Round 1

Finished goods inventory states there are 100 items in stock, when there are actually 110. The first 100 customer orders are accepted and scheduled for immediate shipment. The next 50 customer orders are scheduled and promised for shipment the following week based on the next scheduled receipt. What is the customer service level for the orders scheduled for shipment? 0.91 1 Not enough information to determine 1.11

1 The 100 that were promised this week will be shipped, giving a 100% customer service level

Three of the broad areas necessary to address how well the strategy execution process is performing are 1. Quality, 2. Financial 3. Employee turnover 1. Customer 2. Backorder / backlog. 3. Critical ratio 1. Financial 2. Customer 3. Employees 1. Operations 2. Financial. 3. Schedule

1. Financial 2. Customer 3. Employees Accurate and timely information about daily operations is essential if managers are to gauge how well the strategy execution process is proceeding. Information systems need to cover five broad areas: 1, customer data 2. operations data 3. employee data 4. supplier / strategic partner data 5. financial performance data

A company is determining how much floor space will be required for a new distribution warehouse. The plan is to store 15,000 cartons stacked on pallets 3 high. Each pallet will contain approximately 40 cartons. How many pallet positions will be required for the warehouse? 125 120 375 5000

125 15000 cartons divided by 40 per pallet divided by 3 high = 125

Workloads between work centers might be redistributed by Subcontracting A substitution An alternate routing A temporary routing

An alternate routing An alternate routing is usually less preferred than the primary routing but results in an identical item.

Which of the following costs of quality is addressed by the use of statistical process control? External failure Internal failure Prevention Appraisal

Appraisal Appraisal costs determine the degree of conformance to quality.

Which of the following techniques relies on something other than brainstorming for problem identification? Force field relationship Cause and effect diagram Affinity diagram Bar chart

Bar chart Bar charts get data from a process, not brainstorming.

The finite-scheduling model to determine when an item can be delivered to a customer that includes any constraints that might restrict production is Available-to-promise Operating curve Capable-to-promise Constraint finite scheduling

Capable-to-promise Capable-to-promise is the process of committing orders against available capacity as well as inventory.

Inventory in excess of consumption that has not been used for a defined period is identified as Inactive Hedge Surplus Safety stock

Inactive Inactive inventory is stock designated as in excess of consumption within a defined period or stocks of items that have not been used for a defined period.

Employee non-production time in a continuous improvement environment is acceptable for which of the following reasons? It is not acceptable, as 100% utilization should be the goal It shows management's trust that they will find something to do It allows time for employees to work on improvements It allows employees to utilize flex time

It allows time for employees to work on improvements For it to be a true continuous improvement environment, employees need time to address problems, find solutions and implement them.

The manufacturing environment best suited for the introduction phase of a product's life cycle is Engineer to order Assembly line Flow Job shop

Job shop The job shop layout allows for the incorporation of new product into existing work centers. There has not been enough growth to dedicate a repetitive or flow process.

Which of the following types of inventory would understate inventory turns if included? Work-in-process Raw materials Finished goods Maintenance, repair and operating supplies

Maintenance, repair and operating supplies MRO inventory is excluded from inventory turns calculations, and is monitored separately, or often expensed as issued.

Inventory that has been superseded by a new model and will never be used or sold at full value is defined as Inactive Distressed Obsolete Surplus

Obsolete Obsolete inventory is inventory items that have met the obsolescence criteria established by the organization.

In a job shop environment, which lead time element is typically the longest? Run Wait Queue Setup

Queue Queue time is typically over 90% of the manufacturing lead time in a job shop.

Which of the following techniques are the best indicators of where to concentrate efforts to solve a quality problem? Histograms Pareto analysis Run charts Fishbone diagram

Pareto analysis Using Pareto would determine which of the quality problems make up most of the errors, and are responsible for the most cost.

A tool that enables a planner to perform bottom-up replanning is Pegging Demand time fence Firm planned orders Back-order report

Pegging Pegging allows the buyer to determine what the source of the demand is, and what the impact would be if a change is made.

Universal power supplies that can be set to different voltages based on the country the customer resides in is a sample of Concurrent design Postponement Curve fitting Decoupling

Postponement Postponement shifts product differentiation closer to the consumer by postponing specific changes to the last possible supply chain location.

The objective of sales and operations planning is to Hold sales accountable for the forecast month to month Provide an integrated plan for sales and manufacturing Integrate the master schedule with the business plan Provide a means for the master scheduler to validate the schedule

Provide an integrated plan for sales and manufacturing Even though the S&OP may accomplish some of the other areas indirectly, it's primary objective is to tie the sales, inventory and production plans into one plan

A company makes products with multiple options and is experiencing a temporary increase in sales. Which of the following inventories should be increased? Raw materials Work in process Finished goods Subassemblies

Subassemblies Increasing the subassemblies will allow flexibility to cover demand for various options, yet maintain lead times.

In an assemble-to-order environment, the stocking level where independent demand is planned for the master production schedule is Subassemblies Finished goods Raw materials Purchased parts

Subassemblies The master production schedule would be planned at the sub-assembly level; raw materials and purchased parts would be planned as dependent within MRP; finished goods would be planned at the final assembly schedule level.

Which of the following statements is most true in a production environment with products that are subject to cyclical, random, seasonal and trend types of demand? Temporary help is used to vary capacity Forecasting is primarily based on historical demand Finished goods inventory is a demand buffer The hybrid production strategy is used to vary capacity

The hybrid production strategy is used to vary capacity Being a combination of level and chase methods, the hybrid strategy can vary capacity in response to all types of demand variability; the other responses cannot be inferred from the information in the question

The most likely reason for waiving inspection on a purchased receipt is The part passed inspection six times in a row The lot quantity is too small to select a random sample from The material is holding up production at the bottleneck The receipt is a replacement for one previously rejected

The part passed inspection six times in a row Part of acceptance sampling is to determine when the need for sampling can be reduced or eliminated.

What is indicated if the process capability index Cp is 1.8? Standard deviation is 1.8 / 9 or .2 The distribution is off the nominal centerline by 1.8 sigma Special cause variation is not being controlled or eliminated The process is capable

The process is capable Cp is calculated by dividing the difference between the upper specification limit (USL) and the lower specification limit (LSL) by 6 times Standard Deviation. Cp assumes that the process is centered between the upper and lower specification limits. If the Cp is greater than 1.00, the process is capable.

A disagreement between sales and production when modifying the sales and operations plan is most likely to be caused by Product mix sales always being inaccurate Sales not considering production's overdue orders No capacity for a 2-week shutdown in July The sales volume being consistently overstated

The sales volume being consistently overstated An overstated sales plan will cause an overstated production plan, causing production to overplan resources; sales forecasts product families, not the mix of individual items; overdue orders are not considered as part of the sales and operations plan; everyone will be aware of the shutdown

In an assemble-to-order environment, the number of assemblies is most influenced by The final assembly combinations The manufacturing lead time The master production schedule The structure of the bill of material

The structure of the bill of material The bill of material would determine at what point subassemblies are produced; the other responses do not impact the subassemblies.

Cycle time in a distribution network refers to the Time from placement of the order to receipt of the order Time from shipment of the inventory to the receipt by the customer Time from receipt of the order to shipment Time from customer need to delivery into the customer's inventory

Time from customer need to delivery into the customer's inventory Cycle time in distribution is the elapsed time from when the customer need is defined to the time they receive the inventory

The seven tools that help organizations understand their processes in order to improve them are known as the: 14 Points. basic seven tools of quality (B7). ISO9000. A3 problem solving tools.

basic seven tools of quality (B7). B7 refers to the tools that help organizations understand their processes to improve them.

With proper lot sizing, operation overlapping will: decrease queue time for other orders. decrease move costs. eliminate idle time at the second operation. increase capacity.

eliminate idle time at the second operation. The second operation begins processing prior to completion of the first operation to minimize idle time at the second operation.

Introducing incremental improvements to an existing system is known as: heijunka. andon. kaizen. hoshin.

kaizen. Kaizen is the Japanese term for improvement; continuing improvement involving everyone.

The difference between capacity information used for capacity requirements planning as opposed to rough cut capacity planning is Work center operations are checked Different work centers are checked A greater level of detail is checked Key work centers are not rechecked

A greater level of detail is checked CRP checks more detail than RCCP; operations are typically not checked, unless by finite loading; more work centers are checked, but key work centers are included in both.

Theoretical capacity is most closely approached by A lean manufacturing line using kanbans Automated machining centers dedicated to a product family A heat treating furnace that operates 7/24/365 A synchronous assembly line consisting of automated and manual operations

A heat treating furnace that operates 7/24/365 A continuously operating machine would be close to theoretical capacity; the other responses would all have downtime.

A potential process transition point that a business with declining production volume may face is: project to jobbing. batch to line. line to project. continuous to batch.

continuous to batch. With declining production volume, the appropriate choice would be to move from a high volume continuous production to building products in intermittent batches. Batch to line and project to jobbing describe the reverse, that is moving from low volume processes to high volume processes. The jump from line to project is very large, and the nature of project manufacturing places it outside of any type of product made in a line or batch mode.

A preventive maintenance program is being initiated at a company. The program should first be implemented for: a work enter that only has one machine. equipment that has the longest setup time. the most expensive equipment. equipment that gates work center capacity.

equipment that gates work center capacity. It is critical that the gating work center capacity be available to feed downstream operations.

In which environment is the demand management function least likely to provide customers with promise dates? make-to-stock assemble-to-order make-to-order engineer-to-order

make-to-stock In a make-to-stock environment, customers buy directly from the available inventory, so customer service is determined by whether the item is in stock or not. Since the other options will require that the item be produced after the customer order is taken, all will have promise dates.

Queue, setup, run, wait and move times are components of: replenishment lead time. demand lead time. manufacturing lead time. delivery lead time.

manufacturing lead time. These are the elements that make up the manufacturing portion of the lead time.

The process known as PDCA stands for: prepare, do, check, accept. plan, do, check, action. plan, decide, coordinate, act. plan, develop, check, accept.

plan, do, check, action. PDCA stands for plan-do-check-action.

Assessing performance in a specific process by comparing it with best in class companies is an example of: benchmarking. best practice. performance measurement. quality function deployment.

benchmarking. Benchmarking compares a company's costs, products, and services to that of a company thought to have superior performance.

If 10 hours of load is desired at the end of Week 4, the average capacity for each week would be (with week 0 + 1 + 2 + 3 +4 = 110 between released and planned orders already): 15 20 25 35

25 If the desired load at the end of period 4 is 10 hours and there is a total of 110 hours of load available, the workstation would have to increase capacity to 25 hours each week, or 100 hours of capacity. This would leave 10 hours of load at the end of week 4.

A capital budget item costs $18,000 and had an annual savings of $2,500 labor and $500 in annual power usage in a company with a 12% internal rate of return. They payback period in years would be Not enough information to calculate. 8.3 years 5 years 6 years

6 years $18,000 / $3,000 = 6 years

To simplify understanding of attainment of goals in a facility that maintains a large number of measures crossing many organizations while providing data on a variety of interests, key performance indicator reporting should provide users with An executive summary including strategy measures only Separate KPI's for executives, middle managers and individual performers Visual graphics for every single task An aggregation of measures from detail and tactical to broad and strategic

An aggregation of measures from detail and tactical to broad and strategic To mitigate confusion and complexity of progress monitoring resulting from an overwhelming number of KPI's that no one person really understands, performance targets should include an aggregation of measures from detail and tactical to broad and strategic

When the balance sheet is displayed horizontally it is likely to be used to Satisfy Securities & Exchange Commission regulations Provide more year to date detail than the other displays Appraise the trend in the accounts over the years Enable more relevant accounts to be displayed that the vertical report

Appraise the trend in the accounts over the years The balance sheet and income statement are often presented horizontally and vertically. The horizontal balance sheet is employed to appraise the trend in the accounts over the years.

A critical step in developing a corporate social responsibility (CSR) strategy is to identify which of the following? Regulations that have a significant financial affect on the firm Areas where the interests of the firm and society overlap Significant uses of energy in the supply chain. Opportunities to reduce the operating costs of the firm

Areas where the interests of the firm and society overlap A company impinges upon society during its normal course of business, while external social conditions influence corporations. Therefore, a critical step in developing a CSR strategy is to identify these areas of overlap and, consequently, understand the mutual dependence of corporations and society, as well as their shared values.

When assessing potential points of weakness in a risk assessment for a technology based businesses, analysts must be aware that At any moment a competitor may experience a breakthrough and take market share A solidly composed patent will give them many years of competitive protection. Colleges and universities are often available for cutting edge research & development Outsourcing is a viable alternative to increase capacity and provide flexibility to customers

At any moment a competitor may experience a breakthrough and take market share A technology based company supplier of high tech coatings was caught by surprise when their competitor introduced a new coating technology enabling it to produce product at levels of cleanliness significantly better than they.

Large scale productivity software implementations often experience implementation delays or initially perform below expectations. A mitigation strategy would be to Budget for additional time and reduced performance post implementation Hire a third party to implement it Keep the old system running in parallel until 100% functionality and user acceptance exists Implement it in small pieces while keeping existing systems in place

Budget for additional time and reduced performance post implementation With productivity technology (software) implementations it is often the case that performance drops below existing and projected levels until the application "works as expected".

Successfully incentivizing employees in a labor paced environment to exceed scheduled output within scheduled time is an example of an employee wage policy That is bound to cause strife when engineering increases standard times by operation Will likely put the company's products at the top in this industry for quality That will be totally compatible with almost every unionized organization Creating production value

Creating production value When designing the payroll system at one steel company, management decided to incentivize the employees with a 1% bonus rewarded for every 1% that their output exceeds goal. The company consistently achieves their low cost provider goals.

A product characterized by standardized designs, price competition and process improvement is in which stage of its life cycle? Maturity Introduction Growth Decline

Maturity The mature phase takes place when sales begin to level off due to market saturation. Price competition has increased and process improvements can be made to lessen the impact of declining profits.

Which of the following results is an output of the business planning process? Determination of capital equipment investment to support the resource plan Mission, goals and objectives of the organization, with action plans Statement of revenue, cost and profit objectives by product family Sales and operations plan, production plan and inventory or backlog plan

Statement of revenue, cost and profit objectives by product family The business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statement

Material is staged for which of the following reasons? To minimize the impact of inventory errors To use warehouse space efficiently To balance the workload in the storeroom To offset poor storeroom response

To minimize the impact of inventory errors By staging inventory before put-away, use, or shipment enables inventory control to validate balance records.

Reporting metrics on part reduction, recycled content, and total weight reduction including packaging is a good example of how The voice of the customer can facilitate savings Design for logistics can benefit holistically Using life cycle analysis can result in resource and energy savings Component modularity can drive product design

Using life cycle analysis can result in resource and energy savings Targets including reducing the number of parts, increasing recycled content, reducing overall weight of products is a good example of how using life cycle analysis has helped companies to identify where resources and energy reductions can be made

A steel manufacturer changed their process from using a few large coke-fueled ovens to using many small electronic arc furnaces. thus reducing product costs considerably. This is an example of Design for manufacturability Reverse engineering Value chain redesign Leapfrogging

Value chain redesign One successful steel manufacturer uses small electronic arc furnaces rather than the more expensive coke ovens typically used in traditional steel manufacturing thus being able to deliver competing product at lower cost. This is an example of value chain redesign.

If during the assessment period of an acquisition specific synergies are observed and found to be positive, strategists must keep in mind that risks continue to lie in the fulfillment of the overall strategic goal. Strategically, the decision to acquire then becomes a question of How long it will take to successfully implement a common order entry system. What the international market thinks of the plan Compatibility of company cultures and how they can be made more similar Whether it is faster / cheaper to buy vs. develop internally

Whether it is faster / cheaper to buy vs. develop internally The decision to acquire is a question of whether it is faster and more economical to buy something that the company could have developed on their own

The possibility of maintaining or acquiring other diverse businesses will be facilitated by finding a manufacturing strategic fit an entity with a positive cash flow an entity with solid assets a company with a similar strategic vision

a manufacturing strategic fit When snowmobile maker Bombadier diversified into motorcycles, it was able to setup MC assembly lines within the same manufacturing facility where it was assembling MC's.

The Accounting group in a make to stock company who manufactures their products often encourages building finished good inventory to excess. This accounting group is likely using: Part period balancing Baseline Measures absorption costing Backflushing

absorption costing Absorption costing assigns variable costs and a portion of fixed costs to each unit of production. Building excess inventory allows costs to be assigned across more units.

The balance sheet of a company represent a summary of its assets, liabilities and owner's net worth assets, liabilities and equities assets and liabilities revenue and expenses

assets, liabilities and equities The balance sheet of the company represent the summarized data of its assets, liabilities and equities

Supporters of sustainability view sustainability as a means to prevent lawsuits gain a competitive edge and increase market share stay ahead of environmental regulations gain recognition in third world countries

gain a competitive edge and increase market share Embracers of sustainability are much more likely to have a solid business case definition of sustainability such as the triple bottom line (social, economic, environmental) and are much more likely to see the financial benefit.

In the five forces model of competition, as products available from rival suppliers become less differentiated supplier rivalry is said to increase diminish design innovation cause price increases become stagnant

increase Similar product offerings buyers have less reason to be brand loyal. Thus increasing supplier rivalry.

Incorporating sustainability policies within the strategic planning process can have the added benefit of avoiding plant level regulatory fines. reducing transportation costs. adding measurable activities to facilities personnel job descriptions. increasing expertise and diversity at the board of directors level

increasing expertise and diversity at the board of directors level The board of directors level would be strategic. The other responses would be tactical, not strategic.

Which principle of supplier partnerships is LEAST important? mutual need pricing compatibility of interests trust

pricing The essential keys for effective supplier relationship management (SRM) require compatibility of interests, mutual need, and trust. While price is important, a buyer will pay more if the supplier relationship provides other factors such as high quality and on-time delivery.

Strategies that emphasize areas where the company is weak or has unproven competencies should be ignored in favor of areas where competency exists can improve morale by providing a target for improvement act as catalysts for improvement and should be pursued are often used as stretch goals

should be ignored in favor of areas where competency exists Strategies that place a heavy emphasis on areas where the company is weak or unproven competencies should be avoided. The company's strategy should be aimed at capturing market opportunities that are most suited to the company's collection of capabilities.

A line works one 8 hour shift per day, 5 days per week. If the demand is 960 units per day, the takt time is 12.5 minutes .04 minutes 2.5 minutes .5 minutes

.5 minutes 8 x 60 minutes / 960 = .5 minutes

Work center 10 has 44 hours of available capacity. Product X has an internal setup time of 2 hours, and a run time of 4 hours per piece. What quantity of Product X can be produced? 21 10 11 19

10 44 hours - 2 hours internal setup = 42 hours/4 hours per piece = 10 pieces

Standard hours/part = 0.1 Standard hours expected = 7.2 Standard internal setup time = 0.25 hour Scheduled downtime = 0.0 Actual run time = 7.0 hours Actual internal setup time = 0.1 hour Total hours/shift = 8.0 Resources = 1.0 Shifts/day = 1.0 Using the information provided for a work center, the efficiency for the work center is 103 97 105 95

105 Efficiency = standard hours produced / actual hours worked = 7.2 + .25 / 7 + .1 = 1.049

Using the information provided on the most recent period, the product cost based on process costing is Units per period: 10,000 Direct labor at actual: $160,000 Direct material at standard: $600,000 Overhead: $400,000 Margin per unit: $50 Scrap units per period: 100 76 77 116 117

116 (160,000 + 600,000 + 400,000) / 10,000 = 116

A production order is for a quantity of 250 pieces. Setup for the order is 2 hours, and the run time is .5 hours per piece. How much capacity will be required for this part? 127 hours 125 hours 121 hours 123 hours

127 hours .5 hours x 250 pieces + 2 hours = 127 hours

Last year a company had an average inventory of $24,000,000 and the cost of sales for the year was $48,000,000. The budget for the year shows the cost of sales increasing by 25%, with no increase in the average inventory. What inventory turns did the company have, and what will they need to have this year to meet the budget? .5 / .4 2 / 3 2 / 2.5 .5 / 2.5

2 / 2.5 48,000,000 / 24,000,000 = 2 60,000,000 / 24,000,000 = 2.5

An operator can assemble a product at a rate of 30 units per hour. The throughput time is 1 hour 2 minutes .5 minute 1 minute

2 minutes 60 minutes / 30 units = 2 minutes per unit

If the annual demand is 50,000 units, the ordering cost is $100 per order, the carrying cost is 20%, and the unit cost is $5, the annual ordering cost for an order quantity of 2500 is 2500 500 2000 100

2000 50,000 / 2500 x 100 = 2000

Using a 365 day year: If the cost of goods sold is $100,000 and the Average inventory is $ 55,000 then the average age of the inventory is 663 0.55 202 150.7

202 Average age of the inventory is calculated by dividing 365 by the inventory turns; 365 / 1.8 = 202

A work center has four employees that work 8 hour shifts with a utilization of 85%. Demand on the work center is 60 units. Takt time at the work center is 27 minutes 32 minutes 7 minutes 6 minutes

27 minutes Takt = available time/demand; 8x4x60x.85 = 1632 available minutes.

The parts per million defect target level for a company pursuing six sigma is: 6 3.4 0 2

3.4 The six sigma approach includes producing only 3.4 defects for every one million opportunities or operations.

An order is received for 3600 items to be produced in a process that has an unavoidable scrap loss of 10 percent. What quantity should be started? 3600 3960 4000 4360

4000 The calculation is as follows: 3600 / (1 - .10) 4000 units.

A company intends to cut its backlog from four months to two months. Annual demand is 360 units. The number of units that should be included in the production plan is 720 420 300 360

420 Production rate is 30 units per month. To decrease backlog, an extra 60 units should be produced above the annual demand.

Backward scheduling work center A Move time between operations = 1 day Wait time = 1 day Due date is day 100 Operation: Work Center, Operation time (days), Queue time (days) 10: A, 2, 5 20: B, 4, 3 30: C, 2, 1 Using backward scheduling, when should the order arrive at work center A 80 81 77 79

77 Due date = 100 Move date after operation 30 = 99 Wait date after operation 30 = 98 Run time at operation 30 = 96 Queue time at operation 30 = 95 Move date after operation 20 = 94 Wait date after operation 20 = 93 Run time at operation 20 = 89 Queue time at operation 20 = 86 Move date after operation 10 = 85 Wait date after operation 10 = 84 Run time at operation 10 = 82 Queue time at operation 10 = 77

Run time = 15 minutes per piece Setup time = 1 hour Queue time = 8 hours Move time = 8 hours Quantity of order = 28 pieces Using the information provided, calculate the total capacity requirement for a work center in hours. 16 24 8 7

8 (28*15) + 1 = 8; setup and run time are included, move and queue time are not.

Fourth party logistics (4PL) and third party logistics (3PL) are different in that A 3PL typically manages outbound transportation only, and a 4PL typically manages inbound and outbound transportation A 3PL typically manages outbound transportation only, and a 4PL typically manages warehouses with vendor managed inventory services A 3PL typically manages outbound transportation only, and a 4PL ideally manages all aspects of the client's supply chain. A 3PL typically manages outbound transportation only, and a 4PL typically manages finished good warehousing and outbound transportation

A 3PL typically manages outbound transportation only, and a 4PL ideally manages all aspects of the client's supply chain. Fourth party logistics (4PL) differs from third party logistics (3PL) in that where a 3PL typically manages outbound transportation only, a 4PL ideally manages all aspects of the client's supply chain.

An example of using the poka-yoke technique in process design is A rack system is designed to only go one direction The number of types of fasteners is reduced from 20 to 5 A coupling is designed to eliminate incorrect insertion Setup time is reduced by standardizing tooling

A coupling is designed to eliminate incorrect insertion Poka-yoke tries to eliminate the occurrence of errors in the process by making steps as foolproof as possible.

The target inventory level of a periodic review system is A minimum An economic order quantity A maximum An average

A maximum In a min-max inventory system, the target inventory level is the equivalent of the maximum.

The best way to monitor the completion of a project's time and budget is An on-line system A spreadsheet maintained by the project manager A method that is simple and easy for everyone to use Enterprise Resource Planning

A method that is simple and easy for everyone to use In order for everyone to easily report time and activities, the solution must be easy to use and accessible.

A synchronized production principle that determines the size of the production batch as compared to other quantities is that it is equal to A multiple of the transfer quantity The order quantity The bottleneck yield quantity The work center activation quantity

A multiple of the transfer quantity It is ideally one or some multiple of the kanban quantity of the next work center; the others may or may not be true.

Which of the following statements about throughput time is correct? A reduction in throughput time will reduce work in process Throughput time is shorter than manufacturing lead time Throughput time is the time it takes from material entering the production facility until it exits Throughput time is the addition of operation time for each operation on the routing

A reduction in throughput time will reduce work in process WIP is reduced when throughput time is reduced; throughput time is equivalent to manufacturing lead time, but does not start when material enters the production facility; it is the addition of both operations times and inter-operations times.

Operations strategy formulation should be An annual process with quarterly adjustments A monthly seven step process involving top management A relatively infrequent event A five year rolling activity updated bi-annually

A relatively infrequent event The process of formulating an entirely new operations strategy should be a relatively infrequent event.

Management is primarily a skill that keeps a complicated system of people and processes functioning well. Leadership on the other hand is A set of processes that creates organizations or adapts them to significantly changing circumstances Involved in looking to the future using market trends, demographic change, and world wide political events More oriented towards working with marketing and corporate financiers Managing the managers

A set of processes that creates organizations or adapts them to significantly changing circumstances Management is a set of processes that can keep a complex system of people and technology running smoothly. Leadership is a set of processes that creates organizations in the first place or adapts them to significantly changing circumstances.

The most likely reason for establishing a financial tolerance when cycle counting is An inventory shortage beyond the tolerance requires material review board involvement A tolerance requires an override from management so the cause for error can be found The adjustment meets the 80-20 rule for items requiring material planning re-explosion Exceeding the tolerance enables cost accounting to get involved to verify asset value

A tolerance requires an override from management so the cause for error can be found Tolerances provide an opportunity to recheck the count and then track the history of the usage, adjustments and receipts to determine the cause of the error.

For which one of the following situations would the periodic review system be most appropriate? A variety of goods in a distribution center that are purchased from the manufacturers A variety of goods in a retail store that are supplied by a single distributor A component that is purchased directly from the manufacturer by an assembler Work-in-process controlled by a pull production system

A variety of goods in a retail store that are supplied by a single distributor A periodic review system is a form of independent demand management in which inventory levels are reviewed and an order is placed at specific intervals. Order quantities may vary, but typically replace items consumed during the time period. The periodic review system is advantageous in retail settings stocked with many different items from a central location because it consolidates deliveries and reduces shipping and handling costs. The other answers are not situations where a periodic review system would be appropriate.

A key rule for operations performance measures is that they Are consistent year after year Focus on a department's positive performance Align with the company's overall goals Can be easily viewed on charts

Align with the company's overall goals Measurements must align with the company's goals; they must change as the needs of the organization change.

Using safety lead time for manufactured items will result in A decrease in the planning horizon An increase in work in process An increase in customer service levels A decrease in queue time

An increase in work in process Safety lead time will result in orders being released earlier, which will cause an increase in WIP; there is no guarantee this will have any impact on the customer service level positive or negative; the planning horizon may need to be increased, and queue times will increase.

Which of the following results is most likely to occur in a company that does not use a formal sales and operations planning process? Inventory turns will be used to plan production for the next month The potentially available demand quantity will not be recognized An informal process will exist individually within the various departments Senior staff members will develop the plans required for operation

An informal process will exist individually within the various departments Each department will have its own plan for tracking plan to actual, but they will not be integrated; the other responses may happen regardless of whether S&OP exists

When a failure becomes external, four viable mitigation options include Refunding, replacing, reworking, threating a lawsuit Apologizing, refunding, reworking, providing compensation Refunding, reworking, replacing, canceling all business Replacement, rework, refund, dinner meeting with purchasing agent

Apologizing, refunding, reworking, providing compensation Failure recovery strategies can involve a wide range of activities like micro recovery steps that include apologizing, refunding monies, reworking the product or service, or providing compensation.

Which of the following types of costs of quality include inspecting materials? Appraisal External failure Internal failure Prevention

Appraisal Typical appraisal costs include inspection, quality audits, testing, calibration, and checking time.

Internal initiatives enhancing existing order qualifiers Should be driven by the voice of the customer As most appropriately prioritized using customer feedback Are unlikely to provide much competitive benefit Will likely increase business.

Are unlikely to provide much competitive benefit Any further improvement in qualifying factors above the qualifying level is unlikely to gain much competitive benefit.

Which of the following is a process environment that most likely uses both a master schedule and a final assembly schedule (FAS)? Assemble to order personal computers Remanufacture of automotive engines Synchronized production of small motors Repetitive manufacturing of toasters

Assemble to order personal computers Many personal computer manufacturers partially build their computers, but wait for the final order from the customer before adding items such as a hard drive, RAM memory, graphics cards and similar items ; automotive engines would begin and end with the same unit; repetitive and synchronized may use FAS if the environment is assemble to order, but that is not the environment stated.

The length of the master scheduling planning horizon for a make-to-stock product should be Equal to the delivery lead time At least as long as the cumulative lead time At least as long as the manufacturing lead time Equal to the sales and operations planning horizon

At least as long as the cumulative lead time If the planning horizon is shorter than the longest cumulative lead time, there will not be enough time to order components.

The top level of the distribution requirements planning record should be At the master production schedule level At the distribution center At the manufacturing facility At the point closest to the customer

At the point closest to the customer The best information to drive the planning would come from the point closest to the customer, whether that be direct information from the customer, or the DC closest to the customer.

Which of the following advanced planning and scheduling techniques is of most value to the master scheduler in developing a valid master schedule? Availability of decision-support tools Having real-time feedback Incorporation of business rules Quantification of constraints

Availability of decision-support tools Having decision-support capability enables alternate scenarios to be evaluated in order to develop and then maintain a valid master schedule.

Information outside of the closed-loop process between production planning and capacity planning for determining work center loading is Available and allocated inventory Released order quantities Available work center capacity Planned order required dates

Available and allocated inventory An assumption that inventory is available is already made; the other responses are all feedback elements.

A scheduler uses the critical ratio to determine the priority of jobs AA, BB, CC, and DD. Beginning November 20, the following schedule exists: Job - Due Date - Lead Time Remaining (hours) AA - Nov 23 - 24 BB - Nov 22 - 24 CC - Nov 23 - 16 DD - Nov 22 - 16 The plant has an 8-hour workday. Which of the following jobs should be scheduled first? AA BB CC DD

BB The critical ratio is calculated as (due date - current date) / manufacturing lead time remaining. The order with the lowest critical ratio is run first. When applied to the four orders, the critical ratios are as follows: AA = 23-20 = 3 / (24/8hrs.) = 1 BB = 22-20 = 2 / (24/8hrs.) = .66 CC = 23-20 = 3 / (16/8hrs.) = 1.5 DD = 22-20 = 2 / (16/8hrs.) = 1

Which of the following techniques should be introduced to reduce the cost of processing transactions? Larger order quantities, backflushing and supplier certification Larger order quantities, backflushing and kanbans Larger order quantities, supplier certifications and kanbans Backflushing, supplier certification and kanban

Backflushing, supplier certification and kanban Although larger order quantities reduces the number of batches, it increases lead time, inventory and costs.

Which of the following Sales and Operations planning results is most likely to be used to measure the sales department performance in an engineer-to-order environment? Backlog plan Inventory plan Financial plan Capacity plan

Backlog plan Backlog in money or months of work is an indicator of the health of the company; the other responses do not answer the question

Which of the following types of processes best supports the widest range of production volume and permits a company to most easily adjust its capacity to match demand? Batch Line Continuous Jobbing

Batch Batch production is defined as a manufacturing technique in which parts are accumulated and processed together in a lot. Batch processes also enable companies to easily adjust resources to produce different products. Jobbing's strong point is very high product variety but with low volumes. A line process]s strong point is high volume, but usually with narrow effective variety. Continuous production's strong point is high very high volume, but with low variety and inflexible resources.

Establishing standards and performance measurements for warehousing is important in order to Eliminate disagreements on what utilization and efficiency should be Base compensation on achievement to standards Report performance to the central supply warehouse management Benchmark daily activities and guide continuous improvement

Benchmark daily activities and guide continuous improvement The objective of standards setting and measuring performance is to provide a baseline for performance and determine areas of improvement.

Which of the following approaches will have the least affect in reducing the cost of transactions? Vendor scheduling Blanket PO with multiple receipts Backflushing to floor stock balances A kanban system

Blanket PO with multiple receipts Blanket order receipts still require transactions.

In a company that regularly has a past due order condition, backward scheduling in material requirements planning and forward scheduling in an assemble-to-order environment have what in common? Both techniques use the same required dates. Both techniques use the same lead times. Both techniques calculate the same critical path. Both techniques identify the same start dates.

Both techniques use the same lead times. Both will use either a standard or calculated lead time; start dates and required dates may not be the same based on the dates used to begin the scheduling process; the critical path is generally the same, but may be different due to the overload condition.

A technique useful for businesses to become virtual supply chains in order to reduce costs and improve due-date performance is Business process re-engineering (BPR) Business continuation plan (BCP) Business to consumer (B2C) Business -to-business commerce (B2B)

Business -to-business commerce (B2B) Business-to-business commerce (B2B) is business being conducted over the Internet between businesses.

Material produced as a residual of or incidental to the production process is a Co-design Residual item By-product Co-product

By-product A by-product is material of value produced as a residual of or incidental to the production process.

Which of the following considerations is outside the sales and operations demand management process? Customer starting up a new larger facility Capacity of a new assembly line for a new product Management override of the statistical forecast Selection of a statistical forecasting technique

Capacity of a new assembly line for a new product Capacity relates to supply, rather than demand, planning

A work cell has 6 operations. Information required to determine the capacity of the cell includes Capacity of the slowest operation Setup Number of operators Capacity of the fastest operation

Capacity of the slowest operation The slowest operation in the work cell would be the constraint; number of operators may or may not impact the capacity; setup would be linked to a particular item, not the work cell.

Rated capacity is most useful for which of the following techniques? Capacity requirement planning Rough cut capacity planning Master production scheduling Material requirements planning

Capacity requirement planning CRP uses rated capacity; rough cut only uses it for key work centers; the others don't use it.

A company with customer-specific configurations can minimize the impact of demand changes by achieving flexibility in Delivery lead times Lot sizes Inventory levels Changeovers

Changeovers Being able to changeover from one configuration to another will increase the ability to meet changes in demand faster.

Which of the following causes of process variation indicates that the process is under control and subject only to uncontrollable everyday factors such as temperature and humidity? Assignable cause Nominal cause Common cause Special cause

Common cause Small variations are likely to occur. When assignable causes exist, the process would be out of control.

Group members engaged in continuous improvement activities often encounter which of the following obstacles? Management involvement Training requirements Conflicting goals Meeting schedules

Conflicting goals Individuals and departments may have conflicting goals or hidden agendas, or conflicting interpretations of the business goals.

Which of the following techniques are the best measures of variability within boundaries? Check sheets Scatter diagrams Control charts Run charts

Control charts Control charts provide limits for checking that the process is within a tolerance or boundary; the others plot the process, but not necessarily with boundaries.

Inputs to capacity requirements planning from material requirements planning include Due dates and order quantities Due dates and work center information Work center information and standard hours Standard hours and order quantities

Due dates and order quantities MRP provides CRP with order quantities and dates to compute the load.

Utilization of assets in distribution would include Cubic volume used /cubic volume available Floor space used / floor space available Vehicle space used / vehicle space available Rack space used / rack space available

Cubic volume used /cubic volume available The utilization of the warehouse asset can be measured by the ratio of space used to space available.

A demand-pull facility produces five versions of an end item with final assembly schedules. Which of the following elements must be accounted for when scheduling a dedicated final assembly line? Historical yield Customer demand Tooling availability Available capacity

Customer demand A pull facility will schedule based on demand.

Which of the following information from material requirements planning can be used to sequence production orders? Critical ratio Required start date Shortest processing time Customer order priority

Customer order priority Customer order priority is used by MRP; the others are sequencing rules used by production scheduling.

A transportation methodology where suppliers pack products so they can be easily sorted at intermediate warehouses or for outgoing shipments is known as Cross-shipping Package to order Cross-docking Dock-to-stock

Cross-docking Cross-docking is the concept of packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments.

A company's core competency Is associated with a task within the company's value chain activities Could be its product innovation capabilities Is related to a company's product quality Is tied to a measure of production efficiency

Could be its product innovation capabilities A core competence is a proficiently performed internal activity that is central to a company's strategy and competitiveness. 3M has a core competency in product innovation, its record of introducing new products goes back several decades and new product introduction is central to 3M's strategy of growing its business.

A good problem-solving team for solving complex business problems is Departmental Cross functional Self-directed Virtual

Cross functional Complex business issues usually span multiple departments or functions so are best suited for cross-functional teams for solutions.

In a distribution environment, which of the following functions is generally considered a joint responsibility of the manufacturer and distribution center? Customer order servicing and administration Warehousing finished goods prior to shipment Distribution center site selection analysis Determining packaging of the finished product

Customer order servicing and administration Customer order management is handled by both, especially where demand variability causes unexpected stockouts, expediting is required, etc.; site analysis would only be an issue for the DC; warehousing finished goods and packaging would be the responsibility of the manufacturer

Which of the following is a typical measurement for the SCOR metric Reliablity? Time to increase activity rate Actual versus theoretical throughput time Customer satisfaction score Average lateness of orders

Customer satisfaction score The customer satisfaction score is a typical measurement for the SCOR metric Reliability. The average lateness of orders is a measurement for the SCOR metric Asset Management Efficiency; time to increase activity rate is a typical measurement for the SCOR metric Agility; actual versus theoretical throughput time is a typical measurement for the SCOR metric Responsiveness.

Supply chain variation frequently occurs when Variation in historical demand will skew the quantitative forecast A valley and a peak exist in product demand history Customers place larger orders than necessary Product shortages are typically followed by price increases

Customers place larger orders than necessary Concerning a temporary shortage of finished goods, supply chain distortion may occur primarily because customers place larger orders than necessary

Which of the following conditions is most likely to trigger the material requirements planning (MRP) system to revise the material plan? End items are shipped from stock to satisfy customer orders. Cycle counting inventory adjustments are reported. Rated capacity for a critical work center is changed. An engineering change for a routing is implemented.

Cycle counting inventory adjustments are reported. If an inventory adjustment is reported during cycle counting, the MRP system will revise the material plan to reflect the change in required inventory. The end items have already been manufactured and do not impact the material plan. The other answers are incorrect because they do are not MRP triggers.

Which of the following statements is most true of raw material cycle counting? Cycle counting should only be done by outside experts Cycle counts should be made when no other transactions are being performed Cycle counts should be made at the beginning or end of the shift Cycle counts are delayed until the balance is as low as possible

Cycle counts should be made when no other transactions are being performed The timing of completion of transactions is critical when performing cycle counting, transactions need to be completed prior to the cycle count. Cycle counts are best completed by employees who know the items being counted. Cycle counts can happen at any inventory level and should follow rules set up by the company related to frequency, location and risk of stockout for scheduling cycle counts, which can be made at any time during the shift.

