ISDS

process reeingineering

_______________ is the fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

Supply Chain Management (SCM)

_______________ is the management of activities that procure raw materials, transform those materials into intermediate goods and final products, and deliver the products through a distribution system.

e. All of the above are true.

Capacity planning in closed-loop MRP a. utilizes feedback about workload from each work center b. may make use of resource requirements profiles (load reports) c. may smooth work center loads with such tactics as overlapping and lot splitting d. does not add capacity, but rather seeks effective use of existing capacity e. All of the above are true.

c. support suppliers so they become or remain price competitive

Characteristics of JIT partnerships with respect to suppliers include a. competitive bidding encouraged b. buyer plant pursues vertical integration to reduce the number of suppliers c. support suppliers so they become or remain price competitive d. most suppliers at considerable distance from purchasing organization e. All of the above are characteristics of JIT partnerships.

b. large lot sizes to save on setup costs and to gain quantity discounts

Characteristics of just-in-time partnerships do not include a. removal of in-transit inventory b. large lot sizes to save on setup costs and to gain quantity discounts c. long-term contracts d. few suppliers e. buyer helps supplier to meet the quality requirements

d. there is a clearly identifiable parent

Demand for a given item is said to be dependent if a. it originates from the external customer b. there is a deep bill of material c. the finished products are mostly services (rather than goods) d. there is a clearly identifiable parent e. the item has several children

b. modular bills

Firms making many different final products use __________ to facilitate production scheduling. a. planning bills b. modular bills c. phantom bills d. overdue bills e. none of the above

e. all of the above

Flexibility can be achieved with a. movable equipment b. inexpensive equipment c. sophisticated electronic equipment d. modular equipment e. all of the above

c. $3.00

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50 b. $2.00 c. $3.00 d. $150.00 e. not enough data to determine

larger

For a given level of demand, annual holding cost is larger as the order quantity is _____________.

b. setup cost should be relatively small

For the lot-sizing technique known as lot-for-lot to be appropriate a. future demand should be known for several weeks b. setup cost should be relatively small c. annual volume should be rather low d. item unit cost should be relatively small e. the independent demand rate should be very stable

c. 4,000 units, with B more profitable at low volumes

Fred's Fabrication, Inc. wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $70,000. The variable cost for A is $9.00 per unit and for B, $14.00. The revenue generated by the units processed on these machines is $20 per unit. The crossover between machine A and machine B is a. 4,000 units, with A more profitable at low volumes b. 4,000 dollars, with A more profitable at low volumes c. 4,000 units, with B more profitable at low volumes d. 4,000 dollars, with B more profitable at low volumes e. none of the above

d. short-term relationships with few suppliers

Which one of the following is not a supply chain strategy? a. negotiation with many suppliers b. vertical integration c. keiretsu d. short-term relationships with few suppliers e. virtual companies

e. restaurants

Which of the following industries is likely to have low equipment utilization? a. auto manufacturing b. commercial baking c. television manufacturing d. chemical processing e. restaurants

a. lot-for-lot

Which of the following lot-sizing techniques results in the lowest holding costs? a. lot-for-lot b. EOQ c. part-period balancing d. Wagner-Whitin algorithm e. the quantity discount model

b. variability increase

Which one of the following is not a benefit of the implementation of JIT? a. cost reduction b. variability increase c. rapid throughput d. quality improvement e. rework reduction

b. fixed equipment

Which one of the following is not a layout tactic in a JIT environment? a. work cells for families of products b. fixed equipment c. minimizing distance d. little space for inventory e. poka-yoke devices

d. strong job specialization

Which one of the following is not a requirement of JIT systems? a. quality deliveries on time b. low setup time c. training support d. strong job specialization e. employee empowerment

automated storage and retrieval system or ASRS

___________ is a computer-controlled warehouse that provides for the automatic placement of parts into and from designated places within the warehouse.

material requirements planning II or material resource planning or MRP II

___________ is a system that allows, with MRP in place, inventory data to be augmented by other resource variables.

channel assembly

___________ postpones final assembly of a product so the distribution channel can assemble it.

net material requirements

____________ are the result of adjusting gross requirements for inventory on hand and scheduled receipts.

standardization

____________ involves reducing the number of variations in materials and components as an aid to cost management.

mass customization

____________ is a rapid, low-cost production process that caters to constantly changing unique customer desires.

Throughput or capacity

____________ is the amount a facility can hold, store, receive, or produce in a period of time.

service level

____________ is the complement of the probability of a stockout

just-in-time inventory

____________ is the minimum inventory necessary to keep a perfect system running

virtual companies

____________ rely on a variety of supplier relationships to provide services on demand.

raw material

_____________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Cycle counting

_____________ is a continuing reconciliation of inventory with inventory records.

lot-for-lot

_____________ is a lot-sizing technique that generates exactly what was required to meet the plan

Net Present Value (NPV)

_____________ is a means of determining the discounted value of a series of future cash receipts.

electronic data interchange

_____________ is a standardized data-transmittal format for computerized communications between organizations.

logistics management

_____________ is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.

safety stock

_____________ is extra stock that is carried to serve as a buffer.

lead time

_____________ is the time between placement and receipt of an order.

focused processes

_____________ represent an organization's attempt to gain increased efficiency through specialization, which can include, for example, concentrating on certain classes of customers.

phantom bill of material

______________ is a bill of material for components, usually assemblies that exist only temporarily; they are never inventoried.

Material Requirements Planning (MRP)

______________ is a dependent demand technique that uses a bill of material, inventory, expected receipts, and a master production schedule to determine material requirements.

ABC analysis

______________ is a method for dividing on-hand inventory into three classifications based on annual dollar volume.

service blueprinting

______________ is a process analysis technique that focuses on the customer and the producer's interaction with the customer.

repetitive focus

______________ is a process strategy that uses a product-oriented production process that uses modules.

E-procurement

______________ is the term describing purchasing facilitated through the internet.

finite capacity scheduling or FCS

______________, unlike MRP, recognizes that departments and machines have limitations on their capacity that must be observed if the schedule is to be realistic.

Break-even

_______________ analysis finds the point at which cost equals revenues

Layout flexibility

___________________ allows manufacturing work cells and offices to be easily rearranged.

Educating suppliers

___________________ gets suppliers to accept responsibility for satisfying end customer needs

c. flexible manufacturing systems

"Operators simply load new programs, as necessary, to produce different products" describes a. CAD b. automated guided vehicles c. flexible manufacturing systems d. vision systems e. process control

c. 110

A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 16 b. 70 c. 110 d. 183 e. 600

a. help suppliers meet quality requirement

A characteristic of JIT partnerships with respect to quality is to a. help suppliers meet quality requirement b. inspect all incoming parts c. maintain a steady output rate d. impose maximum product specifications on the supplier e. draw up strict contracts ensuring that all defectives will be immediately replaced

d. the high cost of changing partners

A disadvantage of the "few suppliers" strategy is a. the risk of not being ready for technological change b. the lack of cost savings for customers and suppliers c. possible violations of the Sherman Antitrust Act d. the high cost of changing partners e. All of the above are disadvantages of the "few suppliers" strategy.

d. since there is no count of inventory during the review period, a stockout is possible

A disadvantage of the fixed-period inventory system is that a. it involves higher ordering costs than the fixed quantity inventory system b. additional inventory records are required c. the average inventory level is decreased d. since there is no count of inventory during the review period, a stockout is possible e. orders usually are for larger quantities

d. master production schedule

A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n) a. net requirements document b. resource requirements profile c. aggregate plan d. master production schedule e. Wagner-Whitin finite capacity document

a. flow diagram

A drawing of the movement of material, product, or people is a a. flow diagram b. process chart c. service blueprint d. process map e. none of the above

d. no purchase because neither machine yields a profit at that volume

A fabrication company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

closed-loop MRP system

A(n) __________________ provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times.

