Operations Management Final Exam

T/F According to the textbook, the five basic modes of transportation are motor, rail, air, water, and pipeline.

True

T/F As tighter control limits are instituted for the tracking signal, there is a greater probability of finding exceptions that require no action, but it also means catching changes in demand earlier.

True

T/F At a service facility it has been calculated that they can handle the demand per hour approximately 76 percent of the time at a rate of 4 per hour. This means that approximately 24 percent of the time, demand per hour will be greater than four customers, causing queues to develop.

True

T/F Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception.

True

T/F Criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments.

True

T/F Foreign suppliers located farther away may be able to deliver goods faster than domestic suppliers due to more efficient transportation and logistical systems

True

T/F Lack of internal or external collaboration will create quality, cost, delivery timing, and other customer service problems that are detrimental to supply chains.

True

T/F One of the assumptions of the economic order quantity model (EOQ) is that purchase price must remain constant.

True

T/F Poor logistics management can bring a supply chain to its knees, regardless of the quality of the products.

True

T/F Procurement credit cards can be used for small purchases including meals, lodging, and travel expenses.

True

T/F Reverse logistics refers to the movement and storage of returned goods.

True

T/F Rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program.

True

T/F While a company's Internet presence may be desirable for finding information or conducting product transfers, touching products and talking face-to-face with company representatives remains an integral part of the supplier-customer interface.

True

T/F Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes and variations due to common causes.

True

T/F Supply chain analytics can be used along the supply chain to schedule production according to expected supplier deliveries

True

T/F Supply chain management is concerned about how suppliers' products are designed, produced, and transported.

True

T/F The Malcolm Baldrige National Quality Award recognizes firms for their quality achievements but is only given to U.S. firms.

True

T/F The economic order quantity model (EOQ) is the optimal independent demand order quantity that minimizes total annual inventory costs.

True

T/F Themed restaurants such as the ESPN zone (sports theme), Rainforest Cafe (jungle theme), and Chuck E. Cheese (kids theme) are all examples of Entertainment facilities.

True

T/F To control and enhance the capabilities of companies within a supply chain, well-designed performance measurement systems must be implemented.

True

T/F Toyota initially designed their JIT program on Ford's manufacturing system.

True

T/F Two methods for managing supply chain risk include utilizing a supply chain IT system and identifying backup suppliers.

True

T/F A SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization.

False

T/F A country that imposes high tariffs encourages foreign-based companies to import goods.

False

T/F In Europe, rail transportation tends to be much more prevalent and reliable than rail transportation in the U.S., because European track, facilities, and equipment are newer and better maintained.

True

T/F Reverse logistics has become an important trend in ethical and sustainable sourcing.

True

T/F When both the demand and lead time of a product are variable, firms must keep a higher safety stock level compared to variations in just demand, to offer the same service level.

?

Organizations practicing lean production often increase their inventory levels in order to create a cushion against variability so that they can investigate and eliminate the weaknesses in their systems.

False

T/F A lean system is also known as a push system.

False

T/F According to the text, good queue management consists of managing only what the customer perceives to be as the waiting time.

False

T/F According to the textbook, there are four key supply chain business processes: Purchasing, Manufacturing, Distribution, and Returns.

False

T/F According to the textbook, third-party logistics providers (3LPs) do not offer assistance with helping products clear customs.

False

T/F ERP Implosion is the process of converting a parent item's planned order releases into component gross requirements.

False

T/F Generally speaking, motor carriers are less expensive than rail carriers to haul goods.

False

T/F If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease.

False

T/F In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to more than 1.00 and less than 100.

False

T/F In general, performance measurement systems are mostly identical from company to company.

False

T/F It is considered unethical for a firm to intentionally buy from women-owned businesses.

False

T/F Pareto Analysis means that 20 percent of the items get about 80 percent of the safety stock.

False

T/F The EOQ equation is derived by setting the annual purchase cost equal to the annual holding cost.

False

T/F The batching of orders is unlikely to increase the likelihood of the bullwhip effect occurring.

False

T/F The legacy MRP system was programmed to coordinate with other functional areas in the firm.

False

T/F The objectives of any CRM initiative should be focused on what the company can reasonably achieve.

False

T/F The optimal capacity utilization for an organization would be 100%.

False

T/F The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.

False

T/F Trends in supply chain management include expansion of the supply chain and decreasing supply chain visibility.

False

T/F Volatile currency exchange rates do not have an impact on location decisions.

False

T/F When a single company that is implementing an ERP system chooses to use one company to provide an operations module, another to provide the sales and marketing application, and yet another company to provide the finance and accounting module, that single company has chosen to utilize the single integrator approach.

False

T/F When customer expectations are met or exceeded, the service is deemed to possess low quality.