The following information is available about jobs in a work center. It is now day 150. Using the priority rule of critical ratio, what is the desired job sequence? Job: Arrival Sequence - Processing Time (hours) - Due Date - Work days remaining A: 1 - 5 - 156 - 4 B: 3 - 3 - 153 - 3 C: 2 - 2 - 152 - 1 D: 4 - 4 - 152 - 3 E: 5 - 1 - 155 - 2 A,B,C,D,E D,B,A,C,E E,C,B,D,,A C,E,B,D,A

D,B,A,C,E Critical ratio is time remaining/work remaining; Job A critical ratio = 6/4 or 1.5, B = 1, C = 2, D = .7, E = 2.5

When using capacity planning to validate the material plan, which of the following information is most critical? Standard hours/part Theoretical capacity Demonstrated capacity Key work centers

Demonstrated capacity Demonstrated capacity identifies what the work center has been able to achieve in the past; theoretical is ideal and would create overloads; key work centers would be used at the MPS level; standard hours would already be accounted for in the load calculation.

A company is going to begin an aggressive sales promotion for a new make-to-stock product line that will affect most work centers. Capacity requirements planning can best be used to Determine whether the company is capable of meeting the forecast Determine whether material storage can handle the expected volume Determine the timing and impact of the forecasted load Determine the number of units that can be made

Determine the timing and impact of the forecasted load CRP will help determine when the inventory buildup will have to start to prepare for the sales promotion; the number of units and capability are management decisions; CRP is not concerned with storage.

An important element of keeping project team members engaged and on track is Continual updating of project cost projections Developing team member project skills The ability to build fex-time into the schedule Inviting top management to project meetings

Developing team member project skills The project manager cannot successfully complete the project without the involvement of team members, so their development is critical.

First come, first served and shortest process time are examples of which of the following techniques? Operation splitting Bottleneck management Input/output rules Dispatching rules

Dispatching rules Both are methods of sequencing work within a work center.

Another name for the bill of distribution is Distribution network structure Supply chain network Bill of labor Bill of resources

Distribution network structure Bill of distribution is a synonym of distribution network structure.

A statistical control chart has displayed one reading below the mean but within the upper and lower control limits. The action should be to Adjust the mean Stop the operation to review the tolerances Do nothing but continue to monitor Ignore the reading

Do nothing but continue to monitor The charts are used to identify trends, which have not occurred yet with only one reading.

In group consensus-building, which of the following actions takes place? There was 100% participation in the agreement Each member supports the decision, whether or not they agree with it The majority of the members agreed with the decision The members have reached 100% agreement on the decision

Each member supports the decision, whether or not they agree with it Consensus is a group decision-making process where everyone agrees to support the decision, whether or not they voted for the decisions.

Which of the following is true in a bottleneck situation? A bottleneck must be fed at a rate of less than or equal to its capacity. Establishing a time buffer before the bottleneck minimizes flow disruption. Capacity and priority must be looked at independently. Utilizing a non-bottleneck resource 100% of the time produces 100% utilization overall.

Establishing a time buffer before the bottleneck minimizes flow disruption. Establishing a time buffer prior to the bottleneck allows for any delay from the feeding workstation to be minimized.

Which of the following capabilities of finite loading is most important in an environment where routings use many of the same work centers? Maintaining priority Establishing sequence Determining load Defining capacity

Establishing sequence Determining sequence is most important due to shared resources. Load is determined via MRP; some orders may have the same priority. Capacity has already been defined

The PDCA cycle of quality improvement can be illustrated by which of the following situations? Prioritizing changes by identifying the problems that will be resolved by making these changes Working toward a decision that satisfies all participants Exploring a range of solutions to a problem and piloting them in a controlled way before selecting one for implementation Planning quality concurrently with production planning

Exploring a range of solutions to a problem and piloting them in a controlled way before selecting one for implementation PDCA is a four-step process for quality improvement that stands for plan-do-check-action (or act). In the first step (plan), a plan to effect improvement is developed. In the second step (do), the plan is carried out, preferably on a small scale. In the third step (check), the effects of the plan are observed. In the last step (action), the results are studied to determine what was learned and what can be predicted. Prioritizing changes is a function of the Pareto analysis; working toward an acceptable decision is consensus building and planning quality and production concurrently is an activity of worker self-control (empowerment).

Which of the following performance measure areas is excluded from any measure of variance? Actual run time Utilization Efficiency External setup time

External setup time External setup time is not a variance factor as it has no direct labor, material or allocated overhead elements.

As a product or service matures, the organization's collective knowledge of risk prevention and mitigation will Successfully eliminate all existing risks associated with that product or service Prevent all intrusions to the facility from any regulatory agency Facilitate reduction in both errors of commission and omission Cause the complete elimination of all risks for all products and services

Facilitate reduction in both errors of commission and omission As errors of commission and omission are reduced due to increased experience within the organization, the implementation of operational strategy needs to address: learning, capturing & reporting the value of the buildup of operations knowledge, the momentum of foundational knowledge, and continuing focus on resource & process change.

The responsibility of a leader of a small group improvement activity is to Give the team a project name Make decisions when there is not consensus Report the team's decisions to management Facilitate the group's activities

Facilitate the group's activities The leader is the group facilitator, and should not be called on to make final decisions. Their job is to facilitate the group process.

The purpose of a modular bill of material includes Translating the sales and operation plan to the master production schedule Easier material requirements planning processing Facilitating forecasting Minimizing inventory for unique components

Facilitating forecasting A modular bill of material is a type of planning bill that is arranged in product modules or options. It is often used in companies where the product has many optional features

The higher the capability index, the Fewer the number of rejects Greater the number of rejects The lower the upper specification limit The greater the upper specification limit

Fewer the number of rejects The higher the capability index, the more of the normal curve falls within the limits, meaning fewer rejects.

An inventory transaction type most likely found in an environment that produces to a forecast as opposed to an environment that produces to a customer order is Finished goods Raw materials Service parts Work in process

Finished goods Make-to-stock environments must receive, issue and adjust finished goods inventory that has been produced mainly to a forecast; the other responses are typical in any environment.

A retailer sells seasonal items in addition to its year round product lines. Three distribution centers service the stores. Seasonal items are not ordered by the stores, but are distributed based on a percentage of the business the store typically averages. Which of the following safety stock techniques is most appropriate for these items? Fixed Statistical Percentage Time period

Fixed Safety stock should be fixed at zero since this item is not regularly stocked. Percentage is not a safety stock technique. Statistical and time period are inapplicable for seasonal items.

The ability of manufacturing to respond quickly to external or internal changes is Agility Adaptability Configurability Flexibility

Flexibility Flexibility is the ability of the manufacturing system to respond quickly, in terms of range and time, to external or internal changes.

Which of the following flows is most likely used in a flow environment that is supply-constrained by the availability of a seasonal vegetable? Forward Finite Backward Mixed

Forward Forward flow is used when there is a defined starting point, or when work can only begin upon receipt of supply.

Which of the following scheduling techniques is used in an assemble-to-order environment for customer order promising? Mixed-model Backward Rate-based Forward

Forward Forward scheduling enables current orders to be accounted for when determining a new order's ship date; the other responses are typically not used in assemble-to-order.

Which of the following techniques combines product design parameters, customer needs, and a competitive assessment? Matrix chart Interrelationship diagram Force field interrelationships House of quality

House of quality House of quality is a structured process that relates customer-defined attributes to the productÕs technical features needed to support and generate these attributes.

The element of flexibility most related to the number of kanbans in the system is Having short internal setup times that permit frequent changeover The ease with which movable equipment allows a layout to be reconfigured The ability of a work center to match the required output rate Having a certification program that ensures operator cross-training

Having short internal setup times that permit frequent changeover The shorter the setup, the fewer the number of required kanbans; the other answers have nothing to do with kanbans.

Machine operators at XYZ Company are paid on an incentive system. Production is reported by the operator, including scrap. No adjustment is made for parts found defective at final inspection. Verification of parts counts is not routinely done. Which of the following outcomes would be expected in this environment? I. Reported parts counts would tend to be higher than actual. II. The value of work-in-process inventory would be understated. III. Scrapped parts would tend not to be reported. I and II only I and III only II and III only I, II, and III

I and III only Production run on an incentive system will normally result in overstatements of actual production and poor scrap reporting simply because operators are paid by production output. Option (II.) is incorrect because incentive production usually results in high WIP inventories as operators select products with high process yields and long production runs.

Which two of the following approaches to product design most positively impact manufacturing performance? I. Reducing parts complexity II. Organizing design processes III. Debugging during the manufacturing cycle IV. Integrating product and process design I and II I and IV II and III II and IV

I and IV By reducing parts complexity (I.) and closely integrating product and process design (IV.) the manufacture of products is more rationalized and simplified, thereby improving performance. Option (II.) is incorrect because organizing design processes will improve the task of product design only. Option (III.) is incorrect because correcting product and design during production is a negative approach to production management

The proper sequence to follow when applying benchmarking processes is to Identify and adapt best practice then continue to benchmark best in class and best in world Engage finance to find how much this change has influenced the latest balance sheet After adapting best in class, immediately seek out best in world characteristics and try to emulate those Find from key end item customers if they see improvement

Identify and adapt best practice then continue to benchmark best in class and best in world One of the most widely used methods for gauging how well a company is executing its strategy entails benchmarking. Benchmarking involves contrasting the company's performance of particular activities and business processes against "best in industry" and "best in world" performers.

An engineer-to-order environment with fairly long lead times has a severely overloaded work center in the middle of the production process. Assuming deadlines cannot be changed, a simulation of the situation is most likely to Identify the magnitude of the overload Resolve the overload for each period Project new end-item dates Identify changes to specific work orders required

Identify changes to specific work orders required Load is tied to specific orders in this situation; it is unlikely that end item dates will be changed in this type of environment; periods are daily and it is unlikely that simulation would be able to resolve the issue; the magnitude has already been identified.

The first step in the A3 process is to Identify the root cause and importance of the issue Research the possible solutions Identify the required outcome Map out the follow-up process

Identify the root cause and importance of the issue A3 problem solving includes root cause analysis, current and target conditions, implementation, and follow-up plans to ensure an objective has been met.

A downside associated with linking corporate financial incentives to specific performance objectives is that While achieving their goals executives may not communicate deep enough into the organization Since executives always focus on long term strategies there are typically few downsides Executives always prioritize financial goal achievement over sustainability goals If the objectives are not long term, executives may follow risky strategies hoping to increase short-term earning

If the objectives are not long term, executives may follow risky strategies hoping to increase short-term earning Compensation packages at many companies have increasingly rewarded executives for short term performance improvements- most noticeably achieving quarterly and annual earnings targets and boosting stock prices by specified percentages. [This ] often motivates them to take unwise business risks to boost short-term earnings...The focus on short term performance has proved damaging to long-term company performance and shareholder interests.

If suppliers and customers seek to reduce inventories and retain service they will likely find success with Statistically calculating product lead time The use of open bid auctions Increased customer involvement in the supplier's day to day planning and control. Long term purchase agreements

Increased customer involvement in the supplier's day to day planning and control. Inventories may be reduced in a supplier/customer partnership by increased customer involvement in the supplier's day to day planning and control.

Reducing lead time has which of the following results? Increased fixed manufacturing costs Increased responsiveness to customer demand Shorter planning cycles Decreased fixed manufacturing costs

Increased responsiveness to customer demand Reducing lead times, and specifically setup times, allows for more frequent changes to adapt to changes in demand.

Which of the following actions may result in unmanageable backlog? Productivity gains Increasing available capacity Increasing planned lead time Purchase of single-purpose equipment

Increasing planned lead time Increasing planned lead time means each job will be on the shop floor longer, which increases WIP, queues and the inability to process jobs faster.

The reorder point technique is suitable for Make-to-order items Dependent items Independent items High value items

Independent items Reorder point assumes that the demand of an item is independent of other items; the value of items would not be taken into consideration; make to order items would only be ordered when needed.

The portion of setup that is charged to the order includes Obtaining tools Verifying information Installing tooling Re-storing tools for the previous job

Installing tooling Tool installation is performed when the equipment is not operating and is costed as internal setup time; the other responses would not be charged to the job.

Single minute exchange of die is most associated with Single minute exchange of tooling in assembly Internal setup activities moved to external setup Internal setups performed in one minute or less Scheduling the process to be down for ten minutes during setup

Internal setup activities moved to external setup This is the definition of single minute exchange of die; SMED refers to setup that can be done in less than 10 minutes.

Using phantom bills of material will result in a reduction in Inventory transactions and work orders Inventory transactions and lot sizes Product structures and work orders Lot sizes and product structures

Inventory transactions and work orders Using phantoms means that sub assemblies are noted on the bill of material, but not stocked as assemblies, so do not require inventory transactions; the number of product structures does not change; lot sizes are not relevant to the question.

Which of the following techniques encourage suppliers to adopt lean principles? Point of use Random storage Kanban Dedicated storage

Kanban Kanban is the only response that would impact the suppliers; the others would be in house.

In an engineer-to-order environment, which of the following does a large backlog indicate? Job security is stable Engineering design is too slow Capacity is too low Inventory turns are high

Job security is stable Backlog means job security and is a measure of the effectiveness of the sales process; inventory turns are most likely low; there is not information to infer the other responses

In which of the following types of environments is capacity control likely to be of more importance than material control? Job shop Assembly line Repetitive manufacturing Flow shop

Job shop Capacity control is more likely to be necessary where jobs take different routes through production but compete for the same resources.

Operators produce panels consisting of electrical components wired together. A supervisor is most likely to maintain a queue at the assembly work center to Keep personnel fully occupied Keep equipment productive Maintain a high efficiency level Maintain on on-time schedule

Keep personnel fully occupied In a push system, keeping personnel fully occupied is of primary importance to supervisors; it is a manual operation so equipment productivity is not an issue; on-time schedules can be maintained with or without queues; efficiency is a result of production, not a consideration for maintaining queues.

Which of the following situations is most likely a reason for establishing order priorities with a final assembly schedule based on internal measures, rather than on customer-oriented measures? Kanban quantity is larger than the lot size Key work centers are level loaded Damaged product needs to be replaced Customer has a short order due date

Key work centers are level loaded Level loading is independent of any customer priorities.

Which of the following techniques is used in a push system but not in a pull system to ensure that inventory is available for an order prior to release to a work center? Kitting Point-of-use staging Point-of-fit staging Safety stock

Kitting Kitting is the process of constructing and staging kits to verify that parts are available. This would not be necessary in a pull environment as parts would be pulled.

Which of the following key resources is most likely to be used to validate the production plan in a high-volume company that produces a number of families of windows, including standard and custom sizes, and unique design? Housing starts Plate glass Labor hours Production rate

Labor hours Hours is the common denominator given the variety of product families; production rate is not a resource; glass would be used in every product, so not a key resource; housing starts would be used for forecasting, but not the production plan.

Which of the following statements about lean and MRP systems is true? Lean should be used for flowshop environments and MRP should be used for jobshop environments. Lean is destined to replace MRP. Lean and MRP are complementary. Lean is a good substitute for MRP in an assemble-to-order environment.

Lean and MRP are complementary. Lean and MRP each provide separate but linked functions. The key role of MRP is to plan inventory requirements out into the future. The role of lean is to execute the demand pull guiding the actual generation of purchase and manufacturing orders. Lean and MRP are mutually supportive in all manufacturing environments. Lean will not replace MRP.

Which of the following production strategies should show the most consistently high capacity performance? Hybrid Optimized Chase Level

Level In a level strategy, the company controls both the planned load and available capacity

A functional layout company produces several product families that use the same work centers, with some units being a standard design and others having custom design. Which of the following management decisions is most applicable as it relates to master scheduling? Relevance of a demand time fence Use of a final assembly schedule Use of a quantity/period or flow rate Level and type of inventory to stock

Level and type of inventory to stock Decisions would be required on which products to keep in stock as finished goods versus assemblies; a demand time fence would be relevant to manage demand; nothing in the question indicates the applicability of a finished assembly schedule, volume or mix issues.

A primary advantage of lift trucks over conveyors is that Lift trucks do not occupy space continuously Lift trucks move loads over long distances Lift truck operators are indirect vs. direct Lift trucks move heavier loads than conveyors

Lift trucks do not occupy space continuously Conveyors are fixed in place, and are often installed overhead to be out of the way of lift trucks, AGV's and pedestrians.

Which of the following limitations applies to the number of levels in a cause and effect diagram? Limited by the physical dimensions of the paper Limited by the length of the brainstorming session Limited to 2-3 based on a significant few principles Limited by the number of causes and sub-causes

Limited by the number of causes and sub-causes The only limit is the number of reasons for the problem.

Storage considerations related to inventory accuracy are most likely to include: Use of bar codes for location identification Allowance for first in, first out usage Use of a temperature-controlled environment Locked storage for high-value pilferable items

Locked storage for high-value pilferable items Locked storage allows for limited access. The others don't necessarily relate to inventory accuracy, though bar codes may help to reduce data entry errors.

The group responsible for defining and creating a corporate culture is Human resources Each individual department Management Board of directors

Management It is management's responsibility to set the culture necessary for business success.

Capacity requirements planning directly interfaces with Rough-cut capacity planning Material requirements planning Work center finite scheduling Master production scheduling

Material requirements planning CRP directly interfaces with MRP.

Which of the following tasks are the responsibility of purchasing? Designating due dates for blanket order releases Measuring supplier performance Firming planned orders based on supplier shutdown times Determining order quantities to achieve price breaks

Measuring supplier performance Measuring supplier performance is the responsibility of the purchasing department; due dates, order quantities and firming planned orders would be the responsibility of the materials group.

A company produces a product family of electronic games. The supplier lead item for all components are less than eight weeks, except for one, which has a lead time of 16 weeks. Which of the following master schedule formats is best for this situation? Multi-level Cumulative Two-level Single-level

Multi-level Multi-level enables the long lead time component to be master planned in advance of demand being exploded with MRP; on hand and on-order inventory can then be used during the normal planning process.

Four common types of benchmarking are Financial or net profit, per share earnings, competitive and cooperative benchmarking covert, overt, cooperative, and professional Within vertical, outside vertical, best in class and world class Non competitive, competitive, performance and practice benchmarking

Non competitive, competitive, performance and practice benchmarking Four common types of benchmarking are Non competitive, competitive, performance and practice benchmarking.

The efficiency measurement applied to distribution for calculating capacity is Number of trucks that have been loaded Number of pallets received vs number of pallets shipped Number of order lines picked vs standard for number of order lines to be picked Number of trucks that have been unloaded

Number of order lines picked vs standard for number of order lines to be picked In distribution, the standard measure of order lines picked would be compared to the actual order lines picked.

Sources of load on work centers in a job shop include Open orders and planned orders Planned orders and backlog MPS orders and past due orders Open orders and MPS orders

Open orders and planned orders Work center load includes all planned loads as well as orders already open; MPS orders are at the end item level, not at the work center level.

Work Center data Machines = 3 Shifts per day = 1 Days worked per week = 5 Hours worked per shift = 8 Utilization = 85% Operator efficiency = 95% Using the information provided, if the load for next week is 110 hours, the work center is Underloaded Overloaded Balanced Constrained by operators

Overloaded Rated capacity is 96.9, so the work center is overloaded

An important transaction point in a push production as well as a pull environment is Out-of-stock condition based on satisfying a customer order Order completions at departmental boundaries Setup completion and start of production order Cycle count adjustments based on a planned cycle

Order completions at departmental boundaries Departmental boundaries commonly act as costing points, regardless of using pull or push.

Which of the following tools would most likely be used to identify negative variances that must be reviewed by senior management? Force field analysis of negative variance Any negative variance must be reviewed Histogram showing changes over time Pareto analysis of the top 5% variance

Pareto analysis of the top 5% variance Management would review the significant few.

A supplier has notified the buyer that an order for a component will be two weeks late due to a material shortage. Which of the following actions should the material planner take? Perform bottom-up replanning based on pegging and available inventory Identify affected parent orders and rescheduled each by two weeks Expedite the order to the required date De-expedite the order to synchronize required dates

Perform bottom-up replanning based on pegging and available inventory The planner first needs to identify the effect of a late shipment on parent requirements.

Period: Forecast, In Transit, Projected Available Balance, Planned Shipments 0: -, -, 25, - 1: 25, 25, -, - 2: 40, -, -, - 3: 45, -, -, - 4: 60, -, -, - 5: 40, -, -, - Safety stock = 15 Shipping quantity = 50 Transit Time = 1 week Using the distribution requirements planning information provided, what periods of the master production schedule would have gross requirements? Periods 2, 4 and 5 Periods 1, 3 and 5 Periods 1, 3, and 4 Periods 3 and 5

Periods 2, 4 and 5 Period: Forecast, In Transit, Projected Available Balance, Planned Shipments 0: -, -, 25, - 1: 25, 25, 50, - 2: 40, -, 60, 50 3: 45, -, 15, - 4: 60, -, 20, 50 5: 40, -, 25, 50 Planned shipment periods would be offset by the shipping time of 1 week to hit the MPS.

A company operates in a pull environment, with final assembly lines in synchronous mode. Subassemblies maintain buffers ranging from hours to days. A global production performance measurement is Standard hours compared to actual hours Planned throughput rate compared to actual rate Planned number of setups compared to actual setups Planned order completions to actual completions

Planned throughput rate compared to actual rate All work centers can measure throughput rate, and can relate to the rates of the final assembly lines they support; the other responses relate to push systems.

A scheduling technique that considers slack time to increase or decrease the calculated lead time of an order is Forward-flow scheduling Mixed-flow scheduling Probable scheduling Constraint-based scheduling

Probable scheduling Probable scheduling considers slack time to increase or decrease the calculated lead time of an order.

Mass customization is the ability to Produce generic products that the customer can use in multiple ways Produce products with multiple features Produce a large variety of individual products at a low cost Produce large quantities of customer-configured products

Produce a large variety of individual products at a low cost Mass customization is the creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items.

Reducing the levels on the bill of material reduces Production reporting activities Schedule flexibility Material costs Work in process

Production reporting activities Reducing the amount of subassemblies within the bill of material reduces the times reporting has to be done; the other response would not be impacted.

A company has not been able to provide customers with information when a make-to-stock item is out of stock. Which of the following actions would be beneficial in this situation? Increase safety stock levels to reduce stockouts Increase sales and operations planning frequency Provide available-to-promise information to customer service Implement forecast accuracy measures

Provide available-to-promise information to customer service Available-to-promise is the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising.

The voice of the customer process is in complete alignment with The Delphi method Process flow analysis methodology Quality function deployment Qualitative forecast techniques

Quality function deployment Voice of the customer is actual customer descriptions in words for the functions and features customers desire for goods and services. It relates to quality function deployment (QFD).

Which of the following inventory situations is most likely to change the projected available inventory balance from one material requirements planning run to another? Quality hold In-transit Allocation Safety stock

Quality hold Inventory on quality hold may or may not become available, so cannot be considered. The others are all normal considerations of stages in inventory and do not change the MRP calculation.

Method: Cost per Load, Number of Days, Cost Rail: 450, 10, - Truck: 750, 4, - Air: 900, 2, - LTL: 700, 6, - A company is determining the least cost means of moving product to a distribution center. Using the information provided, what the least expensive method? Rail Truck Air LTL

Rail Method: Cost per Load, Number of Days, Cost Rail: 450, 10, 750 Truck: 750, 4, 870 Air: 900, 2, 960 LTL: 700, 6, 880

Which of the following benefits is considered to be the best motivator? Compensation Additional responsibility Self-worth Recognition

Recognition Recognition by peers and management ranks higher on the motivation scale than money or gifts.

Uncontrollable inventory inaccuracies are most likely to be introduced into inventory when Storage is non-centralized Incoming inspection is based on the quality plan Recording the amount received is based on the packing slip Material movement is based on manual means

Recording the amount received is based on the packing slip Accepting the supplier's quantity can introduce inventory inaccuracies; once inside the facility, every count discrepancy is controllable.

The standard hours of load placed on a resource within a time period is the Resource profile Resource driver Bill of resources Resource calendar

Resource profile The resource profile is the standard hours of load placed on a resource by time period.

A fault tree analysis may also be described as which of the following types of analyses? Operations resilience Post-failure Potential cause Risk mitigation

Risk mitigation A fault tree analysis is defined as a logical approach to identify the probabilities and frequencies of events in a system that are most critical to uninterrupted and safe operation. This analysis may include failure mode effects analysis (determining the result of component failure interactions toward system safety) and techniques for human error prediction. As a method to understand why a failure has occurred, it would be used to in post-failure review. Operations resilience is used to gauge how resilient an operation is in the face of potential risks. Potential cause review is a form of risk management. Risk mitigation is the process of determining alternative paths in the face of a potential risk.

A company's customer is implementing lean initiatives, and have asked that the order receipt to ship time be reduced by 50%. This will have a significant impact on production and supporting departments. Which functional area should take the lead in evaluating this request and taking action? Production Quality Senior management Sales

Senior management Senior management must be ready to commit and assign a core team and support personnel to initiate lean initiatives; the others would support, not lead.

The purchasing/supplier partnership concept is supported by Single source supplier Lot traceability Acceptable Quality Level Order acknowledgements

Single source supplier Single source supplier provides the commitment to the partnership; order acknowledgements are not necessary when agreements are in place; quality at the source is better than acceptable quality level of incoming inspection; lot traceability is not relevant.

The A3 methodology is used as a tool for which of the following? Solving problems Documenting manufacturing costs Tracking statistical process control Replacing the plan-do-check-act (PDCA) process

Solving problems A3 is a problem-solving methodology. The method typically confines a team to use simple communication to describe and track problem solving on metric "A3" (11 inch by 17 inch) paper. The other answers are not correct because they do not use the A3 methodology as a tool.

It is important for a material planner to know which of the following demand information from the master production schedule? Source Timing Quantity Accuracy

Source In order to make rescheduling decisions if there is a supply problem, the planner would need to know if the source was a customer order, forecast or safety stock replenishment; accuracy would be unknown if a forecast is involved; the quantity and timing are already known by MRP.

Which of the following measurements remains the same regardless of what is reported for performance? Efficiency Standard hours Utilization Actual hours

Standard hours Standard hours is based on a work center and production quantity; actual hours vary; efficiency and utilization are calculated percentages.

The plan for determining actions to support the mission, goals, and objectives of an organization is the Sales and operations plan Project plan Strategic plan Tactical plan

Strategic plan The strategic plan is the plan for how to marshal and determine actions to support the mission, goals, and objectives of an organization

On-time supplier deliveries can be impacted most by Dedicated transportation carriers Long lead times Sufficient supplier capacity Purchase order quantities

Sufficient supplier capacity Supplier capacity that is adequate for meeting the dates has the impact on on-time deliveries; long lead times, changes in the purchase order quantities, or dedicated carriers do not necessarily have an impact.

Which of the following goals of pull systems is easiest to implement as compared to push systems? Synchronized production Reduced inventory Shortened cycle times Continuous improvement

Synchronized production Synchronized production is difficult to achieve in push systems, but is critical for a pull system; the other answers are goals in either push or pull.

A company using a pull environment is creating a flow line to improve throughput to meet customer demand. Which of the following data needs to be calculated to design the line? Utilization Takt time Cycle time Efficiency

Takt time Takt time would determine how many units need to be produced to meet the demand, which will determine the time for each operation in order to produce the flow.

A benefit of developing strategic alliances with key suppliers is The ability to form long-term contracts Elimination of extra suppliers Vertical integration Better response time from suppliers

The ability to form long-term contracts Strategic alliances are the basis for long-term contracts which provide multiple benefits for both parties.

A condition when a normally dependent demand item is not included in a material requirements planning bill of material explosion is As a dependent demand item, the item would not be included on the bill of material The assembly is changed from a make to a buy part There is excess inventory on all of the components The item doesn't require safety stock

The assembly is changed from a make to a buy part When an item is changed to a purchased component, the explosion stops and ignores the components; as a dependent item, it would have been included on a bill of material; excess inventory and blank safety stock amounts do not stop the explosion process.

Capacity requirements planning has been used to check the validity of the material plan, and no constraining work centers were identified. Which of the following scenarios is most likely the reason? The capacity check did not include the various constraining work centers Capacity requirements planning used infinite capacity rather than finite loading The production operations are balanced and have no individual bottlenecks The available capacity was greater than that required by the volume and mix

The available capacity was greater than that required by the volume and mix The only scenario that is known is that there is enough available capacity. Individual operations within a work center may still have bottlenecks.

The final assembly schedule takes place when There are few options The component level is fixed The customer's order is received The forecast is fixed

The customer's order is received The final assembly schedule is a schedule of end items to finish the product for specific customersÕ orders in a make-to-order or assemble-to-order environment.

A key principle of collaborative planning, forecasting and replenishment (CPFR) is Joint meetings between customers and suppliers Integrating enterprise resource planning systems The exchange of information between trading partners Using the internet to exchange information

The exchange of information between trading partners CPFR is a process where supply chain trading partners jointly plan key supply chain activities from production and delivery of raw materials to production and delivery of final products to end customers

The frequency that material requirements should be replanned is determined by The total manufacturing lead time The frequency that requirements and/or priorities change The frequency of bill of material changes The amount of forecast error

The frequency that requirements and/or priorities change MRP is used to maintain priorities of manufacturing and purchase orders. As demand changes, so do priorities, so MRP should be run to re-balance supply and demand.

One-hundred percent inspection is most appropriate for an incoming part used in a complex product assembly when There is a high probability of one or more failures within the inspection batch The inspection cost is less than the cost of loss resulting from failure of the part There is a high cost of failure to the customer in normal usage of the product The high cost of inspection is justified by the high cost of the part itself

The inspection cost is less than the cost of loss resulting from failure of the part Cost of inspection outweighs cost of failure of the assembly; the cost of the item does not always determine cost of quality; an inspection batch would be considered for sampling, not 100% inspection; customer usage is more related to shipments and service parts.

Which of the following benefits is the most likely reason for reducing internal setup time when implementing continuous improvement? The lot quantity per kanban can be reduced There are fewer activities where a mistake can be made Shorter cycle times can be quoted to the end customer The number of kanbans in the process can be reduced

The lot quantity per kanban can be reduced The lot quantity can be reduced due to being able to perform more frequent setups; the other options are not supported by enough information in the question.

The number of exposures to stockouts is related to The required customer service level The number of replenishment orders The level of safety stock The reorder point

The number of replenishment orders The chance of stocking out occurs when inventory is low, which occurs at the time an order is being placed.

When designing a new part, a company can contract with one or more suppliers in a competitive bidding situation, or perform concurrent engineering with one supplier. Which of the following situations would most support concurrent engineering? It is too difficult to manage multiple suppliers for a single part design The part design is not well defined and will affect the product design Concurrent engineering places the cost of part design on the supplier One supplier will ensure lower prices, shorter lead times and higher quality

The part design is not well defined and will affect the product design Concurrent engineering enables the part design to be done in parallel with shared knowledge.

In a company with somewhat erratic demand levels, which of the following information is of most importance to the planner in the relationship between material and capacity planning? Overload conditions The plan is achievable Underload conditions A balance exists

The plan is achievable The objective of running CRP with MRP is to know that the plan is achievable; knowing the other elements is important in order to help achieve the plan.

A purchased component has a net requirement in period 4. It has a 6-period lead time and no scheduled receipts. Which of the following actions will be the result of material requirements planning? The planned order release is scheduled for period 1 and is due in period 4 The planned order release is scheduled for period -2 and is overdue for release The planned order release in period 1 is rescheduled for receipt in period 6 The planned order is overdue and the planner will need to delay the master production schedule

The planned order release is scheduled for period 1 and is due in period 4 MRP will assume the plan can be executed, and will provide an action to release the overdue planned order; a second action messeage may be given to expedite. There are no past periods within MRP.

A lot undergoing acceptance sampling inspection is most likely accepted because The sample conforms to the sampling plan with respect to defects No part variability outside of 3 standard deviations is detected The sample shows a quality issue but there is a need for the parts in production Sample measured values can be statistically compared to nominal values

The sample conforms to the sampling plan with respect to defects The sampling plan identifies the criteria for acceptance and rejection; standard deviations are process measures, not incoming inspection.

Which of the following elements is a key principle of lean purchasing? The use of single source suppliers All packaging is returned to the supplier Suppliers stock inventory at their location Blanket orders are used

The use of single source suppliers All of these may be utilized in a lean environment, but most will not be possible without the key element of single source supplier partnerships.

The most important reason for reporting and knowing throughput is Throughput per hour can be used to monitor continuous improvement at a work center Throughput is a good measure for reporting to external stakeholders Throughput can vary due to the time period being reported when capacity is underutilized Throughput measures capability in addition to reporting production status

Throughput measures capability in addition to reporting production status It is important to not only know throughput for current orders, but is useful for planning, scheduling and continuous improvement prioritization; different time periods don't change anything else; rate per minute or hour is calculated, not reported.

A planning logic for independent demand items where the planned order releases are input to the master schedule is Final assembly scheduling Distribution resource planning Distribution planning Time-phased order point

Time-phased order point Time-phased order point is a planning logic for independent demand items, where gross requirements come from a forecast, not via explosion.

The role of the quality department in implementing total quality management (TQM) includes Test products for conformance to specification Evaluate suppliers based on quality of material received Serve as team leads for self-directed work teams Train employees on quality concepts and techniques

Train employees on quality concepts and techniques Management should be the first to be trained in TQM to show their commitment and support of the project. That training must then be rolled down to individual employees, by teaching them the tools of quality, which would best come from the quality department.

The lead time used in distribution requirements planning is the Order fulfillment lead time Manufacturing lead time Transit time to the warehouse Delivery lead time

Transit time to the warehouse DRP logic uses the in-transit time to determine when inventory should be available to be shipped from the supply facility.

Which of the following choices will improve a company's responsiveness to customer demand? Drum-buffer-rope Two-level master schedule Increased productivity Large lot sizes

Two-level master schedule A company using a two-level master schedule would allow flexibility in the last operations based on actual demand.

Geller manufacturers a full range of lighting fixtures for the home and office. These are shipped to four distribution centers that serve four areas of the country. Each distribution center has both automated and manual storage. Which of the following is MOST similar between these two areas? Transport of pallets to storage area Selection of pallet storage location Update of receipt to the host computer Selection of storage location at receiving

Update of receipt to the host computer All four distribution centers must report receipt of inventory to the host computer so that planning data is updated across the planning system. The other answers are incorrect because each DC may have different receiving and stocking arrangements.

Central point scheduling is a technique that Uses both forward and backward scheduling starting from the scheduled start date of a particular operation Requires every piece in a lot to be finished at one work center before any piece in the lot can be processed at the succeeding work center Automatically or manually interrupts the process to allow the scheduler the opportunity to review Proceeds sequentially from the initial period to the final period while observing capacity limits

Uses both forward and backward scheduling starting from the scheduled start date of a particular operation Central point scheduling employs both forward and backward scheduling, starting from the scheduled start date of a particular operation.

An effective way to improve the capability of production process equipment is Applying drum-buffer-rope Moving internal setup to external setup Performing 100% inspection on assemblies Using design of experiments (DOE)

Using design of experiments (DOE) Design of Experiments is a quality management technique used to evaluate the effect of carefully planned and controlled changes to input process variables on the output variable. The objective is to improve production processes.

Which of the following bottleneck performance measures is as meaningful in a make-to-order environment with a functional layout as it is in a make-to-stock environment with a flow layout? Setup time Utilization Lot size Efficiency

Utilization Bottlenecks in any environment need to be fully utilized; Efficiency is more meaningful in a pull environment than make-to-stock; Setup includes external setup which is not a good performance measure; Lot size is a given based on customer orders in a make-to-order system.

The ratio of hours worked to the hours available is Efficiency Utilization Standard hours Productivity

Utilization Utilization compares actual time used to available time. Traditionally, utilization is the ratio of direct time charged (run time plus setup time) to the clock time available.

The processes of creating, producing, and delivering a good or service to the market is a Value stream Cumulative lead time Logistics Business-to-business commerce

Value stream The value stream is the processes of creating, producing, and delivering a good or service to the market.

A backlog in a make-to-order company contains a large number of orders of many unique items. In which of the following situations would selection of a random storage location most likely reduce overall efficiency? When load size prevents consolidation When zoning is not a consideration When materials are for the same order When two loads can be consolidated into one

When materials are for the same order Storing materials together for the same order increases picking efficiency while having little effect on storage.

The inventory for a dependent demand item was incorrect during the last cycle count, and there is no safety stock. Which date from material requirements planning is of most use to the material planner to ensure availability of the part? When the next cycle count will take place When the next planned order is scheduled When the part's next scheduled receipt is scheduled When the next gross requirement will occur

When the next planned order is scheduled The date of the planned order is when MRP has determined that inventory will be zero and a new order will be required; MRP does not know when a cycle count is planned; any new gross requirements may not be a concern if there is plenty of inventory; the receipt was scheduled prior to the change in the inventory.

A key up-front question concerning the viability of a process technology investment is Will it shorten the time between a customer making a request and the product delivered How the new system will improve profitability Is it cloud based or client server based or both The expected return on investment

Will it shorten the time between a customer making a request and the product delivered When evaluating the acceptability of process technology investment a key question to ask is: Will it shorten the time between a customer making a request and having it confirmed (or product delivered)?

A continuous improvement activity such as developing a tool that facilitates quicker setup on a specific machine Should be completed by management Should fall under the company's program management department and be subject to all the formal controls one would expect within formal project management scope. Will likely be completed with two or three people from manufacturing within a work group Should involve a cross functional team

Will likely be completed with two or three people from manufacturing within a work group The size of the activity indicates that two or three knowledgeable people should be able complete the project relatively quickly. The activity is not big enough to fall under the company's program management department, and a cross-functional team may not bring the specific expertise to this project. This type of project should be done by the people closest to the work, not management.

When implementing new productivity technology, significant risks one must consider are that the application may not Have the necessary documentation for training and implementation Work as planned, be done on schedule, stay within budget Be operable without internal or external experts Meet paying customer's needs

Work as planned, be done on schedule, stay within budget The risk with implementing a new IT application where the technology may not work, is that the project may not be done on time and not be done within budget

Load leveling has which of the following benefits for scheduling? Personnel requirements vary based on scheduled customer demand Workforce deployment and machine use are stabilized. Queue and move times, along with the number of setups, are minimized. Inventory levels are minimized due to schedule stability and reliability

Workforce deployment and machine use are stabilized. Load leveling creates a trade-off between more stable workforce deployment and machine use while varying inventory levels to meet demand. Load leveling could produce product earlier than needed and thus create excess inventory; Workforce deployment (personnel requirements) would be stabilized and queue depends on how much work-in-process (WIP) is in the shop.

Charting the process average can best be done using which of the following types of charts? P Median X-bar S

X-bar An X-bar chart is a control chart in which the subgroup average is used to evaluate the stability of the process level.

A fishbone diagram most often is used to identify: a process. a cause. the organizational flow. a problem.

a cause. A fishbone diagram (Cause and Effect diagram) illustrates the main causes and sub-causes leading to an effect (symptom). The fishbone diagram is one of the seven tools of quality. A fishbone diagram is used after the problem has been identified. A fishbone diagram is not a planned series of actions or operations, or process. The organizational flow describes how materials and/or information passes through the various parts of the organization.

A company that chooses to see reduced revenue while postponing increases in existing manufacturing capacity is following a non innovator strategy good manufacturing practices (GMP) a revenue neutral strategy a lag capacity strategy

a lag capacity strategy A lag capacity strategy is one in which capacity is added after demand is realized.

A satisfactory quality average used during sampling inspection is called: first pass yield. first article inspection. perceived quality. acceptable quality level (AQL).

acceptable quality level (AQL). An acceptable quality level is a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average.

