume of shipping of 150 units a day. Using the centroid method, which of the following are the X and Y coordinates for the new plant location? A. (81,117) B. (88, 138) C. (117,102) D. (76,123) E. X and Y coordinates cannot be computed from the data given

B. (88, 138)

Which of the following product categories includes fashionable clothing, personal computers, and other products that typically have a very brief life cycle? A. Functional products B. Dysfunctional products C. Innovative products D. Bullwhip products E. Value density products

C. Innovative products

Which of the following are elements that address elimination of waste under lean production? A. Production ahead of demand B. Group plant loading technology C. Kanban production control system D. Minimized run times E. Full capacity utilization

C. Kanban production control system

Which of the following is an assumption of the basic fixed-order quantity inventory model? A. Lead times are averaged B. Ordering costs are variable C. Price per unit of product is constant D. Back orders are allowed E. Stock-out costs are high

C. Price per unit of product is constant

Which of the following address elimination of waste under lean production? A. Info-matic warehouse networks B. Outsourced housekeeping C. Quality at the source D. Backflush E. Bottom-round management

C. Quality at the source

To implement a flow process in developing a lean system a firm might do which of the following? A. Improve capacity utilization B. Build product in anticipation of demand C. Reduce setup/changeover time D. Eliminate some fixed costs E. Implement groupware

C. Reduce setup/changeover time

Ownership costs are incurred after the initial purchase and are associated with the ongoing use of the product or material. Which of the following is not an ownership cost listed in the text? A. Financing costs B. Energy costs C. Taxes D. Maintenance and repair costs E. Supply network costs

C. Taxes

According to the text, an important decision for multinational companies is the nation in which to locate the home base for each business. Which of the following business activities does not happen at the business's home base? A. Core process technology is created B. A critical mass of production takes place C. The largest profits are recorded D. Strategy is created E. Core products are created

C. The largest profits are recorded

Firms keep supplies of inventory for which of the following reasons? A. To maintain dependence of operations B. To provide a feeling of security for the workforce C. To meet variation in product demand D. To hedge against wage increases E. In case the supplier changes the design

C. To meet variation in product demand

Imagine comparing a manufacturing operation using regular lot-sizing and the same operation with a Kanban/lean production approach. What would be your expectations of the difference between the total cost (i.e., inventory holding costs + setup/ordering costs) of each? A. Inventory holding cost will increase nonlinearly with inventory B. Total costs will be lower for the regular lot-size operation C. Total costs will be lower for the Kanban/lean production operation D. The order quantity will be larger for the Kanban/lean production approach E. As long as the total quantity is the same, total costs will be the same

C. Total costs will be lower for the Kanban/lean production operation

Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) to arm's length relationships (outsource)? A. Cost B. Location C. Investment D. Coordination E. Control

D. Coordination

In making any decision that affects inventory size, which of the following costs do not need to be considered? A. Holding costs B. Setup costs C. Ordering costs D. Fixed costs E. Shortage costs

D. Fixed costs

Which of the following is a lean production technique that is not reported in the textbook to have been successfully applied in service firms? A. Organize problem-solving groups B. Upgrade housekeeping C. Upgrade quality D. Freeze windows E. Eliminate unnecessary activities

D. Freeze windows

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions? A. Suppliers B. Free trade zones C. Political risk D. Gross national product E. Tariffs and customs duties

D. Gross national product

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions? A. Government barriers B. Trading blocs C. Environmental regulation D. Immigration rules E. Local labor costs

D. Immigration rules

Which of the following is not an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does best B. Improve flexibility to meet changing demand for products and services C. Increase product and service value by improving response to customer needs D. Improve credibility and image by associating with superior providers E All of these are organizationally-driven reasons for outsourcing

D. Improve credibility and image by associating with superior providers

Which of the following is not one of the categories of manufacturing inventory? A. Raw materials B. Finished products C. Component parts D. Just-in-time E. Supplies

D. Just-in-time

. In implementing a lean production system you should work with suppliers to do which of the following? A. Calculate lead times B. Quality circles C. Freeze windows D. Make frequent deliveries E. Achieve bottom-round management