False

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about: a. 10% of their time on expediting orders b. 20% of their time on expediting orders c. 30% of their time on expediting orders d. None of the these

a. 10% of their time on expediting orders

An internal or external event that causes a disruption or failure of supply chain operations is an example of a. Bull-whip effect b. Back-shoring c. Supply chain risk d. Six Sigma quality management

a. Bull-whip effect

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. Bullwhip effect b. Delphi method c. CPFR effect d. Mean deviation

a. Bullwhip effect

When an organization attempts to offer the right products and services to customers at the right time through the offer of individual promotions tied to specific events like birthdays and anniversaries, this is referred to as: a. Event-based marketing b. Segmented selling c. Personal holiday marketing d. Extreme segmentation marketing

a. Event-based marketing

Waste in Japan is also referred to as: a. Muda b. Kanban c. Poka-yoke d. Sakichi

a. Muda

Which of the following is TRUE? a. Performance metrics and personal business relationships are both keys to building successful partnerships. b. ISO 75000 is the supplier award given to the highest rated supplier in Japan. c. The key to successful partnerships is developing performance measures with weights greater than 3.50. d. SRM software modules are very affordable (less than $50,000) and can be implemented with a week.

a. Performance metrics and personal business relationships are both keys to building successful partnerships.

Which of the following has made external integration more difficult to achieve? a. Problems with internal integration efforts b. Identifying key trading partners c. Lack of software applications to coordinate the effort d. Increased number of franchise operators

a. Problems with internal integration efforts

___________________ are for-profit organizations that contract out or lease a wide range of light manufacturing, warehousing, and distribution services to other companies. a. Public warehouses b. Private warehouses c. Breakbulk warehouses d. Consolidation warehouses

a. Public warehouses

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Select the key dimensions of performance based on what is important to the end consumer b. The weights for all dimensions must sum to 1 or 100% c. Evaluate each of the performance measures on a rating between zero and one-hundred d. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score

a. Select the key dimensions of performance based on what is important to the end consumer

Which of the following would be a good reason to outsource (buy) versus making? a. To utilize existing capacity within a company's own firm b. A firm lacks the technology or expertise to produce an item c. To have more direct control over the design and production of an end item d. No competent supplier presently produces the needed item

b. A firm lacks the technology or expertise to produce an item

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Establish corporate ethical and sustainable sourcing policies b. Certify suppliers as ISO 9001 compliant c. Develop a performance measurement system d. Prioritize items based on ethical and sustainability opportunities and ease of implementation.

b. Certify suppliers as ISO 9001 compliant

Which of the following are required elements of an effective CRM initiative? a. Sending out promotional materials via e-mails and traditional mail to a large random group of a potential customers b. Cross-selling customers after an initial purchase c. Preserving a traditional sales force that communicates with the supply-chain members d. All of these

b. Cross-selling customers after an initial purchase

Which of the following customer service elements can be classified as an example of posttransaction elements? a. Salesperson politeness b. Customer complaint resolution c. Customer service policies d. The company's choice of organizational structure

b. Customer complaint resolution

Promoting diversity by intentionally buying from small firms or ethnic minority businesses is an example of: a. Supply base rationalization b. Ethical sourcing c. Sustainable sourcing d. Supply base sourcing

b. Ethical sourcing

Due to the success of NAFTA, the U.S________________. a. Has decided to extend the agreement until 2025 b. Has free trade agreements in 20 countries c. Both A & B d. None of the above

b. Has free trade agreements in 20 countries

Customer relationship management, distribution network, transportation management, and service response logistics are all important issues that are most closely related to: a. Purchasing b. Logistics c. Integration d. Manufacturing

b. Logistics

The ___________ planning horizon is shorter than the aggregate production plan's, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? a. Material requirements plan b. Master production schedule c. Demand time fence d. Capacity Requirements Plan

b. Master production schedule

Information technology advances, for example, have made cyber attacks: a. Less common b. More common c. Nearly impossible d. Limited to franchises

b. More common

You are a manager at Sunnydale Appliances. A customer who recently purchased a dishwasher contacts you with a problem and requests warranty information. According to the text, this is an example of: a. Probable customer churn b. Posttransaction customer service c. Transaction customer service d. Pretransaction customer service

b. Posttransaction customer service

Intermodal marketing companies (IMCs) are companies that act as intermediaries between intermodal a. Trucking companies b. Railroad companies c. Waste management companies d. Warehouse management companies

b. Railroad companies

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as: a. CRM b. SRM c. ISO 9000 d. SCSS

b. SRM

Encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as: a. Progressive procurement b. Supplier management c. Right-shoring d. Supply chain performance management

b. Supplier management

Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series? a. Cyclical Variations b. Trend Variations c. Seasonal Variations d. Random Variations

b. Trend Variations

Which of the following is a direct benefit from the adoption of NAFTA? a. A reduction in illegal immigrants crossing the border from Mexico b. An increase in manufacturing job opportunities in the U.S. c. An increase in trade between U.S., Canada, and Mexico d. An increase in trade between U.S. and China

c. An increase in trade between U.S., Canada, and Mexico

Firms can safeguard customer information by doing which of the following? a. Allow customers to opt-in and out of mailing lists b. Allow customers to access their accounts online to view information collected about themselves c. Both A & B d. None of these

c. Both A & B

According to the text, which of the following is considered a current trend in supply chain management? a. Using supply chain analytics b. Increasing supply chain visibility c. Both A and B d. None of these