To detect when a work center output might vary from the plan, the planner should compare: actual input to actual output. actual input to planned input. actual output to planned output. planned output to planned input.

actual input to planned input. Actual input is compared to planned input to identify when work center output might vary from the plan because work is not available at the work center. Comparing actual output to planned output would happen after the fact and won't help to detect when a work center output MIGHT vary from the plan.

It is determined that the key to success in a particular market is in the company's ability to deliver a variety of high quality products in less lead time than industry standard. The operational emphasis should be on the operation's quality utilization agility cost

agility Agility is the ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provide enhanced value to customers through customization.

The A in the DMAIC process stands for: assign. assess. act. analyze.

analyze. Define, measure, analyze, improve, control are the steps of DMAIC.

A company operates in a make-to-order environment, and has departments with job shop layouts. On-time schedule performance, most commonly,is a function of: reducing the number of jobs at work centers by limiting floor space. an actual queue time that is not longer than planned. achieving the planned internal setup and run times. splitting lots when necessary to supply downstream operations.

an actual queue time that is not longer than planned. Queue is the longest element of lead time. Actual queues less than planned (standard queue time) keep the schedule on time. Splitting lots is an exception condition. Achieving planned times is expected as normal. Material would need to be staged somewhere else if space was limited.

An electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers is: an andon. jidoka. a kanban. a heijunka.

an andon. Andon is an electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers.

When the number of a company's distribution centers serving a geographical area increases but the level of customer service remains the same, the result is generally a decrease in aggregate inventory levels. a decrease in the company's investment in real property. an increase in transportation costs. an increase in delivery lead times.

an increase in transportation costs. More service centers will increase transportation costs because there will be more LTL miles. More service centers will decrease delivery lead times. The company will have to increase its investment in real property for the new service centers. The increase in service centers means that aggregate channel inventories will increase.

A prerequisite for effective self-directed teams typically is that the team members: are empowered to take responsibility for understanding and performing work. have similar work experiences. willingly report to a team supervisor. are at similar levels in the organization.

are empowered to take responsibility for understanding and performing work. A self-directed work team is an independent self-controlling group in which members plan, organize, determine, and manage their duties and actions. In self-directed teams, workers must have knowledge and responsibility for understanding and performing work.

A management style of employee empowerment enables workers to: hire and fire personnel. make improvements in their work place. perform management evaluations. authorize work orders.

authorize work orders. Employee empowerment is the practice of giving non-managerial employees the responsibility and the power to make decisions regarding their jobs or tasks.

While designing the new automated dashboard, the new CEO suggested adding a number of financial measures to the new dashboard along with customer complaints, manufacturing cycle time by product group and year-to-date spend on education and training. This view is commonly referred to as the balanced scorecard house of holistic perspectives product positioning perspective balance sheet

balanced scorecard A balanced scorecard is a list of financial and operational measurements used to evaluate organizational performance. It may include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements.

All of the following are considerations in the adoption of a process focus EXCEPT the: capital intensity of the manufacturing process book value of current production assets type of technology used in the manufacturing process complexity of the manufacturing process

book value of current production assets The book value of current production assets will have no affect on how the assets will be used in production. The other answers all will have an effect on the adoption of new production processes.

To eliminate excess inventory one period and shortages in another within a multi-node supply chain, a company implemented point of sales reporting. This solution helped eliminate the stress of stockouts bullwhip effect tendency to add bias to the forecasts excessive costs of ERP system changes

bullwhip effect The bullwhip effect is an extreme change in the supply upstream generated by a small change in demand downstream. Inventory can quickly move from being backordered to being excess, due to the communicating orders with inherent delays of moving product down the chain.

During a discussion centered on lead and lag, a CEO approved a capital equipment expansion. This is an example of the CEO implementing their business acumen approved budget continuous improvement strategy capacity strategy

capacity strategy One of the strategic choices that a firm must make as part of its manufacturing strategy is the capacity strategy, such as lead lag and tracking.

Which of the following manufacturing technology choices would most likely provide the greatest benefit to a company whose order winners are delivery speed and flexibility? automated material handling cellular manufacturing system quality function deployment transfer line

cellular manufacturing system A cellular manufacturing system is a manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell. This configuration enables high output and flexibility. A transfer line is a manufacturing system which consists of a predetermined sequence of machines connected by an automated material handling system and designed for working on a very small family of parts. Since it is concerned with producing very small families of parts, it would not be the optimum answer. The use of automation equipment to move inventories in the plant will have a marginal impact on manufacturing technology choices. QFD is used in product design and will have an indirect affect on manufacturing technology choices.

The input/output report for a work center in the current period is showing an input queue at the work center. The most appropriate action is: check the cumulative input/output report. increase the work center output. decrease the work center input. re-run capacity requirements planning.

check the cumulative input/output report. It is necessary to check a cumulative report to determine if this is a one-period scenario or a trend occurring at the work center.

Process capability studies are based on: analysis of form, fit, function. overall equipment effectiveness (OEE). comparisons between tolerances and variation. input/output control charts.

comparisons between tolerances and variation. Determining the capability of a process is based on the ability of the process to stay within a set of tolerances, and the measure of the variation.

Pulling together a cross functional team to drive new product design is an example of project management concurrent engineering good manufacturing practices (GMP) backward integration

concurrent engineering Concurrent engineering is the simultaneous participation of all the functional areas in the product design activity.

A program useful in bringing a new product to market faster is: focused factory. kaizen blitz. concurrent engineering. critical to quality characteristics (CQC).

concurrent engineering. Simultaneous or concurrent engineering can reduce the time to market as tasks do not have to be done linearly.

Quality can be defined as: zero defects. within 1 standard deviation of mean. six sigma. conformance to requirements.

conformance to requirements. Quality is conformance to requirements or fitness for use.

Statistically determined lines on a control chart are called: standard deviations. control limits. axis. medians.

control limits. Control limits are statistically determined lines on a control chart.

Accurate inventory levels are mostly influenced by which of the following items? cycle counts bill of material maintenance longer forecast horizons annual physical inventory

cycle counts Counting inventory item balances on a regular basis enables control personnel to keep balances correct and enables them to search for the root cause of error. If the BOM is incorrect then incorrect quantities will be withdrawn from stocks causing production shortages. However, incorrect BOMs are only one of multiple reasons for incorrect inventories.

A product can be produced at a rate of 2 per minute. This is known as: lead time. delivery time. cycle time. cumulative lead time.

cycle time. Cycle time is the time between completion of two units.

The goal of a six sigma program is to: improve the Capability Index to a 6 sigma improve from a five sigma program decrease process variation create 3.4 DPMO

decrease process variation Six sigma furnishes tools for the improvement of business processes. The intent is to decrease process variation and improve product quality.

Failure mode effects analysis (FMEA) rates failures based on the probability of their occurrence and their: ease of mitigation. chance of occurring more than once. degree of severity. likelihood of causing other failures.

degree of severity. FMEA is used to identify the factors that are critical to failure and rates them by the likelihood they will occur and the consequences of the failure (severity). Corrective actions can then be applied to those failures based on their rankings for occurrence and severity.

The removal of outliers from demand data in order to provide a reasonable historical base from which to forecast is called smoothing demand filtering regression time series decomposition

demand filtering Demand filtering is a method of controlling variations by providing a check that limits the amount of the variation from one period to the next. A demand filter typically is a ratio of the new demand to the average of the old demand.

Which of the following is likely to be the most important order winner for a producer of custom-designed, low-volume products? image design capability price/cost delivery speed

design capability Companies that build custom-designed products normally will be competing based on the special capabilities or attributes of the product made to a specific customer specification. Custom-designed products usually are very expensive to build and prices are high. Custom-made products normally have an extended lead time. A custom-designed product focuses on the special functions needed by the customer where image plays a very minimal part.

At one time a high-end automobile had 97 components. After an out-of-the-box evaluation, the number was reduced to 7 parts. This part reduction is a key goal of Supplier rationalization benchmarking concurrent engineering design for manufacturability

design for manufacturability Simplification of parts, products, and processes to improve quality and reduce manufacturing costs is known as design for manufacturability.

A quality management technique that measures controllable and uncontrollable process variables and their effects on managing satisfactory outputs from the process is called: design of experiments. design for quality. design for manufacturability. design for the environment.

design of experiments. DOE is a quality management technique used to evaluate the effect of carefully planned and controlled changes to input process variables on the output variable. The objective is to improve production processes.

A significant advantage of using forward scheduling in the make-to-order environments is that it: determines when orders could be completed. minimizes overloading of work centers. ensures that operations arenÕt scheduled in the past. reduces idle time in production.

determines when orders could be completed. Forward scheduling is a technique where material procurement and operations scheduling start when the order is received and then operations are scheduled forward form this date. This method is used to determine the earliest delivery date. The other answers are incorrect because they are not specifically related to forward scheduling.

Analyzing capital investments by estimating future cash flows and translating them into equivalent amounts in today's terms is called average return on investment analysis payback analysis internal rate of return analysis discounted cash flow analysis

discounted cash flow analysis Discounted cash flow analysis is a method of investment analysis in which future cash flows are converted, or discounted, to their value at the present time. The net present value of an item is estimated to be the sum of all discounted future cash flows.

Which of the following roles of warehouses deals with the grouping of different items into an order? distribution channel. manufacturing channel. transaction channel. physical supply channel.

distribution channel. The distribution channel is concerned with the transfer or delivery of goods or services to the customer. The physical supply channel is concerned with the movement of goods from suppliers to manufacturers. The manufacturing channel is concerned with the movement of materials and components into the production process for conversion to finished goods. The transaction channel is concerned with the transfer of ownership. Its function is to negotiate, sell, and contract.

The supplier in a new product introduction can reduce time to market by automating production processes developing new technology making hard tooling early involvement

early involvement Getting the supplier involved early in the design process significantly assists in cutting design and production lead times for the components and materials needed to build the new product. Simply automating processes does not necessarily result in quicker new product release. Making tooling is only one of the steps performed by the supplier. Developing new technology does not necessarily result in quicker new product release.

A company uses material requirements planning for an electronic product family. Which of the following ordering techniques is MOST likely to already incorporate the rounding factor for a part where inventory is in units and purchase orders are in cartons of 100? period lot-for-lot fixed economic

fixed A fixed order policy will require replenishment in a set quantity. This is appropriate where order quantities must match the supplier's selling unit of measure, which in this case is 100 units. Options A, C, and D all will order the exact quantities that are needed.

A workforce whose members are cross-trained and who can be assigned to different tasks is a: flexible workforce. modular workforce. allocated workforce. floating workforce.

flexible workforce. A flexible workforce is a group of people who is cross-trained and whose work rules permit assignment of individual workers to different tasks.

Analyzing the movement of material within a process can be achieved by using a: scatter diagram. flowchart. statistical process control chart. r-chart.

flowchart. The output of a flowcharting process is a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process.

The kanban system is responsible not only for implementing the production schedule but also: for facilitating the continuous improvement of execution and control. for replacing the annual pysical inventory process for eliminating the need for a raw material or component warehouse for facilitating the MRP

for facilitating the continuous improvement of execution and control. The kanban system is responsible not only for implementing the production schedule but also for facilitating the continuous improvement of execution and control.

A design method that identifies the physical similarity of parts and provides for rapid retrieval of existing designs is: taguchi methodology. design for the environment. group technology. design of experiments.

group technology. Group technology is an engineering and manufacturing philosophy that identifies the physical similarity of parts and provides for rapid retrieval of existing designs and facilitates a cellular layout.

Workplace organization refers to: consolidation of management levels through employee empowerment. changing from a hierarchical to a matrix structure to support a pull system. having a clean area with place for everything and everything in its place. having operations organized in a sequential and synchronous flow.

having a clean area with place for everything and everything in its place. The arrangement of tools, equipment, materials, and supplies according to their frequency of use.

Pareto analysis is a method used to: categorize corrective actions. summarize possible causes of problems. determine product quality. identify causes with the largest impact.

identify causes with the largest impact. Pareto analysis and charting is used to divide items into classes based on the levels of a certain characteristic.

Corrective actions are defined as: changes to the general ledger to fix incorrect entries. adjustments to inventory balances based on cycle counts. implementation of solutions to reduce or eliminate problems. discipline of employees for non-conformance.

implementation of solutions to reduce or eliminate problems. Corrective action is the implementation of solutions resulting in the reduction or elimination of an identified problem.

A major airline achieved considerable cost savings with its mastery of fast turnarounds of planes at the gate. This is an example of improvements from improved efficiencies improved labor conditions for gate personnel supply chain redesign vertical integration

improved efficiencies Southwest airlines, RyanAir, and EasyJet have all achieved considerable cost savings by reconfiguring the traditional value chain of commercial airlines thereby permitting it to offer travelers dramatically lower fares.

Increasing lead times in an effort to get more work done and meet the schedule will most likely result in: decreased planned order releases. increased queue times. decreased production lead time. increased capacity.

increased queue times. Increasing lead time will lead to increased work in process which will increase queues; capacity and planned orders will not be affected.

Based on the theory of constraints, capacity of a work center can be managed most effectively by: increasing utilization of bottlenecks. decreasing utilization of non-bottlenecks. increasing utilization of non-bottlenecks. decreasing utilization of bottlenecks.

increasing utilization of bottlenecks. Maximizing the utilization of constraints is the primary method of ensuring the maximum capacity can be realized.

The most likely reason for schedules determined within material requirements planning being changed in production is: work center capacity changed since planning began. schedules are based on often incorrect forecasts. infinite loading does not account for sequencing. lead times are based on standards and not actuals.

infinite loading does not account for sequencing. MRP does not account for sequencing at a work center, but goes by due dates only; the other statements are true, but are not as likely a reason.

The best approach for managing planning vs. execution in capacity management is: capacity requirements planning. critical ratio. input/output control. backlog monitoring

input/output control. Input/output control is a technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored.

A successful employee involvement (EI) program EXCEPT: meticulously follows management directives is good for emplyee morale, but seldom results in significant improvements invests production personnel with the power to improve operations is a stand-alone event

invests production personnel with the power to improve operations Perhaps the most important reason for the success of an EI program is investing production personnel with the power to unearth and pursue the improvement of operations. When management sets the goals and guides personnel involvement, the EI program breaks apart or is simply ignored. An EI program can result in significant improvements and should be an ongoing program.

A small past-due load often exists at a certain work station. Otherwise, past due loads move around the facility based on product volume and mix. This is an indication that the work station: precedes a bottleneck. follows a bottleneck. is a bottleneck. is a stand-alone work center.

is a bottleneck. A bottleneck is a facility, function, department, or resource whose capacity is less than the demand placed upon it.

A normal progression for a unique product characteristic that delights customers is it always starts off as the focal point for advertising and sales presentations at the product introduction stage. it becomes a likely catalyst for a line extension or a new product it moves from Patent pending status to a Patent approved status it becomes an order winner over time, and eventually possibly an order qualifier.

it becomes an order winner over time, and eventually possibly an order qualifier. By definition because delights rely on their novelty, when offered in the market they're no longer novel. As more company's introduce similar services (or features) what was once a delight becomes an order winner. In time it may even become an order qualifier.

Which of the following manufacturing processes most likely would be characterized by a narrow range of standard products, low direct labor costs, and a high level of technical support for manufacturing? project line jobbing batch

line Line is a type of manufacturing process used to produce a narrow range of standard items with identical or highly similar designs. Production volumes are high, production and material handling equipment is specialized, and all products typically pass through the same sequence of operations. Jobbing (syn.: Job Shop) is incorrect because it is characterized as a type of manufacturing process used to produce items to each customer's specification, where production operations are designed to handle a wide range of product designs and are performed at fixed plant locations using general-purpose equipment. Batch is incorrect because it is characterized as a type of manufacturing process in which sets of items are moved through the different manufacturing steps in a group or batch. Project is incorrect because it characterizes a type of manufacturing process used for large, often unique, items or structures that require a custom design capability (engineer-to-order).

"Getting the right goods or services to the right place at the right time and in the desired condition" best defines: operations management. procurement. supply chain management. logistics.

logistics. Logistics is the process of obtaining, producing, and distributing material and product in the proper place and in proper quantities.

A strategy to attain technology superiority in product development may lead to market domination during the early stages of a product's life cycle unnecessary complexity in the manufacturing process copy cat manufacturers who have no regard for intellectual property rights overly complex products containing unnecessary features

market domination during the early stages of a product's life cycle A principle offensive competitive strategy includes leapfrogging competitors by being first to market with next-generation products. Example; Microsoft led the X box market by 12 months until Sony's PlayStation was released.

Using nominal group technique to generate ideas is similar to: force field analysis. A3. brainstorming. mind-mapping.

mind-mapping. Nominal group technique is similar to brainstorming, used by teams to generate ideas on a particular subject.

A quality-designed product will help prevent which of the following situations? Competitive pricing The need for continuous improvement Increased service-related costs Lot traceability issues

ncreased service-related costs A quality design can help lower total system cost, which would include the amount of service after the sale.

Greater input than output at a work center on an occasional basis is most likely caused by: less output than planned at the previous work center. normal variability in the execution process. planning using the wrong work center capacity. less output than planned at the work center.

normal variability in the execution process. Normal variability occurs everywhere.

Records for a part dimension over time show it has a single mean and that values tend to cluster around the mean. This type of distribution is likely to be referred to as: z-bar. normal. binomial. pareto.

normal. The APICS Dictionary describes normal distribution is a particular statistical distribution where most of the observations fall fairly close to one mean.

Material consumed in a pull environment is determined by: number of units completed. actual yield percentage. number of customer orders. scheduled rate of production

number of units completed. Units complete determines the material used in a pull environment.

Mean time to repair (MTTR) is the average time: to get a technician on site. of the part repair. between failures. of all part repairs.

of the part repair. MTTR is the average time that it takes to repair a product.

The splitting of a set of operations of a specific order into subgroups so each can be run on a different machine is called: job splitting. order splitting. group splitting. operation splitting.

operation splitting. Dividing a lot into two or more sublots and simultaneously processing each sublot is known as operation or lot splitting.

A market leader in systems computing failed to adapt to market trends for smaller devices and cloud computing. This reveals a poor assessment process concerning their executive dashboard capabilities monthly sales and operations planning (S&OP) strengths weakness, opportunity and threat (SWOT) processes operations strategy

operations strategy The operations strategy are decisions that shape the long-term capabilities of an operation and their contribution to overall strategy. Operations strategy should be consistent with the overall strategy

Which of the following factors would be LEAST useful in determining the sales and operations plan time horizon? order backlog capacity acquisition lead time business plan cumulative lead time

order backlog The order backlog provides the data relating to orders that have been booked by the company. The planning horizon must be at least as long as the cumulative lead time to build the finished goods in the plan. The other answers are incorrect because they require long-term planning horizons.

Which of the following best measures the production operation's contribution to delivery reliability? cycle time per part direct labor hours per product number of customer complaints percent master schedule achieved

percent master schedule achieved There is a direct correlation between the percent of the master schedule that is completed as scheduled and on time delivery. Cycle time per part refers only to the time that it takes for a product to be built. Whether it is built on time is not a consideration. The number of customer complaints is actually a quality or customer service issue. Direct labor hours per product is the standard hours it takes to produce a product. It has no affect on product delivery time.

Which of the following best measures the production operation's contribution to delivery reliability? percent master schedule achieved direct labor hours per product cycle time per part number of customer complaints

percent master schedule achieved There is a direct correlation between the percent of the master schedule that is completed as scheduled and on time delivery. Cycle time per part refers only to the time that it takes for a product to be built. Whether it is built on time is not a consideration. The number of customer complaints is actually a quality or customer service issue. Direct labor hours per product is the standard hours it takes to produce a product. It has no affect on product delivery time.

A work center is best described as a set of machines and/or operators that: perform related processes. produce at the same rate of output. perform tasks in a sequence. produce the same products.

perform related processes. A work enter is a specific production area, consisting of one or more people and/or machines with similar capabilities.

Actual queue time of a job at a work center is most impacted by the: utilization of the work center. priority of the job. efficiency of the work center. lot size of the job.

priority of the job. If dispatching rules push a job to the end of the sequence, the queue time will be longer than possibly planned; the inverse is true if an order gets moved up in the sequence.

Which of the following will have the greatest influence on an employee's evaluations and promotions? performance to standard product output setup time problem-solving skills

problem-solving skills An employee's problem-solving skills provide the most value to an organization. The other answers all relate to the use of predefined standards to measure how well an employee is performing. These measures will show productivity, but what is really valued is an employee's ability to propose new ideas and search for avenues for continuous improvement.

A flowchart that is useful for identifying areas of waste in the process is a: process map. control chart. mind map. cause and effect diagram.

process map. Diagraming the flow of a process enables the identification of steps that are non-value-added or waste.

A make-to-order company believes that reducing customer lead time will result in a competitive advantage and increased sales. The sales and operations planning process should authorize an increase in: finished product inventory levels the sales forecast work in process production

production Increasing sales will require production to produce more.

The role of master scheduling is to create a statement of planned output from production and to: drive the distribution planning process determine the feasibility of the operations plans provide information for coordinating production and sales synchronize the plans with trading partners

provide information for coordinating production and sales Master scheduling provides information on when products will be available in the future, enabling sales to promise delivery to customers.

The design methodology most relying on the voice of the customer as well as cross functional input from the organization is: quality design. total quality management. design for production. quality function deployment.

quality function deployment. QFD is a methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation of the supporting production management system.

When a strategy for continuous improvement is initiated, policies on which of the following areas are usually established first? cost reduction flexibility delivery dependability quality improvement

quality improvement The first objective in a continuous improvement process is to improve quality. Once quality is improved, secondary projects for cost reduction, increased delivery dependability, and process flexibility can then take place.

When a company is pursuing a program to achieve manufacturing excellence, which of the following objectives should receive the highest priority? volume flexibility delivery reliability quality improvement cost reduction

quality improvement The other options are all excellent goals to achieve higher productivity at the lowest cost. However, all of them rest on continuous quality improvement.

Samples are plotted over time on a chart that includes the part's nominal value, and upper and lower specification limits. The technique being used is: histogram. checksheet. r-chart. p-chart.

r-chart. An R, or range, chart are used to plot small samples taken on a regular basis.

The best way for a company to reduce the cost of quality and improve customer satisfaction is to: increase finished product inspection. establish a customer warranty program. reduce process variability. perform regular customer surveys.

reduce process variability. Reducing variability in products and processes decreases the probability of quality defects. The closer products and processes are to the standard, the greater the probability that they will not have quality defects. The increasing finished goods inspection will only eliminate substandard output. The real goal to quality improvement is to attack process variation at the source—during production. All that a customer warranty program does is to assist customers handle sub-quality products when they occur. Customer surveys provide information about the quality of products after they have been delivered to the customer and are quality-reactive.

One benefit of a focused factory is: reduced functional departments. increased machine utilization. increased supervisory involvement. reduced production lead time.

reduced production lead time. Repetition and concentration on a very limited product usually increases efficiency, which impacts lead time.

Manufacturing lead times can be reduced by: reducing input at bottleneck work centers. reducing planned queue times at work centers. ensuring there is a backlog of work so that no machines are idle. increasing the number of operators at the work center.

reducing planned queue times at work centers. Queue time makes up most of the lead time, so reducing what is planned will reduce the amount of time the product is in process; Increasing backlog or the number of operators does not ensure a reduction in lead time; reducing input at the bottlenecks may cause the bottleneck to not be utilized 100%.

A design for a product or service that plans for intended performance in harsh environments is called: sustainable design. robust design. protective design. environmental design.

robust design. Robust design is a design for a product or service that plans for intended performance even in the face of a harsh environment.

Planning of additional materials in excess of what is needed to satisfy gross requirements is also known as: pipeline inventory forward scheduling independent demand safety stock

safety stock Forward scheduling is incorrect because it describes a scheduling technique where the scheduler proceeds from a known start date and computes the completion date for the order. Pipeline inventory is incorrect because it refers to the amount of inventory that is currently in the supply or distribution pipeline. Independent demand is incorrect because it describes the demand arising from customer orders for a company's finished goods.

A product is subject to only a distributor sales channel. Which of the following is used to identify the necessity of providing feedback to distributors regarding the feasibility of meeting their demand as forecasted for a seasonal product? aggregate forecast of all distributors sales and operations planning master scheduling of end items customer relationship management

sales and operations planning Sales and operations planning (S&OP) provides a snapshot into how well the sales and operations plans are progressing. A pure distribution channel does not have a master schedule. Aggregating all channel forecasts will provide no information on how well these forecasts are performing over time.

The process analysis tool used to identify correlations between data points is a: scatter diagram. gantt chart. p-chart. cause and effect diagram.

scatter diagram. A scatter diagram data using an x and y axis so that a correlation can be seen.

A company using theory of constraints is trying to achieve: resource leveling. increased capacity utilization. mixed-flow scheduling. schedules that adapt to restrictions.

schedules that adapt to restrictions. Theory of constraints is managing the constraints, or restrictions, that exist in the process.

A group of people who independently work to manage their actions to achieve a defined output is a: self-directed work team. middle management group. quality circle. work cell.

self-directed work team. A self-directed work team manage their duties and actions without immediate supervision.

Dispatching a production order results in: changing the planned to the actual start date. ensuring that required resources are available. balancing input with output at the work center. sequencing the production order for work.

sequencing the production order for work. Dispatching sequences the orders.

A company defines the critical parameters for a component of a new product and then lets a supplier partner design the component. The most significant advantage of this approach would be that it: improves performance of the final product. reduces the cost of the final product. enables a reduction in the marketing staff. simplifies internal project coordination.

simplifies internal project coordination. The practice of sub-contracting work to suppliers with whom an organization has developed close relationships has the advantage of simplifying the amount of internal project coordination required, which can result in shorter lead times and higher development efficiencies The other answers are not significant advantages to this approach.

Increased output is best achieved by doing which of the following? implementing flexible manufacturing systems simplifying design using expert systems using computer-aided design

simplifying design Making the production process easier, visible, and fool-proof enables operators and production equipment to effectively increase output, reduce wastes, and increase quality. The other answers are incorrect because a dependence on automation does not ensure productivity increases if the production environment is not prepared to effectively deploy them in support of lean production techniques.

Which of the following may be used as a measure of flexibility? reduction of burden rate machine efficiency output per employee skills per employee

skills per employee The skills possessed by employees are a measurement of the flexibility to work on other tasks. Output per employee is a calculated measurement demonstrating performance on a particular job. Reducing the burden rate is a financial metric that does not affect worker or machine flexibility. Machine efficiency is an output calculation that measures how well a machine is producing to the standard.

Overlapping is used to compress lead time by: consolidating setups. grouping operations to run concurrently. choosing alternate routings so that orders can run concurrently. starting the second operation before the first has completed the full quantity.

starting the second operation before the first has completed the full quantity. Operation overlapping may be used to reduce manufacturing lead time by moving pieces to the second work center before the first operation has completed the entire quantity on the order.

When a person dominates the discussion in a meeting, the individual who requests additional input from other members of the group is the: gatekeeper. extrapolator. sensei. supervisor.

supervisor. Gatekeeping is a group technique to effectively manage a situation, discussion or meeting

The material requirements planning (MRP) logic will plan a receipt for an item with safety stock and a fixed order quantity when the projected available balance is less than: the lot size quantity the safety stock quantity zero the gross requirement quantity

the safety stock quantity Safety stock is the additional inventory planned as protection against fluctuations in demand. The planned order logic will schedule a planned order release to prevent the projected available balance from going below the safety stock level.

Which of the following performance measurements is likely to be the most important to operations managers of a medium volume, short life cycle product line? number of schedule changes capacity utilization time to market standard error of the forecast

time to market Short life cycle production is usually focused on products that need to get to market quickly. Production is medium volume so the smaller lot sizes enable managers to quickly schedule and reschedule production. The standard forecast error is an important factor for all forms of manufacturing. The medium volumes (lots sizes) can usually be changed without significant scheduling problems.

Visibility into suppliers'systems can allow the organization to prepare its own system to manage production and logistics—for example to find processes a supplier can eliminate to reduce the cost to adjust production schedules in response to delayed material delivery to make decisions on a supplier's viability to collect data for the next S&OP meeting

to adjust production schedules in response to delayed material delivery Visibility into a supplier's system allows the organization to react more quickly to supplier delivery changes. A supplier's vialbility should have been determined during supplier selection; visibility into a supplier's system will not provide a view to processes tht can be eliminated and the information from the supplier's system is too granular for a S&OP meeting.

A management approach to success through customer satisfaction is: total quality engineering (TQE). total productive maintenance (TPM). total quality management (TQM). total quality control (TQC).

total quality management (TQM). TQM is a management approach to long-term success through customer satisfaction.

All of the following factors are required to implement effective cross-functional teams EXCEPT: change management. employee empowerment. total quality management. shared vision.

total quality management. To be successful, cross-functional teams must be driven by employee empowerment, shared vision, and change management expertise. These factors are so important because team members cut across business functions and sometimes across supply chain partners. Total quality management refers to the activities surrounding product development and process management to eliminate the causes of variance and to build an ethic of continuous improvement in all activities.

Standard activities producing differing results is an example of: conformance. variation. common cause. rejection.

variation. Variation is a change in data, a characteristic, or a function.

The quality function deployment (QFD) process can be facilitated with a process known as voice of the customer (VOC) group technology analysis horizontal integration vertical integration

voice of the customer (VOC) Voice of the customer (VOC) uses customer descriptions for the functions and features customers desire for goods and services.

Which of the following business characteristics would typically make a lead capacity strategy appropriate? Capacity can be activated or deactivated in increments. Activating and deactivating capacity is costly. Price is the competitive priority being pursued. Both material and capacity constraints exist.

Capacity can be activated or deactivated in increments. A lead capacity strategy is one where, as demand is increasing, capacity is added prior to the realization of demand. If capacity can be activated and deactivated in increments, the business can respond accordingly to changing demand.

In resource planning, the bill of resources is based on which of the following? One unit of the typical product. The lot size of a typical product. The lot size of each product. One unit of each product.

One unit of the typical product. The bill of resources works with product families. To estimate how long it would take to build a product family, it is necessary to arrive at a summary or average of how long it would take to build one typical item in a product family.

A production facility is capable of producing 1000 units per shift. Planned capacity is 7.2 hours per 8 hour shift, one shift per day, and five days per week. Customer demand is 800 units per day. What is the takt time? .50 minutes per unit .54 minutes per unit .43 minutes per unit .60 minutes per unit

.54 minutes per unit 7.2 hours x 60 minutes/hour / 800 units = .54 minutes between units

Within the demand time fence used by master scheduling, how much of the forecast demand from sales and operations planning is included? 0 Greater of customer orders or forecast Lesser of customer orders or forecast 1

0 Within the demand time fence, only customer orders are included.

A company introduced a new product five months ago that is selling at twice the rate projected by marketing. In order to make the smoothed forecast as responsive as possible, the best alpha factor to use is 0.1 0.7 0.2 0

0.7 .7 weights the most recent period's usage the greatest because a high alpha factor exponential smoothing reacts more quickly and a low alpha factor will react more slowly to a trend

(Period, Forecast, Customer Orders, Projected Available Balance, Master Production Schedule) OH: (0, 0, 0, 15, 0) Demand Time Fence: (1, 20, 19, 0, 0), (2, 20, 20, 0, 0), (3, 20, 21, 0, 0) Planning Time Fence: (4, 20, 21, 0, 0), (5, 20, 25, 0, 0), (6, 20, 24, 0, 0), (7, 20, 20, 0, 0), (8, 20, 18, 0, 0) Safety stock = 10 Lot size = 30 Using the information provided, which periods would have a master schedule quantity? 1,3,4,7 1,2,3,4,6,7 1,2,4,5,6,8 1,2,3

1,2,4,5,6,8 (Period, Forecast, Customer Orders, Projected Available Balance, Master Production Schedule) OH: (0, 0, 0, 15, 0) Demand Time Fence: (1, 20, 19, 26, 30), (2, 20, 20, 36, 30), (3, 20, 21, 15, 0) Planning Time Fence: (4, 20, 21, 24, 30), (5, 20, 25, 29, 30), (6, 20, 24, 35, 30), (7, 20, 20, 15, 0), (8, 20, 18, 27, 30)

Internal setup time: 1 hour External setup time: 2 hours Queue time: 8 hours Run time per 1,000 units: 8 hours Move time: 2 hours Standard cost per hour: $60.00 Standard material cost per unit: $10.00 Standard allocated overhead per hour: $30.00 Using the information provided, the standard cost to produce one unit based on a batch quantity of 1000 is 10.81 10.9 11.53 10.54

10.81 (8x60 + 1x60 + 8x30 + 1x30)/1000 + 10 = 10.81

A company packages in units of 100 per carton. Production yield averages 99%. What is the order quantity transmitted from master production scheduling to material requirements planning for a period order quantity of 1000 units? 1000 1011 1005 1010

1000 MPS will transmit the required quantity to MRP. MRP would then apply the yield to the order based on existing inventory or safety stock for release to production.

A part has a historical yield of 99%. What quantity should be started in order to produce 1000 parts? 1011 990 1010 1000

1011 1000/.99 = 1011 (rounded up)

A warehouse works 5 days per week, with 8 hours available for order processing by 3 individuals. If utilization last week was 85%, the amount of time spent processing orders was 120 102 34 20

102 8x5x3 = 120; 120x.85=102

Period: Gross Requirements, Scheduled Receipts, Projected Available, Net Requirements, Planned Order Receipt, Planned Order Release 0: -, -, 80, -, -, - 1: 36, -, -, -, -, - 2: 42, -, -, -, -, - 3: 50, -, -, -, -, - 4: 45, -, -, -, -, - 5: 55, -, -, -, -, - 6: 55, -, -, -, -, - 7: 55, -, -, -, -, - 8: 55, -, -, -, -, - Lead time = 1 week Order policy = fixed order quantity of 100 Safety stock = 10 Using the information provided, what is the projected available balance in period 4? 107 0 100 7

107 Period: Gross Requirements, Scheduled Receipts, Projected Available, Net Requirements, Planned Order Receipt, Planned Order Release 0: -, -, 80, -, -, - 1: 36, -, 44, -, -, 100 2: 42, -, 102, -, 100, - 3: 50, -, 52, -, -, 100 4: 45, -, 107, -, 100, - 5: 55, -, 52, -, -, 100 6: 55, -, 97, 3, 100, - 7: 55, -, 42, -, -, 100 8: 55, -, 87, 13, 100, -

Period: Plan, Actual, Deviation, Cumulative Deviation Input: 1: 400, 450, -, - 2: 400, 430, -, - 3: 450, 440, -, - 4: 450, 480, -, - 5: 500. 520, -, - 6: 500, 530, -, - Output: 1: 400, 360, -, - 2: 400, 410, -, - 3: 450, 530, -, - 4: 450, 460, -, - 5: 500, 520, -, - 6: 500, 540, -, - Using the information provided, what is the cumulative input deviation at the end of period 5? 80 200 40 120

120 Period: Plan, Actual, Deviation, Cumulative Deviation Input: 1: 400, 450, 50, 50 2: 400, 430, 30, 80 3: 450, 440, -10, 70 4: 450, 480, 30, 100 5: 500. 520, 20, 120 6: 500, 530, 30, 150 Output: 1: 400, 360, -40, -40 2: 400, 410, 10, -30 3: 450, 530, 80, 50 4: 450, 460, 10, 60 5: 500, 520, 20, 80 6: 500, 540, 40, 120

Week 1 2 3 4 Forecast 100 100 100 100 Customer Orders 80 20 10 40 Projected Available Balance 225 125 25 25 25 Available-to-promise (cumulative) Master Production Schedule 0 0 100 100 The cumulative available-to-promise quantity in the first period would be: 75 units 145 units 125 units 0 units

125 units The cumulative available-to-promise quantity in the first period is equal to the on hand inventory (225) plus the master production schedule (MPS) (0) minus the sum of orders until the next MPS (80 + 20); 225 + 0 - 100 = 125.

What is the efficiency percentage for this employee? Hours in attendance: 10 Direct hours on production: 8 Standard hours per piece: 1 Pieces produced: 10 80% 100% 125% 133%

125% Based on the above data, the actual direct hours of output (hours charged) is 8 hours. The standard direct hours of output (standard hours times piece produced) is 10 hours. Efficiency = 10 / 8 = 125%.

A likely reason why a process is said to exhibit signs of being out of control if 13 points are on one side of the median is 13 points can easily be plotted in a 2-shift or 2-day operation 13 is a typical number used for plotting and easy to remember 13 points are statistically required in order to calculate a new median 13 points should be equally likely to occur on both sides of the median

13 points should be equally likely to occur on both sides of the median The average of all points should approximate the median; points all on one side are showing a tendency of heading out of control.

If a smoothing constant is .1, the old forecast was 150, and actual demand was 170, what is the forecast for the next period? 152 160 155 187

152 (.1x170) + (.9x150) = 152

Item: X Lead Time: 2 On-hand: 4 Period: Forecast, Customer orders, Projected Available balance, Master production schedule 1: 10, 5, 9, 20 2: 5, 2, 2, - 3: 20, 1, 1, 20 4: 12, -, 9, 20 5: 12, -, 17, 20 Lot size: 20, Safety stock: 0, Demand time fence: 3, Planning Time Fence: 5 A company received a new order for 25 units, shippable immediately. If it is assumed that previous customer orders have higher priority and that no rescheduling is possible within the first three periods, the new order should be scheduled in which of the following ways? 5, 3, 17 17, 0, 8 19, 0, 6 20, 0, 5

17, 0, 8 This question uses discrete ATP for the answer. ATP for period 1 is calculated as On-Hand (or PAB) + Supply - Demand (Customer Orders) up to the next MPS receipt. (Note: ATP ignores the forecast and focuses on customer orders only.) The PAB is calculated only in those periods with a MPS receipt. Starting numbers: On Hand = 4; MPS receipt = 20; Demand (Customer Orders) = 7 (5 in period 1, 2 in period 2) 4+20-7 =17 Therefore, 17 can be promised in Period 1. Since there is no ATP in period 2, ATP is 0. The remaining 8 are then promised from period 3 17, 0, 8.

Production kanban cards indicate four cards for Part A, two for Part B, then two more for Part A. Quantity per kanban is 50 units. Safety stock is equal to one kanban quantity for Parts A and B. Which of the following production occurs based on this information? 250 Part A, 150 Part B, 150 Part A 200 Part A, 100 Part B, 100 Part A 350 Part A, 150 Part B 300 Part A, 100 Part B

200 Part A, 100 Part B, 100 Part A Production occurs in the exact sequence and quantity specified by the kanban cards.

Period: Gross requirements, Scheduled receipts, Projected available, Net requirements, Planned order receipts, Planned order releases 0: -, -, 60, -, -, - 1: 20, -, -, -, -, - 2: -, -, -, -, -, - 3: 24, -, -, -, -, - 4: 12, -, -, -, -, - 5: -, 80, -, -, -, - 6: 20, -, -, -, -, - Order Quantity: 80 Safety Stock: 20 Allocated Quantity in the first period: 12 Lead Time: 2 periods The projected available for the item at the end of period 1 would be: 28 40 48 60

28 The projected available balance is calculated as the previous on-hand balance (60) minus allocations (12) plus scheduled receipts (0) minus gross requirements (20); 60 - 12 + 0 - 20 = 28.

