Under The Pressure

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Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: What is the total cost if Dave relies on part-time employees to meet additional demand? $77,500 $43,500 $53,500 $70,500

$43,500

For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: 1. $250,000 2. $190,000 3. $300,000 4. $280,000 Using a moving average with n = 3 terms, what would be the forecast for week 5? $256,667 $232,124 $246,667 $255,000

$256,667 (190,000 + 300,000 + 280,000)/3 = 256,667

19. All of the following are true about supplier scorecards EXCEPT: A. They reduce the need for incoming quality inspection. B. They are used to provide performance feedback to suppliers. C. They are often used to categorize suppliers based on an overall score. D. They are used to measure supplier performance based on key performance indicators.

A. They reduce the need for incoming quality inspection.

Maintaining inventory involves a which expense related to the cost of capital invested in inventory: A) Insurance B) Storage and obsolescence C) Taxes D) All of the above

All of the above

Managers can manage demand by: A) Influencing the timing or quantity of demand through pricing changes B) Influence the timing of order fulfillment C) Encourage customers to shift their orders from one product the another D) All of the above E) None of the above

All of the above

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true/. l Jones will have higher hiring and firing costs. All of the options are true. Jones will have higher investment in plant and equipment. Jones will have lower inventory carrying costs.

All of the options are true Chase plans typically require more equipment investment, resulting in lower inventory carrying costs, and higher hiring/firing costs.

Which of the following factors should be considered when one designs a forecasting process? Time horizon for planning. Level of detail for planning. Availability of data. All of these

All of these Forecasting systems should be tailored to the users' needs.

If you are evaluating whether a supplier's workforce is receiving fair wages, you are most likely doing a(n):

Assessment of sustainability

If you are evaluating whether a supplier's workforce is receiving fair wages, you are most likely doing a(n): Spend analysis. Assessment of sustainability. ISO 9000 assessment. Total cost of ownership assessment.

Assessment of sustainability.

29) What is the optimal total cost of the aggregate plan developed to address Scenario 8.1? Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

B) $18,950

11) The length of the planning horizon is usually between

B) three and eighteen months.

7) The operational parameter concerned with the number of workers/units of capacity needed for production is

B) workforce.

4. Outsourcing is often a good choice when: A. There are only a few suppliers. B. A product is in the mature phase of the life cycle. C. Technology is new. D. The product is critical to a firm's competitiveness.

B. A product is in the mature phase of the life cycle.

1. All of the following are supply management goals EXCEPT: A. Ensure timely availability of resources. B. Purchase at the lowest price. C. Enhance quality. D. Assess technology and innovation.

B. Purchase at the lowest price.

7. Aspen Corporation has discovered that it uses 10 different suppliers for a particular type of item, has bought 20 different models of that item, and total expenditures last year for the item were $100,000. Aspen most likely is conducting: A. Supplier audits. B. Spend analysis. C. Supplier certification. D. Make or buy analysis.

B. Spend analysis.

20. Williams Inc. has acquired software to help manage interactions with its supply base. This suggests that Williams Inc. is involved in: A. Vendor-managed inventory. B. Supplier relationship management. C. Online reverse auctions. D. Supplier auditing.

B. Supplier relationship management.

16. When you need to identify a supplier for a new purchase, the FIRST place that you should look is: A. A local trade show. B. The list of your company's current suppliers. C. The list of suppliers that your company has used in the past. D. The Web site of industry groups.

B. The list of your company's current suppliers.

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as: Noncritical. Leverage. Bottleneck. Strategic.

Bottleneck

41) What information does a master production schedule provide that an aggregate plan does not?

C) Specific product family production information

3) Aggregate planning solves problems involving

C) aggregate decisions rather than stock keeping unit (SKU) level decisions.

16) The fundamental trade-offs available to an aggregate planner are between

C) capacity, inventory, and backlog costs.

In recent years some companies have begun to work closely with their customers and/or suppliers by sharing information to develop demand plans and execute those plans. The procedure they are following is known as: Collaborative planning, forecasting, and replenishment. Conjoint analysis and forecasting. Joint planning of demand forecasts. Coordinated fore planning of requirements.

Collaborative planning, forecasting, and replenishment. Collaborative planning, forecasting, and replenishment is a process for sharing information and plans with supply chain partners.

Preparing an RFQ or RFP is an important step in: Negotiation. Online reverse auctions. Supplier scorecards. Competitive bidding.

Competitive bidding

Which of the following would NOT be a step in conducting a make/buy analysis? Assessing quantitative costs of outsourcing Evaluating new suppliers who could make the SKU Assessing the relationship of the product to the firm's core competencies Conducting a detailed internal audit of purchasing practices

Conducting a detailed internal audit

End Item A is made by assembling 2 of Part B and 3 of Part C. Part C is made from 2 of component D and 2 of component E. Component D is considered to be a: A. Level 0 B. Level 1 input C. Level 2 input D. Level 3 E. Level 0 AND Level 2 input

End Item A is made by assembling 2 parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for End item A are 100 units. What is the gross requirement for part E? A. 175 B. 275 C. 375 D. 250

Materials requirement planning (MRP) systems are used primarily to A. Plan materials B. Plan lead time C. Plan production D. Plan distribution E. Plan materials AND Plan production

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the pure level plan: Has lower inventory carrying cost than the hybrid plan. Has higher hiring/layoff cost than the hybrid plan. None of these. Has higher hiring/layoff cost than the chase plan.