Enterprise Resources Planning (ERP)

A(n) __________________ system is packaged business software that automates and integrates the majority of their business processes, shares common data and practices across the entire enterprise, and produces and accesses information in a real-time environment.

b. there are usually a few critical items, and many items which are less critical

ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high d. more time should be spent on class "C" items because there are more of them e. an item is critical if its unit price is high

Utilization

____________ is actual output as a percent of design capacity.

Efficiency

____________ is actual output as a percent of effective capacity.

Variability

____________ is any deviation from the optimum process that delivers perfect product on time, every time.

vertical integration

____________ is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor.

Kanban

____________ is the Japanese word for card that has come to mean "signal."

level scheduling

_______________ involves scheduling products so that each day's production meets the demand for that day.

d. 15,000 units

Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is a. $90,000 dollars b. 90,000 units c. $15,000 dollars d. 15,000 units e. cannot be calculated from the information provided

c. a component item is coded at the lowest level at which it appears in the BOM structure

Low level coding means that a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above

c. MRP augmented by other resource variables

MRP II is accurately described as a. MRP software designed for services b. MRP with a new set of computer programs that execute on microcomputers c. MRP augmented by other resource variables d. an enhancement of MRP that plans for all levels of the supply chain e. a new generation of MRP software that extends MRP to planning and scheduling functions

c. can still be profitable

Making environmentally sound products through efficient processes a. is unprofitable, as long as recyclable materials prices are soft b. is known as lean manufacturing c. can still be profitable d. is easier for repetitive processes than for product-focused processes e. none of the above

e. time from raw materials receipt to finished product exit

Manufacturing cycle time is best defined as the a. length of the work shift, expressed in minutes per day b. time it takes a unit to move from one workstation to the next c. time between the start of one unit and the start of the next unit d. sum of all the task times to make one unit of a product e. time from raw materials receipt to finished product exit

b. the quantity and timing of planned order releases

Material requirements plans specify a. the quantities of the product families that need to be produced b. the quantity and timing of planned order releases c. the capacity needed to provide the projected output rate d. the costs associated with alternative plans e. whether one should use phantom bills of material or not

c. total inventory based costs

Most inventory models attempt to minimize a. the likelihood of a stockout b. the number of items ordered c. total inventory based costs d. the number of orders placed e. the safety stock

e. annual dollar volume

ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality b. unit price c. the number of units on hand d. annual demand e. annual dollar volume

minimum

In an economic order quantity problem, the total annual cost curve is at its _____________ where holding costs equal setup costs.

decoupling

Inventory that separates various parts of the production process performs a ___________ function.

c. 70

---Given the following bill of material If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed? a. 3 b. 40 c. 70 d. 90 e. 110

e. 300

---Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E? a. 4 b. 100 c. 200 d. 250 e. 300

a. 50

---Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E? a. 50 b. 100 c. 150 d. 200 e. 300

d. ASRS

. "Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes a. AGV b. CAD/CAM c. CIM d. ASRS e. FMS

c. high-volume, low-variety products

. A product-focused process is commonly used to produce a. high-volume, high-variety products b. low-volume, high-variety products c. high-volume, low-variety products d. low-variety products at either high- or low-volume e. high-volume products of either high- or low-variety

d. Capacity may only be added in large chunks.

. Which of the following is false regarding capacity expansion? a. "Average" capacity sometimes leads demand, sometimes lags it. b. If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting. c. Total cost comparisons are a rather direct method of comparing capacity alternatives. d. Capacity may only be added in large chunks. e. All of the above are true.

pull system

A(n) _________________ is a JIT concept that results in material being produced only when requested and moved to where it is needed just as it is needed.

c. components, ingredients, and materials required to produce an item

A bill of material lists the a. times needed to perform all phases of production b. production schedules for all products c. components, ingredients, and materials required to produce an item d. operations required to produce an item e. components, ingredients, materials, and assembly operations required to produce an item

b. engineering change notice

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n) a. modular bill b. engineering change notice c. resource requirements profile d. lead time-offset product structure document e. planning bill

c. less than $30,000

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is a. greater than $80,000 b. greater than $130,000 c. less than $30,000 d. impossible to calculate, because no interest rate is given e. impossible to calculate, because variable costs are not known

a. $20,920

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is approximately a. $20,920 b. $26,160 c. $49,840 d. $70,920 e. $106,990

D) drop shipping

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing a. postponement b. cross-docking c. channel assembly d. drop shipping e. float reduction

c. supermarket

A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles. Some assemblies and parts are common to many end items. To relieve the MPS of performing order releases on these common parts, the firm might choose to use the __________ technique. a. Wagner-Whitin b. economic part period c. supermarket d. gross material requirements e. resource requirements profile

a. $0.45

A firm wants to develop a level material use schedule based on the following data. What should be the setup cost? Desired lot size: 60 Annual demand: 40,000 Holding cost: $20 per unit per year Daily production rate: 320 Work days per year: 250 a. $0.45 b. $4.50 c. $45 d. $450 e. $500

c. backward integration

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed a. horizontal integration b. forward integration c. backward integration d. current transformation e. job expansion

b. drop shipping

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing a. postponement b. drop shipping c. channel assembly d. passing the buck e. float reduction

d. intermittent process

A job shop is an example of a(n) a. repetitive process b. continuous process c. line process d. intermittent process e. specialized process

d. It picked the supplier that offered the lowest price based on quantity discounts.

A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action? a. It used a pull system to move inventory. b. It produced in ever smaller lots. c. It required deliveries directly to the point of use. d. It picked the supplier that offered the lowest price based on quantity discounts. e. It worked to reduce the company's in-transit inventory.

b. quantities and required delivery dates of final products

A master production schedule contains information about a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

c. what product is to be made, and when

A master production schedule specifies a. the raw materials required to complete the product b. what component is to be made, and when c. what product is to be made, and when d. the labor hours required for production e. the financial resources required for production

c. the capacity needed to provide the projected output rate

A material requirements plan contains information with regard to all of the following except a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. the capacity needed to provide the projected output rate d. inventory on hand for each final product e. inventory on hand for each subassembly

orders

A process focus facility (for example, a print shop) will likely schedule ______________ as the focus of its master production schedule.

b. $7.20

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d=400 per day (250 days per year), p=4000 units per day, H=$40 per unit per year, and Q=200 (demand for four hours, half a day). a. $2.00 b. $7.20 c. $18.00 d. $64.00 e. $1,036.80

b. $800

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total annual inventory costs. a. $400 b. $800 c. $1200 d. zero; this is a class C item e. cannot be determined because unit price is not known

b. 200 units per order

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order a. all 4000 units at one time b. 200 units per order c. every 20 days d. 10 times per year e. none of the above

a. 0.133

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. The weighted contribution of this product is approximately a. 0.133 b. 0.200 c. 0.40 d. 0.667 e. $1.667

b. one-third as large

A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is a. three times as large b. one-third as large c. nine times as large d. one-ninth as large e. cannot be determined

b. increased by less than 50%

A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is a. unchanged b. increased by less than 50% c. increased by 50% d. increased by more than 50% e. cannot be determined

b. 245

A production order quantity problem has daily demand rate = 10 and daily production rate = 50. The production order quantity for this problem is approximately 612 units. The average inventory for this problem is approximately a. 61 b. 245 c. 300 d. 306 e. 490

e. All but d are true.

A quasi-custom product a. gets its apparent customization from the combinations available from a small number of modules b. is often the output of repetitive focus facilities c. is a valid description of a fast food sandwich d. is only possible when the focus strategy of service productivity improvement is in use e. All but d are true.

b. forward integration

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of a. horizontal integration b. forward integration c. backward integration d. current transformation e. keiretsu

d. no purchase because neither machine yields a profit at that volume

A shop wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $22 per unit. If the estimated output is 9,000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

value stream mapping

A special form of time-function mapping, which goes beyond the organization into its supply chain, is _____________.

a. 41

A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level? a. 41 b. 55 c. 133 d. 140 e. 165

c. flexible manufacturing system

A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n) a. adaptive control system b. robotics c. flexible manufacturing system d. automatic guided vehicle (AGV) system e. manufacturing cell

robust

A(n) __________ model gives satisfactory answers even with substantial variations in its parameters.

Flexible manufacturing system or FMS

A(n) __________ uses an automated work cell controlled by electronic signals from a common centralized computer facility

bill of material or BOM

A(n) ____________ is a listing of the components, their description, and the quantity of each required to make one unit of a product.

Master Production Schedule (MPS)

A(n) ____________ is a timetable that specifies what is to be made and when.

fixed-period

A(n) ____________ system triggers inventory ordering on a uniform time frequency.

load report or resource requirement profile

A(n) ______________ can illustrate whether a work center has been scheduled beyond its capacity.

process chart

A(n) _______________ uses symbols to analyze the movement of people or material.

c. the existing product has seasonal or cyclical demand

Adding a complementary product to what is currently being produced is a demand management strategy used when a. demand exceeds capacity b. capacity exceeds demand for a product which has stable demand c. the existing product has seasonal or cyclical demand d. price increases have failed to bring about demand management e. efficiency exceeds 100 percent

d. have had dramatic impact on customer interaction with services and with products

Advances in technology a. have impacted the manufacturing sector only b. have had only limited impact on services c. have failed to change the level of customer interaction with an organization d. have had dramatic impact on customer interaction with services and with products e. have dramatically changed health care, but have not changed retailing

e. line balancing

All of the following are "opportunities" for supply chain management except a. postponement b. drop shipment c. blanket orders d. channel assembly e. line balancing

d. requires major changes in the company and its processes to implement

All of the following are advantages of enterprise resource planning (ERP) except it a. creates commonality of databases b. increases communications and collaboration worldwide c. helps integrate multiple sites and business units d. requires major changes in the company and its processes to implement e. can provide a strategic advantage over competitors

d. it states that all items require the same degree of control

All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle d. it states that all items require the same degree of control e. it states that there are the critical few and the trivial many inventory items

warehouse management and automation

Amazon's original concept of operating without inventory has given way to a model in which Amazon is a world-class leader in _______________.

d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory

Among the advantages of cycle counting is that it a. makes the annual physical inventory more acceptable to management b. does not require the detailed records necessary when annual physical inventory is used c. does not require highly trained people d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory e. does not need to be performed for less expensive items

b. there is no physical count of inventory items when an item is withdrawn

An advantage of the fixed-period inventory system is that a. the supplier will be more cooperative b. there is no physical count of inventory items when an item is withdrawn c. no inventory records are required d. orders usually are for smaller order quantities e. the average inventory level is reduced

c. repetitive process

An assembly line is an example of a a. product-focused process b. process-focused process c. repetitive process d. line process e. specialized process

b. Fourteen is the reorder point, and 100 is the order quantity.