D. Make frequent deliveries

Which of the following are fixed-time period inventory models? A. The EOQ model B. The least cost method C. The Q model D. Periodic system model E. Just-in-time model

D. Periodic system model

What transportation mode has very high initial investment costs but gives a very low cost per mile for products that are highly specialized and require no packaging? A. Highway B. Rail C. Water D. Pipeline E. Air

D. Pipeline

The textbook The Toyota Production System identified which of the following types of waste to be eliminated? A. Underproduction B. Excess quality C. Preventive maintenance D. Product defects E. Kaizen

D. Product defects

When using the supply chain uncertainty framework to classify supply chains, a supply chain for functional products with an evolving supply process is called which of the following? A. Efficient B. Forward looking C. Agile D. Risk hedging E. Responsive

D. Risk hedging

Which of the following is not mentioned in the text as a technique for identifying potential sites for plants or other types of facilities? A. The centroid method B. Factor-rating systems C. Linear programming D. The transportation method of decision analysis E. Regression analysis

D. The transportation method of decision analysis

In which of the following situations should we not use the transportation method of linear programming? A. To find a new site location for a plant B. To minimize costs of shipping "n" units to "m" destinations C. To maximize profits of shipping "n" units to "m" destinations D. To determine which corner of a street intersection to locate a retail service facility E. To locate a finished goods distribution warehouse

D. To determine which corner of a street intersection to locate a retail service facility

Which of the following is not a reason to carry inventory? A. To provide a safeguard for variation in raw material delivery time B. To take advantage of economic purchase-order size C. To maintain independence of operations D. To meet variation in product demand E. To keep the stock out of the hands of competitors

E. To keep the stock out of the hands of competitors

A company wants to determine where they should locate a new warehouse. They have two existing production plants (i.e., Plant A and Plant B) that will ship units of a product to this warehouse. Plant A is located at the (X, Y) coordinates of (50, 100) and will have volume of shipping of 250 units a day. Plant B is located at the (X,Y) coordinates of (150, 200) and will have a volume of shipping of 150 units a day. Using the centroid method, which of the following are the X and Y coordinates for the new plant location? A. (81,117) B. (88, 138) C. (117,102) D. (76,123) E. X and Y coordinates cannot be computed from the data given

B. (88, 138) X = (100x500+150x200) / ( 250+150) = 87.5 and Y = (100x250+200x150) / (250+150) = 137.5

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand, which of the following is the number of standard deviations necessary to have the 95 percent service probability assured? A. 1.28 B. 1.64 C. 1.96 D. 2.00 E. 2.18

B. 1.64 Companies using this approach generally set the probability of not stocking out at 95 percent. This means we would carry about 1.64 standard deviations of safety stock,

If annual demand is 35,000 units, the ordering cost is $50 per order, and the holding cost is $0.65 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 5,060 B. 2,320 C. 2,133 D. 2,004 E. 1,866

B. 2,320

If annual demand is 35,000 units, the ordering cost is $50 per order, and the holding cost is $0.65 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 5,060 B. 2,320 C. 2,133 D. 2,004 E. 1,866

B. 2,320 Sqr (2DS/H)

Assuming no safety stock, what is the reorder point (R) given an average daily demand of 78 units and a lead time of 3 days? A. 421 B. 234 C. 78 D. 26 E. 312

B. 234

If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply? A. 45,000 B. 234 C. 120 D. 23.4 E. 4.5

B. 234

Assuming no safety stock, what is the reorder point (R) given an average daily demand of 78 units and a lead time of 3 days? A. 421 B. 234 C. 78 D. 26 E. 312

B. 234 78 times 3 = 234

38. If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply? A. 45,000 B. 234 C. 120 D. 23.4 E. 4.5

B. 234 Weeks of supply = (Average Aggregate Inventory/Cost of goods sold) x 52. = (45,000/10,000) x 52 = 4.5 x 52 = 234. Note that Cost of Goods sold is an income statement item and refers to an annual figure. Average Aggregate Inventory is a balance sheet item.