The forecast for the previous month was 300, and actual demand was 320. Using an alpha factor of .3, what is the forecast for the new month? 314 306 326 294

306 (.3x320) + (.7x300) = 306

If safety stock is 1000, unit cost is $2, lead time is 12 weeks, service level is 90% and demand is 3000 per week, what is the reorder point? 37000 73000 6000 36000

37000 DDLT + SS = 3000x12 + 1000 = 37,000

A work center requires 36 standard hours to produce 200 units of a product. If the work center has an efficiency of 110%, and a utilization of 80%, how many actual hours will be required to produce the product? 40.9 49.5 31.7 26.2

40.9 36/110%/80% = 40.9

A factory works 3 shifts with 5 machines on each shift, 8 hours per shift, 5 days a week, with no overtime scheduled. If utilization is 90% and efficiency is 80%, the calculated rated weekly capacity would be: 600 432 480 540

432 The calculation is as follows: 3 shifts x 5 machines x 8 hours x 5 days x 90% utilization x 80% efficiency = 432.

Using the information provided, what are the available to promise quantities for periods one through five? (Period, Forecast, Customer Orders, Projected Available Balance, Available to Promise, Master Production Schedule) (-, -, -, 15, -, -), (1, 10, 10, 5, -, -), (2, 10, 11, 34, -, 40), (3, 10, 9, 24, -, -), (4, 10, 11, 13, -, -), (5, 10, 8, 33, -, 30), (6, 10, 11, 22, -, -), (7, 10, 9, 12, -, -), (8, 10, 8, 32, -, 30) 5,9,0,0,2 5,34,24,13,33 0,31,22,10,22 5,24,14,4,24

5,9,0,0,2 (Period, Forecast, Customer Orders, Projected Available Balance, Available to Promise, Master Production Schedule) (-, -, -, 15, -, -), (1, 10, 10, 5, 5, -), (2, 10, 11, 34, 9, 40), (3, 10, 9, 24, -, -), (4, 10, 11, 13, -, -), (5, 10, 8, 33, 2, 30), (6, 10, 11, 22, -,), (7, 10, 9, 12, -, -), (8, 10, 8, 32, 22, 30)

A work center has a utilization of 90% and an efficiency of 95%. Over the past months it has produced quantities of 600, 610, 640 and 630 per week. What is the demonstrated capacity of the work center? 530 589 620 558

620 Demonstrated capacity is based on number of units/hours that are being produced. Utilization and efficiency are not included in the calculation.

Using the information provided, what is the rated capacity of the work center? Work center information: Hours Available 7.2 Internal setup hours .2 Standard hours produces 7.0 Actual hours worked 7.1 Scheduled downtime hours .8 Hours per shift 1 Shifts per day 1 Days per week 5.5 Number of resources 20 879 855 880 867

855 available hours x utilization x efficiency = (20 x 8 x 1 x 5.5)-.8 x (7.1 / 7.2) x 7 / 7.1 = 855

Standard hours/part = .1 Scheduled run time = 7.2 Standard internal setup time = .25 hours Scheduled downtime = 0 Actual run time = 7.0 hours Actual internal setup time = .1 hour Total hours/shift = 8 Resources = 1 Shifts/day = 1 Using the information provided for a work center, the utilization for the work center is 88 93 91 89

89 Utilization = Actual hours worked / hours available = 7 + .1 / 8 = .8875

(Period, Forecast, Customer Orders, Projected Available Balance, Available-to-promise, Master Production Schedule) (-, -, -, 20, -, -), (1, 20, 19, -, -, -), (2, 21, 20, -, -, 50), (3, 20, 21, -, -, -), (4, 22, 21, -, -, 50), (5, 24, 25, -, -, -), (6, 262, 24, -, -, 50), (7, 28, 20, -, -, -), (8, 28, 18, -, -, 50) Using the information provided, what is the available-to-promise quantity in period 2? -19 31 9 50

9 (Period, Forecast, Customer Orders, Projected Available Balance, Available-to-promise, Master Production Schedule) (-, -, -, 20, -, -), (1, 20, 19, 1, 1, -), (2, 21, 20, 31, 9, 50), (3, 20, 21, 10, -, -), (4, 22, 21, 38, 4, 50), (5, 24, 25, 13, -, -), (6, 262, 24, 37, 6, 50), (7, 28, 20, 9, -, -), (8, 28, 18, 31, 16, 50)

A company had a cost of goods sold of $500,000 and net sales of $800,000 in one year. Beginning inventory was valued at $50,000, and ending inventory at $60,000. What was the inventory turnover for the year? 10 8 14 9

9 average inventory = 50,000+60,000 / 2 = 55,000; 500,000 / 55,000 = 9

Product: Quantity Produced, Standard Hours, Hours Charged A: 200, 200, 250 B: 60, 120, 100 C: 80, 80, 100 Work Center 18 Week 15 Total hours worked—480 Planned labor—420 standard hours/week Standard labor cost—$5/standard hour The productivity of the work center is: 83% 89% 94% 120%

94% Based on the above data, the actual output (hours charged) is (250 + 100 + 100 = 450). The actual input (total hours worked) is 480. Production = 450 / 480 = 94%.

Which of the following statements about utilization of resources is true? A bottleneck is a pacing operation. Increasing utilization of an operation increases throughput. Utilization is the minimum number of hours expected from the work center. 100% utilization of all resources should be an objective.

A bottleneck is a pacing operation. Production should be paced using the throughput of any bottlenecks; resources should only be utilized at the % to meet the schedule; increasing utilization of only one operation may have no impact on the overall throughput.

Early customer involvement in the design process can result in Key performance indicators Improved manufacturability Lower training costs A longer product life cycle

A longer product life cycle Ensuring that products are aligned with customer's requirements can lengthen the life cycle of the product, as it was designed per customer specs.

Customer-supplier relationships that focus on the future and long term inter-company team building may find the relationship itself Jeopardized by a failure to meet expected order winning characteristics A major order-winning factor Something that needs to be formalized using long term partnership agreements Jeopardized by a failure to meet expected order qualifying characteristics

A major order-winning factor Enlightened customer-supplier relationships that focus on the big picture and longer term may find the relationship itself the major order-winning factor .

A company uses moving average to forecast on a monthly basis, and has many customers with varied demand. An outlier is most likely represented by One customer order within a period is 10 times larger than any other order A shutdown of the company for a month with no customer orders accepted Actual demand for a period is three standard deviations greater than the forecast Actual demand for a period causes the next period's forecast to exceed the median

A shutdown of the company for a month with no customer orders accepted Not accepting orders will cause that period to artificially drive the forecast down for the following periods; orders will always vary in size

When a company has multiple divisions essentially performing the same functions, a good first step related to continuous improvement and benchmarking would be To ensure management avoids benchmarking one against the other as this will likely cause ill feelings between the two organizations To have the two organizations benchmark other company's activities in these areas in hopes of developing one common company-wide process A simple benchmark process is to benchmark one division's processes vs. another's To jointly form a cross-company cross-functional team to come up with a "best in company" proposal

A simple benchmark process is to benchmark one division's processes vs. another's When a company has multiple divisions or organizational units performing much the same functions, At different locations it can also be useful to look at "best in company practices" as a benchmark for improvement.

Expediting can be a positive response to business growth and A function that manufacturing companies should make permanent A source of operational risk when operations is constantly stressed to meet ever growing demand A good way to augment ever changing schedules that the ERP system may have difficulty managing A solid replacement for a push shop floor control system

A source of operational risk when operations is constantly stressed to meet ever growing demand Business growth, although seemingly positive, becomes a risk when operations has to stretch or be reconfigured to deal with larger volumes, often leading to a loss of focus.

Which of the following is the most necessary component of an efficient back flushing system? Accurate inventory lead times Accurate forecasts Regular S&OP meetings Accurate Bill of Material

Accurate Bill of Material Back flushing requires very accurate bills of material because when work is completed, the system removes the number of parts that should have been used by the number of units produced. For example, a table requires one table top, four leg assemblies, and 28 hardware packets; 100 tables are produced in a batch. Upon completion of production, then, 100 table tops will be removed from inventory, 400 hundred leg assemblies, and 2800 hardware packets. Inaccurate Bills of Material will create inventory inaccuracies. The other answers may be important to the company, but have little bearing on back flushing.

Which of the following considerations of a supplier rating system would be most critical for the supplier? Accurate drawings for unique customer parts Performance reporting by month Clearly pre-published lead times Ability to compare suppliers with each other

Accurate drawings for unique customer parts Accurate drawings will improve the supplier's pricing and quality; the other responses are not as critical for a supplier rating.

For the purpose of material requirements planning, it is most important for the bill of material to Be usable for balancing capacity and load Calculate product cost Accurately define part dependencies Be linked to the operation routings

Accurately define part dependencies Without accurate item and usage within the bill of material, the entire explosion and netting process is invalid.

In an assemble-to-order environment, the execution and control function can help ensure a valid material plan by Maintaining bottleneck flexibility through utilizations of at least 85% Identifying alternate routings if the primary routing is unavailable Achieving production order on-time start and completion dates Providing accurate efficiency and utilization factors for work centers

Achieving production order on-time start and completion dates In any environment, achieving start and completion dates best supports the material plan; efficiency and utilization are more important in make-to-order environments; bottlenecks should be utilized at 100%; alternate routings are helpful, but are sometimes less efficient.

Material requirements planning indicates that safety stock will be dipped into in period 2. The next order will be received in period 3 due to a component availability issue at the supplier. Which of the following actions will most likely occur? Action message to reschedule order from period 3 to 2; planner allows safety stock to be used Action message to reschedule order from period 3 to 2; planner temporarily reduces the safety stock quantity No action message generated by MRP so no action from planner No action message from MRP; buyer attempts to expedite order from supplier

Action message to reschedule order from period 3 to 2; planner allows safety stock to be used An action message will be generated to reschedule the order. However, as the order cannot be expedited, safety stock should be consumed. Safety stock is in place for this very purpose.

Which of the following outputs from material requirements planning is of most use to the rest of the organization for achieving the material plan? Released orders Purchase requisitions Time-phased plan Action messages

Action messages Action messages identify what to do to balance supply and demand., include purchase requisitions, released orders, rescheduling receipts, etc.

Which of the following outputs from material requirements planning is of most use to the rest of the organization for achieving the material plan? Time-phased plan Released orders Action messages Purchase requisitions

Action messages Action messages identify what to do to balance supply and demand., include purchase requisitions, released orders, rescheduling receipts, etc.

Which of the following cost accounting methods identifies profitable products based on cost drivers? Actual market Standard activity Activity Based Costing Value-added

Activity Based Costing A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products.

Which of the following management philosophies is least likely to focus on throughput? Lean Manufacturing Total Quality Management Theory of Constraints Activity Based Costing

Activity Based Costing Activity-based costing is focused on actual costs incurred for one item; the other responses are all focused on throughput due to lead time, elimination of waste, etc.

The costing more commonly used for items imported for resale when substantial changes in the exchange rate are regularly experienced is Average Standard Activity-based Actual

Actual With actual costing,the item costs are tracked, by lot, batch, or order. This is used when item costs may fluctuate greatly between inventory purchases. This is the only way to establish true cost.

In a standard cost environment, which of the following labor reporting is most important to a continuous improvement program? Standard production order hours Actual run hours Actual setup hours Standard internal setup hours

Actual run hours Actual run hours can be compared to standard to determine variance. Actual setup could be both internal and external setup. Changing of standard hours are long term in nature.

A benefit of cross-training employees is Additional problem-solving ideas generated due to cross-trained knowledge Reduced need to hire from outside More consistent salary levels Retaining proprietary knowledge in-house

Additional problem-solving ideas generated due to cross-trained knowledge Cross-training simply means improving employee proficiency levels in roles outside their current responsibilities. The more trained people on the continuous process improvement team, the more ideas that can be generated for solving the problem. Different skills, backgrounds and expertise provide a broader base for generating solutions.

To prevent management from getting out of touch from what is really happening in the company, many CEO's ask leaders to Adopt the management by walking around supervisory style Manage people very closely using short interval goals. Disguise themselves and play the role of an entry level associate Arrange a leave of absence for department heads so they can clear their minds

Adopt the management by walking around supervisory style One major internet retailer's CEO is noted for his practice of management by walking around (MBWA). Asking many questions as he's touring the facilities, he insists that the company's managers spend time in the trenches [on the floor] with their people to prevent getting disconnected from the reality of what's happening.

A matrix chart has been developed to compare supplier pricing for a new part so standard cost can be established. Which of the following costs should be included? Material handling All of the above Incoming inspection Freight

All of the above Freight cost is a variable; a supplier could be certified, so there would be no incoming inspection costs in that case; different suppliers couldhave different packaging, so material handling may also be important.

In a job shop environment, which situation is optimal from a capacity planning perspective? Required production rate is less than or equal to the production line design rate All work centers are fully loaded and no orders are overdue per the materials plan Key work center available hours are less than or equal to material plan standards hours Bottleneck work centers hours are scheduled at less than or equal to full utilization

All work centers are fully loaded and no orders are overdue per the materials plan Having all work centers loaded and no orders past due is the best possible scenario.

Items that have been assigned to specific orders but have not yet been released from the stockroom to production are referred to as Work-in-process Reserved Allocated Promised

Allocated Allocation is the classification of quantities of items that have been assigned to specific orders but have not yet been released from the stockroom to production.

Which of the following activities is an attempt to ensure that material is available in advance of need by production? Allocating material Increase safety stock levels Increase the frequency of running the MRP Put a red "Hold" sticker on the parts list

Allocating material Allocating inventory ensures material is not available for other orders.

Which of the following statements correctly describes allocation logic? Allocations quantities should be set to whichever is lower of the quantity required or the quantity available Allocation quantities should be offset from the order due date by the parent item planned lead time Allocations should be created at the time of order release Allocations do not have to be included in the pegging process

Allocations should be created at the time of order release Allocations must be created at the time of order release; allocations are requirements when the order is released, regardless of scheduled receipt due dates or lead times; they must be included in the pegging process, so that all sources of demand can be established; allocation quantities are the requirement quantity, regardless of the quantity available.

A company has historically provided a high level of customer service. A past-due condition in the master production schedule might be a result of An exception occurring in the availability of capacity and materials The production plan being overloaded and the condition not caught by resource planning The master production schedule being overloaded and the condition not caught by rough-cut capacity planning Production not following the master production schedule priorities and not completing all of the orders as scheduled

An exception occurring in the availability of capacity and materials Since the past-due condition is not normal, an exception must have occurred; the other responses all refer to the planning and execution processes not being performed correctly, which would not be indicative due the normally high customer service level.

A material planner is most likely to need to take manual action if A planned order needs to change from period 4 to 3 based on a new requirement. Material requirements planning is requesting a firm-planned order date change. Allocated material has not been picked for a released order An inventory adjustment transaction reduced available inventory from 100 to 0

An inventory adjustment transaction reduced available inventory from 100 to 0 MRP will automatically recalculate based on the adjustment, but it is likely that there may need to be some manual action as well to expedite the material; firm planned orders have already been firmed for date and quantity, so likely will not be changed; planned orders do not require any planner action; allocated material picking does not affect MRP calculations.

In-transit time is accounted for in distribution requirements planning by Safety capacity Nothing, it is built into the delivery time Safety stock An offset in gross requirements

An offset in gross requirements Just as MRP offsets the lead time from the planned order release by the lead time, DRP offsets the in-transit time. The planned shipment to the receiving warehouse is the gross requirement for the supply warehouse.

An effective quality process for product design includes which of the following activities? Ensuring the design is complex enough that it cannot be duplicated by competitors Determining the split of appraisal vs. prevention costs Aligning design features with demographic data for sales information Analyzing the product or service's sensitivity to the environment

Analyzing the product or service's sensitivity to the environment Analyzing the materials and processes used and their sensitivity to the environment will help the company achieve sustainability goals. Simple, standardized process designs are best.

Production has determined that a particular order will be late due to a purchased part being past due. Which of the following scenarios is most likely to occur in a job shop environment? Material planning delays the order due date by one week. The order is completed up to the point where the part is needed. The order is cancelled and recreated when the purchase part arrives. Another order will take its place in the dispatch sequence.

Another order will take its place in the dispatch sequence. In a job shop, multiple jobs pass through functional departments in lots, and each lot may have a different routing. Multiple jobs would be using the same machinery, so if one could not be produced, another job would move ahead of it in sequence.

Which of the following steps completes the purchasing cycle? Selecting suppliers Issuing a purchase order Requesting quotations Approving a supplier's invoice for payment

Approving a supplier's invoice for payment Once a purchase order has been received, quality inspected, and marked as completely received, it is now ready for accounts payable to pay the invoice. The other answers are all steps that must be completed before the purchasing cycle is considered as complete.

Using suppliers to perform subcontracted operations requires that the services performed Are the last step in the routing Are part of the routing Are listed on a purchase order Are less expensive being done outside

Are part of the routing Any outside processing should be part of the routing, and include lead times for being sent out and returned; there may be a blanket order or purchase agreement for this rather than a PO.

Major improvements are sometimes known as breakthrough improvements and Depend typically on one or two highly skilled people Should be quick to implement Are generally not successful Are rarely inexpensive

Are rarely inexpensive Change strategies can be categorized into general groups: Continuous improvement, and breakthrough improvement. Breakthroughs are rarely inexpensive, often disruptive of existing work processes, frequently involving changes in product/service or process technology. Continuous change assumes more and smaller incremental improvement steps.

A component is defined on only one bill of material at level 6, but also has independent demand. Which of the following statements is true? As a service part, the low-level code is -0- The item cannot be planned by material requirements planning due to the independent demand As a service part, the low-level code 6 It is treated as a phantom subassembly.

As a service part, the low-level code 6 The low-level code of a component does not change based on how it is used, as long as it has a parent item.

Which of the following causes of variation does statistical process control attempt to detect, before defective items are produced? Assignable Environmental Machine Chance

Assignable SPC measures one or more elements where causes of variation can be determined and corrected; chance variation is inherent in any process; environmental and machine variation are elements of chance.

Which of the following environments using both a master production schedule and a final assembly schedule is most likely to achieve the highest on-time customer performance level? Assemble-to-order Make-to-stock Make-to-order Engineer-to-order

Assemble-to-order Assembly to order promises within a window of time, and typically has a shorter lead time than engineer to order or make to order, which have less flexibility, and more variance; a final assembly schedule is typically not used in a make to stock environment.

A company has a number of products that are similar, but are subject to unstable demand patterns. The company desires to implement a program to reduce inventory investment while providing a maximum 3-day customer order turnaround. Which of the following manufacturing environments is most applicable to meet that goal? Assemble-to-order Make-to-stock Engineer-to-order Make-to-order

Assemble-to-order Since the products are similar, assemblies and options could be produced to a forecast and then assembled to a customer order.

Which production environment will most benefit from capable-to-promise functionality? Assemble-to-order and make-to-order Engineer-to-order and make-to-stock Engineer-to-order and make-to-order Assemble-to-order and make-to-stock

Assemble-to-order and make-to-order Capable-to-promise is the process of committing orders against available capacity as well as inventory. ATO and MTO are capacity and lead-time constrained so orders should be promised based on availability of resources

A new product has been introduced and has a fairly stable production schedule. Which of the following actions is the best use of capacity requirements planning? Assess the need for overtime or an inventory build up to support a sales promotion Help material planning to identify which customers to delay at bottleneck work centers Identify available load so material planning can increase the forecast to consume it Evaluate available load over time to identify projected capacity increases or decreases

Assess the need for overtime or an inventory build up to support a sales promotion Capacity planning supports planning by showing needs over a horizon. Load is not determined by knowing available capacity.

Two risks associated with international distribution are Asset protection and operational profitability Cultural issues and operational profitability Global competition and cultural issues Asset protection and global competition

Asset protection and operational profitability Two risks associated with distribution planning are asset protection and operational profitability; competition is global no matter where distribution occurs; cultural issues can be an issue, but are less of a risk.

Which of the following actions is an effective way to use supplier partnerships? Reduce the procurement department due to less work Assist suppliers with cost saving initiatives and share the savings Use the supplier partnership to renegotiate prices Determine which suppliers will receive annual awards

Assist suppliers with cost saving initiatives and share the savings The benefit of a supplier partnership is the opportunity for both parties to benefit from cost savings based on continuous improvement.

Conveyors used as part of an assembly operation should be At an ergonomic height Simple and inexpensive Controlled by systems A replacement for indirect labor

At an ergonomic height If used for assembly they must be at an ergonomic height.

A company pursues a chase production strategy during holiday peaks. Which of the following elements is most likely to cause variability if rated capacity is recalculated on a period-by-period basis for capacity requirements planning? Utilization Efficiency Demonstrated hours Available hours

Available hours Available hours will change based on responding to holiday peaks. Efficiency and utilization should remain about the same.

During a core competency analysis it is discovered that the company has best in class capabilities in designing integrated circuits for their top end products. A few multi national integrated circuit manufacturers have the potential to lower costs significantly. The outsourcing decision should Be to outsource to the chip manufacturer who comes closest to sharing the company's vision of the future Be weighted most heavily in favor of the highest quality outside supplier Be to outsource to the chip manufacturer who's technical design group is geographically closest to the company Be in favor of keeping this technology in house

Be in favor of keeping this technology in house Outsourcing is the process of having suppliers provide goods and services that were previously provided internally. Outsourcing involves substitution—the replacement of internal capacity and production by that of the supplier

Success in operations drives better products and services, increased range of product capability, better supply relationships and heightened customer satisfaction due to high quality performance. All of these attributes Are independent of strategy development as these attributes are all tactical Become strategic when taken from a holistic viewpoint Once mastered should be relied upon to continue their high performance May be relied upon to manage almost any new product design that could increase market share.

Become strategic when taken from a holistic viewpoint The strategic importance of operational knowledge is vital to establishing an operations based strategic advantage. A superior understanding of what one's processes can do at the limits of their capability, allows the organization to better provide products and services due to confidence in knowing for sure what the process can deliver. Well controlled processes will also have fewer errors and waste and therefore high efficiency [lower costs, higher quality].

When a company embarks on a path of major or breakthrough improvement for a specific task the best place to start is with Customers who categorize the company as a major supplier Suppliers who categorize the company as a major customer Benchmarking best in class performers Benchmarking best in world performers

Benchmarking best in class performers One of the most widely used methods for gauging how well a company is executing its strategy entails benchmarking. Benchmarking involves contrasting the company's performance of particular activities and business processes against "best in industry" and "best in world" performers.

Orders that provides the supplier with forward visibility of the requirements for a component are called Firm planned orders Open orders Blanket orders Planned orders

Blanket orders Blanket orders provide the supplier with long-term requirements, sometimes for the year or life of a contract; firm planned orders and open orders extend only through the lead time or short term planning horizon; planned orders provide some visibility, but may not be materialize based on demand changes, and the question does not designate this is a single or sole source supplier.

Which if the following conditions typically is a prerequisite for a successful partnership with a supplier? Both companies are willing to make a long-term commitment to the partnership. The supplier is a source of items that are critical to the customer. There are many potential partners that can supply the items. The customer represents more than a third of the suppliers business.

Both companies are willing to make a long-term commitment to the partnership. A supplier partnership is the establishment of a working relationship that requires both companies to make a long-term commitment to the partnership. The other answers are incorrect because they are not typical prerequisites to a successful supplier partnership.

Which of the following statements best identifies the relationship between resource planning and rough-cut capacity planning in a make-to-stock environment? Both evaluate demand in the same units of measure for planning consistency Both use the same total number of work centers to close the loop Both are iterative processes until availably capacity is consumed Both include key work centers and use the same capacity planning process

Both include key work centers and use the same capacity planning process Both use key work centers, though not necessarily the same ones, or the same number of work centers, and the process is the same; the units of measure would vary, depending on the resource; capacity is not necessarily consumed, and is not the purpose of the processes.

Which of the following elements related to closing the demand/supply loop is most likely to be included within rough-cut capacity planning? Final assembly Theoretical capacity Constraining operations Bottleneck work centers

Bottleneck work centers Rough cut capacity planning is at the key or bottleneck work center level; the other responses are not used in RCCP.

Which of the following statements is true concerning throughput? Bottlenecks control throughput Throughput controls the available capacity of a facility Available capacity is throughput less constraints Capacity required is reduced by bottleneck throughput

Bottlenecks control throughput Bottlenecks are the constraint that controls throughput; throughput impacts leadtime, not available or required capacity.

Which of the following tools typically relies on a facilitator to ensure that all team members have a chance to contribute? Affinity diagram Force field analysis Brainstorming Pareto chart

Brainstorming Brainstorming is a technique that teams use to generate ideas on a particular subject. Each person on the team is asked to think creatively and write down as many ideas as possible.

The volume/mix of throughput on which overhead absorption rates are established is Overhead capacity Cost pool Budgeted capacity Cost center

Budgeted capacity Budgeted capacity is the volume/mix of throughput on which financial budgets were set and overhead/burden absorption rates established.

In the theory of constraints planning and control system, which of the following techniques facilitates the capacity control function? Rope Drum schedule Buffer management Pace of throughput

Buffer management The buffer ensures that the process will never be starved for needed inventory. This buffer of inventory represents the amount of time that the inventory in the buffer protects the constraint from disruptions. The rope pulls production to the constraint for necessary processing. The drum of the system refers to the pace of production going through the constraint.

Which of the following functions does the drum-buffer-rope (DBR) method perform? Develops pull between operations Minimizes inventory Schedules a constraint Buffers all work centers

Buffers all work centers The basic goal of the DBR method is to recognize that all processes contain a weak link or constraint that limits the productive output of the entire system. The purpose of the DBR method is to schedule production around the constraint and not to minimize inventory. In fact, the DBR method calls for a buffer of inventory to be present to ensure that a problem does not cause the constraint to go idle. Buffers are not needed al all process work centers in a DBR method. Only the constrained work center has a buffer. While the rope provides a pull between operations the focus of DBR is on managing the constraint.

The first step in establishing a supplier partnership is Defining the means of communication Ranking the suppliers in order of least price Having the suppliers fill out a financial profile Building a level of trust in the relationship

Building a level of trust in the relationship Supplier partnerships must be based on a trusted relationship in order to be able to share information back and forth, and reap the other benefits.

A company has researched expanding capacity by designing and acquiring the largest machine of its type in the industry, even though there is thought to be excess capacity already. A new facility is also scheduled, rather than an expansion of the existing building, to house business teams and marketing. This is an example of The operations people having too much influence in the company Business strategy driving the need for a focused factory Antiquated thinking that bigger is better Marketing run amok.

Business strategy driving the need for a focused factory The company had an earlier plan to expand capacity, but market share diminished. During the next few years they fine tuned the plan on paper and decided big was best allowing them to have excess capacity (flexibility) and volumes would drive item costs down. When the market again rose they decided to not expand but build...big. Enough room for the largest machine of its kind and enough room to consolidate business and marketing team in the same [focused] facility. Their major customer liked what they saw and awarded them 100% of their orders over the next ten years. Success was achieved from day 1.

Which of the following conditions would typically make an industry attractive to new entrants? Buyer demand is growing rapidly. Taxes in the region are low. Industry customer base is growing slowly. There is strong customer brand loyalty.

Buyer demand is growing rapidly. Growing demand by buyers indicates that the industry's growth and profit prospects are strongly attractive to potential entry candidates, as opposed to answer B, where the customer base is growing slowly. Answer D is incorrect because the stronger the loyalty of buyers to a specific brand, the harder it is for a new entrant to break into the marketplace. Answer C is incorrect because low taxes would not typically be sufficient to attract new entrants.

The strategic management of any operation Cannot be separated from how well operational resources are managed at the detail level Should not be constrained by past operational efficiencies or quality performance Will be determined by the ability of the facility to react to short term changes in schedule or product mix Is the key driver of operations, regardless of operation's past performance

Cannot be separated from how well operational resources are managed at the detail level The strategic importance of operational knowledge is vital to establishing an operations based strategic advantage. A superior understanding of one's processes can do at the limits of their capability allows the organization to better products and services due to confidence in knowing for sure the process can deliver. Well controlled processes will also have fewer errors and waste and therefore high efficiency [lower costs, higher quality].

If a work center is overstated in terms of available production capacity, Planned order required dates won't match customer order required dates Capacity requirements planning becomes less useful as a feedback tool The company will add capacity via additional personnel, tooling or equipment Efficiency will increase

Capacity requirements planning becomes less useful as a feedback tool CRP becomes less useful because an overload condition appears to be OK, and does not give accurate information; dates are not affected; there is not enough information about the load to determine if all periods will be overloaded; capacity may be added but the question does not indicate if this a long or short-term problem.

Capacity requirements planning uses infinite rather than finite planning because Capacity requirements planning is simply a reflection of the requirements from the material plan Customer demand is inconsistent and requires variable work center capacity The material requirements plan cannot provide sufficient detail for finite loading Infinite capacity matches the level of detail as defined in the planning hierarchy

Capacity requirements planning is simply a reflection of the requirements from the material plan The materials plan drives the requirements for capacity planning.

In the implementation of lean, which of the following is the most significant change for the accounting function? Physical inventory of work-in-process inventory is more time-consuming. Budgeted scrap and rework costs that create variances are reduced. Costs of incentive programs increase. Cellular processes no longer report every operation to accounting.

Cellular processes no longer report every operation to accounting. In a lean process, production occurs based on the demand pull from the next downstream work center and not a work order. As such, when production occurs operators do not normally report each demand kanban's labor and overheads. Costs are usually aggregated and posted on an aggregate basis for the work center.

A representative of a supplier has called a buyer to tell her that the minimum order quantity for a raw material is being increased to 1,000 pieces immediately. Which of the following would be the most appropriate action for the buyer to take next? Change the quantity for all scheduled receipts. Firm all planned orders for the item at 1,000 pieces. Change the lot sizing parameters for the item. Use a pegging report to identify all affected customer orders.

Change the lot sizing parameters for the item. The revised minimum order quantity should result in a change to the lot size for the item. Orders for scheduled receipts have already been released and can't be altered. The timing of the requirements may change with the revised lot sizing; by firming the orders, MRP will not adjust the timing or the quantity to reflect the new lot size. The lot size change does not affect customer orders.

Management has determined that the master production schedule will not be met. The last action to be taken would be to Change the master production schedule Move non-utilized resources Use alternate routings Schedule overtime

Change the master production schedule Since the master production schedule drives the ordering of all manufactured and purchased components, changing it will lead to changes throughout the planning system. Other alternatives should be considered if possible.

Which of the following is the best way to begin changing employee behavior? Implement a human resource information system. Change the performance measurement and reward system. Provide more timely and explicit management directives. Simplify and flatten the organizational structure.

Change the performance measurement and reward system. By changing a process, having personnel perform the process over and over, and rewarding performance on the new process employees become familiar with and accepting of a new process. Changing the number of reporting layers in an organization will not change employee behavior. Implementing a new human resources computer system will do nothing to change employee behavior. Closer management of employees often has a negative impact on employee behavior.

Material requirements planning may recalculate planned orders as a direct result of Changes in customer order dates Changes in the planning horizon Changes in work order receipt dates Changes in capacity

Changes in work order receipt dates A change in a scheduled receipt may cause the replanning of a planned order; customer order dates will directly impact the MPS, not MRP; changes in planning horizon and capacity will have no direct impact on MRP.

Material requirements planning may recalculate planned orders as a direct result of Changes in the planning horizon Changes in customer order dates Changes in capacity Changes in work order receipt dates

Changes in work order receipt dates A change in a scheduled receipt may cause the replanning of a planned order; customer order dates will directly impact the MPS, not MRP; changes in planning horizon and capacity will have no direct impact on MRP.

A company monitors customer orders and inventory levels daily, and generates production orders weekly. Those orders are processed the following week to maintain inventory at a fairly steady level. The production planning method used is Hybrid Level Chase Replenishment

Chase Demand is being met with a 1-week lag by varying production and maintaining stable inventory levels

The table provided is an example of which of the following production strategies? (Quarter, Inventory, Planned Production, Sales) (0, 10, 0, 0), (1, 10, 20, 20), (2, 10, 25, 25), (3, 10, 30, 30), (4, 10, 35, 35) Hybrid Balanced Chase Level

Chase The planned production follows the shipment amounts so this is chase.

Which of the following production methods is most likely to be used in an engineer-to-order environment? Pull Level Push Chase

Chase inventory is not produced for finished goods; Level would not be applicable for engineer-to-order. Push and pull are applicable in any environment

A buyer has notified the material planner that a purchase order required in period 2 will not be received until period 3. The first action the planner should take is to Check to see if safety stock will cover the requirement in period 2 Determine if the buyer can expedite the order Determine which parent orders can be rescheduled from period 2 to 3 Check to see which parent orders will be adversely affected by the delay

Check to see if safety stock will cover the requirement in period 2 Safety stock is used to cover supply variability, so should be checked first. The other responses may be required if the safety stock is not sufficient to cover the demand.

A company has a mandate to meet schedule dates. Capacity requirements planning has identified a capacity overload, and it appears the product will be shipped late. Which of the following actions should be done first? Reschedule the due date to resolve the overload Check with production to see if the date can be met Check with purchasing to see if materials can be expedited Check with the customer to select a different date

Check with production to see if the date can be met Check with production to see if overtime or other work priorities can be changed to meet the date.

A press is used to stamp left and right-hand door panels simultaneously from a roll of sheet metal. The relationship between those two parts is Co-stamped By-product Co-produced Co-product

Co-product Co-product definition is to be manufactured together.

Products that are usually manufactured together because of product or process similarities are Co-products By-products Grouped products Batch products

Co-products A co-product is usually manufactured together or sequentially because of product or process similarities.

The role of top management in the sales and operations planning process is to Develop the production plan Make the final decisions after the meeting Provide the information used in the process Commit to the process and the results

Commit to the process and the results Top management's role is to support the S&OP process, and agree to the results.

A certified supplier has begun making late deliveries. The first action the buyer should take is to Increase the purchasing lead time Change the certified supplier status to non-certified Communicate with the supplier to help identify the reason and resolve Start sourcing the goods from a different supplier

Communicate with the supplier to help identify the reason and resolve Communicating with the supplier to determine if this is a process, quality or transportation issue would be the first step, in addition to whether this is a long term or short term issue.

Cooperation between partners within a supply chain can best be achieved by setting up multiple channels of Reporting Communication Transportation Quality checks

Communication Today's supply chain requires that communication occurs between more than just the purchasing agent and the customer service rep. Multiple departments are involved to ensure a true partnership with respect to product quality and continuous improvement.

An important part of driving force analysis of an industry is to determine whether the forces will lead to an increase or decrease in which of the following? Competitive intensity Technology change Industry costs Internal strengths

Competitive intensity One step in driving force analysis is to determine whether the prevailing driving forces are acting to make the industry environment more or less attractive, including whether they are making competition more or less intense.

A design process that attempts to meet all the needs of the stakeholders and should result in a product that can be quickly brought to the marketplace is Product benchmarking Reverse engineering Prototyping Concurrent engineering

Concurrent engineering Concurrent engineering refers to the simultaneous participation of all the functional areas of the firm in the product design activity.

In order to better serve its customer needs, a manufacturer wants to change the design of one of its products, while minimizing time to market. This could best be accomplished with Concurrent engineering Research and development New product design Six sigma

Concurrent engineering Concurrent engineering uses the strategy of product and process design happening simultaneously through the involvement of all parties to speed up the time to market.

In order to reduce process variability, a company should first Tighten up the tolerances Determine the cost of quality Use statistical sampling to find defects Conduct a process capability study

Conduct a process capability study A company should first conduct a process capability study to determine whether a process can be maintained within a tolerance.

Which of the following methods would be most effective for monitoring a process in a state of control? Conduct frequent sampling Incorporate a process capability index Conduct periodic audits Perform analysis of variance (ANOVA)

Conduct periodic audits If the process is under control, the cost of appraisal can be lessened by doing quality audits rather than daily control.

A company seeking to increase flow and improve critically constrained resources in its supply chain would train employees on which of the following principles of theory of constraints management? Consider all constraints simultaneously when establishing schedules. Process batch sizes must be fixed. Flow and capacity should be balanced. Utilization and activation of a resource are the same.

Consider all constraints simultaneously when establishing schedules. For a process to be improved, all of the subprocesses must be reviewed and improved together. By improving one subprocess only, planners may cause a new constraint somewhere downstream in the overall process flow. According to TOC a resource is being fully utilized only if it contributes to the entire process or operation creating more output. A process can be activated in the sense that it is working, but it may only be creating stock or performing other non-value added activity. In TOC the size of the process batch should be variable, not fixed. Flow, not capacity should be balanced. It is more important to reduce throughput time rather than achieving a notional capacity balance between stages of processes.

A supplier has placed goods at a customer location, but does not receive payment until after the goods are consumed. This is an example of Floor stock Leasing Consignment Point-of-use inventory

Consignment Consignment is the process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.

An important criteria for measuring a group's process is that the measurements should be Consistent with company objectives Be based on standard operating procedures Be linked to bonus compensation Chart the individual progress of each team member

Consistent with company objectives Group objectives should always be consistent with company objectives.

A company has limited resources in some work centers, and bottlenecks that move around based on product mix. Salesmen must be notified of overloads so schedule changes can be made with the customers. Which of the following scheduling techniques should be considered by management? Resource requirements scheduling Constraint-oriented finite loading Rough-cut capacity scheduling Finite master production scheduling

Constraint-oriented finite loading Constraint-oriented finite loading is a technique that plans orders around bottleneck work centers. The objective is to maximize total production throughput.

Continuous improvement measures are typically more important than traditional accounting measures in which of the following environments? Job shop Batch Intermittent Continuous flow

Continuous flow In a continuous flow, labor cost is typically lower, and accounting costs are not associated with particular orders.

Cost reduction objectives with suppliers can best be achieved by Re-engineering designs Volume purchasing Cost-volume-profit analysis Continuous improvement

Continuous improvement Continuous improvement activities will highlight areas on both sides of the partnership that can be beneficial in reducing costs.

Which of the following environments would have the most predictable throughput? Assembly line Continuous process Intermittent Job shop

Continuous process A continuous flow would have a predictable, steady throughput. The other environments would have variability based on the product mix.

A characteristic of a lean enterprise strategy is Using Taguchi methods 100% utilization Continuous, small increments of improvement Cellular manufacturing

Continuous, small increments of improvement Lean can best be defined by the elimination of waste through continuous improvement.

A company is going to evaluate the quality performance of several suppliers over a 120 day period and the initial measure will be the acceptance rate of each incoming lot. Which of the following would be most appropriate to use to track the performance of each supplier? Scatter diagram Flow chart Control chart Histogram

Control chart A control chart is a graphic comparison of process performance data used to detect assignable causes of variation in the process. By using control charts, the company can evaluate the average acceptance rates, any trends, and if the acceptance rates vary or remain stable for each supplier. Scatter diagrams are uses to analyze the relationship between two variables. Flow charts are drawn to better understand relationship between steps in a process. A histogram is a graph representing a simple frequency distribution.

Adding additional warehouses to the distribution network typically results in which of the following cost changes? Costs of shipments to the warehouses increases Transportation costs stay the same Costs of shipment to customers increases Total transportation costs increase

Costs of shipments to the warehouses increases More warehouses means additional transportation costs to fulfill additional warehouse inventory.

Which of the following data collection points serves two purposes in a pull environment that has machining and assembly lines, and receives material directly to point-of-use areas? Operation start and completion dates Statistical process control points Count points Order start and completion dates

Count points Count points identify the number of units passing the point, and can also be used to backflush the inventory consumed up to that point that has not already been issued.