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? a. One hundred is the reorder point, and 14 is the order quantity. b. Fourteen is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. Fourteen is the safety stock, and 100 is the reorder point. e. None of the above is true.

e. 200

An item's holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 weeks. EPP is a. .005 b. 60 c. 72 d. 100 e. 200

a. has a facility that is below optimum operating level and should build a larger facility

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises a. has a facility that is below optimum operating level and should build a larger facility b. has a facility that is above optimum operating level and should build a smaller facility c. is suffering from diseconomies of scale d. has utilization higher than efficiency e. has efficiency higher than utilization

process strategy

An organization's approach to transforming resources into goods and services is called its _____________.

e. All of the above are true.

An organization's process strategy a. will have long-run impact on efficiency and flexibility of production b. is the same as its transformation strategy c. must meet various constraints, including cost d. is concerned with how resources are transformed into goods and services e. All of the above are true.

b. variable costs and revenues increase in direct proportion to the volume of production

Basic break-even analysis typically assumes that a. revenues increase in direct proportion to the volume of production, while costs increase at a decreasing rate as production volume increases b. variable costs and revenues increase in direct proportion to the volume of production c. both costs and revenues are made up of fixed and variable portions d. costs increase in direct proportion to the volume of production, while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts e. All of the above are assumptions in the basic break-even model.

modular bills

Bills of material organized by major subassemblies or by product options are called _____________.

d. the break-even point depends upon the proportion of sales generated by each of the products

Break-even analysis can be used by a firm that produces more than one product, but a. the results are estimates, not exact values b. the firm must allocate some fixed cost to each of the products c. each product has its own break-even point d. the break-even point depends upon the proportion of sales generated by each of the products e. None of these statements is true.

e. total revenue equals total cost

Break-even is the number of units at which a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total profit equals total cost e. total revenue equals total cost

a. level 0

By convention, the top level in a bill of material is a. level 0 b. level 1 c. level T d. level 10 e. level 100

a. railroads

By which distribution system is 90 percent of the nation's coal shipped? a. railroads b. trucks c. waterways d. pipelines e. none of the above

c. 4845

Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 85%. What is the expected weekly output of cranks for this company? a. 5100 b. 5700 c. 4845 d. 969 e. 6783

a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated

Computer-integrated manufacturing (CIM) includes manufacturing systems that have a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated b. transaction processing, management information systems, and decision support systems integrated c. automated guided vehicles, robots, and process control d. robots, automated guided vehicles, and transfer equipment e. all of the above

a. close relationships with trust

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? a. close relationships with trust b. close relationships with skepticism c. distant relationships with trust d. distant relationships with skepticism e. none of the above

e. 4.16

Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold? a. 12.50 b. 5.20 c. 2.60 d. 0.08 e. 4.16

a. 12.50

Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover? a. 12.50 b. 10.00 c. 42.00 d. 4.16 e. 20.00

b. provides a measure of inventory accuracy

Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency e. assumes that the most frequently used items must be counted more frequently

e. more than 40

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be? a. about 18 b. about 24 c. about 32 d. about 38 e. more than 40

d. All of the above are true.

Dependent demand and independent demand items differ in that a. for any product, all components are dependent-demand items b. the need for independent-demand items is forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.

e. a and c

Distortion in MRP systems can be minimized when safety stock is held at the a. purchased component or raw material level b. work-in-process level c. finished goods level d. a and b e. a and c

b. a time-phased stock replenishment plan for all levels of a distribution network

Distribution resource planning (DRP) is a. a transportation plan to ship materials to warehouses b. a time-phased stock replenishment plan for all levels of a distribution network c. a shipping plan from a central warehouse to retail warehouses d. material requirements planning with feedback loop from distribution centers e. a material requirements planning package used exclusively by warehouses

c. means the supplier will ship directly to the end consumer, rather than to the seller

Drop shipment a. is equivalent to cross-docking b. is the opposite of a blanket order c. means the supplier will ship directly to the end consumer, rather than to the seller d. is the same thing as keiretsu e. is a good reason to find a new firm to ship your products

b. is the same thing as Internet purchasing

E-procurement a. works best in long-term contract situations, and is not suited for auctions b. is the same thing as Internet purchasing c. represents only the auction and bidding components of Internet purchasing d. is illegal in all states except Nevada and New Jersey e. All of the above are true of e-procurement.

c. 13

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is _____ days. a. 6 b. 9 c. 13 d. 17 e. cannot be determined

b. 9

Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is ______ weeks. a. 6 b. 9 c. 12 d. 18 e. 28

c. 8

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _____ weeks. a. 6 b. 7 c. 8 d. 10 e. cannot be determined

b. capacity a firm expects to achieve given the current operating constraints

Effective capacity is the a. maximum output of a system in a given period b. capacity a firm expects to achieve given the current operating constraints c. average output that can be achieved under ideal conditions d. minimum usable capacity of a particular facility e. sum of all of the organization's inputs

e. All of the above are true of ERP.

Enterprise resource planning (ERP) a. has been made possible because of advances in hardware and software b. uses client/server networks c. creates commonality of databases d. uses business application-programming interfaces (BAPI) to access their database e. All of the above are true of ERP.

d. automates and integrates the majority of business processes

Enterprise resource planning (ERP) a. seldom requires software upgrade or enhancement b. does not integrate well with functional areas other than operations c. is inexpensive to implement d. automates and integrates the majority of business processes e. all of the above

e. all of the above

Ethical and environmentally friendly processes include which of the following? a. emission controls b. recycling c. efficient use of resources d. reduction of waste by-products e. all of the above

a. Setup cost must be cut to one fourth its current value.

Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in half, by what proportion must setup cost change? a. Setup cost must be cut to one fourth its current value. b. Setup cost must also be cut in half from its current value. c. Setup cost must double from its current value. d. cannot be determined e. none of the above

b. produce in long production runs to reduce the impact of setup costs

Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is not part of JIT? They a. communicate their schedules to suppliers b. produce in long production runs to reduce the impact of setup costs c. use a pull system to move inventory d. continuously work on reducing setup time e. produce in small lots

transportation

Handling material more than once is an example of the waste called ___________________.

d. uses work cells to feed its assembly line

Harley Davidson a. utilizes job shops to make each of its modules b. uses product focused manufacturing c. uses a large number of modules to build a small number of different bikes d. uses work cells to feed its assembly line e. All of the above are true.

d. postponement

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of a. vendor managed inventory b. standardization c. backward integration d. postponement e. timely customization

b. food preparation in large batches

If a casual-dining restaurant is attempting to practice JIT and lean operations, which of the following would not be present? a. close relationship with the restaurant's suppliers of food, utensils, and equipment b. food preparation in large batches c. a kitchen set up to minimize wasteful movements d. lean inventories of food e. All of the above should be present.

c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting

If a load report (resource requirements profile) shows a work center scheduled beyond capacity a. the company must add capacity by enlarging the facility b. the company must add capacity by such tactics as overtime and subcontracting c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting d. the aggregate plan must be revised e. the Wagner-Whitin algorithm should be used to rebalance the load

demand, lead time

If a safety stock problem includes parameters for average daily demand, standard deviation of demand, and lead time, then _____________ is variable and ___________ is constant.

c. 49 units

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately a. 28 units b. 30 units c. 49 units d. 59 units e. 114 units c (Probabilistic

c. 13 units

If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, 90 percent service level will require safety stock of approximately a. 7 units b. 10 units c. 13 units d. 16 units e. 26 units

a. aggressive marketing

If demand exceeds capacity at a new facility, an organization can use which of the following to move demand to an existing facility? a. aggressive marketing b. lower prices at all facilities c. build a facility of the correct size d. add a complementary product e. reduce lead times

d. adding safety stock

If demand is not uniform and constant, then stockout risks can be controlled by a. increasing the EOQ b. placing an extra order c. raising the selling price to reduce demand d. adding safety stock e. reducing the reorder point

c. is one-half of the economic order quantity

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand H D S Q ⋅ ⋅ =* 2 a. is smaller the smaller is the holding cost per unit b. is zero c. is one-half of the economic order quantity d. is affected by the amount of product cost e. All of the above are true.

b. In-transit inventory falls as suppliers are located closer to facilities.