If annual demand is 12,000 units, the ordering cost is $6 per order, and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 576 B. 240 C. 120.4 D. 60.56 E. 56.03

B. 240

If annual demand is 12,000 units, the ordering cost is $6 per order, and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 576 B. 240 C. 120.4 D. 60.56 E. 56.03

B. 240 Qopt= Sqr (2DS/H) = sqr (2(12000x6)/2.5)= 240

A company has recorded the last six days of daily demand on a single product they sell. Those values are 37, 115, 93, 112, 73, and 110. The time from when an order is placed to when it arrives at the company from its vendor is 3 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)? A. 540 B. 270 C. 115 D. 90 E. 60

B. 270

A company has recorded the last six days of daily demand on a single product they sell. Those values are 37, 115, 93, 112, 73, and 110. The time from when an order is placed to when it arrives at the company from its vendor is 3 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)? A. 540 B. 270 C. 115 D. 90 E. 60

B. 270 Average demand is 37+115+93+112+73+110 / 6 = 90. Lead time = 3 days so the reorder point is 90 x 3 = 270.

If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover? A. 19.23 B. 4.5 C. 0.8654 D. 0.2222 E. None of these

B. 4.5

If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover? A. 19.23 B. 4.5 C. 0.8654 D. 0.2222 E. None of these

B. 4.5 Inventory turnover = Cost of goods sold / Average aggregate inventory value. $450,000 / $100,000 = 4.5. Note that Cost of Goods sold is an income statement item and refers to an annual figure. Average Aggregate Inventory is a balance sheet item.

You have been called in as a consultant to set up a Kanban control system. The first thing to do is to determine the number of Kanban card sets needed. Your research shows that the expected demand during lead time for a particular component is 150 per hour. You estimate the safety stock should be set at 25% of the demand during lead time. The tote trays used as containers can hold 8 units of stock and the lead time it takes to replenish an order is 2 hours. Which of the following is the number of Kanban card sets necessary to support this situation? A. 42 B. 47 C. 68 D. 89 E. 94

B. 47

You have been called in as a consultant to set up a Kanban control system. The first thing to do is to determine the number of Kanban card sets needed. Your research shows that the expected demand during lead time for a particular component is 150 per hour. You estimate the safety stock should be set at 25% of the demand during lead time. The tote trays used as containers can hold 8 units of stock and the lead time it takes to replenish an order is 2 hours. Which of the following is the number of Kanban card sets necessary to support this situation? A. 42 B. 47 C. 68 D. 89 E. 94

B. 47 k = 150 x 2 x 1.25 / 8 = 46.875 = 47

Assuming no safety stock, what is the re-order point (R) given an average daily demand of 50 units, a lead time of 10 days and 625 units on hand? A. 550 B. 500 C. 715 D. 450 E. 475

B. 500

Assuming no safety stock, what is the re-order point (R) given an average daily demand of 50 units, a lead time of 10 days and 625 units on hand? A. 550 B. 500 C. 715 D. 450 E. 475

B. 500 Fifty (50) times ten (10) equals 500.

If annual demand is 50,000 units, the ordering cost is $25 per order, and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 909 B. 707 C. 634 D. 500 E. 141

B. 707

If annual demand is 50,000 units, the ordering cost is $25 per order, and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 909 B. 707 C. 634 D. 500 E. 141

B. 707 sqr (2(50,000x25)/5)= 707.14 = 707

Plant A is located at the (X, Y) coordinates of (100, 200) and has a volume of shipping of 500 units a day. Plant B is located at the (X, Y) coordinates of (150, 400) and has a volume of shipping of 200 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location? A. About 100 B. About 114 C. About 130 D. About 150 E. X coordinate cannot be computed from the data given

B. About 114

Plant A is located at the (X, Y) coordinates of (100, 200) and has a volume of shipping of 500 units a day. Plant B is located at the (X, Y) coordinates of (150, 400) and has a volume of shipping of 200 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location? A. About 100 B. About 114 C. About 130 D. About 150 E. X coordinate cannot be computed from the data given

B. About 114 (100x500+150x200) / (500+200) = 114.29

The total value of all items held in inventory for the firm valued at cost is which of the following? A. Cost of goods to be sold B. Average aggregate inventory value C. Weeks supply of goods D. Inventory turnover E. None of these