A successful outcome of a business process workflow redesign, intended to solve a cross functional activity problem, often leads to Training in how to follow the newly documented process Bringing in consultants to assist in interpreting the results Using the study as justification for the purchase of additional applications software Creating a new single department to take charge of the whole process

Creating a new single department to take charge of the whole process Companies searching for ways to improve their operations have sometimes discovered that the execution of strategy-critical activities is hampered by a disconnected organizational arrangement whereby pieces of an activity are performed in several different functional departments, with no one group or manager being accountable for optimal performance of the entire activity. To address sub-optimal performance a company can reengineer the work effort using business process reengineering, and create a new single department or cross functional work group to take charge of the whole process.

A labor-intensive production line that requires specific skills is trying to increase its flexible capacity. This can best be achieved by Establishing a focused factory Hiring temporary staff with the necessary skills Automating the equipment to do some of the work Cross-training workers in various skills

Cross-training workers in various skills Because the line is labor-intensive additional skills are needed. The best way to handle this would be to cross-train individuals, which provides flexibility as demand changes.

Which of the following conditions is most likely to trigger the material requirements planning (MRP) system to revise the material plan? Cycle counting inventory adjustments are reported. An engineering change for a routing is implemented. End items are shipped from stock to satisfy customer orders. Rated capacity for a critical work center is changed.

Cycle counting inventory adjustments are reported. If an inventory adjustment is reported during cycle counting, the MRP system will revise the material plan to reflect the change in required inventory. The end items have already been manufactured and do not impact the material plan. The other answers are incorrect because they do are not MRP triggers.

The process that targets reducing defects and errors in existing products and services is: B7. SPC. DOE. DMAIC.

DMAIC. DMAIC identifies problems in existing products, determines root causes, and provides solutions.

Improving forecast accuracy contributes to which of the following actions? Decreasing delivery lead times Decreasing sales and operations planning frequency Increasing productivity Increasing inventory turnover

Decreasing delivery lead times An increase in forecast accuracy means more of the correct product is available to fill customer orders when they arrive

A company uses a level production strategy to build inventory prior to a peak season. Which of the following inventory turns should be expected? Stable prior to peak season, increasing during peak season Increasing prior to peak season, decreasing during peak season Decreasing prior to peak season, increasing during peak season Decreasing prior to peak season, stable during peak season

Decreasing prior to peak season, increasing during peak season Sales are low prior to peak season and finished goods inventory is building. During peak season sales increase and finished goods decrease

A work center that is designated to produce a single item or a limited number of similar items is said to have Dedicated capacity A functional layout Group technology Horizontal integration

Dedicated capacity Dedicated capacity is a work center that is designated to produce a single item or a limited number of similar items.

Which of the following statements about process quality is true? All variations can be controlled in some way Quality can be inspected into a product Statistical process control determines quality criteria Defects further down the process cost more

Defects further down the process cost more The more that has been done on a product the more costs have been applied and the more expensive the rework; SPC measures the conformance, but does not determine criteria; variation is a way of life.

An assemble-to-order environment using a mixed model production schedule has a bottleneck work center. The best rough cut capacity planning approach for determining the feasibility of the master production scheduler is to Define capacity as 85% of rated to provide 15% to accept additional customer orders Define capacity as some percent less than 100% of rated capacity by management policy Define capacity as rated capacity x utilization x efficiency to factor the engineering standard Define capacity at 100% of rated capacity and utilization when mix of demand justifies it

Define capacity at 100% of rated capacity and utilization when mix of demand justifies it Bottlenecks should be scheduled at the rated capacity if there is sufficient business volume to justify it; defining capacity at less than 100% runs the risk of not having necessary subassemblies and component inventory available in the time periods required.

The first step in the problem solving cycle is to Determine the cause Evaluate the training Assign a management team Define the problem

Define the problem Definition of the problem is the first step in any problem solving technique.

Which of the following order-winning criteria typically lie within the jurisdiction of the manufacturing function? Competitive pricing Delivery reliability Aftermarket service Product design leadership

Delivery reliability The other answers belong to marketing, product engineering, sales, and customer service functions.

In an established pull system with some suppliers delivering as often as every four hours, which of the following performance measures is most important? Part availability Delivery reliability Use of kanbans Required quantity

Delivery reliability With such frequent deliveries, quantity is less of an issue than on-time delivery; availability and quantity are assumed in a pull system; kanbans may or may not be necessary.

A qualitative forecasting technique where the opinions of experts are combined in a series of iterations is known as the Shewhart method Taguchi method Deming method Delphi method

Delphi method The Delphi method is a qualitative forecasting technique where the opinions of experts are combined in a series of iterations.

When setting up the bill of resources, the master scheduler would ignore which of the following elements? Labor Demand Setup Equipment

Demand Demand is external, and not a resource or constraint on a resource.

In a company that has over 20,000 end items in stock, which of the following demand elements is likely to take the most time to assess for sales and operations planning? Demand for existing products Demand for a new product Demand for hedge inventory Demand for a sales promotion

Demand for existing products Demand must be determined for the product families in aggregate; a single new product can be fairly easily added to the existing families; hedging and sales promotion only affect certain products and timing

Sales are linked to the distribution network by Transportation costs Demand forecasts Warehouse management systems Rough cut capacity planning

Demand forecasts Sales data is converted into demand forecasts, which is then fed to the distribution network for planning inventory levels.

Managing consignment inventory is an essential function of which of the following processes? Master scheduling Forecasting Demand management Capacity management

Demand management Demand management is the function of recognizing and managing all demands for products, including consigned inventory in customers' locations. Master scheduling is concerned with the planning and management of all finished goods that are built by the plant. Forecasting is concerned with determining the future demand on products subject to independent demand. Capacity management is concerned with determining the optimal allocation of plant production resources to build products.

A company uses lot-for-lot ordering for its distribution center. What will be the most likely result? The company's bottom line will improve Transportation costs will be reduced Stockouts will be reduced Demand on the supplying warehouse will be erratic

Demand on the supplying warehouse will be erratic Even though lot-for-lot will minimize the amount of inventory at the DC, it will most likely increase stockouts, decrease customer service, and increase transportation costs due to more shipments coming from the supply warehouse.

The main components of Advanced Planning and Scheduling are Demand planning, production planning, production scheduling, material requirements planning, and final assembly scheduling Demand planning, sales and operations planning, master production scheduling, material requirements planning, and distribution planning Demand planning, production planning, production scheduling, distribution planning, and transportation planning. Forecasting, sales and operations planning, production scheduling, distribution planning, and transportation planning.

Demand planning, production planning, production scheduling, distribution planning, and transportation planning. The five main components of APS systems are (1) demand planning, (2) production planning, (3) production scheduling, (4) distribution planning, and (5) transportation planning..

Which of the following is awarded to organizations, initially in Japan only, that successfully apply statistical quality control? Malcolm Baldrige National Quality Award. EFQM Excellence Model Deming Prize ISO 9000

Deming Prize The Deming Prize was instituted in 1951 and is awarded to those companies that have successfully applied company-wide quality control based upon statistical quality control. The EFQM Excellence Model is a European quality award to recognize quality achievement. ISO 9000 is a set of international standards that establishes requirements for companies' quality management systems. The Malcolm Baldridge National Quality Award is an award presented to American companies to encourage quality efforts and provide guidance on quality improvements.

When management fails to articulate a concise operational strategy that is aligned with overall corporate strategy, the result is that Departmental "specialists" will tend to optimize their own areas of control without consideration of the rest of the organization Company-wide solutions will become a viable substitute for the weak Operational strategy IT security will likely fall victim to corporate espionage ERP system accuracy will continue to be reliable because employee training is part of the ERP system startup

Departmental "specialists" will tend to optimize their own areas of control without consideration of the rest of the organization In the absence of more explicit operations strategy, specialists in areas such as inventory control, process technology, will tend to develop their own "systems" protecting their own organizational positions.

A small motor is used in an appliance production line, where the demand varies due to seasonality and is over-planned in the master schedule. The motor also has service part independent demand through a chain of repair shops, which varies by hours of product usage. Which of the following statements is true of the safety stock? Safety stock is minimal since repair shops will carry some in stock Dependent demand variability is ignored when determining safety stock Actual demand is netted against forecast to determine safety stock Safety stock is carried by each repair shop

Dependent demand variability is ignored when determining safety stock Safety stock is only required for independent demand parts, since it is overplanned in the MPS. The other statements are either not true, or can only be assumed.

Which of the following areas of push system documentation is reduced by a pull system during the process design phase? Detailed routings by operation Calculation of start and end dates Material pick and shortage lists Planned and overload conditions

Detailed routings by operation Routings by operation are defined during the process design phase. The other three are reduced during production, not process design.

Job analysis includes which of the following actions? identifying and communicating what is required Determination of skills, ability and responsibilities of the person doing the job Job description and selection Recruitment, selection, compensation and performance appraisal

Determination of skills, ability and responsibilities of the person doing the job Job analysis is the process of gathering significant task-oriented activities and requirements about work required of employees.

The objective of performance measurements is to Provide benchmarking for other companies Reward employees for jobs well done Provide information for finance Determine if the operation is meeting or exceeding expectations

Determine if the operation is meeting or exceeding expectations Measurements are put in place to determine if the operation is meeting or exceeding expectations.

As part of supplier selection, a company should take which of the following actions? Encourage the development of in-house capabilities to be able to do more make vs. buy Exchange proprietary technical documents with potential suppliers Rank the suppliers in order of geographic proximity Determine material handling, inspection and transportation costs

Determine material handling, inspection and transportation costs Material handling, inspection and transportation are all part of the total cost of a purchased item; technical docs should only be shared with suppliers once selected; geographic proximity is not the only ranking criteria; it may be less expensive to buy vs. make, depending on the capabilities required.

Pegging is used to Determine priorities for manufacturing Determine the source of gross requirements Link sub-assemblies with parent items Display the quantity of a component in the bill of material

Determine the source of gross requirements Pegging is the ability to identify for a given item the sources of its gross requirements and/or allocations.

Pegging is used to Display the quantity of a component in the bill of material Determine the source of gross requirements Link sub-assemblies with parent items Determine priorities for manufacturing

Determine the source of gross requirements Pegging is the ability to identify for a given item the sources of its gross requirements and/or allocations.

The carrying cost rate used in the economic order quantity (EOQ) is Based on the unit cost Calculated by the master scheduler A percentage of the ordering cost Determined by management policy

Determined by management policy Carrying costs include cost of capital, risk costs, storage costs, etc. Management determines how much of the cost to apply to inventory based on a % of the financial value of inventory.

Which of the following actions is taken first to ensure the validity of the material plan in a make-to-stock company? Development of the operations plan Development of the capacity requirements plan Development of the material requirements plan Development of the master production schedule

Development of the master production schedule The MPS is the first time in the planning hierarchy that individual products are defined by date and quantity.

Which of the following routing data do both infinite capacity requirements planning and finite scheduling use for planning and scheduling External setup hours Direct labor hours Theoretical capacity Sequencing rules

Direct labor hours Both use internal setup and run time, which include direct labor hours; sequencing is only used by finite scheduling; setup would include external setup time with neither use; theoretical capacity is not used for planning.

Which of the following actions provides visibility of flow in a lean production environment? Displaying performance measures over time in the work areas. Attaching large parts-identification tags to containers. Installing lights to warn people of approaching robotic vehicles. Posting customer complaints.

Displaying performance measures over time in the work areas. A smooth flow of materials, information, and people in an operation is central to lean production. High visibility of flow aids in recognizing potential improvements. Warning lights regarding robotic vehicles is not a visibility measure for operations; however, lights to indicate line stoppage would be considered such a visibility measure. Posting customer complaints does not provide visibility of flow. ID tags should not be confused with kanban, which are visual signals that may be similar to tags or cards.

The acceptance of computer systems in delivering products and services has resulted in the change of Monolithic one size fits all ERP systems to multiple smaller ERP systems Kanban cards to computer generated Kanban reports Push systems to pull systems in every aspect of the operation internally and externally Distributing performance data to executives only to distributing performance data to a much wider audience

Distributing performance data to executives only to distributing performance data to a much wider audience Within his discussion on systems Tom Kotter contrasts 20th century organizational characteristics with 21st century characteristics and finds: 1. that dependence on a few performance information systems will change to one of depending on multiple performance systems especially those focused on customers. 2. Distributing performance data to executives only vs. distributing performance data widely. 3. Offering management training and support system to management only to offering management training and support systems to many people.

Which of the following relationships is more characteristic of a general business contract than a customer-supplier partnership? Customer and supplier perform concurrent engineering on the design of a new product Customer establishes a single-source relationship with the supplier for certain products Supplier dedicates a portion of their capacity over a long-term basis to the customer Distributor provides all of the company's hardware and standard electrical components

Distributor provides all of the company's hardware and standard electrical components This would be a contractual purchase agreement that does not involve the mutual commitment of a partnership; the other answers all involve more than a contract.

An effective approach for Implementing a continuous improvement program is to Educate a cross-functional team in problem-solving techniques Incorporate quality circles throughout the company Hire a continuous improvement consulting firm Institute a management by walking around philosophy

Educate a cross-functional team in problem-solving techniques A feature of continuous improvement is the use of teams working together to achieve common goals.. Problems typically cross functional lines to multi-functional teams are best.

When the overall strategy is to compete with low cost, no frills products, operations must Compromise from time to time with low cost / low quality component suppliers Do all they can with technology. Robots that replace people don't look for breaks, vacations or raises. Utilize outsourcing as much as possible regardless of supply chain complexity Do all they can to leverage low labor costs in low labor rate countries without the assistance of sophisticated technology

Do all they can to leverage low labor costs in low labor rate countries without the assistance of sophisticated technology When a European car manufacturer acquired an existing automobile facility in an emerging nation just moving from central planning to market driven planning their hope was to build low cost no frills car. Leveraging existing platforms and a low cost design imperative they succeeded. The facility was bare bones with no robot technology, leveraging low labor rates.

Upon recognizing an uncertainty of the value streams that generate customer value, a company's first step should be to Consolidate all IT systems under one company-wide enterprise resource planning system Hire experienced consultants to assist Train key employees in value stream mapping Document all value streams across the entire organization and then share findings with all involved

Document all value streams across the entire organization and then share findings with all involved The company wanted to improve the speed and efficiency of its technology rollouts. They knew that many functions were sub-optimal. When value streams were defined [presumably value stream mapping was used], and a sharing of knowledge occurred simultaneously with all groups together discussing the issues that the company was able to identify the specific functional processes that delivered value to customers. Once identified [shared] they were able to improve them.

A product family is experiencing an upward trend in demand, which is adversely affecting customer service. Which of the following forecasting techniques is most applicable? Low alpha factor Single smoothing Double smoothing Trending with bias

Double smoothing Double smoothing adjusts a single smoothed forecast for an upward or downward trend; the other responses do not weight the current month enough to pick up trends

The process of a supplier shipping directly to the purchaser's customer is known as Intraplant transfer Freight consolidation Drop shipping Freight forwarding

Drop shipping A drop ship is to have a supplier ship directly to another or to have a supplier ship directly to the buyer's customer.

The three components of sustainability are Social, Environmental, Regulatory Economic, Environmental, Ecological Economic, Environmental, Social Social, Economic, Regulatory

Economic, Environmental, Social Sustainability includes elements of protecting the environment, sustaining the future economy, and being a responsible citizen.

When two business units are merged, with the sole purpose of exploiting the opportunity to exchange R&D resources or use common manufacturing or distribution facilities, the companies are said to be sharing Intellectual property Economies of scale Economies of scope Design for manufacturability concepts

Economies of scope Economies of scale are cost savings that accrue directly from a larger sized operation- for example manufacturing costs may be lower in a larger plant than in a small plant. Economies of scope stem directly from strategic fit along the value chains of related businesses.

When measuring shop floor performance, which method will encourage not producing unwanted product? Utilization Productivity Schedule completion Efficiency

Efficiency Schedule completion encourages performance to plan; the others encourage utilizing clock hours and earning standard hours.

Infinite loading will indicate which of the following situations when comparing a gateway work center to a non-gateway non-bottleneck operation? Either may precede the other Gateway capacity is higher Either may be overloaded Either may be in multiple routings

Either may be overloaded Any operation may be overloaded which will be shown using infinite capacity; the gateway always precedes non-gateway work centers; the other responses are not indicated by the question.

A company seeks to maximize the life span and utilization of all products delivered. From this perspective an elevator company would sell the Elevator and service contracts Elevator a breakeven or loss and manage service as their key revenue generator Elevator and provide free service Elevator as a service, maintaining ownership themselves

Elevator as a service, maintaining ownership themselves The concept of natural capitalism divides the world's resources into four basic areas: Natural, Human, Manufactured and Financial capital. Under this philosophy an elevator company would see the elevator as a service, maintaining ownership themselves

Which of the following actions minimizes or eliminates wasteful activities in an operation? Mistake-proof the external setup activities Convert internal to external setup activities Eliminate statistical process control Eliminate external setup activities

Eliminate statistical process control Statistical process control is a method of quality control in which statistical methods are used to monitor and control a process. Monitoring and controlling the process ensures that it operates at its full potential. At its full potential, the process can make as much conforming product as possible with a minimum (if not elimination) of waste, rework, or scrap. External setup activities occur when the operation is down; improving external setup improves available capacity but does not necessarily reduce wasteful activities.

A key benefit of using certified suppliers is Eliminating the need for price negotiation Eliminating the need for incoming inspection Reducing purchasing lead times Receiving the best possible price for the goods

Eliminating the need for incoming inspection Parts coming from certified suppliers do not require incoming inspection; the other responses may or may not be true.

Low-level codes are maintained by the bill of material system because they Are unknown until the material requirements planning explosion process completes Simply the maintenance process when a make part is changed to a buy part Enable the material requirements planning explosion to be performed more accurately Simplify the update process when phantom levels are included in the bill of material

Enable the material requirements planning explosion to be performed more accurately The low-level code enables the explosion process to more effectively compute total requirements for items; it is known when the bill of material is created; phantoms or make/buy codes do not affect low level codes.

Management can show their support for small group improvement activities by Encouraging ownership of the task by empowering the group with authority Providing management intervention when needed Rewarding individual results Highlighting the group's success in the annual report

Encouraging ownership of the task by empowering the group with authority Encouraging ownership and decision-making authority shows management's trust and respect for the group's accomplishments.

The information determined by a perpetual inventory system when an issue transaction is processed is the Issue quantity Issue location Beginning balance Ending balance

Ending balance A perpetual inventory system maintains the current/ending balance on a transaction-by-transaction basis.

The Manufacturing Environment, where product volume is low and product variety is high for a given item, is: Assemble-to-Order Make-to-Order Make-to-Stock Engineer-to-Order

Engineer-to-Order Because customer product specifications require a unique design, product volume in engineer-to-order environments is low. Generally no two products are alike; therefore, product variety is high. There can be many variations of the product. The make-to-order environment is on the opposite end of the spectrum, with high volumes, but low variety of products. Make-to-order and assemble-to-Order are between these two extremes.

A highly engineered product was introduced a few years ago, with standards defined, bills of material and routings finalized and work centers set up to minimize material handling. Major improvements in cycle time have been made. The information that is most likely to need changed is Engineering standards and work center output Bills of material and routings Cycle time and bills of material Routings and work center capacity

Engineering standards and work center output If cycle time has improved, lead times and output are most likely to have changed; nothing infers that BOM's or routings have changed.

Which of the following is the most important consideration when implementing an information system to control shop floor operations? Encouraging users to operate independently with a minimal amount of training Providing staff specialists with the information needed to control production operations Supporting differentiation between functional areas and production operations Ensuring shop personnel have input into choice or design of new technology

Ensuring shop personnel have input into choice or design of new technology An effective information system should place as much responsibility for managing production operations with factory personnel. This requires then that these personnel have input into designing the system that they will be required to use. A fundamental goal of an information system is to integrate and not separate business functions. It is important to place as much responsibility as possible for operations in the hand of factory personnel. An integrated information system requires everyone in the organization to act as a team driven by mutually supporting goals and objectives.

Buying from suppliers that manage waste to minimize the impact of their organization on the earth is known as Environmental scanning Green manufacturing Environmentally responsible purchasing Six sigma

Environmentally responsible purchasing Environmentally responsible purchasing is an objective of purchasing departments to minimize the impact the organization has on the environment.

When international competition becomes significant Offshoring becomes a necessary alternative Even small advantages in product and service specifications can have a significant impact on competitiveness. Operations must continuously apply cost savings measures to all existing products to help increase market share Mass customization is frequently used as a product differentiator

Even small advantages in product and service specifications can have a significant impact on competitiveness. From a market perspective international competition has become increasingly intense. Therefore even small advantages in product and service specifications can have a significant impact on competitiveness.

Which of the following actions is the first step in the Theory of Constraints (TOC) improvement process? Create time buffers of inventory in front of critical work centers. Reduce the level of variability in production volume. Develop a value stream map of the entire system. Examine the entire system to identify what is limiting output.

Examine the entire system to identify what is limiting output. In TOC, the first of a five-step process for performance improvement is to identify the constraint. The other answers are either not the first step in TOC or they are not specific steps in the TOC improvement process and are more typically in a lean production environment.

The strongest threats relating to competition within an established industry are likely to come from angel investors New technology innovators Existing competitors mergers and acquisitions

Existing competitors Established companies within an industry already have the resources to compete, and are the most likely source of new competition.

ISO 14001 compliance can be misleading in that ISO regulations are able to be interpreted in a variety of ways Existing violations are permitted as long as there's a commitment to comply. ISO regulations are different for each country A company's compliance may have expired but there's no way to verify that.

Existing violations are permitted as long as there's a commitment to comply. ISO 14001 describes an environmental management system intended to continually improve the environmental performance of a company. However companies set their own goals so improvement is not standardized. As a result third party certification is often required by customers to ensure that suppliers are following stringent standards. Even existing violations of environmental regulations are permitted as long as there exists a clear commitment to comply.

Warranty claims and repair costs would be which of the following costs of quality? Internal failure External failure Appraisal Prevention

External failure External failure costs includes such costs as warranty and returns.

Which of the following elements of lead time is ignored by capacity requirements planning? Internal setup Wait Move External setup

External setup External setup is performed while the previous job is being run.

The purpose of a modular bill of material includes Translating the sales and operation plan to the master production schedule Minimizing inventory for unique components Facilitating forecasting Easier material requirements planning processing

Facilitating forecasting A modular bill of material is a type of planning bill that is arranged in product modules or options. It is often used in companies where the product has many optional features

Facility, Production Volume, Product Variety, Production Lead Time, Operations per Product, Production Resources A, High, High, Long, Many, Many B, High, Low, Short, Few, Many C, Low, High, Long, Many, Few D, Low, Low, Short, Few, Few In which facility would product unit costs most likely be reduced through a setup reduction program? Facility A Facility B Facility C Facility D

Facility C The factors to consider are: Low production volume that there are a lot of small order released; High product variety means that there are a number of different products that can be produced; and many Operations per product means that there is a lot of setup being performed.

Mitigation of an out-of-control internal manufacturing process must follow the path of Hiring more quality personnel Use the supplier of the raw materials as the temporary scapegoat Fact finding, education, and empowerment, observe, adjust and repeat.. Hiring a public relations consultant

Fact finding, education, and empowerment, observe, adjust and repeat.. A major multi-national customer reported to their paper supplier that their ink-jet paper product was curling [failing] under conditions of low humidity. A year later the plant was supplying acceptable paper, but plant productivity, scrap and re-work levels were poor. Then the major customer produced statistical proof that the supplier's process was out of control. [Initially mitigation took the form of Plan, Do, Check Act.]

A company makes four product lines with a variety of features and options offered for each product line. Which of the following tools is most appropriately used to document the product configurations to be built over the next two weeks in this situation? Master production schedule Final assembly schedule Detailed material plan Planning bill of material

Final assembly schedule The final assembly schedule (FAS) is prepared after receipt of a customer order, as constrained by the availability of material and capacity (based on the features and options ordered), and schedules the operations necessary to complete the product assembly. It states the exact set of end products to be built over some time periods. Detailed material plan and planning bill of material are incorrect because they do not document the product configurations to be built. MPS is incorrect because an assemble-to-order company does not typically develop a master production schedule.

A company makes four product lines with a variety of features and options offered for each product line. Which of the following tools is most appropriately used to document the product configurations to be built over the next two weeks in this situation? Planning bill of material Final assembly schedule Master production schedule Detailed material plan

Final assembly schedule The final assembly schedule (FAS) is prepared after receipt of a customer order, as constrained by the availability of material and capacity (based on the features and options ordered), and schedules the operations necessary to complete the product assembly. It states the exact set of end products to be built over some time periods. Detailed material plan and planning bill of material are incorrect because they do not document the product configurations to be built. MPS is incorrect because an assemble-to-order company does not typically develop a master production schedule.

A make-to-stock company ships product within three days of completion of two weeks of manufacturing. Any components with lead times greater than one week are stocked in inventory. The product is standard, with minor customizations, though demand may be erratic. The company should maintain the make-to-stock environment rather than attempting to change to assemble-to-order because Level production minimizes total inventory investment over a chase strategy Marketing cannot guarantee a 3-day shipment time for an assemble-to-order environment A product requiring two weeks to produce cannot be assembled and shipped in three days Finished goods inventory enables stable production even though demand is erratic

Finished goods inventory enables stable production even though demand is erratic Minor customizations, erratic demand and stable production favors make-to-stock; assemble-to-order will require forecasting and stocking of subassemblies and options to meet a 3-day delivery

A retail company has decided to focus on internet sales, and open a few new stores, rather than an aggressive new store approach. All demand will be adequately served by the existing distribution centers. An important consideration in the development of the new strategy is Finished goods inventory turns Capacity of current distribution centers Existing store growth rate Geographic location of new stores

Finished goods inventory turns Inventory turns affects finances, DC capacity and operations; the other responses are all known or can already be projected based on historical data.

A company produces a variety of items with short manufacturing lead times. Which of the following capacity planning techniques would be most useful for bottleneck work centers? Infinite capacity planning Detailed capacity planning Finite capacity planning Bottleneck capacity planning

Finite capacity planning Finite capacity planning maximizes what can be produced. Infinite is what MRP would use.

Which of the following elements is used to reduce system nervousness? Economic order quantity Firm planned orders Planned orders Safety stock

Firm planned orders Firming planned orders allows the planner to make decisions on whether small changes are important enough to react to, as well as locking in order quantities and dates for various reasons.

Which of the following elements is used to reduce system nervousness? Safety stock Economic order quantity Firm planned orders Planned orders

Firm planned orders Firming planned orders allows the planner to make decisions on whether small changes are important enough to react to, as well as locking in order quantities and dates for various reasons.

To override the material requirements planning logic for quantity or date of a planned order, the planner should use Firm planned orders Demand time fences Planned order releases Scheduled receipts

Firm planned orders MRP automatically recalculates planned orders as requirements change. A firm planned order allows the planner to maintain a certain quantity and date to prevent MRP from recalculating

To override the material requirements planning logic for quantity or date of a planned order, the planner should use Demand time fences Planned order releases Scheduled receipts Firm planned orders

Firm planned orders MRP automatically recalculates planned orders as requirements change. A firm planned order allows the planner to maintain a certain quantity and date to prevent MRP from recalculating.

There is available inventory of 100 units of a component. There are five parent orders that each require 100 of the component, for a total requirement of 500 units. The five end items are being produced to a forecast, and no actual demand is known. Which of the following actions is the planner most likely to do? Firm the planned orders of the parents for 20 each and release all five Wait and see which parent is the first to stock out and release that parent Release one of the parent orders on the scheduled date and hold the others. Expedite the component and release the five orders on their scheduled release dates

Firm the planned orders of the parents for 20 each and release all five Allocate the available inventory so as to produce some of each parent.

The most powerful and most widely used tool for diagnosing the principal competitive pressures in a market is the Five forces model Balance sheet Income Statement Four P's (Price, Product, Promotion, Placement)

Five forces model The five-forces model analyzes competitive pressures in a market and assesses the strength and importance of each of those pressures.

An engineer-to-order environment produces large cabinets. One of the bulk items is used in all end items and has a limited point-of-use storage area. Which of the following ordering techniques is most likely to be used? Period Fixed Economic Reorder point

Fixed Since the item is used in all items, the fixed order quantity would be used. The other options do not account for the storage space limitation.

An engineer-to-order environment produces large cabinets. One of the bulk items is used in all end items and has a limited point-of-use storage area. Which of the following ordering techniques is most likely to be used? Reorder point Period Fixed Economic

Fixed Since the item is used in all items, the fixed order quantity would be used. The other options do not account for the storage space limitation.

Which of the following production layouts will most likely contain dedicated lines? Functional Cellular Fixed position Product

Fixed position A product layout is typically used for only one or similar products.

Cross-trained workers are an important part of lean principles for which of the following reasons? Flexibility is increased because personnel can be moved around Compensation levels are flattened for easier management Cross-training eliminates competition among workers Skills are developed for internal hiring

Flexibility is increased because personnel can be moved around Cross-training enables employees to be moved around as needed, within work cells, production lines, and project teams.

Safety lead time is most appropriate to use for an item in distribution center inventory to compensate for which of the following? Fluctuations in replenishment lead time Customer order changes Changes in product configurations Forecast variability

Fluctuations in replenishment lead time Safety lead time is added to normal lead time to protect against fluctuations in replenishment lead time so that an order can be completed before its real need date. Replenishment lead time is the total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use.

When multiple important tasks remain for the company to pursue, leadership must Articulate each and every goal in priority sequence Align bonus rewards by group based on departmental goals Focus on a few goals while putting some others aside Prioritize all important tasks

Focus on a few goals while putting some others aside Strategy involves focus and choice. Choice means setting aside some goals in favor of others. When this hard work [of prioritization] is not done, weak strategy is the result.

Producing a consistently high-quality product requires which of the following actions? Increasing the amount of sampling. Focusing on an error-free process. Using automated inspection equipment. Implementing preventive maintenance.

Focusing on an error-free process. Monitoring and controlling the process prevents the production of defects by tracking assignable causes of variation, and watching for trends towards out of control processes.

The sales forecast is disaggregated into individual forecasts at the distribution center level. This may result in Increases in the planners need for involvement Forecast errors at the detail level Decreases in safety stock levels Inconsistency between the total forecast and the distribution center forecasts

Forecast errors at the detail level Forecasts are more accurate at the aggregate level, so even though it is necessary to break it into individual DC's, accuracy will lessen

A company is introducing a new product, which is expected to have service and warranty demand for one of the components. The best way to account for the part demand is to Overplan the end item at the master production schedule to account for the service demand Forecast the component independent demand at the master production schedule level Carry safety stock at the end-item level from a forecast Purchase extra quantities of the component as a one-time buy

Forecast the component independent demand at the master production schedule level Independent demand must be forecasted; risk is minimal as the component can also be used in production; increasing the end item inventory does not help the demand of the component; a one-time buy may be OK for an item being phased out, but not a new product.

A medium-size package delivery service has a large market share in its home country. It projects slowing growth in that country and is planning to expand into five neighboring countries. Which of the following would be the most appropriate strategy for entering these five countries at the same time? Franchising its brand in each of the countries. Developing service tailored to each country. Forming a strategic alliance with a service in one of the countries. Expanding current operations into those countries.

Franchising its brand in each of the countries. Franchising is well suited to expansion of services and retailing enterprises and to build a simultaneous presence in foreign markets. The franchisee bears most of the cost and risk of establishing foreign locations.

A job shop environment includes Functional layout, variable routings, job costing Functional layout, variable routings, dedicated machines, job costing Variable routings, dedicated machines, job costing Functional layout, variable routings, dedicated machines

Functional layout, variable routings, job costing Dedicated machines are typically found in a flow ship, whereas multi-purpose machines are found in a job shop.

A supplier corrective action program should be used to Process credit memos Correct invoices that do not match the purchase order Help identify root causes of problems and correct them Provide a way for supplier's to communicate buyer issues to management

Help identify root causes of problems and correct them Correction action systems are in place to identify root causes of problems and take action to correct it.

To "roll up" a forecast refers to the process of Combining the master production schedule quantities to meet the forecast demand Combining salespersons forecast to a total forecast for an item Making sure the resource plan validates the sales and operations plan Generating detailed forecasts which aggregate to the total forecast

Generating detailed forecasts which aggregate to the total forecast In pyramid forecasting, detailed forecasts are aggregated to higher levels until a total number is generated.

Identifying sources for procurement regardless of location is an example of Global sourcing Outsourcing Offshore sourcing Multisourcing

Global sourcing Global sourcing is the function of selecting international suppliers, rather than simply local or domestic.

Which of the following statements about supplier rating systems is true? They should be mandatory for all suppliers. They should be used only when suppliers do not perform to expectations. Suppliers who achieve the lowest price should be rewarded. Goals should be mutually agreed upon.

Goals should be mutually agreed upon. It is extremely important that buyers and sellers agree to fundamental goals so that the buyer's criteria of supplier capabilities is clearly known by the supplier before assessment occurs. A supplier rating system is always concerned with current levels of supplier performance as one of several important criteria to review in the assessment process. Formal agreements and marketplace leadership may pre-qualify a supplier, rendering rating assessment redundant. The lowest price is often not the prime consideration in rating suppliers.

A make-to-order company is in the process of implementing lean manufacturing techniques, making equipment layout changes and standardizing the designs of their highest value products in order to transition to assemble-to-order. Which of the following actions should also be taken to reduce the backlog from six to three weeks? Don't take orders for the assemble-to-order products for three weeks. Work overtime until the backlog has been reduced to three weeks Gradually reduce marketing's quoted lead time to three weeks No action is required since the backlog will reduce automatically

Gradually reduce marketing's quoted lead time to three weeks As product design and production improvements shorten cycle time, the backlog will be reduced as well, but if the quoted lead time is not reduced, customers will continue to order six weeks in advance. Working overtime does not fulfill the lean manufacturing principles, and no company is going to stop taking orders.

A make-to-order company is in the process of implementing lean manufacturing techniques, making equipment layout changes and standardizing the designs of their highest value products in order to transition to assemble-to-order. Which of the following actions should also be taken to reduce the backlog from six to three weeks? Work overtime until the backlog has been reduced to three weeks No action is required since the backlog will reduce automatically Don't take orders for the assemble-to-order products for three weeks. Gradually reduce marketing's quoted lead time to three weeks

Gradually reduce marketing's quoted lead time to three weeks As product design and production improvements shorten cycle time, the backlog will be reduced as well, but if the quoted lead time is not reduced, customers will continue to order six weeks in advance. Working overtime does not fulfill the lean manufacturing principles, and no company is going to stop taking orders.

Planned orders from a distribution warehouse become which of the following components? Demand in the sales and operations plan Gross requirements of the master production schedule Planned orders in the master production schedule Planned orders in material requirements planning

Gross requirements of the master production schedule Planned orders from a warehouse become gross requirements in the MPS during DRP.

Cross-functional project teams should receive training in Microsoft Project Project management Dealing with difficult people Group dynamics

Group dynamics Project teams are working together toward a goal and need to understand how teams work together successfully.

A company recognized as a virtual company will likely Have few operational resources and few suppliers Have many operational resources and many suppliers Have many operational resources and few suppliers Seek to integrate vertically whenever possible

Have few operational resources and few suppliers A company providing customer end item products that is organized as a virtual company will likely have few operational resources and few suppliers.

In a make-to-stock environment, the correct level of finished goods being planned in a time of increasing sales is indicated by Increasing inventory turnover Customer base increasing Actual sales exceeding plan High customer service levels

High customer service levels If high service levels are being maintained, the proper mix and quantity of inventory is being produced; inventory turns may not change if average inventory is keeping pace with cost of goods sold; sales exceeding plan would likely indicate that there is insufficient inventory to support the sales; there is no relationship between customer base and levels of finished goods

To maximize the firm's total net income a company should focus on products with The fastest lead time from order launch to order complete will maximize the company's top line Higher contribution margins The fastest setup and changeover times will maximize the company's bottom line The fastest setup and changeover times will maximize the company's top line

Higher contribution margins Even though sales may decrease in general the emphasis on products with higher contribution margins maximizes a firms total net income

Which of the following statistical process control tools shows the extent and type of variation in a set of data? Pareto chart Histogram Flow chart Scatter plot

Histogram A histogram charts the type of variance as well as the frequency distribution.

Which of the following approaches to managing engineering changes is the most disruptive to manufacturing? Establishing an engineering change committee Including the supplier in engineering change decisions Introducing changes during prototype runs Holding all changes until the product is in production

Holding all changes until the product is in production Engineering changes can be very expensive, and are best handled as they arise, rather than a complete overhaul after production has begun.

To focus on customer needs, a company should implement Concurrent engineering Lean Manufacturing House of quality Six sigma

House of quality The voice of the customer is documented and followed through the use of the house of quality tool.

A make-to-order company is ready to introduce a new product family that has many of the criteria the market is demanding. Which of the following production strategies is most applicable for the introduction phase of the new product Chase Hybrid Level Ramp-up

Hybrid Demand is unknown but the company believes sales will be good; Some inventory buildup enables the company to be somewhat flexible for the actual timing and quantity of demand; chase is appropriate, but will not satisfy some demand or timing at this critical time in the product's life cycle; Level builds inventory but there is no history to warrant it

Which of the following customer service measures are appropriate for mature make to stock products? I. Percentage of orders shipped on schedule II. Line-item fill rate III. Finished-goods inventory turnover IV. Total manufacturing cycle time I and II only I and III only II and IV only I, II, III, and IV

I and II only Options (I.) and (II.) measure the performance of finished goods sales by order and by line. Option (III.) is incorrect because turnover is a measurement for inventory and not customer service. Option (IV.) is incorrect because manufacturing cycle time measurements are important for determining manufacturing and not customer service performance.

Which of the following methods encourages employee involvement within an organization? I. Implementing ideas quickly II. Recognizing employees for their ideas III. Promoting competition among employees I only III only I and II only I, II, and III

I and II only Options (I.) and (II.) promote employee participation and commitment to an employee involvement effort. Option (III.), however, promotes negative competition among employees with the result that employees focus more on their individual agendas and ambitions versus the common goals of the organization.

Which of the following characteristics are desirable in a system measuring overall plant productivity? I. Visibility of multiple manufacturing resources II. Identification of factors for improving throughput III. Presentation of data in discounted dollars IV. Detailed analysis of labor variances I and II only I and III only II and IV only I, II, and IV only

I and II only Options (I.) and (II.) provide for techniques that measure overall plant productivity. Option (III.) is incorrect because data in discounted dollars provides minimal information regarding plant productivity. Option (IV.) is incorrect because examining detail labor variances does very little to provide aggregate information needed to track overall plant productivity.

Which two of the following action messages may be generated by materials requirement planning (MRP)? I. Cancel the order. II. Change the lot size. III. Release the order. IV. Generate the overload.

I and III Options I and III are valid action messages because they refer to order scheduling and management. Option II is invalid because the lot size of a product is maintained in the item-planning master file. Option IV is a distractor with no meaning.

A company that transitions from sequential product development to concurrent engineering typically experiences which of the following outcomes? I. Better fit of products to production capabilities II. Increased influence by manufacturing engineering over design decisions III. Reduced variety of product components I and II only I and III only II and III only I, II, and III

I and III only Concurrent engineering enables the organization to involve the entire organization to be continuously and simultaneously involved in new product development. The intent is to enhance the design with the inputs of all the key stakeholders. Such a process should ensure that the final design meets all the needs of the stakeholders and should ensure a product that can be quickly brought to the marketplace while maximizing quality and minimizing costs. Option (II.) is incorrect because manufacturing engineeringÕs role is not increased over other project participants.