If the goals of JIT partnerships are met, which of the following is a result? a. For incoming goods, receiving activity and inspection are outsourced. b. In-transit inventory falls as suppliers are located closer to facilities. c. The number of suppliers increases. d. In-plant inventory replaces in-transit inventory. e. All of the above are consequences of meeting the JIT partnership goals.

e. cannot be determined without lead time data

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock? a. 8 units b. 10 units c. 16 units d. 64 units e. cannot be determined without lead time data

e. customers' infrequent engineering changes

In JIT partnerships, suppliers have several concerns. Which of the following is not such a concern? a. desire for diversification b. poor customer scheduling c. small lot sizes d. producing high enough quality levels e. customers' infrequent engineering changes

contribution, weighting

Multiproduct break-even analysis calculates the __________ of each product, __________ it in proportion to each product's share of total sales.

d. is impossible

In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket a. signals the need to purchase that end item in that period b. implies that value was scheduled by the MPS c. signals the need for a negative planned order receipt in that period d. is impossible e. All of the above are true.

a. management's attempt to continually respond to minor changes in production requirements

In MRP, system nervousness is caused by a. management's attempt to continually respond to minor changes in production requirements b. the use of the lot-for-lot approach c. management's marking part of the master production schedule as "not to be rescheduled" d. the use of phantom bills of material e. management's attempt to evaluate alternative plans before making a decision

rejected or refused

In a quantity discount problem, if the savings in product cost is smaller than the increase in the sum of setup cost and holding cost, the discount should be _____________.

c. 154 units

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. The standard deviation of demand during lead time is approximately a. 15 units b. 100 units c. 154 units d. 500 units e. 13,125 units

a. end items

In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of a. end items b. modules c. kits d. customer orders e. warehouse orders

d. customer orders

In job shop (make-to-order) operations, the master production schedule is usually expressed in a. end items b. modules c. kits d. customer orders e. warehouse orders

d. human resources

In mass service and professional service, the operations manager should focus on a. automation b. equipment maintenance c. sophisticated scheduling d. human resources e. all of the above

e. customization

In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except a. automation b. standardization c. tight quality control d. removing some services e. customization

e. All of the above are true.

In supply chain management, ethical issues a. are particularly important because of the enormous opportunities for abuse b. may be guided by company rules and codes of conduct c. become more complex the more global is the supply chain d. may be guided by the principles and standards of the Institute for Supply Management e. All of the above are true.

c. 141

In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per unit per month, the economic order quantity is approximately a. 24 b. 100 c. 141 d. 490 e. 600

a. increase by about 41%

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will a. increase by about 41% b. increase by 100% c. increase by 200% d. increase, but more data is needed to say by how much e. either increase or decrease

d. inadequate capacity

In the make-or-buy decision, one of the reasons for buying is a. to assure adequate supply b. to obtain desired quality c. to remove supplier collusion d. inadequate capacity e. to maintain organizational talents

e. to assure adequate supply in terms of quantity

In the make-or-buy decision, one of the reasons for making is a. to reduce inventory costs b. to obtain technical or management ability c. inadequate capacity d. reciprocity e. to assure adequate supply in terms of quantity

b. lower production cost

In the make-or-buy decision, which of the following is a reason for making an item? a. management can focus on its primary business b. lower production cost c. inadequate capacity d. reduce inventory costs e. None of the above is a reason for making an item.

b. to obtain desired quality

In the make-or-buy decision, which of the following is not a reason for buying? a. inadequate capacity b. to obtain desired quality c. patents or trade secrets d. lower inventory costs e. All of the above are reasons for buying.

demand rate to production rate

In the production order quantity model, the fraction of inventory that is used immediately and not stored is represented by the ratio of_____________.

e. All of the above are JIT requirements.

In the quest for competitive advantage, which of the following is a JIT requirement? a. small number of job classifications b. reduced number of vendors c. reduced space for inventory d. quality by suppliers e. All of the above are JIT requirements.

demand management, capacity management

In the service sector, scheduling customers is ____________, and scheduling the workforce is ____________.

e. is the discounted value of a series of future cash receipts

Net present value a. is gross domestic product less depreciation b. is sales volume less sales and excise taxes c. is profit after taxes d. ignores the time value of money e. is the discounted value of a series of future cash receipts

b. keiretsu

Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is a. kanban b. keiretsu c. samurai d. poka-yoke e. kaizen

e. All of the above are JIT influences on layout

Just-in-time systems make demands on layouts, including a. distance reduction b. increased flexibility c. reduced space and inventory d. cross-trained, flexible employees e. All of the above are JIT influences on layout.

d. increased material handling

Kanban is associated with all of the following except a. small lot sizes b. signals, such as cards, lights, or flags c. moving inventory only as needed d. increased material handling e. reductions in inventory

a. postponement

Keeping a product generic as long as possible before customizing is known as a. postponement b. keiretsu c. channel assembly d. forward integration e. backward integration

c. pegging

Linking a part requirement with the parent component that caused the requirement is referred to as a. net requirements planning b. a time fence c. pegging d. kanban e. leveling

a. optimizing one's local area without full knowledge of organizational needs

Local optimization is a supply chain complication best described as a. optimizing one's local area without full knowledge of organizational needs b. obtaining very high production efficiency in a decentralized supply chain c. the prerequisite of global optimization d. the result of supply chains built on suppliers with compatible corporate cultures e. the opposite of the bullwhip effect

distortion of information

Local optimization, incentives, and large lots all contribute to __________ about what is really occurring in the supply chain.

d. for a 4% discount rate than for a 6% discount rate

Net present value will be greater a. as a fixed set of cash receipts occurs later rather than earlier b. as the total of the cash receipts, made in same time periods, is smaller c. for one end-of-year receipt of $1200 than for twelve monthly receipts of $100 each d. for a 4% discount rate than for a 6% discount rate e. All of the above are true.

e. Choices a and c are both correct.

Of the four approaches to capacity expansion, the approach that "straddles" demand a. uses incremental expansion b. uses one-step expansion c. at some times leads demand, and at other times lags d. works best when demand is not growing but is stable e. Choices a and c are both correct.

vendor evaluation

Of the three stages of vendor selection, the stage at which criteria, weights, and scores allow a numeric comparison is ______________.

b. worth even more than a dollar earned in sales revenue

One dollar saved in purchasing is a. equivalent to a dollar earned in sales revenue b. worth even more than a dollar earned in sales revenue c. worth slightly more than a dollar earned because of taxes d. worth from 35% in the technical instrument industry to 70% in the food products industry e. only worthwhile if you are in the 50% tax bracket and still have a low profit margin

c. the process chart is more like a table, while the process map is more like a schematic diagram

One fundamental difference between a process chart and a process map is that a. the process chart uses a time dimension while a process map is not time-oriented b. the process chart includes the supply chain, while the process map stays within an organization c. the process chart is more like a table, while the process map is more like a schematic diagram d. the process chart focuses on the customer and on the provider's interaction with the customer, while the process map does not deal directly with the customer e. None of these is true, because a process chart and a process map are the same thing.

c. time fences

One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are) a. modular bills b. time phasing c. time fences d. lot sizing e. closed loop system

e. All of the above are true of outsourcing.

Outsourcing a. transfers traditional internal activities to outside vendors b. utilizes the efficiency which comes with specialization c. lets the outsourcing firm focus on its critical success factors d. None of the above are true of outsourcing. e. All of the above are true of outsourcing.

a. 50 units

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. The crossover point between process A and process B is a. 50 units b. 200 units c. $2,500 d. $5,000 e. $9,500

c. Process Y is cheaper than process X at all volumes; there is no crossover point.