B. Average aggregate inventory value

An activity where the parts that go into each unit of a product are periodically removed from inventory and accounted for based on the number of units produced. is called which of the following? A. Frozen window B. Backflush C. Level schedule D. Group Technology E. Kanban

B. Backflush

Which of the following is usually included as an inventory holding cost? A. Order placing B. Breakage C. Typing up an order D. Quantity discounts E. Annualized cost of materials

B. Breakage

Which of the following is a plant location methodology good for locating a single facility within a set of existing facilities based in distances and volumes of goods shipped? A. Factor-rating systems B. Centroid method C. Decision trees D. Linear programming E. Regression analysis

B. Centroid method

Which of the following is not an improvement-driven reason for outsourcing? A. Improve quality and productivity B. Enhance effectiveness by focusing on what you do best C. Improve risk management D. Obtain expertise, skills and technologies not otherwise available E. Improve credibility and image by associating with superior providers

B. Enhance effectiveness by focusing on what you do best

Which of the following is a perpetual system for inventory management? A. Fixed-time period B. Fixed-order quantity C. P model D. First-in-first-out E. The wheel of inventory

B. Fixed-order quantity

Which of the following statements holds true for Kanban production control systems? A. The authority to produce or supply additional parts comes from upstream operations B. In a paperless control system, containers can be used instead of cards C. The cards or containers make up the Kanban push system D. They require substantial quantitative analysis prior to implementation E. They have not been successful outside of Japan and the United States

B. In a paperless control system, containers can be used instead of cards

following costs should not be included in the analysis? A. Outbound distribution costs B. Incidental costs C. Energy costs D. Hidden costs E. Taxes

B. Incidental costs

Which of the following is not an improvement-driven reason to outsource? A. Improve risk management B. Increase commitment in a noncore area C. Shorten cycle time D. Improve quality and productivity E. Obtain expertise, skills and technologies that are otherwise not available

B. Increase commitment in a noncore area

Which of the following is not listed in the textbook as a component of a lean supply chain? A. Lean customers B. Lean Management C. Lean logistics D. Lean warehousing E. Lean procurement

B. Lean Management

Which of the following is a lean production technique that has been successfully applied in service firms? A. Decision trees B. Leveling the facility load C. Kanban Card Systems D. Fully utilizing capacity E. Backflushing

B. Leveling the facility load

he textbook The Toyota Production System identified which of the following types of waste to be eliminated? A. Excess quality B. Motion C. Excess capacity D. Underproduction E. Excess demand

B. Motion

One of the objectives in facility location analysis is to select a site with the lowest total cost. Which of the following costs are hidden costs that should be included in the analysis? A. Infrastructure costs B. Movement of preproduction material between locations C. Taxes D. Construction costs E. Bribery costs

B. Movement of preproduction material between locations

The textbook The Toyota Production System identified which of the following types of waste to be eliminated? A. Excess quality B. Overproduction C. Underproduction D. Environmental E. Over-thinking

B. Overproduction

When developing inventory cost models, which of the following are not included as costs to place an order? A. Phone calls B. Taxes C. Clerical D. Calculating quantity to order E. Postage

B. Taxes

An important issue in facility location analysis is business climate. An unfavorable business climate could be indicated by which of the following? A. Similar-sized businesses nearby B. The willingness of local politicians to provide favorable treatment for a consideration C. The presence of other foreign companies in the case of international locations D. The local presence of companies in the same industry E. An established educational institution nearby

B. The willingness of local politicians to provide favorable treatment for a consideration

Which of the following is one of the categories of manufacturing inventory? A. Economic Order Inventory B. Work-in-process C. Quality units D. JIT Inventory E. Re-order point

B. Work-in-process

Plant A is located at the (X, Y) coordinates of (200, 500) and has a volume of shipping of 400 units a day. Plant B is located at the (X, Y) coordinates of (300, 100) and has a volume of shipping of 300 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location? A. About 208 B. About 227 C. About 243 D. About 389 E. X coordinate cannot be computed from the data given