None of these.

Planning for which of the following products would see the LEAST benefit from the use of an MRP

Shampoo

Squeaky Klean, a small consumer products company, purchases custom-designed plastic bottles for its cleaning products that are made at a single plant in Cleveland, Ohio. To make these bottles, specialized tooling must be purchased at a high cost and installed at a supplier's plant. Its sourcing strategy for bottles should be to:

Single source

6) To create an aggregate plan, a company must specify the planning horizon for the plan and the duration of each period within the planning horizon.

TRUE

8) A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.

TRUE

9) The aggregate planner must make a trade-off between capacity, inventory, and backlog costs.

TRUE

Decisions being made about the aggregate production plans represent what type of planning? Tactical planning Detailed operational planning Long-term planning Strategic level planning

Tactical planning Aggregate production plans generally cover a period of three to nine months, which is considered to be tactical planning

Given the data below, the bias of these forecasts is: There is no bias. Positive. Negative.

The error for period 1 is −300, therefore the MFE is −66.7. This is a negative bias. Negative.

part 2

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the inventory carrying cost of a chase plan accomplished through hiring and firing?

$2,000

For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: 1. $250,000 2. $190,000 3. $300,000 4. $280,000 Platinum Nugget uses a three-period weighted moving average to forecast demand, with at = 0.6, at-1 = 0.3, and at-2 = 0.1. What is the forecast for week 5? $295,000 $237,000 $232,000 → $277,000

$277,000 (.6(280,000) + .3(300,000) + .1(190,000))/3 = 277,000

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: What is the total cost if Dave hires one more full-time employee to meet additional demand? $36,000 $52,500 $40,750 $30,750

$40,750

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Given this data, what is the total cost of a LEVEL plan?

$5,110,000

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Given this data, what is the inventory carrying cost of a LEVEL plan? Regular production will vary each month. 5,000 units 4,000 units 6,000 units

$70,000 Inventory carrying cost = 7,000 × 10/unit = $70,000

$8,000

Over a six-month period, the demand for a product has been: June = 200, July = 210, August = 240, September = 240, October = 260, and November = 280. The three-month moving average forecast for December is 260. 300. 280. 240.

(240 + 260 + 280)/3 = 260

. A Master Production Schedule shows the following information: What is the available to promise for period 2? A. 0 B. -20 C. 20 D. None of the options are correct

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month What is the regular monthly actual production for a level plan?

1,250

Alpha Company sold 2,000 widgets yesterday. It had forecasted sales of 1,900 units. Using exponential smoothing with a smoothing constant of 0.6, what is the forecast for today's sales of widgets? 2,040 2,060 1,940 1,960

1,960 1,900 + 0.6(2,000 - 1,900) = 1,960

An office manager forecasts demand for office stationery by exponential smoothing, with alpha = 0.4. Actual demand two weeks ago (i.e., the week before last) was 12 boxes, but the forecast for that period was only 10. Actual demand last week was 7. What was the forecast for last week? 11.0 11.2 8.2 10.8 8.8

10.8 Forecast = 10 + .4(12 - 10) = 10.8

Jones Company had sales of $100,000 last week. The company had forecasted that sales would be $120,000. Using exponential smoothing with a smoothing constant of 0.2, what is the forecast for this week's sales? $104,000 $112,000 $124,000 $116,000

120,000 + .2(100,000 − 120,000) = 116,000

Jones Company uses widgets as component parts. In a particular week, it has gross requirements for 250 units of widgets, beginning inventory of 50 widgets and it scheduled receipts of 350 widgets. Available inventory for the next period is

150 (350 + 50) - 250

A company has the data in the table below concerning its forecast performance over the past four time periods. 10 20 2 100

A company has the following information regarding its forecast performance in the past three periods. What is the mean absolute deviation (MAD)? 225 200 −66.67 1200

200 Summing the absolute values of the errors and determining the average results in (300 + 200 + 100)/3 = 200.

Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, what is the BASE forecast for the next period? 206 236 210 226

206 Ft+1 = FITt + α (dt - FITt) = 200 + 0.20 (230 - 200) = 206

assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, what is the ADJUSTED forecast for the next period? 216.0 210.6 210.0 216.6

216.6 Tt+1 = Tt + β (Ft+1 - FITt) = 10 + 0.10 (206 - 200) = 10 + 0.6 = 10.6. FITt+1 = Ft+1 + Tt+1 = 206 + 10.6 = 216.6.

Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, if demand in period t+1 turned out to be 220, what is the adjusted forecast for period t+2 (choose the closes answer)? 217.3 221.3 227.3 215.9

227.3

Jones Corp. has noticed that sales of its product seem to be related to a variable it calls Gamma. It has developed the data shown below. Develop a simple linear regression from the data and tell Jones what the sales forecast will be if Jones expects Gamma to be 16 (round your forecast to the nearest number of whole units). 31 33 28 34

Using the data below and the regression model, what is the sales forecast if Gamma is expected to be 21? (Round your forecast to the nearest number of whole units.) 39 48 36 42

39 Sales = 6.12 + 1.55(21) = 6.12 + 32.55 = 38.67

Using the data in the table below for Zanda, what is the linear regression forecast for period 5 (choose the nearest number of whole units)? 42 28 44 34

44 F5 = 16 + 5(5.6) = 44 units

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. If Jones prefers a level plan, what will be the regular production rate per quarter?