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is true? a. The crossover point is approximately 6667 units. b. It is impossible for one process to have both of its costs lower than those of another process. c. Process Y is cheaper than process X at all volumes; there is no crossover point. d. Process X should be selected for very large production volumes. e. Process X is more profitable than process Y and should be selected.

e. all of the above

Process redesign a. is the fundamental rethinking of business processes b. can focus on any process c. tries to bring about dramatic improvements in performance d. focuses on activities that cross functional lines e. all of the above

c. are processes that are specialized for relatively few products or customer groups

Product Focused processes a. allow more customization, but are not very efficient b. are desirable because resource needs increase slowly with the complexity of a process c. are processes that are specialized for relatively few products or customer groups d. apply only to service firms, not to manufacturers e. are profitable because customers demand flexibility, not specialization

a. supplier location near plants

Reduction of in-transit inventory can be encouraged through use of a. supplier location near plants b. low setup costs c. low carrying costs d. use of trains, not trucks e. low-cost, global suppliers

d. focuses on the provider's interaction with the customer

Service blueprinting a. provides the basis to negotiate prices with suppliers b. mimics the way people communicate c. determines the best time for each step in the process d. focuses on the provider's interaction with the customer e. can only be successful with two-dimensional processes

b. groups people and machines into departments that perform specific activities

Standard Register a. has dozens of U.S. plants in its Forms Division b. groups people and machines into departments that perform specific activities c. utilizes a product strategy to keep production volume high d. obtains its low-cost advantage by not spending money on CAD systems e. obtains its low-cost advantage by specializing in a relatively small number of products

a. separation, self-service, automation, and scheduling

Strategies for improving productivity in services are a. separation, self-service, automation, and scheduling b. lean production, strategy-driven investments, automation, and process focus c. reduce inventory, reduce waste, reduce inspection, and reduce rework d. high interaction, mass customization, service factory, and just-in-time e. none of the above

toyota production system

TPS stands for ___________________.

e. all of the above

The "bullwhip" effect a. occurs as orders are relayed from retailers to wholesalers b. results in increasing fluctuations at each step of the sequence c. increases the costs associated with inventory in the supply chain d. occurs because of distortions in information in the supply chain e. all of the above

Simplifying/ straighten or simplify

The 5S term _______________ includes analysis to improve workflow and reduce wasted motion.

e. All of these are true.

The 5S's a. have the "flavor" of a housekeeping list b. are a checklist for lean operations c. have become a list of seven items in American practice d. can be used to assist with necessary changes in organizational culture e. All of these are true.

d. 87.7%

The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the capacity of the system is 1900 students per semester and the utilization is 90%. If the number of students who actually got their orientation session is 1500, what is the efficiency of the system? a. 1350 students b. 1710 students c. 75% d. 87.7% e. 90%

d. how many units should be ordered

The EOQ model with quantity discounts attempts to determine a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price c. whether to use fixed-quantity or fixed-period order policy d. how many units should be ordered e. what is the shortest lead time

c. publishes the principles and standards for ethical supply management conduct

The Institute for Supply Management a. establishes laws and regulations for supply management b. is an agency of the United Nations charged with promoting ethical conduct globally c. publishes the principles and standards for ethical supply management conduct d. prohibits backward integration into developing economies e. All of the above are true.

c. keiretsu

The Japanese concept of a company coalition of suppliers is a. poka-yoke b. kaizen c. keiretsu d. dim sum e. illegal

c. 180

The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are a. 20 b. 120 c. 180 d. 240 e. 440

c. 300

The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are a. 150 b. 170 c. 300 d. 320 e. 440

a. 115

The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are a. 115 b. 175 c. 240 d. 690 e. 700

a. master production schedule

The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

a. bill of material

The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. a. bill of material b. master production schedule c. inventory records d. assembly time chart e. net requirements chart

engineering change notice

The ______________ is used to correct an erroneous dimension, quantity, or other specification in a bill of material.

supermarket

The ______________ technique may be applicable where a firm's parts and subassemblies are common to a variety of its products.

make-or-buy

The ________________ decision involves choosing between producing a component or a service internally and purchasing it externally.

manufacturing cycle time

The ___________________ is the time between the arrival of raw materials and the shipping of finished products.

institute for supply management

The _________is an organization that has published principles and standards for ethical supply management conduct.

e. all of the above

The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above

c. 184

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately a. 139 b. 174 c. 184 d. 365 e. 548

b. price and variable cost for each product, and the percent of sales that each product represents

The basic break-even model can be modified to handle more than one product. This extension of the basic model requires a. price and sales volume for each product b. price and variable cost for each product, and the percent of sales that each product represents c. that the firm have very low fixed costs d. that the ratio of variable cost to price be the same for all products e. sales volume for each product

e. convert (explode) net requirements at one level into gross requirements at the next level

The bill of material contains information necessary to a. place an order to replenish the item b. calculate quantities on hand and on order c. convert net requirements into higher level gross requirements d. convert gross requirements into net requirements e. convert (explode) net requirements at one level into gross requirements at the next level

average or straddle

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to____________ demand.

d. total costs for one process equal total costs for another process

The crossover point is that production quantity where a. variable costs of one process equal the variable costs of another process b. fixed costs of a process are equal to its variable costs c. total costs equal total revenues for a process d. total costs for one process equal total costs for another process e. the process no longer loses money

b. enterprise resource planning

The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order entry, purchasing, and direct interface with customers and suppliers is a. MRP II b. enterprise resource planning c. the master production schedule d. closed-loop MRP e. not yet technically possible

airfreight

The fastest growing mode of shipping is ______________

a. a stockout can occur during the review period as well as during the lead time

The fixed-period inventory model requires more safety stock than the fixed-quantity models because a. a stockout can occur during the review period as well as during the lead time b. this model is used for products that have large standard deviations of demand c. this model is used for products that require very high service levels d. replenishment is not instantaneous e. setup costs and holding costs are large

c. master production schedule

The following table is an example of a(n) Week 1 Week 2 Week 3 Week 4 Week 5 Clothes Washer 200 100 Clothes Dryer 300 100 100 100 Upright Freezer 200 500 a. aggregate plan b. load report c. master production schedule d. capacity plan e. inventory record

a. identifying non-value items and removing them, in the "sort/segregate" item

The list of 5S's, although it looks like a housekeeping directive, supports lean production by a. identifying non-value items and removing them, in the "sort/segregate" item b. reducing inventory, in the "standardize" item c. increasing variability through standardized procedures, in the "standardize" item d. eliminating wasted motion through ergonomic studies, in the "support" item e. building good safety practices, in the "shine/sweep" item

small lot sizes or reduction of lot size

The main focus of JIT efforts to reduce investment in inventory requires ____________

e. 99%

The minimum record accuracy required for successful MRP is approximately a. lower than 90% b. 90% c. 95% d. 97% e. 99%

b. the ratio of the reorder point to container size

The number of kanbans is a. one b. the ratio of the reorder point to container size c. the same as EOQ d. one full day's production e. none of the above

d. the amount projected to be on hand

The number of units projected to be available at the end of each time period refers to a. net requirements b. scheduled receipts c. the projected usage of the item d. the amount projected to be on hand e. the amount necessary to cover a shortage

b. dependent demand

The phrase "demand related to the demand for other products" describes a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

d. to minimize the sum of setup cost and holding cost

The primary purpose of the basic economic order quantity model shown below is H D S Q ⋅ ⋅ =* 2 a. to calculate the reorder point, so that replenishments take place at the proper time b. to minimize the sum of carrying cost and holding cost c. to maximize the customer service level d. to minimize the sum of setup cost and holding cost e. to calculate the optimum safety stock

process focus

The process strategy that is organized around processes to facilitate low-volume, high-variety processes is called a(n) ________________.

d. setting the level of safety stock so that a given stockout risk is not exceeded

The proper quantity of safety stock is typically determined by a. minimizing an expected stockout cost b. carrying sufficient safety stock so as to eliminate all stockouts c. meeting 95% of all demands d. setting the level of safety stock so that a given stockout risk is not exceeded e. minimizing total costs

b. many suppliers

The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is a. few suppliers b. many suppliers c. Keiretsu d. vertical integration e. virtual companies

d. control the likelihood of a stockout due to the variability of demand during lead time

The purpose of safety stock is to a. replace failed units with good ones b. eliminate the possibility of a stockout c. eliminate the likelihood of a stockout due to erroneous inventory tally d. control the likelihood of a stockout due to the variability of demand during lead time e. protect the firm from a sudden decrease in demand

b. 90.5 percent; 79.2 percent

The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put in use, the program has become more complex, so that 1050 now represents the most employees that can be trained per year. In the past year, 950 employees were trained. The efficiency of this system is approximately _____ and its utilization is approximately _____. a. 79.2 percent; 90.5 percent b. 90.5 percent; 79.2 percent c. 87.5 percent; 950 employees d. 950 employees; 1050 employees e. 110.5 percent; 114.3 percent

postponement

The strategy for improving service productivity that customizes at delivery, rather than at production, is _____________.

few suppliers

The supply chain strategy of ____________ increases the willingness to participate in JIT.

e. All of the above are true regarding level scheduling.