C. About 243

Plant A is located at the (X, Y) coordinates of (200, 500) and has a volume of shipping of 400 units a day. Plant B is located at the (X, Y) coordinates of (300, 100) and has a volume of shipping of 300 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location? A. About 208 B. About 227 C. About 243 D. About 389 E. X coordinate cannot be computed from the data given

C. About 243 (200x400+300x300) / (400+300) = 242.86

How many free trade zones are there in the United States? A. Less than 50 B. Less than 100 C. About 260 D. More than 412 E. About 310

C. About 260

When using the supply chain uncertainty framework to classify supply chains, a supply chain for innovative products with an evolving supply process is called which of the following? A. Efficient B. Forward looking C. Agile D. Risk hedging E. Responsive

C. Agile

Which of the following is the set of all cost components that make up the fixed-order quantity total annual cost (TC) function? A. Annual purchasing cost, annual ordering cost, fixed cost B. Annual holding cost, annual ordering cost, unit cost C. Annual holding cost, annual ordering cost, annual purchasing cost D. Annual lead time cost, annual holding cost, annual purchasing cost E. Annual unit cost, annual set up cost, annual purchasing cost

C. Annual holding cost, annual ordering cost, annual purchasing cost

The effect of the lack of synchronization among supply chain members is referred to as which of the following? A. Forward buying B. Continuous replenishment C. Bullwhip effect D. Metcalf's Law E. Being out of step

C. Bullwhip effect

The six-step process for green sourcing does not include which of the following? A. Assess the opportunity B. Assess the supply base C. Confer with environmental groups D. Engage sourcing agents E. Institutionalize the sourcing strategy

C. Confer with environmental groups

Which of the following is not an assumption of the basic fixed-order quantity inventory model? A. Ordering or setup costs are constant B. Inventory holding cost is based on average inventory C. Diminishing returns to scale of holding inventory D. Lead time is constant E. Demand for the product is uniform throughout the period

C. Diminishing returns to scale of holding inventory

When considering outsourcing, what should firms be sure to avoid? A. Losing control of noncore activities that don't distinguish the firm B. Allowing outsourcing to develop into a substitute for innovation C. Giving the outsourcing partner opportunities to become a strong competitor D. Allowing employees transferred to the outsourcing partner to rejoin the firm E. Adverse corporate tax implications of asset transfers to the outsourcing partner

C. Giving the outsourcing partner opportunities to become a strong competitor

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions? A. Proximity to customers B. Historical cost C. Infrastructure of a country D. Quality of labor E. Business climate

C. Infrastructure of a country

Which of the following is not an infrastructure criteria used in facility location analysis? A. Adequate school system B. Adequate health care C. Adequate transportation D. Adequate low cost labor E. Adequate public utility systems

D. Adequate low cost labor

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply? A. 1,040 B. 606 C. 104 D. 60.6 E. 2.0

C. 104

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply? A. 1,040 B. 606 C. 104 D. 60.6 E. 2.0

C. 104 Weeks of supply = (Average Aggregate Inventory/Cost of goods sold) x 52 = (1200000/600000) x 52 = 2 x 52 = 104. Note that Cost of Goods sold is an income statement item and refers to an annual figure. Average Aggregate Inventory is a balance sheet item.

You have been called in as a consultant to set up a Kanban control system. The first thing you do is to determine the number of Kanban card sets needed. Your research shows that the expected demand during lead time for a particular component is 1,200 per hour. You estimate the safety stock should be set at 5% of the demand during lead time. The tote trays used as containers can hold 2 units of stock and the lead time to replenish an order is 10 hours. Which of the following is the number of Kanban card sets necessary to support this situation? A. 5,000 B. 5,500 C. 6,300 D. 6,500 E. 7,000

C. 6,300

You have been called in as a consultant to set up a Kanban control system. The first thing you do is to determine the number of Kanban card sets needed. Your research shows that the expected demand during lead time for a particular component is 1,200 per hour. You estimate the safety stock should be set at 5% of the demand during lead time. The tote trays used as containers can hold 2 units of stock and the lead time to replenish an order is 10 hours. Which of the following is the number of Kanban card sets necessary to support this situation? A. 5,000 B. 5,500 C. 6,300 D. 6,500 E. 7,000