5,000 units 20,000/4 = 5,000

Zanda Corp. has experienced demand in the last four years shown in the table below. What is the trend value (b) in the data (choose the closest answer)? 2.5 units/period −1.25 units/period 2.87 units/period 5.6 units/period

5.6 units/period

Using the data below, what is the MAPE 5.0 percent correct 5.99 percent 7.25 percent 5.41 percent

5.99 percent

Using the data below, the company has forecasted next year's demand to be 400. What is the seasonally adjusted forecast for Quarter 1 (choose the closest answer). 71 73 75 125

73 Average/quarter = 100, seasonal adjustment for Q1 = 100(0.732) = 73.2.

A Master Production Schedule shows the following information: Using a lot-for-lot rule, what is the scheduled production for period 1? A. 90 B. 80 C. 100 D. 40

Which of the following is true concerning sales and operations planning? All of these are true. Once the plan is finalized, it should not be changed during the planning period. There is a specific set of steps all firms should follow in the sales and operations planning process. A benefit of the process is that the firm should achieve high service levels with lower inventory.

A benefit of the process is that the firm should achieve high service levels with lower inventory. A benefit of the process is that the firm should achieve high service levels with lower inventory.

A bill-of-materials file contains: A. Invoices for materials that must be paid in this period B. Lists of materials required to produce end item products C. Accounts payable for materials D. Invoices for materials that must be paid in this period AND Lists of materials required to produce end item products E. All options are correct.

. MRP is a process that would be most applicable in which situation: A. Planning requirements for repair parts for production equipment in a manufacturing plant. B. Planning requirements for safety stocks of finished goods in a distribution center. C. Planning requirements for bicycle seats in a bicycle production plant. D. Planning requirements for repair parts for production equipment in a manufacturing plant AND Planning requirements for bicycle seats in a bicycle production plant E. None of the options are correct

A company uses actual demand data to develop its seasonal indices. It has the data shown below for each quarter of the previous two years. 0.732 1.25 0.750 0.714

0.732 Year 1 average demand = (50 + 60 + 90 + 80)/4 = 70 Year 2 average demand = (60 + 70 + 100 + 90)/4 = 80 Quarter 1 SI for year 1 = 50/70 = 0.714. Q1 SI for year 2 = 60/80 = 0.75. Q1 average SI = 0.732.

Qualitative factors that should be assessed when making an insourcing/outsourcing decision include all of the following EXCEPT:

The costs incurred at the start of the contract

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true? The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year. It will be easy to keep the workforce size stable. Inventory will fluctuate significantly during the year. The firm likely will have higher capital investment than if it followed a level plan.

The firm likely will have higher capital investment than if it followed a level plan. Chase plans require sufficient investment in plant and equipment to produce enough output to meet demand in the highest period.

The following table shows capacity requirements data for making Blodgetts. A load profile would show: A. Load above capacity in periods 3 and 5. B. Load below capacity in periods 1 and 3. C. Load never is exactly equal to capacity. D. None of the options are correct.

Advanced planning and scheduling systems (APS)

Use a simpler logic than the logic used in MRP

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total cost of a chase plan which uses only hiring/firing?

correct $257,000

correct $260,700

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. What is the total cost of a CHASE plan (using hiring/firing)?

correct $380,300

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. The total inventory carrying cost of a chase plan is:

correct $4,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total cost of hiring and firing the workers in a chase plan which uses only hiring and firing?

correct $5,000

Demand planning is the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm's operational and financial goals.

true

Linear regression seeks to minimize the sum of the squared errors between the actual values or demand and the values of demand predicted by the straight line.

true

Many times forecasters can make a good approximation of a trend by simply hand-drawing a line through the data to estimate a trend.

true

The ultimate goal of demand management is to match demand and operational capacity in order to attain the business's competitive objectives

true

Outsourcing is often a good choice when:

A product is in the mature phase of the life cycle.

Outsourcing is often a good choice when: There are only a few suppliers. A product is in the mature phase of the life cycle. Technology is new. The product is critical to a firm's competitiveness.

A product is in the mature phase of the life cycle.

33) How many months does the regular time output exceed plant capacity in the optimal solution to Scenario 8.2?

A) 0

24) Use the information from Scenario 8.1 to determine the number of decision variables in this scenario. Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

A) 10

25) Use the information from Scenario 8.1 to determine the number of constraints in this scenario. Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

A) 12

21) Demand is forecast for the next five months as 200, 300, 500, 300, 200. The production planner decides to adopt a chase strategy, so over the next five months they should produce

A) 200, 300, 500, 300, 200.

39) Which of the following is an approach a company can use to create a buffer for forecast error using safety inventory?

A) Overtime

44) Which of these software vendors offer advanced planning systems?

A) SAP

28) Which of these statements about Scenario 8.1 is evident without even developing an aggregate plan? Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

A) Some overtime will be needed.

42) The earliest IT supply chain products were

A) aggregate planning modules.