The technique known as level schedules a. requires that schedules be met without variation b. processes many small batches rather than one large one c. is known as "jelly bean" scheduling d. is based on meeting one day's demand with that day's production e. All of the above are true regarding level scheduling.

d. cost-based price model, market-based price model, and competitive bidding

The three classic types of negotiation strategies are a. vendor evaluation, vendor development, and vendor selection b. Theory X, Theory Y, and Theory Z c. many suppliers, few suppliers, and keiretsu d. cost-based price model, market-based price model, and competitive bidding e. None of the above is correct.

a. catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers

The three major variations of online catalogs are a. catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers b. EDI, ERP, and ASN c. cost-based, market-based, and competitive bidding d. drop shipping, channel assembly, and postponement e. all auction-based

a. vendor evaluation, vendor development, and negotiations

The three stages of vendor selection, in order, are a. vendor evaluation, vendor development, and negotiations b. vendor development, vendor evaluation, and vendor acquisition c. introduction, growth, and maturity d. vendor evaluation, negotiations, and vendor development e. EDI, ERP, and ASN

d. outsourcing

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is a. a standard use of the make or buy decision b. not allowed by the ethics code of the Supply Management Institute c. offshoring d. outsourcing e. keiretsu

c. timing and quantity of orders

The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level e. ordering cost and carrying cost

a. process control

The use of information technology to monitor and control a physical process is known as a. process control b. computer-aided design c. information numeric control d. numeric control e. none of the above

c. card

The word "kanban" means a. low inventory b. employee empowerment c. card d. continuous improvement e. lot size of one

c. process focus, repetitive focus, and product focus

Three types of processes are a. goods, services, and hybrids b. manual, automated, and service c. process focus, repetitive focus, and product focus d. modular, continuous, and technological e. input, transformation, and output

d. required to move orders through the production process, from receipt to delivery

Throughput measures the time a. that it takes to process one unit at a station b. between the arrival of raw materials and the shipping of finished products c. to produce one whole product through an empty system (i.e., with no waiting) d. required to move orders through the production process, from receipt to delivery e. none of the above

outsourcing

Transferring to external vendors a firm's activities that have traditionally been internal is known as _________.

d. excess capacity for peak demands is desirable

Utilization in process-oriented facilities is frequently low because a. the postponement strategy for improving service productivity is being used b. scheduling in process-oriented facilities is not very complex c. with high fixed costs, utilization is not very important d. excess capacity for peak demands is desirable e. low raw material inventories cause machines to be idled

e. All of the above are true.

Value Stream Mapping a. is a variation on time function mapping b. examines the supply chain to determine where value is added c. extends time function mapping back to the supplier d. starts with the customer and works backwards e. All of the above are true.

b. a large market share

Vertical integration appears particularly advantageous when the organization has a. a very specialized product b. a large market share c. a very common, undifferentiated product d. little experience operating an acquired vendor e. purchases that are a relatively small percent of sales

b. mutual trust

Visibility throughout the supply chain is a requirement among supply chain members for a. mutual agreement on goals b. mutual trust c. compatible organizational cultures d. local optimization e. the bullwhip effect

b. Toyota Production System

What does TPS stand for? a. Total Production Streamlining b. Toyota Production System c. Taguchi's Production S's d. Total Process Simplification e. None of the above

d. expected output

What is sometimes referred to as rated capacity? a. efficiency b. utilization c. effective capacity d. expected output e. design capacity

b. 50%

What is the average capacity utilization in the motor carrier (trucking) industry? a. 25% b. 50% c. 75% d. 95% e. 99%

a. throughput

What is the time required to move orders through the production process, from receipt to delivery? a. throughput b. manufacturing cycle time c. pull time d. push time e. queuing time

a. lot-for-lot

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. lot-for-lot b. EOQ c. part-period balancing d. the Wagner-Whitin algorithm e. All of the above are appropriate for the situation

e. Third-Party Logistics

What term is used to describe the outsourcing of logistics? a. E-Logistics b. Shipper Managed Inventory (SMI) c. Hollow Logistics d. Sub-Logistics e. Third-Party Logistics

a. cost-based price model

What type of negotiating strategy requires the supplier to open its books to the purchasers? a. cost-based price model b. market-based price model c. competitive bidding d. price-based model e. none of the above

Material Requirements Planning (MRP)

Wheeled Coach uses ______________ as the catalyst for low inventory, high quality, tight schedules, and accurate records.

c. states of nature are often demand-based, as in "market favorability"

When decision trees are used to analyze capacity decisions, a. "do nothing" is not a possible decision alternative b. probabilities must be assigned to each of the decision alternatives c. states of nature are often demand-based, as in "market favorability" d. states of nature must be known with certainty e. fixed costs are not relevant

daily demand

When demand is constant and lead time is variable, safety stock computation requires three inputs: the value of z, _____________, and the standard deviation of lead time.

e. all of the above

When done correctly, mass customization a. increases pressure on supply chain performance b. helps eliminate the guesswork that comes with sales forecasting c. drives down inventories d. increases pressure on scheduling e. all of the above

e. minimizes the sum of holding, ordering, and product costs

When quantity discounts are allowed, the cost-minimizing order quantity a. is always an EOQ quantity b. minimizes the sum of holding and ordering costs c. minimizes the unit purchase price d. may be a quantity below that at which one qualifies for that price e. minimizes the sum of holding, ordering, and product costs

c. Projected On Hand

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic? a. Gross Requirements b. Scheduled Receipts c. Projected On Hand d. Net Requirements e. Planned Order Receipts

In-transit

When suppliers are encouraged to locate near manufacturing plants, the goal of the JIT partnership is to reduce ___________________ inventory.

e. pilferage, scrap, and obsolescence

Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones? a. housing costs b. material handling costs c. labor cost d. parts cost e. pilferage, scrap, and obsolescence

c. airfreight

Which distribution system is the fastest growing mode of shipping? a. railroads b. trucks c. airfreight d. waterways e. pipelines

e. All of the above are elements of inventory holding cost.

Which of the following are elements of inventory holding costs? a. housing costs b. material handling costs c. investment costs d. pilferage, scrap, and obsolescence e. All of the above are elements of inventory holding cost.

e. all of the above

Which of the following are typical of process control systems? a. They have sensors. b. The digitized data are analyzed by computer, which generates feedback. c. Their sensors take measurements on a periodic basis. d. The sensors' measurements are digitized. e. all of the above

a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

Which of the following best describes a gross material requirements plan? a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started b. an intermediate range plan for the scheduling of families of products c. a chart illustrating whether capacity has been exceeded d. a table that corrects scheduled quantities for inventory on hand e. a schedule showing which products are to be manufactured and in what quantities

c. to produce goods or services previously purchased

Which of the following best describes vertical integration? a. to sell products to a supplier or a distributor b. to develop the ability to produce products which complement the original product c. to produce goods or services previously purchased d. to develop the ability to produce the specified good more efficiently than before e. to build long-term partnerships with a few suppliers

a. FCS recognizes the finite nature of capacity while MRP does not.

Which of the following best differentiates material requirements planning (MRP) from finite capacity scheduling (FCS)? a. FCS recognizes the finite nature of capacity while MRP does not. b. FCS works in services while MRP does not. c. MRP requires time buckets while FCS does not. d. FCS is an input into traditional MRP systems. e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.

b. Its output is a standardized product produced from modules

Which of the following characteristics best describes repetitive focus? a. It uses sophisticated scheduling to accommodate custom orders. b. Its output is a standardized product produced from modules. c. It is too expensive when volumes are low or flexibility is required. d. It is widely used for the manufacture of steel. e. Its costs are often known only after a job is done.

d. building rental costs

Which of the following costs would be incurred even if no units were produced? a. raw material costs b. direct labor costs c. transportation costs d. building rental costs e. purchasing costs

e. all of the above

Which of the following devices represents an opportunity for technology to improve security of container shipments? a. devices that identify truck and container location b. devices that sense motion c. devices that measure radiation or temperature d. devices that can communicate the breaking of a container lock or seal e. all of the above

e. All of the above are functions of inventory.

Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory.

e. reduction in inventory investment

Which of the following is an advantage of the postponement technique? a. reduction in automation b. early customization of the product c. better quality of the product d. reduction in training costs e. reduction in inventory investment

c. "No one knows the job better than those who do it."

Which of the following is an illustration of employee empowerment? a. UPS drivers are trained to perform several motions smoothly and efficiently. b. Unionization of the work place brings better morale and therefore better quality. c. "No one knows the job better than those who do it." d. all of the above e. none of the above

e. channel assembly

Which of the following is an opportunity for effective management in the supply chain? a. random "pull" data b. multistage control of replenishment c. the bullwhip effect d. customer managed inventory e. channel assembly

c. It is inexpensive to implement.

Which of the following is false concerning enterprise resource planning (ERP)? a. It attempts to automate and integrate the majority of business processes. b. It shares common data and practices across the enterprise. c. It is inexpensive to implement. d. It provides and accesses information in a real-time environment. e. All of the above are true.

b. They allow easy switching from one product to the other.