c. Both A and B

Which of the following would be considered a quality of life factor? a. Wage rates b. Foreign exchange rates c. Community safety d. All of the above

c. Community safety

A customer approaches a firm with a question regarding her order status and shipping date; the information the firm provides is an example of which of the eight key supply chain business processes: a. Supply management process b. Demand management process c. Customer service management process d. Order fulfillment process

c. Customer service management process

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: a. Supplier certification programs b. Manufacturer certification programs c. Early supplier involvement d. Total Cost of Ownership initiatives

c. Early supplier involvement

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. New competition b. Supplier quality c. Ergonomic conditions d. Emerging markets

c. Ergonomic conditions

The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier. How often do they give this award? a. Every year b. Every 6 months c. Every 5 years d. Every 10 years

c. Every 5 years

According to the text, which of the following is a service strategy characterized by the idea that a service can serve a narrow target market better than a broad market? a. Differentiation strategy b. Demand strategy c. Focus strategy d. Transitional strategy

c. Focus strategy

Organizations that primarily compete on speed of delivery, such as FedEx and UPS, utilize which of the following approaches for location determination? a. Sourcing center b. Air and ground c. Hub and spoke d. LTL consolidation

c. Hub and spoke

The Quick Response program, developed in the 1980's, was an offshoot of the following supply chain concept: a. Efficient Consumer Response b. Six Sigma c. Just-in-Time d. Kaisen

c. Just-in-Time

______________ creates the efficient flow of goods between supply chain partners, allowing profits and competitive advantage to be maximized. a. Operations b. Transportation planning c. Logistics d. Procurement

c. Logistics

In the text, Table 9.1 shows that for-hire logistics expenditures in the U.S., have _____________ in the past thirty-one years. a. Remained the same b. Slowly declined c. More than quadrupled d. Decreased for the first 10 years, then increased

c. More than quadrupled

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as: a. Material requisition b. Purchase requisition c. Planned order release d. Traveling requisition

c. Planned order release

According to the SCM profile Honda ___________ based on a supplier relations index developed by Planning Perspectives. a. Ranked lower in 2015 than 2014 b. Ranked near the bottom in 2015 c. Ranked near the top in 2015 d. Ranked fifth in 2015

c. Ranked near the top in 2015

The following time-series approach to forecasting uses historical data to generate a forecast and works well when demand is fairly stable over time: a. Naïve Forecast b. Weighted Moving Average c. Simple Moving Average d. Exponential Smoothing

c. Simple Moving Average

Which of the following modes of cargo transport can be characterized as being the most inexpensive and very slow, yet good for transporting very heavy goods a long-distance? a. Air Carriers b. Rail Carriers c. Water Carriers d. Motor Carriers

c. Water Carriers

Regional trade agreements assist with which of the following? a. Monitor national trade policies b. Provide technical assistance for developing countries c. Handle trade disputes d. All of the above

d. All of the above

Supply relationship management personnel routinely communicate with: a. Production personnel to obtain feedback on supplier and purchased item performance b. Marketing personnel for customer feedback c. Suppliers for new product development and performance feedback d. All of the above

d. All of the above

Which of the following are intermodal transportation alternatives? a. Truck trailer-on-flatcar b. Roll-on-roll-off c. Piggyback service d. All of the above

d. All of the above

Which of the following is a vital element in developing a strong supply chain through the practice of process integration? a. Developing and implementing a strong information technology system that allows for fast and easy information exchanges between supply chain partners b. Partner collaborations on methods to improve processes within the supply chain c. Partnerships, which value information sharing and partner collaborations d. All of the above

d. All of the above

Which of the following is an example of how lean programs can help to protect the environment? a. Parts made from recycled materials b. Using rubber from used tires in auto parts c. Batch size reduction to reduce plastics d. All of the above

d. All of the above

An important outcome of statistical process control is: a. Firms can take corrective actions before process variabilities get out of control b. Firms can visually monitor process performance c. Firms can minimize total inventory cost d. Both A & B e. None of these

d. Both A & B

When CRM applications are available 24/7 on smartphones, tablets, and desktops, this is referred to as: a. A high-service application b. Smart CRM c. All-time CRM d. Continuous connectivity

d. Continuous connectivity

A customer's lifetime value is calculated by: a. Summing the projected annual profitability of the customer b. Summing the annual sales of the customer and then dividing by the projected lifetime c. The firm's MRP system d. Finding the NPV of a customer's projected lifetime profits for the firm

d. Finding the NPV of a customer's projected lifetime profits for the firm

When salespeople need to fill end-of-quarter or end-of-year sales quotas they might use ___________, which creates greater use of safety stock causing the bullwhip effect. a. Stockpiling b. Bullwhip ordering c. Order fulfillment d. Order batching

d. Order batching

What component of a time series has variations in demand which show peaks and valleys that repeat over a consistent interval such as hours, days, weeks, months, or years? a. Trend Variations b. Cyclical Variations c. Random Variations d. Seasonal Variations

d. Seasonal Variations

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as: a. Quality Systems Certification b. Supply Management c. Supplier Inspection d. Supplier Certification

d. Supplier Certification