1) The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is

A) aggregate planning.

18) The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the

A) flexibility strategy.

15) Aggregate planning should consider information from

A) only the enterprise as its breadth of scope. B) downstream partners to produce forecasts. C) upstream partners to determine constraints. D) all of the above (ANSWER)

6) The operational parameter concerned with the number of units completed per unit time (such as per week or per month) is

A) production rate.

10) The planning horizon is

A) the time period over which the aggregate plan is to produce a solution.

15. A relationship with a supplier that is characterized by lack of trust, little communication, and short-term transactions is called a(n): A. Adversarial relationship. B. Arms-length relationship. C. Acceptance of mutual goals. D. Full partnership.

A. Adversarial relationship.

13. Which of the following is (are) advantages of full partnerships with suppliers, as compared to traditional adversarial relationships? I. They help reduce uncertainties for both buyer and supplier. II. The full partnership is easier to establish and maintain than other relationships, so more suppliers can be dealt with. III. The full partnership assures the lowest material price. A. I only B. II only C. III only D. I and II only E. II and III only

A. I only

12. A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries. What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables? A. Local, close to its production plant when possible. B. National, using suppliers within each country. C. Global, using the same suppliers across the world. D. Low-cost country sourcing.

A. Local, close to its production plant when possible.

8. Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to: A. Multiple source. B. Increase efficiencies. C. Build partnerships. D. Consolidate purchases.

A. Multiple source.

Advanced Planning and Scheduling Systems: A. Use logic similar to the logic found in MRP. B. Consolidate all business planning systems and data throughout an organization. C. Integrate materials and capacity planning into one system. D. Use logic similar to the logic found in MRP AND Integrate materials and capacity planning into one system. E. All of these options are correct.

A relationship with a supplier that is characterized by lack of trust, little communication, and short-term transactions is called a(n):

Adversarial relationship

Soft benefits of S&OP include: Enhanced teamwork B) Better and faster decisions C) Greater accountability for results D) Both B & C E) Both A & C F) All of the above

All of the above

A "season" in the seasonality index can only occur: A) Daily B) Weekly C) Monthly D) In larger periods E) All of the above.

All of the above.

A forecasting system that changes the value of the alpha parameter in response to the level of forecast error is known as: An adaptive model. A trend enhanced exponential smoothing model. A tracking signal. A time series model. A causal regression.

An adaptive model Adaptive forecasting automatically adjusts smoothing coefficients in an exponential smoothing model in response to a tracking signal.

If the cumulative lead time is 8 weeks, to be feasible, the MPS planning horizon must be

At least 8 weeks

-------describes the relationship of current demand with past demand.

Autocorrelation

13) ________ is used to determine customer service levels.

B) Backlog/stockout quantity

40) What is the name of the plan that breaks apart the aggregate plan into distinct product families?

B) Rough cut capacity plan

17) The strategy where the production rate is synchronized with the demand rate by varying machine capacity or hiring and laying off employees as the demand rate varies is the

B) chase strategy.

46) The quality of the forecast can be improved by using information from

B) downstream partners.

35) When formulating aggregate plans,

B) forecast errors must be taken into account.

50) As capacity utilization increases,

B) it becomes more important to perform aggregate planning.

38) Capacity used to satisfy demand that is higher than forecasted is

B) safety capacity.

36) Forecasting errors are dealt with using

B) safety capacity. C) safety inventory. D) B and C only (ANSWER)

34) Without actually solving the aggregate planning problem, it is safe to conclude that in the optimal solution to Scenario 8.2,

B) the number of units made using subcontracting will exceed the number of units made using overtime.

In the case of lost sales, there is the: A) Direct loss of profit B) Ill-will cost of not being able to meet demand C) Both A and B

Both A and B

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as:

Bottleneck

30) What is the optimal total cost of the aggregate plan developed to address Scenario 8.2? Scenario 8.2 - Willow A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

C) $31,400

26) Use the information from Scenario 8.1 to determine the objective function for this scenario. Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

C) Min Cost = $5(Sigma)Regular + $7.5(Sigma)Overtime + $9(Sigma)Subcontracting + $2(Sigma)Ending Inventory

48) The aggregate plan needs to

C) have some flexibility built into it because forecasts are always wrong.

19) The strategy where a stable machine capacity and workforce are maintained with a constant output rate, with inventory levels fluctuating over time, is the

C) level strategy.

37) Inventory held to satisfy demand that is higher than forecasted is

C) safety inventory.

2) The goal of aggregate planning is to

C) satisfy demand in a way that maximizes profit.

9) Aggregate planning is concerned with determining

C) the production level, inventory level, and capacity for each period.

5) Much of aggregate planning has traditionally been focused

C) within an enterprise.

14. Zanda Corp. is considering trying to develop a full partnership with a particular supplier. This suggests that the item Zanda buys from the supplier is: A. A noncritical part. B. A "bottleneck" item. C. A strategically important part. D. An item appropriate for a "leverage" strategy.

C. A strategically important part.

2. Zanda Corp. had outsourced its production to a company located in Asia. Recently it decided to continue to outsource but bring the production back to a company located in the United States. This decision was likely made after Zanda: A. Conducted a spend analysis. B. Conducted a make or buy analysis. C. Examined total cost of ownership. D. Developed supplier certification processes.

