Exam 1 - MC Examples

What is the purpose of the Bill of Materials?

1. Describes components used to make the product 2. Describes sub assemblies at various stages of manufacturing.

What are the 3 components of a supply chain?

1. Flow of materials 2. Flow and Sharing of Information 3. Flow of Funds

What are the components involved in production planning?

1. Forecasting 2. Master Planning (MPS) 3. Material requirements planning (MRP) 4. Capacity Planning

What are the 3 types of time fences? What are the purposes?

1. Frozen Zone: Capacity and Materials are committed to specific orders. 2. Slushy Zone: Capacity and materials are somewhat committed 3. Liquid zone: any change can be made to the MPS

How does Marketing's objective of customer service affect the rest of the supply chain?

1. High Customer Service 2. Many Disruptions to Productions 3. High Inventories

How does Production's objective of low operating costs affect the rest of the supply chain?

1. Low Customer Service 2. Few Disruptions to Production 3. High Inventory

How does Finance's objective of low cost affect the rest of the supply chain?

1. Low Customer Service 2. Few Disruptions to production 3. Low inventories

To get the most profit a company must have the four main objectives:

1. Provide best customer service 2. Provide lowest production cost 3. Provide lowest inventory investment 4. Provide lowest distribution costs

What is a Chase (demand matching) Strategy? Why is it used?

A chase strategy means a company will produce products when they are demand This is so inventories can be kept to a minimum --> this reduces overall cost.

Which of the following statements is correct? a) Traditionally the supply-production-distribution functions have reported to different departments. b) Material flow into an organization, are processed in some way and distributed to the consumer. c) The supply, production, and distribution functions are part of a total system. d) All of the above are correct.

D) All of the above.

Give an example of make-to-order, and an example of assemble-to-order strategy

Make-To-Order Example: Getting Pants tailored Assemble-To-Order: Q'Doba Burrito Bowl or Pizza Place

What is a production leveling? Why is it used?

Produces products at a uniform rate and will produce the same amount every day the company operates. The working days will vary. Avoids the cost of changing production plan.

What is a hybrid production strategy? Why is it used?

The Chase, Production Leveling, and subcontract strategies compete on different costs. The hybrid is the most common strategy used in industry because they combine the 3 strategies to fit the needs of the company.

In a make-to-order environment, at what level should master production schedule (MPS) take place?

The MPS is a schedule or raw materials replenishment

In an assemble-to-order and configure-to-order environment, at what level should master production schedule (MPS) take place?

The MPS is based off of the base components of the product.

In a make-to-stock environment, at what level should master production schedule (MPS) take place?

The MPS is usually a schedule of finished goods

What is the purpose of demand time fences?

The demand time fence is the amount of time in which time changes are not accepted. The purpose of this is to reduce excessive cost caused by schedule disruption.

What is a subcontracting strategy and why is it used?

When demand is above the inventory level and the demand cannot be met - therefore, subcontracting will by the extra amounts demanded from external sources.The major advantage is production cost since there is no production happening internally.

If the old backlog was 200 units, the forecast for the next period is 500 units, and production for the next period is 600 units, what will be the backlog at the end of the next period? a) 100 units b) 200 units c) 300 units d) 700 units e) 800 units

a) 100 units

Over a 10-week period the cumulative sales are forecast at 10,000 units, the opening inventory is 200 units and the closing inventory is to be 100 units. What should be the weekly planned production for level production? a) 990 b) 1000 c) 1030 d) 1010 e) none of the above

a) 990

Delivery lead time for an "Engineer-To-Order" product includes which of the following? a) Design, Purchase, Manufacture, Assemble, Ship b) Purchase, Manufacture, Assemble, Ship c) Purchase, Assemble, Ship d) Design, Manufacture, Assemble, Ship

a) Design, Purchase, Manufacture, Assemble, Ship Engineering - To - Order: manufactures product after order is received. This allows for high variety but also causes longer customer delivery lead times.

Postponement is best used with items that: a) have a long lead time and many product configurations. b) experience a yield that you won't know until the product is complete. c) are standardized and have short lead times. d) have suppliers with poor delivery performance.

a) have long lead times and many product configurations.

If the cost of manufacturing (direct labor and materials) is 50% of sales and profit is 15% of sales, what would the profit percentage be if the direct costs of manufacturing was reduced from 50% to 47%? a) 15% b) 12% c) 18% d) 3% e) 6%

c) 18%

Which of the following strategies has the shortest delivery lead time and the least customer input? a) Assemble-To-Order b) Make-To-Order c) Make-To-Stock d) Configure-To-Order

c) Make-To-Stock Assemble to order: Manufacturer inventories standard components, so there is no design time, only assembly, shorter lead time. Make-to-Order: uses standard components, little design time, but does not start order until order is received. Make-to-Stock:Produces product based on previous customer demand. Shortest lead time, inventories products based on finished product. Configure-to-Order: Customer can configure product based on standard features and Options. No significant design time --> a shorter delivery time.

Making a pizza at a fast food restaurant would be considered a form of: a) make-to-order b) make-to-stock c) assemble-to-order d) engineer-to-order

c) assemble to order Assemble to order: Manufacturer inventories standard components, so there is no design time, only assembly, shorter lead time.

The process of checking the MPS against available capacity is called: a)capacity planning b) process checking c) rough-cut capacity planning d) shop floor control e) capacity control

c) rough-cut capacity planning ---- capacity planning: process checking: rough-cut capacity planning: shop floor control: capacity control:

A customer requests a new order in a period where there is inadequate material available in the available to promise (ATP) for that period, and the period is within the planning time fence. Which of the following is the best first course of action to take in such a situation? a) shift the planning time fence inward b) tell the customer they cannot have the order in that period c)increase the master schedule quantity for that period by enough to cover the period d) look for an additional material in an earlier ATP

d) look for additional material in an earlier ATP quality

For the purposes of production planning, product groups should be established on the basis of: a) the availability of materials b) the availability of machinery c) market segments d) similarity of manufacturing process e) all of the above

d) similarity of manufacturing process

Which of the following statements are true: I. The conflict between marketing, finance, and production centers on customer service, disruption to production, and inventory levels. II. Marketing's objective can be met with higher inventories. III. Finance's objectives can be met with higher inventories, IV. Productions objectives can be met with higher inventories. ______________________________________________________________________________ a) I, II, III, and IV are true b) II, III, and IV are true c) I and II are true d) I, II, and III are true e) I, II, and IV are true

e) I, II, and IV are true

Which of the following is an input to the production plan? a) market plan b) financial plan c) strategic business plan d) engineering plan e) all of the above are inputs

e) all of the above

Firms will generally make-to-stock when: a) there are many product options b) delivery lead times are long c) demand is unpredictable d) all of the above e) none of the above

e) none of the above Make-To-Stock is when we produce the product based on previous customer demand. Shortest lead time, inventories products based on finished product.

Which of the following is a characteristic of a production plan? a) the only objective is to have an efficient plant b) the production plan is for individual items c) time horizons are 5 years. d) all of the above characteristics of a production plan e) none of the above is characteristic of a production plan

e) none of the above is a characteristics of a production plan Production plan characteristics: - high level of detail of detail is not needed -a translation must be made from product demand to capacity demand -product groups based on similarity of manufacturing process should be used in planning.

Give an example of engineer-to-order, and an example of configure-to-order strategy

engineer-to-order: manufacturing process for a plane configure to order: dell computers

postponement example

example: computer printers plug ins in a global market

What is the planning horizon?

the time span for which plans are made.