Valid reasons to carry safety stock for a manufactured item include which of the following situations? I. Its replenishment time is long compared with the total end-product lead time. II. There are frequent engineering changes in the end products when this part is used. III. A lack of process control results in highly variable yields. I only III only I and III only I, II, and III

I and III only Option I is correct because, as replenishment time increases, so does variability and the need to cover for unplanned demand. Option III is correct because, as variability in production output occurs, the probability of stock increases requiring safety inventories. Option II is incorrect because stocking inventory for products that go through many engineering changes will result in significant amounts of obsolete inventories.

A properly implemented material requirements planning system should result in a reduction of which of the following? I. Inventory II. Engineering changes III. Expediting I only I and III only II and III only I, II, and III

I and III only Options I and III relate to reductions in inventory and expediting when a MRP system is successfully installed. Option II is invalid because MRP will not reduce engineering changes. The task of reducing engineering changes belongs to marketing and product development.

Which of the following changes would have an impact on the use of a production activity control system? I. Changing from a batch to a line manufacturing environment II. Implementing modular bills of material for items with options III. Grouping production equipment into focused work cells I and II only I and III only II and III only I, II, and III

I and III only PAC would be impacted by changing an entire production process from batch to line (I.). Scheduling, sequencing, WIP management, and so on would be significantly changed. Using group technology (III.) would significantly change the way product is scheduled, sequenced, and managed. Option (II.) is incorrect because using modular BOMs will have an effect on materials, but little impact on production processes.

Exponential smoothing techniques are desirable for which of the following reasons? I. Low cost II. Long-range accuracy III. Flexibility of application I only II only I and III only I, II, and III

I and III only The low cost to assemble data and calculate a forecast offered by exponential smoothing are two important attributes of the technique. Option II. is invalid because exponential smoothing is primarily a short- to medium-range forecasting technique. The data and time horizon make it invalid for long-range forecasts which need aggregate data with long planning horizons.

Which of the following documents provide opportunities to reduce paperwork with supplier partners? I. Receiving documents II. Purchase requisitions III. Purchase orders IV. Invoices II and III only I, II, III, and IV I, II, and III only I and IV only

I, II, III, and IV All four of the purchasing documents listed constitute paperwork for the purchasing function. By automating or reducing the about of labor needed to generate each document, paperwork with supply partners can be reduced.

Long-term agreements with suppliers may include which of the following types of special arrangements? I. Simplified paperwork systems II. Returnable containers III. Specially designed containers IV. Effective personal contacts at each site IV only II and III only I, II, and III only I, II, III, and IV

I, II, III, and IV All of the options can be a part of a long-range supplier contract.

Long-term agreements with suppliers may include which of the following terms? I. Required quantities II. Ownership exchange points III. Supplier held inventory IV. Models of transportation IV only II and III only I, II, and III only I, II, III, and IV

I, II, III, and IV Long-term agreements with suppliers will involve all four options.

The development of the sales and operations plan involves which of the following? I. Marketing II. Manufacturing III. Finance I only II only I and II only I, II, and III

I, II, and III All three of these business functions are very closely involved in the sales and operations (S&OP) process.

Effective execution control can improve customer service in which of the following ways? I. By reducing lead time II. By replenishing finished inventory on schedule III. By improving component availability I only I and III only II and III only I, II, and III

I, II, and III All three options can improve customer service. Shorter lead times enable customers to get products faster and provide competitive advantage to the company. Competing orders on schedule is absolutely critical in meeting customer delivery expectations. By having the necessary components and materials on hand to build products, companies can meet customer due dates and service objectives.

The design of a product is improved by which of the following factors? I. Identification of process similarities II. Evaluation of standard part attributes III. Input from the supplier I and II only I and III only II and III only I, II, and III

I, II, and III All three options will improve product design. Identifying process similarities helps in standardizing processes, removing over-complexity, and reducing the number of components needed to produce the product. Early input from the supplier enables better product design by assuring component specifications, participation of the supplier in the design, and information about the capabilities of a supplier to supply components in the right quantities once production begins.

During an MRP II implementation, which of the following education and training subject areas must be learned by managers who will use the system? I. ERP principles and techniques II. The change in the behavior of the organization III. The application of the system to business problems I and II only I and III only II and III only I, II, and III

I, II, and III ERP project leaders must be fully conversant in ERP principles and techniques, be effective as change managers to overcome personnel and corporate culture issues, and be able to apply the ERP functionality to solve business problems.

Which of the following considerations are necessary when selecting suppliers to be a major part of a supply chain? I. The technical capability to work on effective product designs II. Annual sales patterns and financial stability III. An ability to communicate quickly and easily I and II only I and III only II and III only I, II, and III

I, II, and III Options (I., II., and III.) are all essential components of effective buyer-supplier collaboration.

If a company implements the time-phased order point (TPOP) technique, rather than the order point technique, which of the following benefits likely will be achieved? I. Assistance in maintaining true dates of need for open order II. Availability of future planned orders for input to capacity planning III. Planning of components and capacity for future lumpy demand IV. Using historical data to determine the optimum time to reorder I and II only I and IV only III and IV only I, II, and III only

I, II, and III only The TPOP technique provides planners with the ability to view supply and demand within a user-defined planning horizon. By providing a simulation of possible future supply and demand of an item, TPOP enables the planner to maintain the true dates of need for all orders, to use future supply requirements to plan for future capacities, and to see demand requirements for future lumpy demand. IV is incorrect because the TPOP does not use historical data to determine when an item needs to be reordered.

Which of the following objectives typically characterize an employee involvement program? I. Solving problems II. Providing a forum for communication III. Implementing job sharing IV. Decentralized decision making I and II only I, II, and IV only I, III, and IV only II, III, and IV only

I, II, and IV only An effective employee involvement program will be successful if it is focused on solving problems, providing a forum for communicating, and characterized by decentralized decision making. Option (III.) is contra to effective employee involvement because job sharing or work sharing is an employment arrangement where typically two people are retained on a part-time or reduced-time basis to perform a job normally fulfilled by one person working full-time.

Which of the following features are characteristic of continuous process manufacturing? I. Low-cost production II. Multipurpose process technology III. Price as an order-winning criterion IV. Narrow product range II and III only I, II, and IV only I, III, and IV only I, II, III, and IV

I, III, and IV only Continuous manufacturing is defined as a type of manufacturing process that is dedicated to the production of a very narrow range of standard products. The rate of product change and new product information is very low. Significant investment in highly specialized equipment allows for a high volume of production at the lowest manufacturing cost. Thus, unit sales volumes are very large, and price is almost always a key order-winning criterion. Option (II.) is incorrect because continuous manufacturing is performed on highly specialized and inflexible equipment.

Which of the following results are goals of quality function deployment (QFD)? I. Achieving statistical process control II. Understanding customer needs and wants III. Optimizing product and process designs I and II only I and III only II and III only I, II, and III

II and III only QFD is defined as a methodology to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation of the supporting production management system. QFD can be viewed as a set of communication and translation tools. QFD tries to eliminate the gap between what the customer wants in a new product and what the product is capable of delivering. QFD often leads to a clear identification of the major requirements of the customers. These expectations are referred to as the voice of the customer (VOC). With these objectives in mind, QFD seeks to respond to customer needs and wants (II.) while optimizing product design (III.). Option (I.) is incorrect because statistical process control is a set of techniques to measure process control only.

Reductions in which two of the following production variables form the best performance measure of a material requirements plan? I. Setup time II. Number of action messages III. Average queue IV. Component shortages I and II II and III II and IV III and IV

II and IV Option II is correct because reduction in the number of action messages implies that the MRP system is working efficiently. Option IV is correct because the primary role of MRP is to ensure that there are no shortages of components for manufacturing. Option I is incorrect because MRP treats the item lead time as a fixed element in the MRP calculation and, therefore, have no direct effect MRP efficiency. Option III is a measurement of released orders before an operation and is not directly a component of MRP processing.

Use of which two of the following techniques best supports the planning needs of an assemble-to-order manufacturer that produces a product with many options and whose order winner is delivery speed? I. Safety lead time for finished products II. Safety stock of finished products III. Safety stock for long lead time components IV. Planning bills that overplan options I and II I and III II and IV III and IV

III and IV In an assemble-to-order environment, the focus is on the quick assembly of finished goods from component and subassembly features and options. As such, extra stock of components generated through safety stock or planning BOMs will prevent a possible component shortage and inability to ship. Options (I.) and (II.) are incorrect because an ATO environment has no finished goods and assembles to the customer order.

Which of the following outcomes are benefits of implementing group technology? I. Reduced need for employee training II. Increased product variety III. Lower work-in-process inventories IV. Reduced manufacturing lead time I and IV only II and III only III and IV only I, II, III, and IV

III and IV only Group technology is an engineering and manufacturing philosophy that identifies the physical similarity of parts (common routing) and establishes their effective production. It provides for rapid retrieval of existing designs and facilitates a cellular layout. Options (III.) and (IV.) are correct because group products together by family or some other attribute will streamline production, thereby reducing WIP inventories and production lead times. Option (I.) is incorrect because group technology will increase the need for training. Option (II.) is incorrect because group technology has no impact on the variety of products a company produces.

Companies striving to continuously improve environmentally often require suppliers to obtain third party certification of ISO 14001 because If the supplier commits an egregious environmental error the company can claim innocence When advertising the use of an environmentally compliant supply chain the company can refer to authorized certification entities ISO 14001 allows companies to outline their own environmental policy Of the legal liability of accepting a supplier's personal assertion that they're ISO 14001 compliant

ISO 14001 allows companies to outline their own environmental policy ISO 14001 describes an environmental management system intended to continually improve the environmental performance of a company. However company's set their own goals so improvement is not standardized. As a result third party certification is often required by customers to ensure that suppliers are following stringent standards.

An international standard to assist organizations in contributing to sustainable development through an understanding of social responsibility is GRI ISO 26000 GAMP ISO 9000

ISO 26000 ISO 26000 is an international standard adopted by the International Standards Organization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility.

Today's information systems deliver operational specific performance data directly to managers concerning machine, people and product detail within the time frame required. This is an example of A nice to have feature of a fully implemented enterprise resource planning system Invasive big-brother type monitoring IT systems delivering production value a fully functioning computer numerically controlled system

IT systems delivering production value Tracking key performance indicators, gathering information from operating personnel, quickly identifying and diagnosing problems, and taking corrective actions are all integral pieces of the process of managing strategy execution.

Infinite loading is useful for Subcontracting underloads Scheduling daily operations Identifying bottlenecks Increasing efficiency of a work center

Identifying bottlenecks Infinite loading will highlight those work centers that are potential bottlenecks for upcoming load.

Utilizing simulation in manufacturing is most beneficial for Identifying potential continuous improvement areas Improving data collection Training new employees Prototyping new technology

Identifying potential continuous improvement areas Simulating alternate processes can identify areas where improvements can be made.

The time when resources are not producing product is known as Queue time Slack time Wait time Idle time

Idle time Idle time is the time when operators or resources are not producing product because of setup, maintenance, lack of material, lack of tooling, or lack of scheduling.

Which of the following statements about capacity in a job-shop environment is true? If capacity is insufficient, effective shop floor control (SFC) can be used to achieve objectives. If capacity is sufficient, there is no need for SFC. If capacity is sufficient, SFC only reports material movement. If capacity is insufficient, no shop floor system will be able to decrease backlog.

If capacity is insufficient, no shop floor system will be able to decrease backlog. If the load at a work center exceeds the available capacity and it is permitted to continue, the existing hours in backlog will never be decreased. The only way it can be reduced is that the number of hours input into the work center are reduced so that backlog can be reduced.

When using Net Present Value for project justification the rule is that If the Net Present Value is greater than the calculated Internal Rate of Return then accept the proposal If the Net Present Value is greater than the investment times the current rate of return available through normal investment institutions then accept the project. If the Net Present Value is positive, accept the project; otherwise reject. If the Net Present Value calculates plus or minus 5% the square root of the actual cost then accept the proposal, otherwise reject.

If the Net Present Value is positive, accept the project; otherwise reject. Concerning the results of a capital budgeting financial exercise using Net Present Value (NPV): If the Net Present Value (NPV) is positive, accept the project; otherwise reject.

Which of the following criteria would management be most likely to ignore when establishing performance measures for master scheduling? Necessity of a feasible production plan since it is only an approximation of production Impact of forecast accuracy on the ability to match the master schedule with the production plan Necessity that product resource profiles used in rough cut capacity planning be accurate Orders shipped on time and complete to customers per the master production schedule

Impact of forecast accuracy on the ability to match the master schedule with the production plan Regardless of the source of demand, the master schedule must aggregate to the production plan; this is part of the MPS process, and does not need to be measured; a feasible production plans , accurate resource profiles and on-time shipments are all key performance measures.

Before delaying a master scheduled item to balance load with capacity in a make-to-stock environment, the planner should first check the Expected usage rate of the end item based on history Impact on the customer service level of a replenishment delay Number of shifts in the overloaded work centers Load projection for the preceding work centers

Impact on the customer service level of a replenishment delay There are multiple ways to address overloaded work centers, however delaying an end item may affect a business-level customer service objective.

The next step efforts to mitigate customer-reported manufacturing problems after a supplier developed "plan, do, check, act, repeat" strategy would be to Encourage more involvement by cost accounting directly with shop floor supervisors Implement quality processes such as statistical process control Hire black belt certified associates to address the problem Implement lean processes starting with Five S projects

Implement quality processes such as statistical process control PDCA helps to identify a solution to the problems, but, once the solution is implemented, statistical process control methods are used to monitor and control the process. Monitoring and controlling the process ensures that it operates at its full potential. At its full potential, the process can make as much conforming product as possible with a minimum (if not elimination) of waste, rework, or scrap. The 5 Whys look for the root cause, which has already been identified and addressed; a black belt certified associate would use a tool like statistical process control in a case like this; encouraging more involvement with cost accounting doesn't address the need to monitor and control the process.

How does the concept of failsafe relate to equipment? Defective parts cannot be released to the next operation Improper internal setup actions cannot be taken An action that will produce defective parts is prevented Equipment shuts down automatically if a defect is detected

Improper internal setup actions cannot be taken Hard stops are used to eliminate adjustments as part of internal setup; even failsafe methods cannot guarantee no defects.

Which of the following actions to improve the validity of the master schedule is most under the master scheduler's control? Improve accuracy of resource bills of material Identify sources of demand problems Reduce sources of supply problems Aggregate capacity by flattening bills of material

Improve accuracy of resource bills of material Maintaining the resource bill of material to reflect current conditions has an ongoing impact on the validity of the master schedule; the other responses can be supported, but are done by other individuals.

The purpose of having inventory at a distribution center is to Decrease transportation costs Decrease safety stock Improve customer service Increase sustainability

Improve customer service Keeping inventory closer to the customer improves customer service.

The most compelling reason for establishing a supplier partnership is to Simply the overall purchasing process Replace individual orders with scheduled releases Reduce the need for purchasing paperwork Improve quality and delivery reliability

Improve quality and delivery reliability All are desired results, but the quality and delivery reliability need has the most payback.

Design for manufacturability is supposed to result in which of the following? Reduced training needs Improved product quality Reduced product features Delayed market introductions

Improved product quality Design for manufacturability is focused on enabling a product to be easily and cost effectively produced at the highest quality. Design for manufacturability does not necessarily reduce training needs. Design for manufacturability does not necessarily reduce the number of product features. Design for manufacturability should reduce the time for product market introduction.

Point-of-use storage has which of the following advantages as compared to warehousing? Better use of the space Computer controlled Random storage Improves accessibility and productivity

Improves accessibility and productivity Point-of-use storage (on the production floor, near work centers) improves accessibility, productivity, and customer service. In this type of system, frequently used and lower-valued items may be issued in batches to the production floor and will be managed by the workers themselves. The items are removed from the inventory record when they are issued (frontflushing), rather than when they are used (backflushing). The other answers are all warehouse-related.

Which of the following actions is likely to improve the accuracy of a sales forecast? Basing territorial advertising on sales estimates Increasing the sales quotas to match the sales forecast Adjusting the sales forecast up or down by a certain percentage to offset errors Informing sales representatives about the company's business outlook

Informing sales representatives about the company's business outlook Using business information would help sales personnel to better determine potential forecasts; using advertising or sales quotas would have no bearing on the accuracy; adjusting the sales forecast by a percentage does not improve accuracy but merely offsets problems stemming from inaccurate forecasts

Which of the following capacity management techniques calculates the capacity required at a work center in a time period without considering the capacity available? Forward scheduling Input/output control Finite loading Infinite loading

Infinite loading Infinite loading is the calculation of the capacity required at work centers in the time periods required, regardless of the capacity available to perform this work. Finite loading assigns no more work to a work center than it can be expected to execute in a given time period. Forward scheduling is not a capacity management technique, but a scheduling technique where the schedule proceeds from a known start date. Input/output control is a technique where planned and actual inputs and outputs of a work center are monitored.

A way for a company to prevent the failure of a new product release with missed dates or quality / performance issues is to Deliver early versions of the product or service to a friendly customer for testing and feedback Construct the process so that design engineering builds the first few saleable lots of end item product Release the product for sale as soon as possible to keep the pressure on manufacturing Include a prototype build and test process step into the new product release schedule.

Include a prototype build and test process step into the new product release schedule. Often new products are prototyped prior to release. The next stage in the design activity is to turn the improved design into a working prototype so that it can be prototype-tested. This helps reduce the risks of going straight to market from prototype.

By implementing a supplier certification program, a company should be able to eliminate Safety stock Incoming inspection for parts from the supplier Receiving paperwork Quality audits of the supplier

Incoming inspection for parts from the supplier Certifying a supplier means that the parts would not have to be inspected; the other responses would still be necessary.

Which of the following actions by a company is most likely to lead to job enrichment and increased employee satisfaction? Increase employee control over the process. Separate planning from execution. Divide jobs into specialized subtasks. Control quality by inspection.

Increase employee control over the process. Employee involvement and empowerment often results in employee pride, commitment, and a sense of ownership. The other techniques do not lead to job enrichment and satisfaction of today's workforce, where workers are more educated and machinery and instruments more numerous and complicated.

A gear manufacturer has departments running 3 shifts/day, 5 days a week except for the heat-treating furnace which must run 24 hours/day, 7 days a week. Shifts for all departments, except the heat-treating furnace, are 8 hours with 1 hour of lunch/break time per day. The heat-treating furnace produces 50 units/hour, operating 24 hours/day, 7 days/week, with no down time. The gear machining process produces 85 units an hour, operating at 3 shifts/day, 5 days/week. The final assembly line currently is a bottleneck and is capable of producing at a rate of 125 units per hour, and operates 1 shift/day, 5 days/week. Demand is for 8,000 end items per week. What actions should the company make that will allow the 8,000 end items to be made? Increase final assembly to 3 shifts a day and adjust the pace of production (the TOC "drum") for a throughput of 8,000/week. Reduce gear machining to 1 shifts a day, increase Final Assembly to 3 shifts a day and adjust the pace of production (the TOC "drum") for a throughput of 8,000/week. Reduce heat-treating furnace to 2 shifts a day, increase Gear Machine to 2 shifts a and adjust the pace of production (the TOC "drum") for a throughput of 8,000/week. Increase final assembly to 2 shifts a day and adjust the pace of production (the TOC "drum") for a throughput of 8,000/week.

Increase final assembly to 2 shifts a day and adjust the pace of production (the TOC "drum") for a throughput of 8,000/week. The heat-treating furnace currently produces 8,400 units per week (7 days 24hours 50 units), therefore, it already produces enough for the 8,000 units/week. Gear machining currently produces 8,925 units per week (5 days 3 shifts 7 hours*85 units), therefore, it already produces enough for the 8,000 units/week. Final Assembly currently produces 4,200 units per week (5 days 7 hours 120 units). Increasing the Final Assembly process to 2 shifts per day produces 8,400 units per week (5 days 2shifts 7 hours *120 units), which can now handle the 8,000 a week demand. Once these changes are made, the three operations can make 8,400, 8,925 and 8,400 respectively. The pace of production should be tuned to meet the 8,000 a week demand.

Sometimes, a company's electro-mechanical products are used heavily in sometimes unanticipated ways thus leading to emergency service outages. The on-site repair team suggested the products be made to automatically assess, diagnose and report status. The cross functional product review team saw this as an opportunity to increase overall product value. The most impactful outcome of implementing this strategy would likely be to Provide data for continuous improvement Facilitate upstream integration Become a potential union problem if machine diagnostics replace something a person could do Increase the product's order winning features

Increase the product's order winning features Order winners refer to competitive characteristics that cause a firm's customers to choose that firm's goods and services over those of its competitors, and are a competitive advantage for the firm. In this case, product design would be the order winner, ideally eliminating the expensive emergency service outages. This data may be used for continuous improvement, but the immediate goal is to eliminate the emergency service outages. Replacing a person with this new process is not necessarily part of the solution, neither is upstream integration.

A logistics company surveying customers asked for responses to a set of important/non important attributes and how well the company performs against those attributes. Assuming appropriate action to the responses, this is an example of putting a system in place to Use in future marketing promotions Justify price adjustments for superior performance Identify poor performing groups or services for discipline Increase value in product delivery

Increase value in product delivery A transport company sought to find how it was performing to customer needs. To do this they devised a quantitative scale of customer needs vs. a variety of attributes like cost, quality flexibility and so on. They then surveyed their customers asking for responses as to how important was this attribute and how were they performing to this need. Plotting the results they could learn where improvement emphasis needed to be applied.

As organizations become more horizontal, which of the following results will occur? Neutral risk because many suppliers provide the same components The need to expand the supplier base with redundant suppliers engaged to reduce overall risks to supply chain performance Decreasing exposure to risk Increased exposure to risk

Increased exposure to risk Increased reliance on suppliers in the supply chain increases exposure to risk.

Engineering has suggested that a company's products would provide more value to customers if they were capable of identifying and automatically reporting problems to service and repair associates. The most likely effect of this strategy would be A marketing feature that will facilitate moving selling prices higher More frequent on-site service thus increasing costs overall To enhance the product's order qualifying features Increasing customer up time, reducing customer repair costs

Increasing customer up time, reducing customer repair costs An elevator company has diagnostic capabilities built in to each system so that when an elevator or escalator is installed at a customer's site that a worldwide 24 hour remote electronic monitoring that can detect any one of 325 problems. After notification the system can analyze and diagnose. It then may make the service call to a company service person at the nearest location and assists the mechanic in identification of the part(s) in question. This system helps keep outage times to less than three hours. Design is in the loop too so that they can assess and update as necessary for recurring problems [continuous improvement]. Customers also have access to each of their elevators & escalators performance history.

Which of the following actions may result in unmanageable backlog? Purchase of single-purpose equipment Increasing planned lead time Increasing available capacity Productivity gains

Increasing planned lead time Increasing planned lead time means each job will be on the shop floor longer, which increases WIP, queues and the inability to process jobs faster.

A method for improving customer responsiveness in a distribution environment is Hiring additional sales reps Implementing electronic data interchange (EDI) Increasing safety stock Using cross-docking

Increasing safety stock Increasing safety stock means less chance of stock outs and the ability to react to demand changes; the other responses would not impact customer responsiveness

Which of the following changes is most likely to directly impact the master schedule? Extending the planning time fence by 4 periods Increasing safety stock from 1 to 2 period's demand Reducing the lot size quantity by one-half Shortening the demand time fence by one-half

Increasing safety stock from 1 to 2 period's demand Increasing safety stock will have the affect of pulling orders forward in the schedule, which may result in overload conditions or material shortages; extending the planning time fence will have no affect on demand; reducing the lot size will increase the number of orders but not otherwise change the demand quantity or supply; shortening the demand time fence will reduce the number of orders released to production but will not otherwise change demand or supply.

The reorder point technique is suitable for Dependent items Independent items Make-to-order items High value items

Independent items Reorder point assumes that the demand of an item is independent of other items; the value of items would not be taken into consideration; make to order items would only be ordered when needed.

Which of the following reasons can be used for basing incoming inspection on acceptance sampling? Reduce part unit cost by eliminating the need for a supplier to inspect the part Infer lot acceptability from the sample and take defined actions per the quality plan Determine whether 100% inspection is required to separate defective from good parts Develop a quality history for each supplier part that can be used to evaluate performance

Infer lot acceptability from the sample and take defined actions per the quality plan Sampling is for the purpose of determining lot acceptance or rejection;100% inspection may be done if part of the quality plan.

A make-to-stock company produces a standard product sold through their own warehouses. Which of the following capacity planning techniques would most likely be used to validate the material plan? Load balancing Finite Infinite Load leveling

Infinite Infinite capacity planning is the most common technique; finite capacity would not be required where capacity is very predictable.

Which scheduling technique assumes that there will always be sufficient capacity and computes the schedule starting with the due date for the order? Infinite backward scheduling Infinite forward scheduling Finite backward scheduling Finite forward scheduling

Infinite backward scheduling Most systems attempt to backward schedule first, using infinite planning.

Which of the following is a capacity management plan that tracks performance to the capacity plans? Finite loading Rough-cut capacity planning (RCCP) Input/Output control (I/O) Capacity requirements planning (CRP)

Input/Output control (I/O) With I/O, planned inputs and outputs for each work center are developed by capacity requirements planning and approved by manufacturing management. Actual input is compared to planned input to identify when work center output might vary from the plan. The other answers are incorrect because they contribute to the planned inputs, but do not track performance.

Which of the following types of processes would be most appropriate to use in a production facility where the work centers are organized by the function that they perform? Continuous Intermittent Fixed position Repetitive

Intermittent In intermittent manufacturing, products are made in batches using general-purpose work centers organized by function. Work flows continuously through specialized equipment grouped together in a sequence to make the product. Fixed position manufacturing is used for large, complex projects where the product, such as a ship, is being built in one location. Repetitive manufacturing is a type of continuous flow manufacturing for discrete products (for example, automobile manufacturing on an assembly line).

Variations in product design, process requirements, or order quantities, require which of the following manufacturing processes? Level Project Flow Intermittent

Intermittent Intermittent processes work for those products that have variation in design, quantities, requirements, etc.

Although a company has the capability to produce a strategically important item, a question has arisen about the wisdom of outsourcing the item. In most cases, the decision to outsource, when compared with the item's strategic importance to the firm, is Inversely related Just minor considerations in the overall make or buy decision Decisions best left to marketing management Directly proportionally related

Inversely related Outsourcing and the strategic importance of the process, service or product are inversely related: Outsourcing incentive is low when strategic importance is high.

When competitors attack with a disruptive business model or product whose initial features are simpler and more affordable than established offerings, the best response for the established player is to Offer temporary discounts for existing products Introduce a better product, along with cross selling and up selling existing products Start an immediately aggressive plan to acquire the upstart Wait and see if the competitor is successful or not

Introduce a better product, along with cross selling and up selling existing products Incumbents often fail to counterattack a competitors disruptive advances. For example Craig's List offers free classifieds, and in all but one of the top 50 US metropolitan markets for classified ads Craig's list dominates. What was different about that one metropolitan area? That company responded quickly to the business model threat by launching its own free classifieds site along with other significant changes. [Lessons learned; when faced with a disruptive competitor consider quickly matching the disruptive business model.]

In a process industry, which of the following elements decouple the scheduling of sequential stages? Kanbans Inventory Ropes Queues

Inventory Inventories decouple the scheduling of sequential stages within a process industry.

Prerequisites for a material requirements planning system include Routings and SKU locations Bills of material and routings SKU locations and cycle counts Inventory data and bills of material

Inventory data and bills of material MRP uses product structure data as well as available inventory data to determine any imbalance of supply and demand.

A performance objective of material requirements planning would be a reduction of Purchase orders Queue time Bottlenecks Inventory investment

Inventory investment MRP is concerned with having the correct amount of inventory at the right time; the other responses are not objectives of MRP.

Using phantom bills of material will result in a reduction in Lot sizes and product structures Inventory transactions and lot sizes Inventory transactions and work orders Product structures and work orders

Inventory transactions and work orders Using phantoms means that sub assemblies are noted on the bill of material, but not stocked as assemblies, so do not require inventory transactions; the number of product structures does not change; lot sizes are not relevant to the question.

The use of bar-code technology in a manufacturing environment typically will have the LEAST effect in which of the following areas? Inventory turns Work-in-process accuracy Data entry efficiency Distribution productivity

Inventory turns Inventory turns is a macro-performance measurement that details the number of times that an inventory cycles, or "turns over," during the year. A bar-code technology will have the least impact on inventory turns. In contrast, as inventory record become more accurate, productivity, WIP accuracy, and data entry efficiency are greatly improved.

Which of the following performance areas is unaffected by data timeliness in an assemble-to-order environment using backflushing? Inventory accuracy level Inventory turns calculations Notification of rejected receipt Customer order completion

Inventory turns calculations inventory turns is calculated monthly and unaffected by data timeliness; Accuracy can be affected if transactions get out of sequence; order completion only occurs when jobs are completed; rejected receipts need immediate attention.

Which of the following statements is most true of a one-card kanban system? It uses one combination move/production card The two operations are not in line-of-sight The card quantity is equal to a one-day supply It can use a visual signal instead of a card

It can use a visual signal instead of a card It typically has close operations so the signal may be an empty spot for the next unit(s); the other responses may or may not be true.

End-of-line inspection often fails to improve quality for which of the following reasons? It requires extensive personnel. It disregards the causes of poor quality. Inspectors do not understand quality improvement techniques. It excludes quality circles.

It disregards the causes of poor quality. When a product is inspected at the end of the production process, inspectors do not have a window into possible causes of defects occurring back in the process. Continuous inspection during the production process does not require more personnel, only trained operators, and includes quality circles.

Which of the following statements applies to the lot-for-lot batch sizing rule? It generates orders equal to the net requirements for a given number of periods It may only be used with independent demand It generates orders equal to net requirements in each period It is used for serialized inventory to ensure traceability

It generates orders equal to net requirements in each period Lot-for-lot is a lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period; it may be used for any kind of demand.

Floor stock would not appear on a pick list because: It needs to be available for all employees It is easily misplaced It is always backflushed It has already been issued to production

It has already been issued to production The Dictionary defines floor stocks as "stocks of inexpensive production parts held in the factory, from which production workers can draw without requisitions." Floor stock would not appear on a pick list as it has already been issued to production.

Which of the following statements best applies to the sales forecast development process as it relates to sales and operations planning? It is a check and/or revision of the existing forecast It is only constrained by demonstrated capacity It enables forecasts to be extended to the demand horizon It recognizes that forecasting is an inaccurate process

It is a check and/or revision of the existing forecast The forecast is already in existence so needs to be reviewed and revised if needed; forecasts are not constrained by capacity; the demand horizon extends indefinitely into the future

Which of the following statements is true of utilization? The greater the number of resources, the higher the utilization. The greater the number of setups, the lower the utilization Bottleneck resources are utilized 100% It is possible for utilization to be 100% and not produce anything

It is possible for utilization to be 100% and not produce anything The time could be utilized doing internal setup, which was scheduled; the other responses are either not true, or not always possible.

The drum in the drum-buffer-rope scheduling process serves which of the following functions? It is the communication device for releasing work to the manufacturing process. It provides protection for the shipping schedule. It provides protection to the constraint. It is used to create the detailed production schedule.

It is used to create the detailed production schedule. The drum of the system refers to the "drumbeat" or pace of production. It represents the detailed production schedule for the operation, which is focused around the rate of throughput as defined by the constraint. The buffer protects the constraint from disruptions. The drum sets production to the constraint. The rope pulls production to the constraint for necessary processing.

A company has few products but highly variable order quantities, and uses forward scheduling. Using standard run hours as a basis for calculating completion dates is beneficial because It automatically balances the load across operations It provides a more realistic completion date than using fixed lead times It provides start times knowing queue and setup times It helps to prioritize orders in key work centers

It provides a more realistic completion date than using fixed lead times Run time can be used to load operations based on standard hours/part x order quantity; queue and setup are already known given the forward scheduling approach; the other two responses are not correct.

Which of the following statements about finite capacity loading are true? It does not require knowing the capacity available in each time period It requires recalculating load when the schedule is missed It does not require the ability to determine priorities when loading jobs It is a simpler process than infinite capacity loading

It requires recalculating load when the schedule is missed Missed schedules result in load that must be accounted for when determining available capacity; capacity for each work center must be known, as well as the priority of orders; it is a more detailed process than infinite capacity planning.

A problem of considering reducing rated capacity in order to allow for safety capacity is It shows actual received orders cannot be scheduled if demand warrants it It affects related work centers even where safety capacity is not required Actual utilization and efficiency will cause it to be increased on next calculation Rated capacity cannot be reduced due to the way it is calculated

It shows actual received orders cannot be scheduled if demand warrants it Actual capacity is more important than safety capacity for producing known orders in hand; each work center is calculated independently; demonstrated capacity would be recalculated, but rated capacity is typically fixed.

Visual management supports continuous improvement in which of the following ways? It ensures supervisory control of information. It supports group understanding of goals. It supports formal systems to identify opportunities. It simplifies the steps in process improvement.

It supports group understanding of goals. Visual management is a method of group communication where items such as the status of production, inventory levels, improvement activities, goals, schedules, etc are visually displayed and support the group's understanding. Visual management is an informal system and is not intended to support supervisory control. Visual management may be used to display steps in process improvement, but is not used as a method to simplify the steps.

A company wants to lower costs on products purchased from a single source supplier. The most effective way to accomplish this is to Jointly eliminate waste in the product and share the savings Automate the purchasing process Use facilitators to lead the price negotiations Identify competitor prices to use as incentives

Jointly eliminate waste in the product and share the savings Eliminating waste in the product and process will lower costs, which can then be shared by both parties.

A three-pronged approach to managing quality is the: A3 problem solving technique. triple bottom line. continuous improvement trilogy. Juran trilogy.

Juran trilogy. The quality trilogy, or Juran trilogy, is a three-pronged approach to managing quality proposed by Joseph Juran.

The IT function develops a strategy that calls for increasing use of cloud services. When this comes to the attention of the CEO, the CEO is unhappy. What is the most likely source of the problem? Lack of alignment of the functional strategy with the business strategy. Top management is not directly involved and not monitoring progress Lack of proven project management tactics used during implementation Lack of a robust test plan

Lack of alignment of the functional strategy with the business strategy. Some report that the typical IT project failure rate is between 35 per cent and 75 per cent. Often reasons cited are connected to managerial, implementation or organizational factors. One of the main strategic issues was the degree of alignment and integration between IT strategy and the general strategy of the firm.

The cost that includes the product cost plus the costs of logistics, such as warehousing, transportation, and handling fees is the Landed cost Procurement cost Activity-based cost Total line-haul cost

Landed cost Landed cost is the cost that includes the product cost plus the costs of logistics, such as warehousing, transportation, and handling fees.

The cost that includes the product cost plus the costs of logistics, such as warehousing, transportation, and handling fees is the Landed cost Procurement cost Total line-haul cost Activity-based cost

Landed cost Landed cost is the cost that includes the product cost plus the costs of logistics, such as warehousing, transportation, and handling fees.

To demonstrate support for a quality improvement process, management should provide Consultants Discipline Leadership Financial backing

Leadership Leadership, encouragement and recognition is the role of management.

Understanding the human and environmental aspects and impacts during the life of a product, process or service is called Life cycle analogy Life cycle appraisal Life cycle analysis Life cycle assessment

Life cycle assessment Understanding the human and environmental aspects and impacts during the life of a product, process or service, including energy, material and environmental inputs and outputs.

Locating a customer's operation within a supplier's facility will Always lead to backward integration Likely lead to price gauging from the supplier knowing they have all of the customer's business Likely become a source of employee dissatisfaction when cross company salaries and benefits are discussed off site Likely improve customer performance metrics across the board

Likely improve customer performance metrics across the board When the market again rose they decided to not expand but build...big. Enough room for the largest machine of its kind and enough room to consolidate business and marketing team in the same [focused] facility. Their major customer liked what they saw and awarded them 100% of their orders over the next ten years. Success was achieved from day 1. Unfortunately the customer was 100 miles away. Shipping distance caused a number of problems including some damage in transit and delays in delivery. Eventually the customer / supplier team proposed to the supplier management team that the customer co-locate within a new expanded section of the new facility, again, success from day 1.

A discrete manufacturer's marketing strategy is to be the low-cost, high-quality, high-volume, rapid-delivery supplier. Which of the following manufacturing processes would best fulfill this marketing strategy? Batch Line Jobbing Cellular

Line A line process's strong point is high volume, high quality but usually with narrow effective variety. Batch production is defined as a manufacturing technique in which parts are accumulated and processed together in a lot. Cellular production is a manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell. Jobbing's strong point is very high product variety but with low volumes.

A store orders and receives weekly shipments from a distributor, made up of 20 line items. Which customer service measure is of most value to the store? Line items shipped complete Correct items shipped Transportation costs On-time shipment

Line items shipped complete Because they are only getting one shipment each week, the store is concerned that all the items are included; incorrect items can typically be sold, and are not charged to the store.

Simmons sells a broad range of herbs and spices for health and cooking. The weekly order to the distribution center replenishes the individual items sold each week due to lack of storage capacity. The order may be modified by the store based on upcoming sales promotions or seasonality. Which of the following measures of customer service is of MOST value to the store? On-time shipment Line items shipped complete Order cycle time Correct items shipped

Line items shipped complete While the correct items are shipped, the quantities may be incomplete. The order may arrive on time but not have the proper items or quantities.

Which of the following process choices is likely to simplify the sales and operations planning process? Functional Batch Line manufacturing Lot for lot

Line manufacturing Lines produce at a rate that can be converted into a monthly supply quantity; the other responses may all have significant planning variation by month

The amount of scheduled work ahead of a manufacturing facility expressed in terms of hours of work or units of production is called Load profile Released orders Open orders Load

Load Load is the amount of planned work scheduled for and actual work released to a facility, work center, or operation for a specific span of time.

An overstated forecast results in an overestimate of which of the following elements? Load and inventory Inventory and capacity Backlog and load Capacity and backlog

Load and inventory An overstated forecast will show an overestimated load on production, as well as drive component, subassembly and finished goods inventory to be ordered or produced.

An infinite capacity planning report would typically show what type of load profile? Load based on demonstrated available capacity Load based on maximum available capacity Load based on planned and existing manufacturing orders Load based on rated capacity

Load based on planned and existing manufacturing orders Infinite capacity planning uses planned and firm planned orders as well as the uncompleted operations of scheduled receipt to calculate load requirements, without regard to any kind of available capacity.

Which of the following statements describes how capacity planning provides feedback to material planning for scheduling operations? Capacity requirements planning performs availability checks based on material dates Available load is determined and then material requirements planning dates the orders Load profiles designate time periods and work centers where load exceeds capacity An aggregate load report is used for each work center to identify required order due dates

Load profiles designate time periods and work centers where load exceeds capacity Action messages identify specified order-related actions necessary. It does perform availability checks, that is not the feedback mechanism. Required dates stay the same, planned dates change.

A correct statement about the use of a bottleneck is The best operators should be assigned to the bottleneck Bottlenecks are typically the gating work station Queues are an example of waste and should be kept at zero Loading should account for normal variability and be at 100%

Loading should account for normal variability and be at 100% Bottlenecks may need to be planned to allow for normal variability in the planning parameters; queues should always be maintained at a bottleneck to ensure there is always work; the other responses are not true.