C. Examined total cost of ownership

5. Which of the following is NOT a benefit of outsourcing? A. Greater flexibility to change product specifications B. Better access to market information C. Lower supply management costs D. Less capital needed for investment

C. Lower supply management costs

17. Advanced Manufacturing Company is evaluating two suppliers for a component sourcing. After much internal discussion, AMC's management has determined that the critical factors in choosing suppliers are: quality, delivery, price, and service. Further, management has rated the importance of these factors as 0.4, 0.3, 0.2, and 0.1, respectively. On a scale of 1 to 5, Supplier A is rated at 5, 3, 3, and 3, respectively. Supplier B's ratings are 4, 4, 3, and 4. Which supplier has the better weighted score? A. Supplier A B. Supplier B C. Neither, they both have the same weighted score.

C. Neither, they both have the same weighted score.

10. Squeaky Klean, a small consumer products company, purchases custom-designed plastic bottles for its cleaning products that are made at a single plant in Cleveland, Ohio. To make these bottles, specialized tooling must be purchased at a high cost and installed at a supplier's plant. Its sourcing strategy for bottles should be to: A. Use three or more suppliers. B. Dual source. C. Single source. D. Insource bottle production.

C. Single source.

An online auction used for sourcing: Typically drives prices up as suppliers compete against each other. Is used in situations similar to negotiation. Can hurt supplier relationships. Can only consider price.

Can hurt supplier relationships

An online auction used for sourcing:

Can hurt supplier relationships.

Which of the following is NOT one of the costs considered in aggregate production planning Inventory cost. Subcontracting cost. Capital equipment cost. Firing (layoff) cost. All of these are considered in aggregate production planning

Capital equipment cost Capital equipment is considered to be a constraint in aggregate production planning, but its cost is not included.

Significant changes in an MPS quantity several weeks into the planning horizon can

Cause inconsistencies in the MRP

In a ____ production plan, the objective is to match production in each period to the ______ in that period, thus avoiding the need to hold inventory.

Chase, demand

Which of the following would NOT be a step in conducting a make/buy analysis?

Conduction a detailed internal audit of purchasing practices.

Constant changing of the master production schedule and the resulting changes in the requirements for components is referred to as A. Master schedule dynamics B. System nervousness C. Bad planning D. MRP failure

The longest lead time path in the BOM (Bill of Materials) is the

Cumulative lead time

27) Which of these is a constraint that is appropriate for Scenario 8.1? Scenario 8.1 - Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

D) (Sigma)Subcontracting ≤ 300

31) How many units are produced using overtime in the optimal aggregate plan developed to address Scenario 8.2? Scenario 8.2 - Willow A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6. The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. Note: Excel Table Omitted

D) 280

32) How many units are produced using overtime in the optimal aggregate plan developed to address Scenario 8.2?

D) 280

20) Demand is forecast for the next five months as 200, 300, 500, 300, 200. The production planner decides to adopt a level strategy, so over the next five months they should produce

D) 300, 300, 300, 300, 300.

49) How frequently should the aggregate plan be rerun?

D) As inputs to the aggregate plan change

12) An aggregate planner requires information on constraints. Which of the following is one of the typical constraints for an aggregate planner?

D) Limits on overtime

45) The quality of the aggregate plan can be improved by using information from

D) all parts of the supply chain.

47) The aggregate plan should be communicated to

D) all supply chain partners who will be affected by it.

43) Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.

D) data accuracy

8) The operational parameter concerned with the planned inventory carried over the various periods in the planning horizon is

D) inventory on hand.

23) A highly effective tool for a company to use when it tries to maximize profits while being subjected to a series of constraints is

D) linear programming.

14) A poor aggregate plan can result in

D) lost sales and lost profits.

22) Most strategies that an aggregate planner actually uses are in combination and are referred to as the

D) mixed strategy.

4) Aggregate planning, to be effective, requires inputs from

D) throughout the supply chain.

3. Which of the following would NOT be a step in conducting a make/buy analysis? A. Assessing quantitative costs of outsourcing B. Evaluating new suppliers who could make the SKU C. Assessing the relationship of the product to the firm's core competencies D. Conducting a detailed internal audit of purchasing practices

D. Conducting a detailed internal audit of purchasing practices

9. Benefits of single sourcing include all of the following EXCEPT: A. Quantity discounts. B. More consistent quality. C. Better supplier relationships. D. Less supply risk.

D. Less supply risk.

6. The process of understanding how a firm is spending its money and with which suppliers is called: A. Strategic sourcing. B. Make or buy analysis. C. Market analysis. D. Spend analysis.

D. Spend analysis.

18. Which of the following is true about the use of weighted scoring models for supplier selection? A. Once developed, the model weights should never change. B. The supply management department should determine the weights. C. The highest-scoring supplier should always be selected to receive the business. D. There is a good deal of subjectivity in developing and using the model.

D. There is a good deal of subjectivity in developing and using the model.

11. A primary reason for using global suppliers is to: A. Improve sustainability. B. Reduce transportation costs. C. Take advantage of free trade agreements such as NAFTA. D. Work with the same suppliers in many different regions of the world.