Which of the following is false regarding repetitive processes? a. They use modules. b. They allow easy switching from one product to the other. c. They are the classic assembly lines. d. They have more structure and less flexibility than a job shop layout. e. They include the assembly of basically all automobiles.

e. All of the above are true.

Which of the following is false regarding the links between JIT and quality? a. Inventory hides bad quality; JIT immediately exposes it. b. JIT reduces the number of potential sources of error by shrinking queues and lead times. c. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. d. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. e. All of the above are true.

e. pull systems

Which of the following is generally found in most JIT environments? a. a push or pull system, depending upon the rate of demand b. a push system for high margin items and a pull system for low margin items c. a push system for purchased parts and a pull system for manufactured parts d. push systems e. pull systems

e. All of the above represent JIT supplier concerns.

Which of the following is not a concern of suppliers as they prepare to enter into JIT partnerships? a. Suppliers feel that they would be less at risk if they contracted with more than one customer. b. Suppliers are concerned that customers will present frequent engineering changes with inadequate lead time to deal with them. c. Suppliers feel that their processes are suited for larger lot sizes than the customer wants. d. Suppliers are concerned that frequent delivery of small quantities is economically prohibitive. e. All of the above represent JIT supplier concerns.

e. maintenance scheduling

Which of the following is not a concern of the supply chain? a. warehousing and inventory levels b. credit and cash transfers c. suppliers d. distributors and banks e. maintenance scheduling

d. small market share

Which of the following is not a condition that favors the success of vertical integration? a. availability of capital b. availability of managerial talent c. required demand d. small market share e. All of the above favor the success of vertical integration.

e. All of the above are goals of JIT partnerships.

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. obtain improved quality and reliability e. All of the above are goals of JIT partnerships.

d. removal of engineering changes

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. removal of engineering changes e. All of the above are goals of JIT partnerships.

c. Employees, machines, and suppliers produce units that conform to standards.

Which of the following is not a reason for variability? a. Employees, machines, and suppliers produce units late. b. Customer demand is unknown. c. Employees, machines, and suppliers produce units that conform to standards. d. Engineering drawings are inaccurate. e. Drawings or specifications are incomplete.

b. total control over every aspect of the organization

Which of the following is not an advantage of a virtual company? a. speed b. total control over every aspect of the organization c. specialized management expertise d. low capital investment e. flexibility

c. vulnerability of trade secrets

Which of the following is not an advantage of the "few suppliers" concept? a. suppliers' willingness to participate in JIT systems b. trust c. vulnerability of trade secrets d. creation of value by allowing suppliers to have economies of scale e. suppliers' willingness to provide technological expertise

d. Production and use can occur simultaneously.

Which of the following is not an assumption of the economic order quantity model shown below? H D S Q ⋅ ⋅ =* 2 a. Demand is known, constant, and independent. b. Lead time is known and constant. c. Quantity discounts are not possible. d. Production and use can occur simultaneously. e. The only variable costs are setup cost and holding (or carrying) cost.

c. pushing responsibility to the highest level possible through centralized decision making

Which of the following is not an attribute of lean operators? a. eliminating almost all inventory through just-in-time techniques b. minimizing space requirements by reducing the distance a part travels c. pushing responsibility to the highest level possible through centralized decision making d. educating suppliers to accept responsibility for helping meet customer needs e. All of the above are attributes of lean producers.

d. local optimization

Which of the following is not an opportunity for effective management in the supply chain? a. accurate "pull" data b. vendor managed inventory c. postponement d. local optimization e. channel assembly

c. assignment

Which of the following is not one of the Seven Wastes? a. overproduction b. transportation c. assignment d. defective product e. motion

a. high machine utilizations

Which of the following is not one of the essential ingredients for mass customization? a. high machine utilizations b. personnel and facility flexibility c. reliance on modular design d. rapid throughput e. very effective scheduling

e. lag demand with one-step expansion

Which of the following is not one of the four approaches to capacity expansion? a. average capacity with incremental expansion b. lead demand with incremental expansion c. lag demand with incremental expansion d. lead demand with one-step expansion e. lag demand with one-step expansion

d. safety stock inventory

Which of the following is not one of the four main types of inventory? a. raw material inventory b. work-in-process inventory c. maintenance/repair/operating supply inventory d. safety stock inventory e. All of these are main types of inventory.

b. Toyota Production System (TPS)

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

a focus on throughput and reduced inventory?

Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

c. Lean operations

Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

d. Shigeo Shingo

Which of the following is the author of the phrase "Inventory is evil"? a. Poka Yoke b. Pat "Keiretsu" Morita c. Kanban Polka d. Shigeo Shingo e. none of the above

e. None of the above is true.

Which of the following is true regarding opportunities to improve service processes? a. Automation can do little to improve service processes, because services are so personal. b. Layout is of little consequence, since services seldom use an assembly line. c. If a work force is strongly committed, it need not be cross-trained and flexible. d. All of the above are true. e. None of the above is true.

d. All of the above are true.

Which of the following is true regarding the concept of flexibility? a. It is the ability to change production rates with little penalty in time, cost, or customer value. b. It can be accomplished with sophisticated electronic equipment. c. It may involve modular, movable, even cheap equipment. d. All of the above are true. e. None of the above is true.

e. All of the above are true.

Which of the following is true regarding the steps to reducing setup times? a. The first step involves performing as much setup preparation as possible while the process/machine is operating. b. The cycle of steps is repeated until setup time is reduced to under a minute. c. Standardize tooling and standardize training are included in the same step. d. Improved material handling and move material closer are done before operator training. e. All of the above are true.

d. All of the above are true.

Which of the following is true regarding vision systems? a. They are consistently accurate. b. They are modest in cost. c. They do not become bored. d. All of the above are true. e. None of the above is true.

a. low volume, high variety

Which of the following phrases best describes process focus? a. low volume, high variety b. finished goods are usually made to a forecast and stored c. operators are modestly skilled d. high fixed costs, low variable costs e. raw material inventories are high relative to the value of the product

d. high fixed costs, low variable costs

Which of the following phrases best describes product focus? a. low volume, high variety b. finished goods are usually made to order c. processes are designed to perform a wide variety of activities d. high fixed costs, low variable costs e. raw material inventories are low relative to the value of the product

e. all of the above

Which of the following products is likely to be assembled on a repetitive process line? a. automobiles b. personal computers c. dishwashers d. television sets e. all of the above

e. All of the above are true.

Which of the following regarding enterprise resource planning (ERP) is true? a. It involves an ongoing process for implementation. b. It can incorporate improved, reengineered "best processes." c. It has a software database that is off-the-shelf coding. d. ERP systems usually include MRP, financial and human resource information. e. All of the above are true.

c. changes in staffing levels

Which of the following represents a common way to manage capacity in the service sector? a. appointments b. reservations c. changes in staffing levels d. first-come, first served service rule e. "early bird" specials in restaurants

a. inexpensive rates for weekend phone calls

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched? a. inexpensive rates for weekend phone calls b. appointments c. reservations d. first-come, first-served e. none of the above

d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

Which of the following statements about ABC analysis is false? a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. e. All of the above statements are true.

d. The larger annual demand, the less attractive a discount schedule will be

Which of the following statements about quantity discounts is false? a. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. b. In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available. c. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. d. The larger annual demand, the less attractive a discount schedule will be. e. The smaller the ordering cost, the less attractive a discount schedule will be.

d. If annual demand were to double, the EOQ would also double.

Which of the following statements about the basic EOQ model is false? a. If the setup cost were to decrease, the EOQ would fall. b. If annual demand were to increase, the EOQ would increase. c. If the ordering cost were to increase, the EOQ would rise. d. If annual demand were to double, the EOQ would also double. e. All of the above statements are true.

e. All of the above statements are true.

Which of the following statements about the basic EOQ model is true? a. If the ordering cost were to double, the EOQ would rise. b. If annual demand were to double, the EOQ would increase. c. If the carrying cost were to increase, the EOQ would fall. d. If annual demand were to double, the number of orders per year would increase. e. All of the above statements are true.

e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

Which of the following statements best compares modular bills and phantom bills? a. Both pertain to assemblies that are not inventoried. b. There is no difference between the two. c. Both pertain to assemblies that are inventoried. d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills. e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

b. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.

Which of the following statements regarding fixed costs is true? a. Fixed costs rise by a constant amount for every added unit of volume. b. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs. c. Fixed costs are those costs associated with direct labor and materials. d. Fixed costs equal variable costs at the break-even point. e. Fixed cost is the difference between selling price and variable cost.

b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.

Which of the following statements is true about the MRP plan when using lot-for-lot ordering? a. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. e. All of the above are true.

c. Supply chain savings exert more leverage as the firm has a lower net profit margin.