C. 6,300 k = 1200 x 10 x 1.05 / 2 = 6,300

A company has recorded the last five days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)? A. 120 B. 126 C. 630 D. 950 E. 1,200

C. 630

A company has recorded the last five days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)? A. 120 B. 126 C. 630 D. 950 E. 1,200

C. 630 Average demand is 120+125+124+128+133 / 5 = 126. Lead time = 5 days so the reorder point is 126 x 5 = 630.

Which of the following is the symbol used in the textbook for the cost of placing an order in the fixed-order quantity inventory model? A. C B. TC C. H D. Q E. S

E. S

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is inventory turnover? A. 60 B. 10.4 C. 2 D. 0.5 E. None of these

D. 0.5

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is inventory turnover? A. 60 B. 10.4 C. 2 D. 0.5 E. None of these

D. 0.5 Inventory turnover = Cost of goods sold / Average aggregate inventory value = $600,000 / $1,200,000 = 0.5. Note that Cost of Goods sold is an income statement item and refers to an annual figure. Average Aggregate Inventory is a balance sheet item.

In setting up a Kanban control system you need to determine the number of Kanban card sets needed. If the expected demand during lead time is 50 per hour, the safety stock is 20% of the demand during lead time, the container size is 4. If the lead time to replenish an order is 8 hours, what number of Kanban card sets is needed? A. 60 B. 80 C. 90 D. 120 E. 150

D. 120

In setting up a Kanban control system you need to determine the number of Kanban card sets needed. If the expected demand during lead time is 50 per hour, the safety stock is 20% of the demand during lead time, the container size is 4. If the lead time to replenish an order is 8 hours, what number of Kanban card sets is needed? A. 60 B. 80 C. 90 D. 120 E. 150

D. 120 k = 50 x 8 x 1.20 / 4 = 120

In setting up a Kanban control system you need to determine the number of Kanban card sets needed. If the expected demand during lead time is 25 per hour, the safety stock is 20% of the demand during lead time, the container size is 5, and the lead time to replenish an order is 5 hours, what is the number of Kanban card sets needed? A. 5 B. 20 C. 27 D. 30 E. 34

D. 30

In setting up a Kanban control system you need to determine the number of Kanban card sets needed. If the expected demand during lead time is 25 per hour, the safety stock is 20% of the demand during lead time, the container size is 5, and the lead time to replenish an order is 5 hours, what is the number of Kanban card sets needed? A. 5 B. 20 C. 27 D. 30 E. 34

D. 30 Using equation 12.1, k = 25 x 5 x 1.20 / 5 = 30

In outsourcing which of the following internal activities and decision responsibilities cannot be transferred to outside contractors? A. Activities involving people B. Activities involving facilities C. Activities involving equipment D. Activities involving shareholders E. Activities involving technology

D. Activities involving shareholders

Using the fixed-order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4? A. $849 B. $1,200 C. $1,889 D. $2,267 E. $2,400

E. $2,400

The six-step process for green sourcing includes which of the following? A. Provide a press release to local (and perhaps national) media. B. Include members of environmental groups in the decision C. Notify the state and federal environmental agencies of your plans D. Perform an environmental impact study E. Develop the sourcing strategy

E. Develop the sourcing strategy

In implementing a lean production system you should work with suppliers to do which of the following? A. Open facilities near your factory B. Focus workstation capacities C. Backflush D. Provide quality at the source E. Reduce lead times

E. Reduce lead times

When material is ordered from a vendor, which of the following is not a reason for delays in the order arriving on time? A. Normal variation in shipping time B. A shortage of material at the vendor's plant causing backlogs C. An unexpected strike at the vendor's plant D. A lost order E. Redundant ordering systems

E. Redundant ordering systems

When using the supply chain uncertainty framework to classify supply chains, a supply chain for innovative products with a stable supply process is called which of the following? A. Efficient B. Forward looking C. Agile D. Risk hedging E. Responsive

E. Responsive