D. Work with the same suppliers in many different regions of the world.

The positioning and replenishment of finished goods inventories at the retail level can be determined using

DRP (Distribution Requirements Planning)

The ________ develops forecasts by asking a panel of experts to individually respond to a series of questions.

Delphi method

The primary difference between demand management and demand forecasting is Forecasting is only possible when quantitative data are available. A firm cannot execute both approaches simultaneously. Demand management is proactive, while forecasting attempts to predict. One approach deals with uncertainty, while the other deals with known demand.

Demand management is proactive, while forecasting attempts to predict. Demand management proactively attempts to influence demand, while forecasting simply tries to predict demand.

What is the relationship between demand management and demand forecasting? The two planning activities are managed independently. Demand management plans are usually an input to demand forecasting. Demand management is done by operations managers, while demand forecasting is done by marketing managers. Both B and C are correct.

Demand management plans are usually an input to demand forecasting. Demand management plans such as pricing and promotion are inputs needed to forecast demand.

Software that consolidates all of the business planning systems and data throughout an organization is

ERP (Enterprise Resource Planning)

Negotiation is typically used when: Price is the most important factor. There are many equally qualified suppliers who are willing to compete. Early supplier involvement is needed in new product development.

Early supplier involvement is needed

Benefits of ERP systems include all of the following EXCEPT

Easy implementation

End Item A is made by assembling 2 parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for End item A are 100 units. What is the net requirement for Part C? A. 70 units B. 200 units C. 125 units D. 100 units

Zanda Corp. has outsourced its production to a company located in Asia. Recently it decided to continue to outsource but bring the production back to a company located in the United States. This decision was likely made after Zanda:

Examined total cost of ownership

Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is: Exponential smoothing. Time-series. Executive judgment. Moving average. Regression.

Executive judgment. Radically new products do not have any data to support quantitative forecasting. Only executive judgment is a qualitative technique.

1) The goal of aggregate planning is to satisfy demand in a way that minimizes profit.

FALSE

12) Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.

FALSE

13) Safety inventory is defined as inventory held to satisfy demand that is higher than forecasted.

FALSE

14) Safety capacity is defined as capacity used to satisfy demand that is lower than forecasted.

FALSE

17) As inputs into the aggregate plan change, managers do not need to make changes to the aggregate plan.

FALSE

18) As capacity utilization increases, it becomes less important to perform aggregate planning.

FALSE

19) The goal of aggregate planning is to build a plan that satisfies demand while minimizing downtime.

FALSE

4) Short-term production serves as a broad blueprint for operations and establishes the parameters within which aggregate planning decisions are made.

FALSE

7) A planning horizon is usually between three and five years.

FALSE

The focus of an aggregate production plan, in general, is on all of the following EXCEPT: Facilities and capital equipment rather than labor and inventory. Product lines rather than specific items. The intermediate-term future rather than the very short-term future. All of these are the focus of an aggregate production plan. Inventory levels rather than new plants.

Facilities and capital equipment rather than labor and inventory. Aggregate production plans are intermediate-term plans for product lines (families), where facilities and equipment are considered constraints.

A tracking signal is the ratio of the MAD to a running total of forecast error that indicates when the pattern of forecast error is changing significantly.

False

A forecasting technique that seeks inputs from people who are in close contact with customers is known as: Historical analogy. Focused forecasting. Grassroots forecasting. Marketing research.

Grassroots forecasting.

Jones Company uses widgets as a component part. In a particular week it has gross requirements for 250 units of widgets, beginning inventory of 50 widgets, scheduled receipts of 300 widgets, and planned order receipts of 50 widgets. Available inventory for the next period is: A. 650 B. 50 C. 250 D. 150

Benefits of single sourcing include all of the following EXCEPT:

Less supply risk

End item A is made by assembling 2 of part B and 3 of part C. Part C is made from 2 of component D and 2 of component E. Component D is considered to be a

Level 2 input

Which type of aggregate production plan is likely to have the LEAST negative impact on the local community and the workforce? Chase plan with overtime Chase plan with hiring and firing The plans do not differ in their impact on the local community and the workforce. Level plan impact on the local community and the workforce. correct Level plan

Level plan Chase with hiring/firing or with overtime both have potential negative impacts on the community and/or the workforce. Level plans tend to minimize these.

A bill of materials file contains

Lists of materials required to produce end item products

A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries. What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables? Local, close to its production plant when possible. National, using suppliers within each country. Global, using the same suppliers across the world. Low-cost country sourcing.

Local

Local, close to its production plant when possible.

Which of the following is an advantage of a chase production strategy (as compared to a level plan)? All of these. High inventory carrying cost. Lower inventory investment. Low investment in equipment.

Lower inventory investment. In chase plans, production rates are equal to demand, so inventory does not accumulate during periods of low demand.

Which of the following is NOT a benefit of outsourcing?

Lower supply management costs

Which of the following is NOT a benefit of outsourcing? Greater flexibility to change product specifications Better access to market information Lower supply management costs Less capital needed for investment

Lower supply management costs

For purposes of comparability across products, forecasters sometimes adjust the MAD to create a related metric, the _______.