A blanket order can be defined as a Purchase order that includes multiple items Purchase order that includes all the items necessary for a new project Contract with the global headquarters of a supplier Long term commitment with a supplier for the purchase of a quantity of goods

Long term commitment with a supplier for the purchase of a quantity of goods A blanket purchase order is a long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements.

Which of the following contributes the most to a purchasing department's ability to improve supplier delivery reliability? A computerized purchase requisition system Long-term contracts with suppliers Improved relations between expediters and suppliers Use of electronic data interchange (EDI)

Long-term contracts with suppliers Detailing delivery reliability is part of an effective long-term contract negotiated with the supplier. A requisitioning system is part of the internal purchasing process. Requisitions are turned into actual POs. While transmitting purchasing data faster to supplier, EDI does not necessarily mean that the supplier will be shipping on time. In a system where delivery is reliable, the need for expediters disappears.

A component has three qualified suppliers, but none has been designated as the primary supplier. Which of the following lead times should be used by material requirements planning in order to ensure delivery reliability? Average Longest Shortest Historical

Longest The longest lead time ensures that sufficient lead time is provided if that supplier is selected, if the other supplier is selected they receive an order and additional lead time to deliver.

A work order for operation 20 is divided into two lots and runs concurrently on two machines. Which of the following techniques is being used? Lot splitting Lot sizing Lot sequencing Lot overlapping

Lot splitting Lot splitting divides a work order into two lots and runs concurrently on two machines, which reduces manufacturing lead time.

A scheduling method for compressing lead time or to expedite a small quantity is Load leveling Decoupling Batch processing Lot splitting

Lot splitting Lot splitting is dividing a lot into two or more sublots and simultaneously processing each sublot on identical facilities as separate lots.

Which of the following order quantity techniques tends to most closely couple the master production schedule and purchasing performance? Economic order quantity Period Fixed Lot-for-lot

Lot-for-lot Lot-for-lot is a 1 to 1 relationship; the other responses group requirements, and may not be in the master scheduling period quantities.

A make-to-order company has typically used fixed order quantities for its commonly used components. This has resulted in excess inventory over time due to customer changes and new product configurations. The planner should consider which lot sizing techniques to get the problem under control? Fixed period Lot-for-lot Minimum Economic order quantity

Lot-for-lot Lot-for-lot will minimize or eliminate any residual inventory; EOQ will not help as it lags with changes in demand; the other two responses are not lot size techniques.

Which of the following statements about material requirements planning and scheduled receipts is true? MRP will not reschedule but will explode scheduled receipts MRP will reschedule and explode scheduled receipts MRP will reschedule but not explode scheduled receipts MRP will neither reschedule nor explode scheduled receipts

MRP will neither reschedule nor explode scheduled receipts MRP may recommend the rescheduling of a scheduled receipt, but will not automatically reschedule; all components for scheduled receipts have already been exploded.

Which of the following statements about material requirements planning and scheduled receipts is true? MRP will reschedule and explode scheduled receipts MRP will neither reschedule nor explode scheduled receipts MRP will reschedule but not explode scheduled receipts MRP will not reschedule but will explode scheduled receipts

MRP will neither reschedule nor explode scheduled receipts MRP may recommend the rescheduling of a scheduled receipt, but will not automatically reschedule; all components for scheduled receipts have already been exploded.

In a manufacturing environment using a push system, which of the following planning tools would most likely drive the process? MRP-based production activity control Reorder point control DRP-based inventory management Lean-based production methods

MRP-based production activity control In a production environment, MRP is used to identify production and then to push production orders to the plant floor and then to continuously reschedule them until completion. DRP is considered as pull system whereby demand from satellite warehouses is placed on supplying facilities. A lean production system is driven foremost by the demand pull of customer requirements entering the plant. Reorder points are a very poor planning method for production control and should not be used.

Which of the following situations may cause errors in a sales forecast based solely on shipment history? Changes in customer demand Machine downtime Changes in the demand time fence Exponential smoothing

Machine downtime Machine downtime may cause shipments to be missed, even though they were part of customer demand.

Stockouts have occurred due to failures by suppliers to ship on schedule, causing extensive backorders. The past due orders were successfully reduced due to overtime once the parts arrived. The best approach for incorporating this information into the sales and operations planning process for the upcoming month is to Reduce the production plan in the first period to free up capacity for the past due orders Increase the demonstrated capacity in the first period to reflect the use of overtime Maintain the existing approach for developing the production and operational plans Reduce the forecast demand in the first period and replace it the remaining past due orders

Maintain the existing approach for developing the production and operational plans The plan is still valid as the problem existed due to a supplier issue; the production plan should not be reduced due to supplier problems; the forecast cannot be arbitrarily reduced; demonstrated capacity is determined without the use of overtime.

Which of the following relationships are most mutually exclusive? Make-to-order and flow manufacturing Assemble-to-order and repetitive manufacturing Make-to-stock and line production Engineer-to-order and intermittent production

Make-to-order and flow manufacturing Make to order will have some custom engineered parts while flow is continuous with no design required; the other responses all have relationships.

Which of the following lean manufacturing environments is most likely to have the smallest number of subassemblies or semi-finished goods in stock to support ongoing operations and customer service levels? Mass customization Engineer-to-order Make-to-stock Assemble-to-order

Make-to-stock Make-to-stock goods should flow from raw materials to finished goods directly within a lean manufacturing environment. The other choices are all likely to have something in a semi-finished state.

Which of the following types of production environments is most likely to have customer, forecast and distribution demand? Assemble-to-order Make-to-stock Make-to-order Engineer-to-order

Make-to-stock Make-to-stock has forecast and distribution demand, and possibly customer demand; the others typically do not have distribution demand

Which of the following production environments is likely to have the most supplier partnerships where product life cycle is a consideration? Make-to-order Make-to-stock Assemble-to-order Engineer-to-order

Make-to-stock Make-to-stock has high volumes and the greatest need for single sources and strong relationships that focus on product life cycle improvements.

Which of the following concepts support an employee involvement initiative? Management should provide the vehicle to allow employees to solve problems themselves when possible Workers must have access to their supervisors when discussing improvements, and accept their word is final. Employees should act as facilitators, not problem solvers Individual incentive schemes encourage improvement to the process

Management should provide the vehicle to allow employees to solve problems themselves when possible Utilizing employee brainpower and skills to solve problems is part of employee involvement; individual incentives have been found to result in unnecessary work being done to earn the incentive, and do not necessarily improve the process; a worker must know that if he cannot solve a problem with the supervisor, he has the right to escalate.

A company is changing from a make-to-order to an assemble-to-order environment. Which of the following areas will likely change the most? Managing the backlog Internal service measures Customer order service measures Customer feedback

Managing the backlog Moving to assemble-to-order will minimize or eliminate that portion of the backlog

The purpose of first article inspection is to verify the product's Process variability Sustainability Manufacturability Functionality

Manufacturability Auditing the first lot of products manufactured is the first time the quality of the design and process can be reviewed to ensure the product meets the requirements.

Which of the following engineering groups is most involved with a process design quality initiative? Industrial Quality Manufacturing Design

Manufacturing Manufacturing engineers can apply the proper lean principles, quality systems, and use of technology for the process; design engineers are most concerned with product design; industrial engineers are most concerned with methods and standards; quality engineers are concerned with product quality and process capability.

Distribution requirements planning is used for the planning of Manufacturing Transportation Purchasing Sales and operations planning

Manufacturing Ultimately, planned orders from a warehouse become gross requirements in the MPS of either external or internal manufacturing during DRP.

Which of the following actions can be used to design out potential fail points? Increasing the ability to recover. Building in redundancy Mapping processes. Developing corrective action plans.

Mapping processes. Process mapping can aid in the understanding of operations and in identifying where failures may occur so that they can be designed out. Corrective actions and recovery occur after failures, rather than to avoid them. Redundancy means having back-up processes in case of failure.

A company uses rated capacity for capacity requirements planning. Which of the following statements is true? The rated capacity includes regular plus overtime hours Orders will be on time and operations will be well-balanced The planner can schedule up to the theoretical capacity. Material planning may not utilize work center capacity effectively

Material planning may not utilize work center capacity effectively There may be times when demand does not balance with supply; MRP can overload any work center regardless of the type of capacity planning.

The best reason for using planning bills of material in master scheduling is The company is make-to-stock and planning bills match planned production levels Material procurement or productions occurs prior to knowing actual end items Planning bills do not require actual engineering or manufacturing bills of material A single bill can be used no matter how many products are in a product family

Material procurement or productions occurs prior to knowing actual end items Planning bills get necessary components on order until actual configuration is known and allow for flexibility; Actual bills of material are still required for the product; planning bills have nothing to do with planned production levels.

The plan for the production and purchase of components used in making items in the master production schedule is the Sales and operations plan Material requirements plan Capacity management plan Production plan

Material requirements plan The material requirements plan explodes the products from the master production schedule orders to determine the quantities and dates that all manufactured and purchased components are required.

Since capacity has already been validated at the master production schedule level, why is it checked again at the material requirements planning level? Capacity may have changed at the various key work centers Material requirements planning performs a more detailed capacity check at the work center level Master production scheduling uses only key work centers Load may have changed at the various key work enters

Material requirements planning performs a more detailed capacity check at the work center level CRP is a more detailed process than RCCP; master production scheduling doesn't check key work centers, but RCCP does.

Pull systems have which of the following advantages over push systems? End item customer satisfaction is higher Product designs are more robust Material tracking on the shop floor is decreased End item production output is higher

Material tracking on the shop floor is decreased The need for scheduling and tracking movement of materials is minimized or eliminated in a pull system.

The primary goal of Theory of Constraints is: Identifying bottlenecks Elevating constraints Maximize throughput Buffer Management

Maximize throughput The primary goal of Theory of Constraints is to maximize throughput. This is done by identifying bottlenecks, or constraints, elevating them so that they are no longer constraints and sometimes that will include buffering the constraint with either time or inventory.

A common measure of a capacity planning process in a lean environment is Minimal work-in-process between personnel Minimal work-in-process between work stations Minimal work-in-process between operations Minimal work-in-process between work centers

Minimal work-in-process between work centers Work-in-process is a measure of how well the planned buffers between work centers are being maintained and measure the effectiveness of the overall capacity planning process; the other responses are controlled by operations, not by capacity planning.

A company produces make-to-order product families that use common work centers configured in a functional layout. Ship dates are specified by the customer. It is a stable product line in the maturity stage, but demand is erratic. The master scheduler has ongoing problems maintaining a balanced schedule due to randomly appearing overload conditions among the various work centers. A likely cause of the overload condition is Changes in customer orders Missed schedules in production Inaccurate capacity records Late supplier shipments

Missed schedules in production Missed schedules are likely to be a problem due to having a mix of products using the same work centers and meeting customer ship dates; the other responses cannot be inferred from the questions.

A scheduling technique effective for scheduling where several bottleneck stages may exist is Forward-flow scheduling Mixed-model scheduling Mixed-flow scheduling Material-dominated scheduling

Mixed-flow scheduling Mixed-flow scheduling is a procedure used in some process industries for building process train schedules that start at an initial stage and work toward the terminal process stages.

A company produces lawnmowers that come in three horsepowers. Product is produced in lot quantities for retail sales, and assembled to order for direct sales. Which of the following types of bills of material is most likely used for the master scheduling? Modular Common parts Single level Multi-level

Modular Modular bills would allow a percentage to be applied to each of the horsepower options; the others are used for engineering and production, but not for planning.

A direct handoff from one operation to the next such as a customer and supplier located in the same facility will Likely result in additional arrangements this becoming quite complex from a competitive perspective Naturally increase quality levels of finished products Be the root cause of complacency if the customer is always satisfied thus preventing improvements within the process Likely result in close employee friendships thus leading to an overall reduction in the quality of the finished products

Naturally increase quality levels of finished products Supplier co location with a key customer is similar to cellular manufacturing where families of parts are produced within a single line or cell of machines controlled by operators who work only within the line or cell. [Quality defects are discovered almost instantly as product moves from one station to the next. Therefore the process itself drives quality up].

A company produces 5000 end items for distribution and sales. Which information could be evaluated prior to the end of the month in order to streamline the sales and operations planning process? New product review Finished goods levels Forecast accuracy On-time performance

New product review No history exists for new products so the information can be reviewed anytime; the other information is all dependent on end of period figures.

By approving projects that improve the company's performance with their order qualifiers, the company is Likely using the 20 - 80 rule for project prioritization Likely selecting improvement projects based on the Theory of Constraints Spending their money wisely Not going to achieve high levels of competitive benefits

Not going to achieve high levels of competitive benefits No matter how well the company performs at its qualifiers it is not going to achieve high levels of competitive benefits

A company monitors production by knowing what is in process and what the queue time is. Average run time is one hour, and queue times are kept fairly uniform by the planning and scheduling process. Jobs are produced in first in, first out sequence. Which of the following information is easiest for monitoring purposes in this scenario? Number of days the job was in queue Number of jobs in queue, running and waiting Sequence of jobs based on input/output control Priority of jobs based on required date

Number of jobs in queue, running and waiting Knowing the number of days the job is in queue is essentially the monitoring required by the company; the other responses are not relevant for this purpose.

Which of the following quality performance measures is most important to be reported from production? Offline quality related to rework Number of receipts accepted Number of receipts rejected In process common cause quality

Number of receipts rejected Rejected quantities need to be reported to adjust available inventory; the others are all part of standard processing and would not change inventory.

A piece of equipment is incapable of maintaining process control for longer than 4 hours, and has become a bottleneck, due to unforeseen tooling wear. Tool sharpening requires two hours to sharpen and move back into production. Which of the following corrective actions should be done first? Replace the old equipment with new Obtain a second set of tooling Change the material specification and a supplier Loosen the product standards or tolerances

Obtain a second set of tooling Additional tooling means the process stays in operation; changing the tolerances risks end-item quality; the other responses are long term solutions.

When expediting purchased parts that are needed from the supplier before the original due date, a buyer should first try to do which of the following? Offer to de-expedite another part that is needed later than the original due date. Increase safety lead time by one week. Buy all the parts from an alternate source. Offer to pay a premium.

Offer to de-expedite another part that is needed later than the original due date. When expediting work at a supplier, an effective method is to reduce the supplier's load on some other order before expediting an order. Since the supplier has limited capacity, rescheduling out load would be an effective technique to get the supplier to accept the expedite without incurring special expedite costs. While it is an alternative, it most like will result in excess costs because the suppler is not the prime supplier. The buyer should pay a premium only as a last resort. Increasing safety time will not assist in managing the expedite and will, in the long term, result in the purchase of excess inventories.

The envious position of providing a product or service that is very protected from competition Often leads to incredibly sustainable market positions Leads to frequent price increase as the appropriate strategy results in restraint of trade becoming an issue that attracts the attention of government regulators. Causes the company's management to become complacent while products become candidates for competitive dominance

Often leads to incredibly sustainable market positions When a product or service is highly shielded from competitive pressures it often leads to incredibly sustainable market positions.

Two examples of fringe benefit motivational tools for wholehearted employee commitment are On site child daycare and sharing company financial data Personal travel services and sharing top management's personal goals & objectives Sharing sales associates goals and commissions and flex time On site workout facilities and sharing executive financial packages

On site child daycare and sharing company financial data Some non financial reward companies use to enhance employee motivation are:1. provide additional perks & fringe benefits like onsite child care. 2. public recognition. 3. promote from within when possible 3. implementing employee suggestions. 4. Sharing financial data with employees

The best performance measurement to use to obtain higher profitability is Volume production On time completion to schedule Productivity Utilization

On time completion to schedule On time completion to schedule means that what is scheduled is available when it is required, at a quality acceptable to the customer; all the other responses encourage activity, which incur cost and not necessarily extra profit.

A company purchases a high-volume commodity part from three suppliers. Which of the following performance measures is most likely compared by the supplier rating system? Incoming quality On time delivery Quoted lead time Price to cost ratio

On time delivery On-time delivery is probably the only variable. The company will not know the supplier's price to cost ratio. There should not be a quality issue due to it being a commodity.

Most organizations build a scorecard using Key Performance Indicators (KPIs) to track and share transportation performance. Some of these KPIs migh include: Delivery consistency, cost of service, units per transaction Inventory turnover, delivery consistency, back order rate On-Time delivery, delivery consistency, back order rate On-Time delivery, delivery consistency, cost of service

On-Time delivery, delivery consistency, cost of service KPIs that are often used to measure transportation performance include On-time delivery, Quality of service, Cost of service, On-time loading, Delivery consistency, Claims for loss and damage, and Freight bill accuracy. Back order rate, units per transaction and inventory turnover are not transportation metrics.

A data element that can cause the most occurrences of inaccuracy in a master schedule for a particular product is Product mix percentage On-hand inventory Manufacturing lead time Bottleneck capacity

On-hand inventory Inventory data affects projected available balance, available-to-promise and the periods in which an MPS is scheduled.

The validity of the material requirements plan is most reliant on the accuracy of Projected available balance Scheduled receipts Gross requirements On-hand inventory

On-hand inventory The first calculation in the entire process begins with on-hand balance; the other responses are all outputs of either the MPS or MRP.

A company is implementing lean principles, including reducing their supplier base. A key element for the supplier rating system is Lowest cost Kanban cycle time Delivery lead time On-time delivery

On-time delivery On time delivery reliability will be a key performance measure; kanban cycle time is not a precise phase, and kanbans may not be used; delivery time and cost are not as great a factor, especially if suppliers are overseas.

A company uses a chase production strategy to schedule production. A product family consists of ten end items, produced every month. Four high volume units comprise 70% of total production. The two lowest volume units comprise only a very small percentage.How would would the S&OP plan the items in this product family? Four lines for the highest volume units, one for the two lowest and one for the balance One line for the highest volume units, and one for the remaining six products One line for the total number of units with no consideration for mix or volume Four lines for the highest volume units, one for the two lowest and one for the balance

One line for the total number of units with no consideration for mix or volume Regardless of the number of end items, they are all one product family, so they are planned as one line, with consideration for volume.

The projected available balance within the demand time fence is calculated as Opening stock plus MPS orders minus actual demand and production forecast Opening stock plus MPS orders minus actual demand Opening stock minus actual demand and production forecast Opening stock plus MPS orders

Opening stock plus MPS orders minus actual demand and production forecast Within the demand time fence, the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Therefore, the PAB would include opening stock plus MPS orders minus actual demand (customer orders).

In a job shop environment, the technique that results in a short-term planned set of projected completion times for operations and simulated queue levels is Constraint-based scheduling Infinite loading Operations sequencing Capacity requirements planning

Operations sequencing Operations sequencing is a technique for short-term planning of actual jobs to be run in each work center based upon capacity and priorities. The result is a set of projected completion times for the operations and simulated queue levels for facilities.

Due to senior executives having primary responsibility for strategy development, in most corporations The CEO is the primary strategy architect with little influence from others Other senior executives help fashion major elements of the strategy Much "borrowing" through competitive benchmarking occurs The business strategy is formulated first by department heads then fine tuned by the CEO and staff

Other senior executives help fashion major elements of the strategy In most corporations, strategy is the product of more than just the CEO's handiwork. Typically, other senior executives -- business unit heads, the CFO and VP's of production, marketing , HR, and other functional departments have influential strategy-making roles and help fashion the chief strategy components.

The replacement of internal capacity and production with that of a supplier's is known as Buying down Outpartnering Outsourcing Capacity buying

Outsourcing Outsourcing is the process of having suppliers provide goods and services that were previously provided internally.

A company's sustainability strategy first has an impact on Recycling of by-products and co-products Employee attrition Product and process design Employee training

Product and process design In order for sustainability to be an organizational strategy, it must start in the product and process design phase.

When process flexibility becomes a key order winner, the operation should look at Outsourcing to a larger supplier with wider capabilities Outsourcing to many smaller suppliers in hopes that one will have excess capacity when needed A dual strategy of outsourcing and insourcing benefiting from scheduling simplicity Keeping manufacturing in house to provide shorter customer delivery lead times

Outsourcing to a larger supplier with wider capabilities If flexibility is a key order winner, the company should consider outsourcing to a larger supplier with wider capabilities

An advantage of over-forecasting a new assemble-to-order product during the growth phase as it relates to raw material inventory is The planner is assured that any raw material excess will be used eventually Over-forecasting improves customer service by increasing part availability Raw materials are only purchased when actual customer orders offset forecasts There is no relationship between forecasting at the sales and operations level and raw materials

Over-forecasting improves customer service by increasing part availability The growth phase may result in levels that are too low, so excess raw materials buffers against that; there is assurance that the raw materials would all be consumed; the other two responses are incorrect.

Top management's role in implementing total quality management (TQM) includes Hiring outside individuals to drive the implementation process Participating in self-directed work teams Overcoming cultural barriers to employee involvement Aligning the corporate vision with individual needs

Overcoming cultural barriers to employee involvement Top management's role is that of providing the vision and support to drive the program through the organization. That support often comes in the form of breaking down obstacles to the TQM program.

A production plan has established 1000 units in a period for a stocked product family. Specific percentages for end items are not known with certainty. Which of the following alternatives should the master schedule ignore when translating the product family into specific master production schedule quantities? Use a super bill of material to over-plan the percentages in a two-level master production schedule Use a modular bill of material and overplan the options to provide for some uncertainty Make an estimate of the number of actual end items to produce based on history Overplan the end items based on historical deviations to provide for some uncertainty

Overplan the end items based on historical deviations to provide for some uncertainty The end item quantities should not be overplanned as they must equal the quantity in the production plan; the others are all valid approaches.

A firm planned order is used to Manage target inventory levels Override the standard planning parameters that have been defined Allocate material prior to the release of a customer or shop order Schedule a PO contract with a supplier

Override the standard planning parameters that have been defined Firming a planned order can be used to change a particular lot size or lead time that has been defined as a standard, and prevent MRP from manipulating the order.

Material requirements planning has overloaded a work center in a make-to-order company. The most easily adjusted factor is Overtime hours/part Standard hours/person Setup hours/order Scheduled date/part

Overtime hours/part Overtime is the easiest and has the least impact on other orders. Rescheduling the date may impact dates on other orders or components. Setup and standard hours are fixed

Part X has the following information before and after a cycle count. Which of the following statements is true of Part X's inventory accuracy from a financial perspective? Location - Inventory before Cycle Count - Inventory after Cycle Count - % Difference - Allowed % Tollerance L01 - 50 - 80 - +60% - 2.0% L02 - 50 - 20 - -60% - 2.0% Part X monetary value is inaccurate Part X inventory count is accurate Part X monetary value is accurate Part X inventory count is inaccurate

Part X monetary value is accurate The monetary value for part X is accurate, even though the inventory is off at each location. The question asked specifically about the financial perspective.

Which of the following actions would most likely be considered in a push environment to address a missing part problem, but not in a pull environment? Work overtime. Use an alternate routing. Use an alternate part. Partially complete an order

Partially complete an order Orders can be completed to the point of the missing part and then put aside until the part is available; alternate parts would be applicable in either push or pull; the other responses are not part related.

Of the five popular and commonly used capital budget techniques, four common methods are: Independent investment analysis, Internal Rate of Return, External rate of return, Net present value Payback Period, Internal Rate of Return, External Rate of Return and Net Present Value Profitability Index, Internal Rate of Return, External Rate of Return and Net Present Value Payback Period, Accounting Rate of Return, Net Present Value, and Internal Rate of Return

Payback Period, Accounting Rate of Return, Net Present Value, and Internal Rate of Return There are five widely available capital budget techniques.1. Payback Period, 2. Accounting Rate of Return (ARR), 3. Net Present Value (NPV), 4. Internal Rate of Return (IRR), 5. Profitability index.

A supplier receipt has been rejected due to a sampling inspection process. What should production ask the quality department to do in order to keep the material plan valid? Request the material be replaced by another qualified supplier Perform 100% inspection on enough units to satisfy known demand Accept the lot and perform 100% inspection to identify the rejected parts Expedite new replacement materials to the original required date

Perform 100% inspection on enough units to satisfy known demand Sample inspection does not mean all the parts are defective; continuing to inspect may reveal there are sufficient parts to satisfy production requirements; simply inspecting the lot will simply result in more rejects later on; the original required date has already passed; production and quality do not usually have a say in who the supplier is

Attribute sampling has rejected a lot of 200 of a purchased part. There is an immediate need for 50 items for the current week, and 50 more the following week. The supplier has indicated that a new shipment can be made in two weeks for 200 units. Which of the following actions should be recommended by the quality department? Reject the material and update the supplier-part record accordingly Perform 100% inspection until 100 acceptable items are obtained Return the material and add a 2-week safety lead time to future orders Return the material and expedite a replacement quantity

Perform 100% inspection until 100 acceptable items are obtained Since sampling is what was used, there may be enough parts in the entire lot to be used for the 2-week period; the material has already been rejected; the supplier has already indicated the delivery time; adding safety lead time is inappropriate based on one occurrence.

A company is experiencing a change in demand from steady to sporadic. It currently uses economic order quantity (EOQ) to determine purchase quantities for a key component. Which of the following models should it use in the future? EOQ Min-max Period order quantity Kanban

Period order quantity As a product moves from continuous to intermittent demand, a better inventory replenishment tool is a period order quantity where inventory balances are reviewed periodically and quantity purchased up to a specific max quantity. In contrast, EOQ, Min-Max, and Kanban are all based on continuous demand characteristics.

Which of the following situations is most likely to require a forecast of future demand? Introduction of a new manufacturing technology Sole source supplier using allocations by customer Phase-in of a new product family and options Change from functional to flow manufacturing

Phase-in of a new product family and options A new product family has no history so forecasts are used to prepare for expected market demand; new manufacturing technology and changes in environment layout do not change demand; sourcing by allocations requires no need to forecast, only producing what is required

Which of the following computerized system's components is most necessary with a random location storage system? Picking lists with locations Random locator report Storage selection during put away Exception identification report

Picking lists with locations Pickers will not necessarily know the location, FIFO, or other picking rules so logic must be computerized; storage selection can also be done visually.

Consolidated information stored in a single record that contains everything needed to know about a part to plan it effectively is referred to as Plan for every part (PFEP) Product data management Item master Product structure

Plan for every part (PFEP) Plan for Every Part is consolidated information stored in a single record that contains everything needed to know about a part to plan.

Consolidated information stored in a single record that contains everything needed to know about a part to plan it effectively is referred to as Product structure Item master Product data management Plan for every part (PFEP)

Plan for every part (PFEP) Plan for Every Part is consolidated information stored in a single record that contains everything needed to know about a part to plan.

Increasing planned lead times will result in which of the following outcomes? Actual lead times will decrease Work center capacity will increase Planned order release dates will be earlier Load will be decreased

Planned order release dates will be earlier Increasing lead times will cause MRP to call for the release of the order earlier; this in turn will increase the actual lead time as the order becomes work-in-process.

Increasing planned lead times will result in which of the following outcomes? Work center capacity will increase Planned order release dates will be earlier Load will be decreased Actual lead times will decrease

Planned order release dates will be earlier Increasing lead times will cause MRP to call for the release of the order earlier; this in turn will increase the actual lead time as the order becomes work-in-process.

Which of the following orders will production have the most of for planning and scheduling in an assemble-to-order environment? Work in process orders Customer orders Released orders Planned orders

Planned orders Planned orders extend through the planning horizon; the other responses are included in a shorter time frame.

Which of the following statements is true about the material requirements planning process? Planned orders create net requirements for the component Planned orders create gross requirements for components Net requirements create gross requirements for components Gross requirements create net requirements for the component

Planned orders create gross requirements for components Planned orders for a parent become the gross requirements for the component. Net requirements do not necessarily equal planned orders due to lot sizing.

Which of the following targets for effective scheduling does a dispatcher have most control over with respect to improving performance? Planned versus actual completion date Planned versus actual start date Planned versus actual work in process Planned versus actual direct labor hours

Planned versus actual start date Start dates are based on priority and job sequence which is the responsibility of the dispatcher; the other responses are the responsibility of planning and operations.

A bottleneck work station capacity is loaded to 90% of available capacity, but one of the two machines is down for a two-week repair. Which of the following results is expected to occur at operations downstream from the bottleneck? No production orders will be overdue Production will be in synchronous operation Plant capacity will be underutilized Plant-wide queues will increase

Plant capacity will be underutilized Plant capacity is sized for two bottleneck machines and only one is operational meaning half of the plant capacity will be underutilized; orders may very well be overdue; queues will be reduced in the short term and production will most likely not be synchronized.

Which of the following products is most likely to be the simplest to develop a sales and operations plan for? Printers Blue jeans Plywood Ballpoint pens

Plywood Plywood is produced using a continuous process and then cut into lengths; the other products would have more complex product structures and multiple product families

Certification of suppliers enables a company to take advantage of what kind of stocking location? Floor stock Random Point of use Automated storage retrieval

Point of use The supplier is able to deliver directly to the point of use location due to the need for incoming inspection being eliminated.

Direct delivery of material to a specified location on a plant floor near the production line is called Point-of-purchase Point-of-need Point-of-sale Point-of-use

Point-of-use Point-of-use delivery is the direct delivery of material to a specified location on a plant floor near the operation where it is to be used.

Which of the following is an appropriate use of the statement of cash flows for a company? Calculate net income Evaluate the owners' share of the organization Measure the performance of company operations Predict the organization's ability to pay its debts

Predict the organization's ability to pay its debts The statement of cash flows is a financial statement showing the flow of cash into and out of an organization. It helps predict future cash flows, evaluate management decisions, and predict ability to pay debts and dividends. The net income is calculated on the income statement, not the statement of cash flows. The owners' share (owners' equity) is calculated on the balance sheet, not the statement of cash flows. The statement of cash flows does not measure performance.

For a product that has moved from regular production to spare parts supply, which of the following factors is likely to become LEAST important? Customer service Quality Delivery reliability Price

Price Once a product has moved from regular production to intermittent spare parts supply, customer service, delivery reliability, and quality must remain high. Service parts are usually critical to the customer and must be available at all times with perfect quality. Since the product is no longer considered "product" its price can become elastic and based on what the market will bear. Price, therefore, declines as an important factor as customer will pay a premium when equipment goes down.

Maintaining physical control of point-of-use is accomplished by Receipt and issue transactions Limited access Cycle counting Procedures

Procedures Procedures limit the input and control the output based on demand.

Which of the following cost systems rely on costs for a period for determining product cost? Standard costing Process costing Job costing Product costing

Process costing Process costing is a cost accounting system in which the costs are collected by time period and averaged over all the units produced during the period.

Which of the following tools would be most appropriate to use in the measure phase of the six sigma improvement methodology? Implementation plan Cost of poor quality analysis Regression and correlation Process map

Process map Mapping the process is used in the measure phase of the six sigma methodology for improving process effectiveness. The other answers are incorrect because they are used in other phases of the six sigma methodology (evaluate, analyze, and control, respectively).

A presentation of the flow of materials that shows equipment and inventories in a process industry is a Process organization structure Process sheet Process layout Process train

Process train A process train is the presentation of the flow of materials through a process industry manufacturing system that shows equipment and inventories.

A company produces a variety of chocolate products on a repetitive basis to require less cleaning from one product to another. The most likely means of capacity planning is Capacity requirements planning Process train Finite capacity planning Optimization planning

Process train A process train is used in a process industry to represent the flow of materials and plan capacity flow.

Variability refers to a characteristic of Causes Processes Standards Statistical process control

Processes Variability is related to the output of a process as determined by shape, center and spread, measured. Processes are measured to determine the variability of the process.

Having suppliers that are certified via ISO9000 or some other quality standard means Single source relationships can now be established Product quality is assured Suppliers fully understand customer needs Processes are defined and followed

Processes are defined and followed Defined and followed processes are part of ISO9000; the others are possible, but not guaranteed.

A company aware that their processes are suboptimal cannot initiate improvement until A crisis of grand proportions reveals the true need for improvement Those employees who do not agree with the concept are fired Employee financial incentives are introduced Processes are documented, value streams identified and shared with representatives from all departments

Processes are documented, value streams identified and shared with representatives from all departments The company wanted to improve the speed and efficiency of its technology rollouts. They knew that many functions were sub-optimal. When value streams were defined [presumably value stream mapping was used], and a sharing of knowledge occurred simultaneously with all groups together discussing the issues that the company was able to identify the specific functional processes that delivered value to customers. Once identified [shared] they were able to improve them.

Which of the following actions will a company most likely take as a primary focus of their level production strategy to deal with demand peaks while meeting standard lead time delivery? Produce ahead Work overtime Subcontract Level load demand

Produce ahead Building up inventory is used to buffer peak demands; working overtime is unlikely to be a primary focus; level loading is already indicated; subcontracting might be an option, but cannot be inferred

Increasing yield of a product reduces Finished goods inventory Product cost Kanban size Queue time

Product cost If yield is increased, less materials and operation time is necessary, which reduces the cost of the product; queue time is not dependent on lot size; kanban size and inventory levels would remain the same.

Loads in capacity requirements planning in a well-run company are fairly balanced in the short-term but are dropping off later in the planning horizon. The most likely reason is Past due orders are filling up the short term capacity The master production schedule excludes forecasts The capacity requirements planning horizon is too short Product demand needing the work center is dropping off

Product demand needing the work center is dropping off Load dropping off is an indication that planned work is dropping off, product being phased-out etc.; the other responses infer that the company is not using the tools correctly, but the question states the company is well-run.

Which of the following scenarios are most indicated in a participative design environment? Standard parts are used in order to reduce inventory costs Product designs are lowest in cost due to combined engineering Parts are low in cost and lead time, and high in quality Product design is performed in parallel with process design

Product design is performed in parallel with process design Participative design means the product and process are designed in parallel; the other responses are true, and are results of participative design.

Which of the following elements is used by capacity requirements planning to determine total load on work centers in a job shop environment? Demonstrated capacity Schedule accuracy Product routings Customer orders

Product routings Routings tie actual and planned orders to work centers for load planning.

The basic requirement of the design of a manufacturing process is to meet Line balancing Management cost objectives Production schedules Product specifications

Product specifications Producing the product or service to the specifications is the goal of the process design.

Significant reductions in which of the following lead times has the most positive impact on material planning? Production lead time Cumulative lead time Supplier lead time Cycle lead time

Production lead time Significant reductions in production lead time indicates the company is implementing improvements in several areas This simplifies material planning. Cycle time would be helpful but there is no indication where the inventory is held. Cumulative lead time reduction is also helpful, but we do not know the magnitude.

Which of the following reporting points is of most use when determining run times? Move complete Production order complete Partial quantity complete Setup complete

Production order complete Run time is calculated by multiplying the run time per piece by the size of the order. Knowing when the order is completed can provide the run time per peice; the other reporting points don't give the planner sufficient information.

Which of the following planning techniques only indirectly affects material and capacity planning? Final assembly schedule Order configuration Production plan Master production scheduling

Production plan The production plan is stated in terms of families; the other responses are all inputs to MRP

Which of the following statements about production planning is true? Production planning is a process a company uses to plan its resources to change either backlog and/or finished goods inventory. Production planning should be processed on a weekly basis and in detail by unique end items The production plan should be frozen for at least the cumulative lead time of the product Production plan families are broken down into MRP items and the time frame changed to days or weeks

Production planning is a process a company uses to plan its resources to change either backlog and/or finished goods inventory. The production plan does not get frozen, and should be done on a monthly or quarterly basis by product group or family; it is broken down into MPS items.

Reducing the levels on the bill of material reduces Schedule flexibility Material costs Work in process Production reporting activities

Production reporting activities Reducing the amount of subassemblies within the bill of material reduces the times reporting has to be done; the other response would not be impacted.

A make-to-stock company is considering improving their customer service level through a combination of shipping from finished goods and shipping from final assembly. Which of the following inventory management considerations is most important to this new strategy? End items being considered Production responsiveness Manufacturing environment Customer service level

Production responsiveness The key is whether production can receive and ship an order in the lead time quoted to customers. Customer service level is already known to be too low. End items and the make-to-stock environment may be considered, but not until later.

Overhead is allocated based on direct labor at a company maintaining a stable workforce with varied production rates. Which of the following incidents most likely occurred when overhead is under absorbed in month 2 as compared to over absorbed in month 1? Production volume was less Overhead was less Direct labor was more efficient Product unit cost was less

Production volume was less Less direct hours due to lower production volume would cause overhead to be under absorbed.

The maximum output capabilities of a resource is known as Maximum capacity Rated capacity Productive capacity Protective capacity

Productive capacity Productive capacity is the maximum of the output capabilities of a resource or the market demand for that output for a given time period.

Utilization is the ratio of Standard hours to productive hours Hours per shift to hours per day Scheduled hours to productive hours Productive hours to scheduled hours

Productive hours to scheduled hours Utilization is the ratio of time used in production activities to the clock time scheduled for those activities.

A term used to mean the actual output of production compared to the actual input of resources is Efficiency Input/output control Utilization Productivity

Productivity Productivity is an overall measure of the ability to produce a good or a service. It is the actual output of production compared to the actual input of resources.

BigRig Company custom designs, manufactures, and constructs offshore oil drilling platforms. Production processes include fabrication of structural steel, loading on barges, and final assembly of the platforms near the drilling site.Which of the following techniques would BigRig's production planning and control function be most likely to use? Program evaluation and review technique Kanban Minimum order quantity replenishment Capacity requirements planning

Program evaluation and review technique BigRig produces products that are unique and highly customized. As such, BigRig's production environment is engineer to order. Since the products being made are run through projects, the PERT technique would be the most appropriate planning and control tool.

A network analysis technique in which each activity is assigned a pessimistic, most likely, and optimistic estimate of its duration is called the Work breakdown structure Project plan Critical path method (CPM) Program evaluation and review technique (PERT)

Program evaluation and review technique (PERT) The program evaluation and review technique (PERT) is a network analysis technique in which each activity is assigned a pessimistic, most likely, and optimistic estimate of its duration.

BigRig produces products that are unique and highly customized; which of the following methods for costing should be used for each rig they produce? Direct costing Standard costing Activity-based costing Project costing

Project costing BigRig produces products that are unique and highly customized. As such, BigRig's production environment is engineer to order and produced through projects. In this environment project costing is the appropriate model.

Trend extrapolation is used in forecasting in which of the following ways? Permitting easier graphing of the forecast Identifying cyclical patterns Identifying the presence of seasonality in product demand Projecting the long-range movement

Projecting the long-range movement Once a forecast is computed, extrapolation refers to the process of extending that forecast out x-number of periods into the future.

An assemble-to-order company produces subassemblies based on actual customer orders, and stocks the most commonly sold configurations. Planning occurs on a weekly basis. Safety capacity would be used to Buffer against emergency replenishment subassemblies Minimize the need to provide safety stock for late deliveries Provide an opportunity to replenish finished goods stock Provide for orders received between material planning cycles which exceed current load

Provide for orders received between material planning cycles which exceed current load Safety capacity is used to provide extra capacity for unplanned activities; replenishment of finished goods would not be a reason to use safety capacity; safety lead time is used to replace safety stock.

The role of upper management in a quality organization is to Facilitate the quality teams Hire outside resources to provide quality oversight Supervise the quality functions and activities Provide resources and training for quality activities

Provide resources and training for quality activities The main role for upper management is to provide the resources for quality activities and provide training in quality methodology.

Executives in hopes of achieving strategic goals may Pit one department or group against another in hopes of instilling competition Engage specialists to lobby the government in hopes of attaining special tax breaks Provide resources only for those projects that facilitate accomplishing strategic goals Initiate a public relations organization to advertise the company's strategic objectives

Provide resources only for those projects that facilitate accomplishing strategic goals Compensation packages at many companies have increasingly rewarded executives for short term performance improvements- most noticeably achieving quarterly and annual earnings targets and boosting stock prices by specified percentages. [This ] often motivates them to take unwise business risks to boost short-term earnings...The focus on short term performance has proved damaging to long-term company performance and shareholder interests.