Which of the following statements is true regarding the leverage of supply chain savings? a. Supply chain leverage is about the same for all industries. b. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. c. Supply chain savings exert more leverage as the firm has a lower net profit margin. d. Supply chain leverage depends only upon the percent of sales spent in the supply chain. e. None of the above is true.

b. The company was founded as, and still is, a "virtual retailer" with no inventory.

Which of the following statements regarding Amazon.com is false? a. The company was opened by Jeff Bezos in 1995. b. The company was founded as, and still is, a "virtual retailer" with no inventory. c. The company is now a world-class leader in warehouse management and automation. d. The company uses both United Parcel Service and the U.S. Postal Service as shippers. e. Amazon obtains its competitive advantage through inventory management.

b. Dell builds its computers overseas in order to gain a low-cost advantage

Which of the following statements regarding Dell Computer is false? a. Dell is a practitioner of the mass customization process. b. Dell builds its computers overseas in order to gain a low-cost advantage. c. Dell keeps very little inventory of finished goods. d. Dell utilizes a global supply chain, but assembles its computers in the U.S. e. Dell's research focuses on manufacturing issues, not computer part design.

c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used in services.

Which of the following statements regarding JIT in services is true? a. Restaurants do not use JIT layouts because they interfere with creation of a good servicescape. b. Excess customer demand in services such as air travel is met by dipping into safety stocks. c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used in services. d. Scheduling is not relevant to effective use of JIT in services. e. All of the above are false.

d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.

Which of the following statements regarding MRP in services is true? a. MRP is for manufacturing only, and is not applicable to services. b. MRP can be used in services, but only those that offer very limited customization. c. MRP does not work in services because there is no dependent demand. d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. e. None of the above is true.

c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

Which of the following statements regarding Wheeled Coach is false? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

d. Problems become more obvious.

Which of the following statements regarding a pull system is true? a. Large lots are pulled from upstream stations. b. Work is pulled to the downstream stations before it is actually needed. c. Manufacturing cycle time is increased. d. Problems become more obvious. e. None of the above is true of a pull system.

c. Effective control of all goods leaving the facility is one applicable techniq

Which of the following statements regarding control of service inventories is true? a. Service inventory is a fictional concept, because services are intangible. b. Service inventory needs no safety stock, because there's no such thing as a service stockout. c. Effective control of all goods leaving the facility is one applicable technique. d. Service inventory has carrying costs but not setup costs. e. All of the above are true.

c. Operations managers can be environmentally sensitive and still follow a low cost strategy.

Which of the following statements regarding ethical and environmentally friendly processes is true? a. Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy. b. Processes can be environmentally friendly or socially responsible, but not both. c. Operations managers can be environmentally sensitive and still follow a low cost strategy. d. Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly. e. The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.

b. Too much concern with lot-sizing results in false accuracy.

Which of the following statements regarding lot-sizing is true? a. EOQ principles should be followed whenever economical. b. Too much concern with lot-sizing results in false accuracy. c. Lot-for-lot cannot be modified for scrap allowance or process constraints. d. The Wagner-Whitin algorithm simplifies lot size calculations. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the gross material requirements plan is true? a. It shows total demand for an item. b. It shows when an item must be ordered from a supplier or when production must be started. c. It combines a master production schedule with the time-phased schedule. d. It requires several inputs, including an accurate bill of material. e. All of the above are true.

b. It relaxes the assumption that all the order quantity is received at one time.

Which of the following statements regarding the production order quantity model is true? a. It applies only to items produced in the firm's own production departments. b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant. d. It minimizes the total production costs. e. It minimizes inventory.

e. All of the above are true.

Which of the following statements regarding the reorder point is true? a. The reorder point is that quantity that triggers an action to restock an item. b. There is a reorder point even if lead time and demand during lead time are constant. c. The reorder point is larger than d x L if safety stock is present. d. The fixed-period model has no reorder point. e. All of the above are true.

c. long-term partnering with a few suppliers

Which of the following supply chain strategies creates value by allowing suppliers to have economies of scale? a. suppliers becoming part of a company coalition b. vertical integration c. long-term partnering with a few suppliers d. negotiating with many suppliers e. developing virtual companies

d. RFID

Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds? a. ASRS b. AGV c. CAD/CAM d. RFID e. FMS

c. product-focused process

Which of the following transformations generally has the highest equipment utilization? a. process-focused process b. repetitive process c. product-focused process d. specialized process e. modular process

d. to minimize holding costs

Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to minimize holding costs e. All of the above are functions of inventory.

d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.

Which of these statements about the production order quantity model is false? a. The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous. b. Because receipt is noninstantaneous, some units are used immediately, not stored in inventory. c. Average inventory is less than one-half of the production order quantity. d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity. e. None of the above is false.

c. airfreight

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas? a. trucking b. railroads c. airfreight d. waterways e. pipelines

d. Cheramie Trucking trains workers to specialize and become very efficient in one job.

Which one of the following does not exemplify JIT used for competitive advantage? a. Acme Foods decides to decrease the number of its suppliers to just a few. b. Ajax, Inc. is proud to announce that incoming goods are delivered directly to the point of use. c. Ardoyne Builders has a scheduled preventive maintenance program. d. Cheramie Trucking trains workers to specialize and become very efficient in one job. e. Cajun Contractors has reduced the amount of space for inventory.

d. removal of incoming inspection

Which one of the following is a characteristic of a JIT partnership? a. large number of suppliers b. maximal product specifications imposed on supplier c. active pursuit of vertical integration d. removal of incoming inspection e. frequent deliveries in large lot quantities

c. production with zero defects

Which one of the following is a concern expressed by suppliers? a. elimination of in-plant inventory b. delivery to the point of use c. production with zero defects d. large lot sizes e. customers' infrequent engineering changes

a. Jones Company has decreased the number of job classifications to just a few.

Which one of the following is an example of JIT being used for competitive advantage? a. Jones Company has decreased the number of job classifications to just a few. b. Lafourche Metals increases the number of its suppliers to be less dependent on just a few. c. Houma Fabricators is proud to announce that incoming goods are inspected. d. Acme Company tells its maintenance department to intervene only if a machine breaks down. e. Caro Specialty Metals, Inc. has built a new, huge warehouse to store inventory.

c. large lead time

Which one of the following performance measures is not true of a world class firm? a. short time placing an order b. high percentage of accepted material c. large lead time d. high percentage of on-time deliveries e. low number of shortages per year

b. paper forms

Which one of the following products is most likely made in a job shop environment? a. a daily newspaper b. paper forms c. television sets d. cigarettes e. canned vegetables

d. A "customer" work center signals to the "supplier" workstation that more parts are needed.

Which one of the following scenarios represents the use of a kanban to reduce inventories? a. A supervisor tells the operators to stay busy and start producing parts for next month. b. A "supplier" work center signals the downstream workstation that a batch has been completed. c. A supervisor signals to several work centers that the production rate should be changed. d. A "customer" work center signals to the "supplier" workstation that more parts are needed. e. An operator asks the next station's operator to help him fix his machine.

d. Purchasing has an impact on the quality of the goods and services sold.

Which one of the following statements about purchasing is true? a. The cost of purchases as a percent of sales is often small. b. Purchasing provides a major opportunity for price increases. c. Purchasing is always more efficient than making an item. d. Purchasing has an impact on the quality of the goods and services sold. e. Competitive bidding is a major factor in long-term cost reductions.

e. The customer workstation signals to the supplier workstation when production is needed.

Which one of the following statements is true about the kanban system? a. The quantities in the containers are usually large to reduce setup costs. b. It is associated with a push system. c. It is useful to smooth operations when numerous quality problems occur. d. The supplier workstation signals the customer workstation as soon as a batch is completed. e. The customer workstation signals to the supplier workstation when production is needed.

b. It is the minimum inventory necessary to keep a perfect system running.

Which one of the following statements is true regarding JIT inventory? a. It exists just in case something goes wrong. b. It is the minimum inventory necessary to keep a perfect system running. c. It hides variability. d. It is minimized with large lot production. e. It increases if setup costs decrease.

d. AGVs

Which one of the following technologies is used only for material handling, not actual production or assembly? a. robots b. CNC c. CAD d. AGVs e. FMS

b. railroads

With the growth of JIT, which of the following distribution systems has been the biggest loser? a. trucking b. railroads c. airfreight d. waterways e. pipelines

Fixed

_________ cost is the cost that continues even if no units are produced.

postponement

__________ involves delaying any modifications or customization to the product as long as possible in the production process.

Keiretsu

__________ is a Japanese term to describe suppliers who become part of a company coalition.

process control

__________ is the use of information technology to control a physical process.

buckets

__________ refers to the time units in a material requirements planning (MRP) system.

time fences

___________ are a way of allowing a segment of the master schedule to be designated as "not to be rescheduled."

flexibility

___________ involves the ability to respond with little penalty in time, cost, or customer value.