MAPE

The quantities of end items to be completed in each time period into the future is shown in an

MPS (Master Production Schedule)

S&OP results in:

More stable supply rates

How does aggregate planning for services differ from aggregate production planning for products? Service plans make extensive use of inventory to meet demand. correct Most service plans are based primarily on labor requirements. Demand for products typically is stated as the number of hours of labor required, whereas demand for services is generally stated as the number of units of service desired. There is no difference. Since services can't be put in inventory

Most service plans are based primarily on labor requirements. Since services can't be put in inventory, they generally are based on human resource requirements.

Designing postponable products has the potential to allow operations managers to: Ignore forecasts. Move from build-to-stock to assemble or make-to-order operations. Influence the timing of demand. All of these.

Move from build-to-stock to assemble or make-to-order operations. Postponable products obtain final form after customer demand is actually known. Some forecasts are still necessary (for components), and the timing of demand is not changed.

The ___________ forecasting model computes a forecast as the average of demands over a number of immediate past periods.

Moving average

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to:

Multiple source

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to: Multiple source. Increase efficiencies. Build partnerships. Consolidate purchases.

Multiple source

Advanced Manufacturing Company is evaluating two suppliers for a component sourcing. After much internal discussion, AMC's management has determined that the critical factors in choosing suppliers are: quality, delivery, price, and service. Further, management has rated the importance of these factors as 0.4, 0.3, 0.2, and 0.1, respectively. On a scale of 1 to 5, Supplier A is rated at 5, 3, 3, and 3, respectively. Supplier B's ratings are 4, 4, 3, and 4. Which supplier has the better weighted score? Supplier A Supplier B Neither, they both have the same weighted score.

Neither

Neither, they both have the same weighted score.

Which of the following is NOT included in the information about the inventory records file for an item?

Net requirements

Materials requirement planning (MRP) systems are primarily used to

Plan orders

Which of the following is NOT an input into the MRP?

Planned order release

MRP is a process that would be most applicable in which situation?

Planning requirements for bicycle seats in a bicycle production plant

How does product design affect forecasting accuracy? A popular product design improves the demand volume and forecast. None of these statements are true. Forecast accuracy is not related to product design. Postponable product designs remove the need to forecast demand for final product configurations.

Postponable product designs remove the need to forecast demand for final product configurations. Postponements allow forecasting at the component level, which is more accurate.

All of the following are supply management goals EXCEPT:

Purchase at the lowest price.

A legally binding document that signals to a supplier that goods and services are needed is a(n): Purchase requisition. Electronic data interchange. Purchase order. Supplier relationship management document.

Purchase order

A postponable product is one that can be configured to its final form ______ and ______ once actual customer demand is known.

Quickly, inexpensively

The _________ gives an approximation of the forecast error standard deviation

RMSE

Zanda Corp. has been testing the performance of two different forecasting models to see which it should adopt for use. It wants to choose the model that has the smaller standard deviation of the forecast errors. Zanda should compare which of the following to make its choice? MAPE of the two models MFE of the two models RMSE of the two models MAD of the two models

RMSE of the two models RMSE provides a good approximation of the standard deviations of a model's forecast errors.

Capacity requirements planning does all of the following EXCEPT

Recalculate the MRP plan

All of the following are true about supplier scorecards EXCEPT: They reduce the need for incoming quality inspection. They are used to provide performance feedback to suppliers. They are often used to categorize suppliers based on an overall score. They are used to measure supplier performance based on key performance indicators.

Reduce the need for incoming quality

Each month the sales and operations team at Johnson Company meets to develop plans for each of the next six months. This process is known as Rolling planning horizons. Unconstrained planning. Continuous planning. Collaborative planning and forecasting.

Rolling planning horizons. Replanning each month for a given number of periods into the future is known as rolling planning horizons

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences? Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts. All of these. Sales emphasizes revenue, operations emphasizes cost minimization. Sales prefers many product variations, operations prefers few variations.

Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts. Generally, the sales function only wants aggregate forecasts, while operations needs detailed forecasts for planning purposes

A primary reason for using global suppliers is to: Improve sustainability. Reduce transportation costs. Take advantage of free trade agreements such as NAFTA. Work with the same suppliers in many different regions of the world.

Same suppliers in different regions of the world

The demand for housing is characterized by a regular pattern of increasing to a peak, then falling. When the demand reaches a low point, it then repeats the pattern. This pattern usually takes place over a three- to five-year period. This is an example of which type of demand pattern? Autocorrelation Step change Trend Seasonality and cycles

Seasonality and cycles Seasonality and cycles are regular patterns of repeating highs and lows, as described in this example

Single

Aspen Corporation has discovered that it uses 10 different suppliers for a particular type of item, has bought 20 different models of that item, and total expenditures last year for the item were $100,000. Aspen most likely is conducting:

Spend analysis

The process of understanding how a firm is spending its money and with which suppliers is called:

Spend analysis

The process of understanding how a firm is spending its money and with which suppliers is called: Strategic sourcing. Make or buy analysis. Market analysis. Spend analysis.

Spend analysis

Which approach is likely to be used for leverage purchases?

Standardizing purchases

Which approach is likely to be used for leverage purchases? Purchasing cards Vendor-managed inventory Using executive champions Standardizing purchases

Standardizing purchases

A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the purchasing company has begun:

Supplier certification

A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the purchasing company has begun: Spend analysis. Supplier certification. Process simplification. Time reduction analysis.

Supplier certification

Williams Inc. has acquired software to help manage interactions with its supply base. This suggests that Williams Inc. is involved in:

Supplier relationship management

Williams Inc. has acquired software to help manage interactions with its supply base. This suggests that Williams Inc. is involved in: Vendor-managed inventory. Supplier relationship management. Online reverse auctions. Supplier auditing.

Supplier relationship management

In its own country, a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company. This is an example of: Supply risk. Sustainability. Insourcing. Strategic sourcing.

Supply risk

Constant changing of the master schedule and the resulting changes in the requirements for components is referred to as

System nervousness

10) Most strategies that an aggregate planner actually uses are in combination, and are referred to as hybrid strategies.

TRUE

11) To improve the quality of aggregate plans, forecast errors must be taken into account when formulating aggregate plans.

TRUE

15) Companies should work with downstream partners to produce forecasts and with upstream partners to determine constraints when doing aggregate planning.

TRUE

16) Given that forecasts are always wrong to some degree, the aggregate plan needs to have some flexibility built into it if it is to be useful.

TRUE

2) Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

TRUE

20) Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.

TRUE

3) Traditionally, much of aggregate planning is focused within an enterprise and may not always be seen as a part of supply chain management.

TRUE

5) The aggregate planning problem is concerned with determining the production level, inventory level, and capacity level (internal and outsourced) for each period that maximizes the firm's profit over the planning horizon.

TRUE

In the FITt formula, Ft is:

The "base" forecast for period t from the simple exponential smoothing model

The tracking signal will suggest to a manager that Demand for an item is changing. A forecast mode's parameters may need adjustment. There is seasonality in demand. All of these

A forecast mode's parameters may need adjustment. Tracking signal suggests to a manager that model parameters may need adjustment.

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true? The firm must make sure that its maximum capacity is at least as high as the heaviest demand period. The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year. It will be difficult to keep the workforce size stable. Inventory will fluctuate significantly during the year.

Inventory will fluctuate significantly during the year. When using a level plan, inventory will increase during periods of low demand and decrease during periods of high demand

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the hybrid plan: Has higher hiring/layoff cost than the chase plan and higher inventory carrying cost than the level plan. Has lower inventory carrying cost than the chase plan and higher hiring/layoff cost than the level plan. None of these. Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan. Since hybrid plans combine aspects of level and chase, they typically have less inventory than level, but more than chase. They also typically have more hiring/layoff than level, but less than chase.

Which of the following is true about the use of weighted scoring models for supplier selection? Once developed, the model weights should never change. The supply management department should determine the weights. The highest-scoring supplier should always be selected to receive the business.

Highest scoring supplier should be chosen

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing: Inventory carrying costs. Hiring and layoff costs. Cost of subcontracting. Both A and C. Both B and C.

Hiring and layoff costs

Which of the following is (are) advantages of full partnerships with suppliers, as compared to traditional adversarial relationships?

I only. I. They help reduce uncertainties for both buyer and supplier.

In examining the data below, the manager exclaimed that he was very happy to see no bias in the forecasts. How would you respond to the manager? I'm sorry, but there appears to be a very strong positive bias.

I'm sorry, but there appears to be a very strong positive bias.

All of the following are true about supplier scorecards EXCEPT:

They reduce the need for incoming quality inspection.

strategic demand planning would best be utilized: All of these. To determine plans for hiring or laying off employees. To determine plans for employee overtime. To decide whether or not to close a manufacturing plant. To direct day-to-day operations in a manufacturing plant.

To decide whether or not to close a manufacturing plant. Strategic demand planning is necessary for long-term decisions such as building or closing a plant. The others described are shorter-term decisions.

Long-term/strategic demand planning is typically done using what units? Sales at a given location Total business unit sales Total product item sales Total product family sales

Total business unit sales Strategic demand planning supports total business level decisions.

Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate? Total number of desktops to be sold next year. Total number of laptops to be sold next month. Total number of computers (laptops and desktops) to be sold next month. Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year.

Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year. The more detailed the forecast, the less accurate it is likely to be. D is the most detailed.

Which of the following is not an input into the MRP? A. Bill of Materials B. Inventory Records File C. Master Production Schedule D. Planned Order Release E. All listed answers are inputs

Which of the following is not included in the information of the inventory records file for an item? A. Safety stock B. Preferred order quantity C. Net Requirements D. Lead Time E. Item identification number

You are sitting next to a person in business class on a flight from Los Angeles to Sydney, Australia. You mention to that person that you got your ticket two months ago for only $12,500. The person responds that she bought her ticket two days ago for $7,800. This sometimes happens because airlines often use an approach called: Capacity management. Load management. Yield management. Workforce leveling.

Yield management. Yield management is an approach that adjusts prices for a service as demand occurs - or fails to occur

Zanda Company is looking for a requirements planning system to help plan replenishment of its finished goods throughout its network of distribution centers. The type of system Zanda should consider is known as: A. CRP (Capacity Requirements Planning) B. DRP (Distribution requirements Planning) C. MRP (Materials Requirements Planning) D. ERP (Enterprise Resource Planning)

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true Zanda will have higher investment in plant and equipment. Zanda will have lower total production costs. Zanda will have higher inventory carrying costs. Zanda will have higher hiring and firing costs.

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