A focused competitive strategy would be best described as: Providing products that are unique in ways that are valuable to a wide range of customers Providing products to a narrow piece of the total market Providing lower costs than rivals in incorporating upscale attributes Providing low cost leadership

Providing products to a narrow piece of the total market A focused competitive strategy means that a company would "focus" its products and marketing efforts to appeal to a narrow market segment where it feels it has an overwhelming competitive advantage. Low cost leadership is normally used to compete in a mass market, not a narrow market. The products and service offering a targeted at a narrow and not a broad market segment. The marketing strategy is not to compete with low cost products but rather to offer unique products that match exactly the market segment requirements. Competition could be focused on product attributes, but not on low costs.

Production orders are riskiest to dispatch without knowing Operator availability Information availability Equipment availability Purchased part availability

Purchased part availability Purchased parts are from an outside source and hardest to control; the others are internal factors which can be controlled by prioritization and sequencing.

After reviewing production for a particular product family over the past six months, the master scheduler is recommending that the demand time fence be moved out one period. Which of the following sales and operations planning team members could be excused from the discussion and decision making? Sales Senior management Production Purchasing

Purchasing Changing the demand time fence does not impact purchasing lead times or POs; sales and production may need to request changes to management during the additional period; senior management will have an extra period to approve changes; production has an extra period where their schedule and priorities are less likely to change.

A key reason for asking purchasing to be involved in the design of a new product is that There will be a need for buyers to understand specifications Buyers have design expertise with the product family Purchasing has established relationships with key suppliers A number of key components will need to be purchased

Purchasing has established relationships with key suppliers Early involvement with key suppliers can help as product is designed.

A problem with evaluating master scheduling and purchasing performance as they relate to each other is Master scheduling uses rough-cut capacity planning to test for schedule feasibility, but this does not test for supplier capacity Purchasing may have to do a great deal of expediting, incur premium costs for freight and change priorities of other orders to make the MPS appear feasible Master scheduling only has one order per period to use for performance evaluation but purchasing may have hundreds of orders for the same period Purchasing places orders based on reliance on a forecast in those periods near the time fence, but master scheduling is not responsible for the forecast

Purchasing may have to do a great deal of expediting, incur premium costs for freight and change priorities of other orders to make the MPS appear feasible Feasibility should be measured with normal effort; the two functions are typically not compared to each other.

A company that makes decisions at and fulfills their distribution network from a central location uses which of the following systems? Pipeline Push Perpetual Pull

Push Stocking decisions are made centrally and then pushed to the warehouse.

Negotiating purchase order prices is resulting in the delay of procured materials. To minimize this problem, the buyer should Include negotiating capabilities as part of supplier performance measurements Increase order quantities so fewer orders are required Increase purchasing lead times for future orders Put together long-term contracts and purchase agreements with key suppliers

Put together long-term contracts and purchase agreements with key suppliers Negotiating purchase order pricing can be eliminated with purchase agreements and long-term contracts with suppliers; increasing order quantities and purchasing lead times will result in higher inventory levels and increase costs.

A technique useful for aggregating and disaggregating forecast demand is Focus forecasting Pyramid forecasting Demand forecasting Trend forecasting

Pyramid forecasting Pyramid forecasting enables management to review and adjust forecasts made at an aggregate level and to keep lower level forecasts in balance

An action that most supports the principle that quality of information between a customer and supplier leads to product quality is Product tolerances are specified at 6 sigma levels The supplier uses statistical process control on key tooling for the product Drawings are done with the accuracy of Computer Aided Drafting (CAD) Qualified personnel in both companies have reviewed the specifications and requirements

Qualified personnel in both companies have reviewed the specifications and requirements Both parties must understand the requirements.

Which of the following performance measures of a distribution network best lends itself to continuous improvement initiatives? Cycle time Operating costs Asset utilization Quality

Quality Quality includes late, damaged and incomplete deliveries, and are ongoing; the other responses are functions of the level of business and are relatively fixed.

The House of Quality is part of which of the following processes? Quality Function Deployment Statistical process control Acceptable quality level Supplier quality assessment

Quality Function Deployment HOQ is part of the quality function deployment (QFD) process and forces designers to consider customer needs and the degree to which the proposed designs satisfy these needs.

Which of the following techniques would provide the most comprehensive evaluation when designing a new product? Consumer surveys Benchmarking Prototyping Quality Function Deployment

Quality Function Deployment QFD helps ensure that the wants, needs and expectations of the customer are reflected in the design of the product.

Quality Function Deployment is an example of Quality at the Source Reduction of variability Cost of quality Total Employee Involvement

Quality at the Source Quality at the source is the responsibility to provide 100% acceptable quality material to the consumer of the material. QFD provides a benchmark for determining what is considered acceptable quality.

A supplier that provides 100% acceptable quality products is providing Quality at the source Quality Function Deployment Statistical quality control Perceived quality

Quality at the source Quality at the source is a producer's responsibility to provide 100% acceptable quality material to the consumer of the material.

Waste at the supplier can be eliminated by using Joint replenishment Acceptance sampling Quality at the source Vendor-managed inventory

Quality at the source The objective of quality at the source is to reduce or eliminate shipping or receiving quality inspections and line stoppages as a result of supplier defects.

Which of the following methodologies would be most appropriately used during the design of a new product to ensure that it meets the customer needs? Concurrent engineering Quality function deployment (QFD) Quality at the source. Early supplier involvement (ESI)

Quality function deployment (QFD) QFD is a methodology to ensure that all major requirements of the customer are identified and then met or exceeded through the design of the product. Concurrent engineering refers to the simultaneous participation of all functional areas of the firm in the product design activities, but not specifically in regards to meeting customer needs. ESI is the process of involving suppliers early in the product design activity. Quality at the source refers to post-design quality.

Which of the following tools is used to translate customer needs into product features? Critical-to-quality characteristics (CTQs) Quality function deployment (QFD) Process map Pareto chart

Quality function deployment (QFD) QFD is a methodology to identify major requirements of the customer so that customer needs can be met by product features. Answer A Pareto chart is a graphical tool for ranking causes from most significant to least significant. CTQs represent customer expectations for a product, but are not used to translate customer needs into product features. A process map is a diagram of the flow of a process.

A company produces a household appliance in a highly competitive market. Which of the following quality commitments is the customer most interested in? Product features Quality of conformance Product warranty Quality of design

Quality of design Quality design includes performance, functions, features and options; quality of conformance is expected by the customer; Product features are part of quality design; Warranty is no assurance of quality.

A typical supplier performance evaluation would rate suppliers on their ability to meet delivery dates and Transportation needs Quote promises Quality specifications P:D ratios

Quality specifications The supplier must be capable of producing items that meet quality specs. The supplier may or may not be responsible for setting up the transportation to get goods to the customer.

Risk assessment prior to offshoring or outsourcing should analyze as a minimum which of the following five attributes? Quality, intellectual property, infrastructure, employee attitudes, cultural differences Quality, data security, loss of control, financial exchange rates, delivery lead-times Quality, data security, loss of control, employee attitudes, cultural differences Quality, data security, loss of control, employee turnover, cultural differences

Quality, data security, loss of control, employee turnover, cultural differences In a recent Offshoring survey it was revealed that in order these attributes were of concern when offshoring: Quality, Data Security, loss of control, high turnover, cultural differences

A company sells a product that has fairly steady sales throughout the year. The company is using lean manufacturing initiatives to improve quality, reliability and cost, and expect sales to remain steady for some time. Forecasting characteristics for this product should include Quantitative and extrinsic Qualitative and extrinsic Quantitative and intrinsic Qualitative and intrinsic

Quantitative and intrinsic History, trend and annual sales data should be used

Feedback of production information in a company using kanbans is most likely to exclude: Scrap by quantity and operation Quantity produced in excess of target Number of units that were reworked Production quantity completed

Quantity produced in excess of target Overproduction beyond what is needed to complete a kanban quantity is not allowed.

Which of the following information is out of the machining department supervisor's direct control? Operator assignments Tooling availability for jobs in queue Rated capacity of the work center Sequence of jobs to be run

Rated capacity of the work center Rated capacity is a calculation used for load planning; the other responses are all supervisor responsibilities.

Which of the following actions invalidates acceptance sampling for purchased items? Multiple lots from the supplier are received together but inspected separately The sample quantity is specified by the computer and randomly selected per the quality plan The sample quantity is selected based on the lot quantity indicated on the packing slip Receipts from multiple suppliers are included in the inspection lot to speed up the process

Receipts from multiple suppliers are included in the inspection lot to speed up the process Multiple suppliers have different processes, so materials must be inspected for each.

Material requirements planning has identified 20 C-item purchase orders that should be de-expedited by two weeks. Each order averages a two-month supply. Which of the following actions is most appropriate for the planner to take? Release the de-expedite message to the buyer Release change orders to the buyer and supplier Release the de-expedite message to the buyer and supplier Receive the materials on the original due date

Receive the materials on the original due date These are C items and of low value. It will cost more to de-expedite 20 purchase orders than to simply receive them, as there will be little impact on carrying cost.

An organization converting from a process-focused facility to work cells will most likely experience which of the following? Reduced excess capacity A less focused, unstable workforce Increased in-process inventory Reduced manufacturing lead times

Reduced excess capacity Building products in smaller lot sizes will reduce process lead times. Work cells usually will reduce not increase WIP inventory. The workforce will be focused on performing multiple tasks in a dedicated production cell environment. As processes are better focused, utilization and efficiency measurements become less important, and smaller lot sizes are being built, excess capacities might appear.

Which of the following statements best explains how lean initiatives improve inventory accuracy? Bill of material levels are consolidated Backflushing is more accurate than issues Personnel are formally trained on procedures Reduced inventory levels mean less chance of transaction errors

Reduced inventory levels mean less chance of transaction errors One major cause of inventory inaccuracy is the number of individual transactions being processed. Using lean principles of point-of-use, as well as less inventory, would minimize the chance for error; consolidating bill of material levels does necessarily improve accuracy; backflushing is no more accurate than individual transactions.

An organization converting from a process-focused facility to work cells will most likely experience which of the following? A less focused, unstable workforce Increased in-process inventory Reduced excess capacity Reduced manufacturing lead times

Reduced manufacturing lead times Building products in smaller lot sizes will reduce process lead times. Work cells usually will reduce not increase WIP inventory. The workforce will be focused on performing multiple tasks in a dedicated production cell environment. As processes are better focused, utilization and efficiency measurements become less important, and smaller lot sizes are being built, excess capacities might appear.

Which of the following benefits of setup reduction is most immediate? Reduced work in process Improved quality Reduced product cost Reduced queue time

Reduced product cost The time it takes to setup a product has a direct cost that is a component of the overall cost of producing the item. Not only is the cost of setup reduced, but also the lot size produced can be reduced along with queue and lead times. When the setup time is reduced, it will immediately reduce the overall cost of the product. The other answers will also occur with a reduction in setup, but not immediately. These improvements will occur over time as a result of setup time reduction.

Machine utilization can be increased by Increasing product changeovers Increasing efficiency Reducing lot sizes Reducing unplanned downtime

Reducing unplanned downtime The longer the machine is operating, the greater the utilization; more changeovers will lessen the utilization; increasing efficiency may mean there is less of a need for the machine to run at 100% utilization, especially in a pull environment.

A company produces and distributes three families of basic materials that are sold directly to manufacturers. The industry is very competitive and the growth rate is low. Which of the following would be the most appropriate focus for the operations strategy in this situation? Increasing speed of production. Reducing waste in operations. Reducing lead time variability. Increasing operating flexibility.

Reducing waste in operations. The performance objectives for a company differ depending on the type of business. In this situation, with a business that produces standard, basic products in a competitive environment, the focus of the operations strategy will likely by cost reduction and efficiencies, which can be improved by reducing waste in operations.

A benefit of supplier involvement early in the product development phase is Higher profitability for the supplier Decreased purchasing lead time Increase in the product life cycle Reduction in process design time

Reduction in process design time Having the supplier involved during the development phase shortens the time it takes to validate that the design being considered is manufacturable by the supplier.

Which of the following techniques is best for relating one set of forecast economic data to another set of economic data? Moving averages Trend analysis Exponential smoothing Regression analysis

Regression analysis Regression analysis is a statistical technique for determining the best mathematical expression describing the functional relationship between one response and one or more independent variables

A forecast technique used to define the relationship between two or more variables, used to predict one variable over another is Regression analysis Trend analysis Normal distribution Exponential smoothing

Regression analysis Regression analysis is a statistical technique for determining the best mathematical expression describing the functional relationship between one response and one or more independent variables.

Product positioning refers to a product's Relationship in the marketplace based on its features Relationship in the production facility based on similar products Relationship to other products based on total sales Relationship in the distribution network based on its customer base

Relationship in the marketplace based on its features Product positioning is the marketing effort involved in placing a product in a market to serve a particular niche or function.

If an annual contract is in place, the supplier is notified of the delivery amount required by means of a Advance shipment notification Blanket order Release Purchase order

Release Monthly, weekly or daily quantities needed are communicated via releases, which may be in the form of a kanban.

A master schedule with too short a horizon will result in The need to allocate materials to orders further into the future Less master production schedule flexibility Release past-due messages on planned material orders Release past-due message on planned assembly orders

Release past-due messages on planned material orders If the master production schedule is too short, purchase orders will generally have to be placed in less-than-normal lead time.

One method for increasing throughput is Using group technology Delivering materials to point of use Increasing order sizes to minimize setup Relieving bottleneck work centers

Relieving bottleneck work centers Bottleneck work centers determine throughput time for the entire product line; minimizing setups through order sizes and group technology, or having components stored at point of use, will not impact throughput if bottlenecks still exist.

Which of the following actions is most likely to be a quality initiative at an operation? Removing non-conforming parts from the line at the operation where a defect occurs Ensuring 100% quality at the source of incoming inspection Removing defective products from the line at the point where the defect is found Encourage employee involvement and improvement programs.

Removing non-conforming parts from the line at the operation where a defect occurs A defect needs to be detected and removed where it occurs; inspection won't solve the problem. Removing defects where they are found may be remote from where the problem occurred. Employee involvement and improvement programs can be important, but are not directly initiatives at an operation.

Which of the following activities is a reportable occurrence by production? New equipment installation Repair of existing equipment Preventive maintenance Downtime for tooling change

Repair of existing equipment Repair of existing equipment affects capacity and needs to be reported; preventive maintenance is accounted for in rated capacity; new equipment would not be in a capacity calculation yet; tooling changes are accounted for in setup.

A company is performing a quality audit on a supplier that is process-oriented and has an excellent reputation. The company should audit which concept at the supplier? Maintainability Repeatability Flexibility Capability

Repeatability Even if the supplier is known for quality, the customer may not know if the quality is in the process, or a result of inspection; the other responses are implied because they are a process-oriented supplier, and would have been checked at the time of supplier selection.

A company produces a high-volume electronic assembly using a series of dedicated production lines. This is an example of which process environment? Batch Continuous Repetitive Job shop

Repetitive Dedicated production lines for high-volume demand is repetitive manufacturing.

The line balancing approach to capacity management would be most appropriate in which of the following production environments? Repair Intermittent Project Repetitive

Repetitive Line balancing, which balances the assignment of tasks to minimize workstations and idle time, is most appropriate in a repetitive manufacturing environment that repeatedly produces the same discrete product or family of products. In intermittent production, jobs pass through functional departments in lots. In a project layout environment, the product to be manufacture is stationery and workers come to the site to work on it. The line balancing approach does not apply to repairs, which are typical done on individual units.

Which of the following complications exist for the movement of materials from the point-of-use to the point-of-fit in a pull system that supports a mixed-model schedule? Replenishment may not be the same item as was just consumed Movement may require an individual other than the operator Timing of the authorization to move the material may be off Material handling moves may not be synchronized with the schedule

Replenishment may not be the same item as was just consumed What is needed next may be different due to mixed-model.

Using a planning horizon shorter than the longest cumulative lead time may result in Increased throughput A reduction of work-in-process A decrease in inventory turns Replenishment orders released with short lead times

Replenishment orders released with short lead times If the planning horizon does not extend far enough out for long lead time items, the planned order release will fall in the current period, with a message that the release is past due.

Using a planning horizon shorter than the longest cumulative lead time may result in Replenishment orders released with short lead times A reduction of work-in-process A decrease in inventory turns Increased throughput

Replenishment orders released with short lead times If the planning horizon does not extend far enough out for long lead time items, the planned order release will fall in the current period, with a message that the release is past due.

Which of the following approaches can streamline the sales and operations planning review process? Generate reports that show full detail and associated aggregations Only add additional months to the rolling plan when necessary Delegate the reviews among the demand team Report only out-of-tolerance conditions with further detail available

Report only out-of-tolerance conditions with further detail available It is most important to identify and assess out-of-tolerance conditions; reviews should come from the relevant functional areas; the planning horizon should be consistent to allow for long range planning if necessary.

A firm develops the sales and operations plan for a horizon of 18 months. The first two months are frozen. Changes of up to 5% in either supply or demand for a product family are allowed in months 3 through 6. Changes from 5% to 10% in supply or demand are allowed in months 6 through 12. The operations plan indicates that the critical resources are fully committed for the first 12 months of the horizon. The sales staff has requested an 8% increase in the demand plan for one product family in month 9. Which of the following responses to the sales request is most appropriate? Determine whether capacity can be added in time to meet the demand. Accept the request because the change is within the 5% to 10% limit for a product family. Require a corresponding decrease in the demand plans for other product families. Reject the request because capacity is fully committed and the increase cannot be met.

Require a corresponding decrease in the demand plans for other product families. Since the request is beyond the 6 month boundary, the change can be accommodated. However, since capacities are fully booked, the only option available is to decrease demands for other products to accommodate the increase to the product family. There is insufficient capacity available to simply accept the change. There is no increase in capacity possible. It may be possible to decrease other product families and accommodate the proposed change.

A company has been a preferred supplier for a number of years for several parts. Which of the following information is of most importance on a purchase order? Required part number Required terms/conditions Required order quantity Required order due date

Required order due date With a preferred supplier, most of the information is already known, except for the due date for the next order.

A company's suppliers are set up with specific delivery windows of days, weeks, or months within which they must deliver parts. The most likely information the supplier needs for each release is Required quantity Delivery window Delivery timing Required date

Required quantity If the delivery window is set, the window, date and timing are known; the quantity will likely have some variation window to window.

A company operates a strict pull system with their suppliers with shipments every two, four and eight hours. A third party logistics supplier manages all incoming and outgoing shipments. Which of the following delivery performance measures is most likely to incorporate a tolerance to allow for uncontrollable conditions? Required advance shipping notice Required date Required carrier Required time window

Required time window Weather and traffic conditions cannot be controlled, so acceptable time windows need to be provided including tolerances; the others would have -0- tolerance.

An authorization to the purchasing department to purchase specified materials in specified quantities within a specified time is a Request for quote Requisition Planned Order Purchase Order

Requisition A purchase requisition is an authorization to the purchasing department to purchase specified materials in specified quantities within a specified time.

An information system implementation project is six months behind schedule because many people involved with the project are working on a serious problem with product quality. Which of the following actions should the executive steering committee take in this situation? Let the project manager handle the problem and get the project back on schedule. Contract with an outside systems and consulting group to implement the system. Reschedule implementation efforts based on the resources currently available. Cancel the system implementation because it is adversely affecting product quality.

Reschedule implementation efforts based on the resources currently available. The executive sponsors of the project need to get the project restarted. This will probably mean that schedule dates, costs, and resources will need to be changed from the original plan. The project manager will not have enough power to get the project restarted. Turning the project over to a third party is a very negative option that does not get to the root of the problem. Cancelling a project underway is a very expensive and negative solution. It will usually mean the cancellation of company strategies based on the anticipated utilization and efficiencies arising out of the implementation.

Which of the following benefits is the best use of a material requirements planning simulation capability? Evaluating the number of standard deviations to protect via safety stock Rescheduling orders to resolve a key work center overload problem Determining the effect of the master production schedule on a bottleneck Determining the optimal order quantity required to maximize inventory turns

Rescheduling orders to resolve a key work center overload problem MRP modeling is for the purpose of establishing the best schedule possible within the given constraints of demand and supply.

Which of the following actions is most likely to produce a high degree of sustained inventory data integrity? Resolving problems exposed by cycle counting Changing cycle counting methods periodically Increasing frequency of cycle counts Making periodic physical inventories

Resolving problems exposed by cycle counting Operations can count inventory as many times as they want, but variances will never disappear until the root cause of a variance is fully investigated and the process changed to eliminate the variance from occurring again. Increasing the number of times items are counted or changing the cycle count procedures will not solve the root cause of why variances in the counts have occurred. A periodic physical inventory does nothing to identify root-cause problems of count variance.

Processes for identifying, assessing and managing the environmental, social, and ethical risk in the supply chain are elements of Responsible procurement Risk response planning Fitness for use Green reverse logistics

Responsible procurement Responsible procurement is assuring the use of ethical sources of goods and services, to bring about a positive impact and minimize the negative impact on society and environments.

When a company seeks to measure the success of a change from breakthrough as contrasted with a continuous improvement change they should see The company's ROI improve from both improvement task completions The company's gross income improves from both improvement task completions Results in profit vs. better process results Results in better process vs. better employee morale

Results in profit vs. better process results Change strategies can be categorized into general groups: Continuous improvement, and breakthrough improvement. Breakthroughs are rarely inexpensive, often disruptive of existing work processes, frequently involving changes in product/service or process technology. Continuous change assumes more and smaller incremental improvement steps.

An assembly line consists of a combination of paced automated and manual operations. An element that interferes with achieving an average time is Rework on the line Cross-training Line balancing Mixed model scheduling

Rework on the line Rework will slow down all units on the line; the other responses contribute to achieving an average takt time.

Managers must consider which of the following basic types of risks? Risk associated with negative results and risks that may have either negative or positive results Risk that have been fully defined and those that have been historically documented Risks that cannot be avoided and risks that can be avoided Risks with losses very difficult to quantify and risks that are variable based on a number of unknowns

Risk associated with negative results and risks that may have either negative or positive results Speculative risk differs from pure risk in that pure risk is associated with only negative results while speculative risk sees opportunity for both negative and positive outcomes

A technique for manufacturers and retailers that experience high variability in demand for their products to buffer the overall burden of having to deploy inventory for each product is called Bundling Consolidation Value chain initiative Risk pooling

Risk pooling Risk pooling is a method often associated with the management of inventory risk.

To mitigate a potential catastrophic failure, companies may resort to executing Risky company life or death plans Backward integration plans Forward integration plans A new round of stock buyback programs

Risky company life or death plans A US owned amusement park in Paris France was failing so badly in its fourth month of operation that it was close to bankruptcy and banks resisted loan restructuring. An ultimatum was formulated; "restructure our loans or we'll close." The banks relented thus saving the park.

A closed loop approach for measuring the success of problem solving is Root cause analysis and corrective action Benchmarking and implementation Training and performance improvement Data gathering and Control charting

Root cause analysis and corrective action Metrics must be in place to measure the success of solving the problem, and create a continuous loop of continuous improvement.

One method to increase machine utilization is to Run orders with similar setup together Reduce lot sizes Increase preventive maintenance time Run the largest quantity orders first

Run orders with similar setup together Combining similar setups will allow the machine to have less downtime, therefore increasing utilization.

Which of the following measurements is typically calculated for each production order? Efficiency Internal setup Run time Utilization

Run time Run time is the only one dependent on the lot quantity.

Which of the following improvements is most difficult to achieve with a well-implemented continuous improvement program? Lot size reduction Run time reduction Workplace organization Safety stock reduction

Run time reduction Run time reduction may require new equipment, part design, new methodologies, etc. The other options will all occur with continuous improvement.

In the annual new product planning activity, using forecasts of product groups by dollars is often regarded as step two with step one being a competitive competence assessment merger policy reverse engineering activity SWOT analysis

SWOT analysis SWOT is an analysis of the strengths, weaknesses, opportunities, and threats of and to an organization. SWOT analysis is useful in developing strategy. It is important to recognize what a company's strengths and weaknesses are in terms of a new product

Capacity that provides protection from planned and unplanned activities is Productive capacity Theoretical capacity Safety capacity Demonstrated capacity

Safety capacity Safety capacity is the planned amount by which the available capacity exceeds current productive capacity.

The term non-added value would be used to describe which of the following items? Pull system Rework Training Safety stock

Safety stock Rework indicates poor control over processes and quality. By eliminating process errors, the amount of product rework will decline. Safety Stock, or buffer inventories, are an essential part of the lean pull system. The pull system is essential to lean production, this means that actual demand is the trigger to build product versus a standardized batch-sized order quantity. Continuous training of employees and production operators is essential in the continuous improvement of business processes.

Which of the following data is excluded from consideration in the available to promise calculation? Master production schedule orders Safety stock quantity Customer orders On hand inventory

Safety stock quantity ATP calculation does not include safety stock

Which of the following statements correctly describes netting logic when safety stock is involved? Allocations are added to on-hand and safety stock to establish a beginning available balance On hand should be reduced by allocations and increased by safety stock to establish a beginning available balance Safety stock should be used as a value which causes MRP to generate a planned order if the projected available balance falls below the value Safety stock is classified as a requirement in the current planning period

Safety stock should be used as a value which causes MRP to generate a planned order if the projected available balance falls below the value The netting process will ensure that the projected available balance does not drop below the safety stock by creating planned orders. Allocations are taken from the beginning on-hand first, then the gross requirements are subtracted. If the available falls below the safety stock, MRP generates a planned order.

Which of the following statements correctly describes netting logic when safety stock is involved? Allocations are added to on-hand and safety stock to establish a beginning available balance Safety stock is classified as a requirement in the current planning period On hand should be reduced by allocations and increased by safety stock to establish a beginning available balance Safety stock should be used as a value which causes MRP to generate a planned order if the projected available balance falls below the value

Safety stock should be used as a value which causes MRP to generate a planned order if the projected available balance falls below the value The netting process will ensure that the projected available balance does not drop below the safety stock by creating planned orders. Allocations are taken from the beginning on-hand first, then the gross requirements are subtracted. If the available falls below the safety stock, MRP generates a planned order.

In the sales and operations planning process, the responsibility for the finished goods inventory levels belongs to Master scheduling Finance Sales and Marketing Manufacturing

Sales and Marketing Even though everyone shares some responsibility, the forecast coming from sales and marketing is the basis for the production schedule that is generated. Missing the forecast means a possible increase in inventory costs

The first step to be produced in the planning of the scheduling of goods and services is Forecasting Master production scheduling Sales and operations planning Production planning

Sales and operations planning The business plan is in monetary units; the first step in determining what will actually be produced is the sales and operations plan

Sales and operations planning typically includes which of the following functions? Operations, purchasing, quality, and design Design, distribution, marketing and quality Quality, planning, sales and production Sales, marketing, finance and operations

Sales, marketing, finance and operations Sales, marketing, finance, operations and engineering a are all possilbe contributers that provide the input to the S&OP planning process, and are able to make decisions on how best to service customers in the future. Quality, design and distribution are not typical contributors to the sales and operations planning meetings.

The four concerns of sales and operations planning are Demand, supply, forecast and inventory Volume, mix, moneys and sales Volume, mix, demand and supply Sales, production, inventory and money

Sales, production, inventory and money The four concerns of S&OP are sales, production, inventory and money. The mix of the product is a concern of MPS not S&OP.

Which of the following quality aspects is a function of incoming inspection? Sampling a part's dimensions and rejecting the lot Comparing incoming receipts to previously received material Confirming the supplier's process produces acceptable quality Performing 100% inspection to assure outgoing quality

Sampling a part's dimensions and rejecting the lot Sampling is a part of incoming inspection; outgoing inspection may or may not be done by the same people; inspection upon arrival of a shipment does not confirm anything about the supplier's process; the comparison is to the spec not former material.

A likely reason for performing acceptance sampling on a supplier receipt of 1000 resistors is Testing 100% of the resistors is too expensive The lot came from multiple production runs Testing a resistor is a destruct-test process Sampling can be used to accept or reject the lot

Sampling can be used to accept or reject the lot Acceptance sampling uses statistics to determine sample size based on the receipt quantity; the entire lot doesn't need to be testing using this statistical logic; tests on resistors use a meter, not a destruct test so the parts do not have to be scrapped.

A company has a lean relationship with a supplier. A communication technique beneficial for communicating to the supplier for procurement planning over the horizon is a Schedule Kanban Purchase order Contract

Schedule A schedule or forecast of future demand can be shared for long term procurement planning; the other responses are more short term in nature.

The most likely reason for a lean manufacturing company to have only one supplier that uses kanban and returnable packaging designed for a specific part is that Lean manufacturing companies have only one supplier for most parts It is unlikely that multiple suppliers can be found for the same part Containers are owned by suppliers and must be returned to them Schedule and delivery are overly-complicated with multiple suppliers

Schedule and delivery are overly-complicated with multiple suppliers In lean manufacturing, simplicity requires that there is only one supplier for a specific part; the use of kanbans and returnable packaging is best managed with a single supplier.

Which of the following performance measures is most appropriate for a lean enterprise? Management involvement Inventory accuracy Labor utilization Schedule attainment

Schedule attainment Even though all are necessary, attaining the schedule eliminates the most waste by making sure that the right amount of inventory is available at the right time, for both internal and external customers.

An overload condition has been identified in the current period in spite of having a well-balanced final assembly schedule and material plan. The first action to be taken by production is to Adjust capacity planning parameters Schedule overtime to get back on schedule Delay orders that caused the overload Determine the reason for the overload

Schedule overtime to get back on schedule The immediate need is to resolve the existing overload using overtime; the reason would be known to production; adjusting parameters has no benefit to completing the overload; delaying orders may occur but does not result in getting back on schedule.

Compared to infinite capacity planning, the advanced planning and scheduling technique Uses a longer planning horizon Validates the master production schedule Schedules based on achievable operations within a set time period Limits the plan to critical resources only

Schedules based on achievable operations within a set time period An advanced planning and scheduling tool uses priority rules to determine what orders will be produced in what time periods, and takes into account capacity constraints.

The actual cost of an order can be different from its standard cost because of which of the following factors? Tooling Queue Scrap Maintenance

Scrap The reporting of scrap from a production order will increase the actual material, labor, and overheads as additional inventory and labor will have to be expended to build scrap replacement products. The other answers are all activities extraneous to the manufacturing order and will have no impact on standards.

A company has a historical 2% failure rate at final test. The failed units cannot be reworked. Which of the following information should be used in material planning? Yield and scrap are basically irrelevant with a stocked item Scrap is 2% and is accounted for as an addition to the order quantity A 2% safety stock should be statistically calculated for each part. Yield is 2% and is accounted for as an inventory master field

Scrap is 2% and is accounted for as an addition to the order quantity 2% should be added to very order to account for the failure rate. Yield would be 98% and could also be used. Applying safety stock is incorrect because it could substantially affect parts that are also used on other products.

Which of the following production order transactions are used to update item information? Scrap quantity Order complete Work center hours Parts started

Scrap quantity Scrap is updated so MRP can incorporate a number that has been experienced into the order quantity.

Which of the following documents is an integral part of the continuous improvement process in a pull production environment? Product capability analysis Actual production to plan Scrap report Direct labor report

Scrap report Scrap is an indicator that improvement is required.

Which of the following is an example of an internal failure cost of quality? Processing customer complaints Scrapping products that do not meet specifications Warranty field repair Testing products before shipment to customers

Scrapping products that do not meet specifications Scrapping products that do not meet specifications represents an internal failure cost of quality. The other answers represent appraisal and inspection costs and external failure costs.

If the sales profile in the information provided is also representative of the previous year, the pattern indicated is J: 50, F: 50, M:60, A:60, M:80, J:90, J:70, A:50, S:40, O:40, N:40, D:40 Seasonal Trend Random Cyclical

Seasonal May, June and July appear to be a seasonal peak demand; there is no indication of trend or other factor

A company purchases almost 30% of its raw material directly from farmers, cutting out wholesalers and distributors. This allows the companies to Increase their hold on the farmers by eliminating an echelon. See that the true suppliers of raw material realize a higher price for their efforts Promote the farmers to a tier one supplier facilitating tighter controls Reduce the costs associated with an entire echelon thus driving their profit margins up

See that the true suppliers of raw material realize a higher price for their efforts A popular coffee roster company purchases about 29% of its coffee directly from farmers, cutting out the intermediaries. This allowed the roaster company to see that farmers realize a higher price for their efforts.

In assessing a company's overall advantage or disadvantage as contrasted with its competitors a typical first step is to Reverse engineer products from the top 20 % of all competitors Identify all competitors and hypothesize their various strengths Segregate the company's operations into different types of primary and secondary activities Outsource all non core competency tasks.

Segregate the company's operations into different types of primary and secondary activities A first step in evaluating a company's economic advantage or disadvantage relative to its competitors is to segregate the company's operations into different types of primary and secondary activities

Which of the following aspects of a job most determine the day and time when it will be done? Queue Sequence Priority Availability

Sequence Sequence determines in what order jobs are done; availability is assumed or the job would not be released; many jobs may have the same priority.

Strategic continuous improvement activities facilitated by management includes Affinity groups where a variety of products are assessed Setting direction, developing resources, and deploying resources Pure market research Finding opportunities, acquiring capabilities, and delivering product

Setting direction, developing resources, and deploying resources Management leadership provides a unity of purpose while also establishing the direction of the organization. As such, the responsibility of leadership consists of creating and maintaining the internal environment, including developing and deploying resources.

Which of the following would not be considered an operational function within a distribution environment? Setting inventory levels Forecasting demand Picking customer orders Determining safety stock levels

Setting inventory levels Setting inventory levels is a tactical planning function set during the sales and operations planning (S&OP) process. The other answers are operational functions.

To develop a team-based environment, a first step is to develop a Project plan Measurement plan Company hierarchy Shared vision

Shared vision All projects and teams are based on the vision, which is a consensus of what is to be accomplished.

Production material is issued upon release of the order, and costs are accumulated by department for a customer order based on direct material, direct labor and allocated overhead. Direct cost would include Floor stock materials included on the bill of material Sheet metal layout in the shearing operation Direct sales by the sales and service departments Tool sharpening as required for released orders

Sheet metal layout in the shearing operation Layout is part of internal setup, so would be a direct labor cost; the others are all part of allocated overhead.

Two suppliers for a new part have responded to a request for quote based on annual usage projections. The buyer is evaluating the suppliers on total cost criteria. With all things being generally equal otherwise, which of the following reasons best explains why total cost is higher for one supplier? Shipment frequency is weekly as opposed to monthly The supplier has included a one-time charge for tooling The buyer has not evenly weighted each supplier's pricing Transportation has been included in the total cost

Shipment frequency is weekly as opposed to monthly A higher shipping frequency will incur higher transportation costs that would need to be offset by lower carrying or other costs; both suppliers would have a one-time tooling charge; the weighting of the criteria would be done using a spreadsheet; transportation costs should be included in both bids in order to see total procurement costs.

At which of the following levels in the product structure is the final assembly schedule in an assemble-to-order environment? Narrowest point of the product structure Level 1 of the configured bill of material First occurrence of a custom-designed part Shippable end item level of the bill of material

Shippable end item level of the bill of material The final assembly schedule would be at the end item sold to the customer, which is level -0- of the bill of material; narrowest point is where master scheduling occurs; level 1 and custom-designed parts do not represent the FAS level.

Increasing the number of distribution centers usually results in a reduction in Cumulative lead time Shipping times to the customer Transportation costs Safety stock

Shipping times to the customer More warehouses typically means less time, and therefore less cost, for shipping to the customer.

It is determined that it is not possible to complete all the jobs at the work center on time. To solve the problem, the dispatcher removes the job which will take the longest and reschedules it so that the remaining jobs will be completed on time. This sequencing technique is an example of Critical ratio Shortest processing time First come, first served Earliest job due date

Shortest processing time Shortest processing time rule directs the sequencing of jobs in ascending order by processing time.

When the company is pursuing a capacity lag strategy it Should always find the plants working at full capacity Typically finds achieving 90 to 100 % capacity utilization very difficult Is the best way to protect market share Is more expensive from a machine and labor perspective than a capacity leading strategy

Should always find the plants working at full capacity A capacity lagging strategy should always find the plant(s) working at full capacity

Loss caused by scrap, theft, deterioration, or evaporation is known as Shrinkage Attrition Waste Yield

Shrinkage Shrinkage is the reductions of actual quantities of items in stock, in process, or in transit.

A benefit of an effective work-cell layout is Reduced setup time Reduced process variability Increased utilization Simplified materials handling

Simplified materials handling A benefit of work cells is the reduced queue times, simplified control needs and immediate feedback.

A new product is being introduced to the company's product mix, which will have an effect on the current period material plan due to the cumulative lead time of the purchased parts. Which of the following actions would be of immediate value to the material planner? Analyze orders that are likely to be late Model the key work center capacities Analyze the product cumulative lead time Simulate the revised material plan

Simulate the revised material plan Simulating the new material plan will identify those items that will be out of balance, without disrupting the already balanced plan; the cumulative lead time has already been calculated; key work centers would be evaluated at the MPS level; late orders will be determined after the simulation has been run.

Which of the following actions should a dispatcher perform in an environment where there is excess capacity, in order to meet a shortage at a downstream operation? Expedite Split the lot Pay premium Overtime

Split the lot Split the lot so the required quantity is done in less time; the other 3 are not up to the dispatcher.

Which of the following accounting methods results in no change in inventory value regardless of whether material costs are increasing or decreasing? Process Actual Standard Average

Standard The other options increase or decrease with material cost changes.

The equation used to calculate actual labor hour requirements is Standard hours divided by (efficiency x utilization) Standard hours divided by (efficiency minus utilization) Standard hours x (efficiency x utilization) Standard hours divided by utilization

Standard hours divided by (efficiency x utilization) The question asks what are the actual labor hours, not what would be the standard capacity. As such, the calculation would first multiply the efficiency (either by work center or product) by the utilization (by work center) for the product to be built. Next, the standard hour to build the product would be determined. Finally, the actual hours would have to be determined by factoring in the efficiency and utilization. This would be done by dividing the standard hours by the efficiency and utilization.

Time-phased load by operation for capacity requirements planning is calculated using Actual setup and run times Setup and run times calculated by MRP Average setup and run times Standard setup and run times

Standard setup and run times CRP uses the run times and setup times within the standard routings to determine load on each work center.

Which of the following approaches will facilitate the smooth integration of a new product to production? Prototyping Standardization of components Statistical process control Quality function deployment

Standardization of components Standardization of components and processes shortens the prototyping time and learning curve, getting products to market faster.

Which of the following project documents describes the purpose, history, deliverables, and measureable success indicators for a project? Work breakdown structure Milestone schedule Scope statement Statement of work

Statement of work A project's statement of work is one of the first planning documents that should be prepared; it describes the purpose, history, deliverables, and measureable success indicators for a project. Milestone schedule is incorrect because includes only a high-level schedule displaying important deliverables. The scope statement is limited to describing the products to be created by the project. The work breakdown structure is a hierarchical description of the project including project phases, deliverables, and work packages.

When using a six sigma problem solving approach, problems are identified using Observations Financials Statistics Brainstorming

Statistics In order to be six sigma a process would have to well controlled, using data to investigate defects.

Which of the following is the MOST important reason why stock out duration is important when considering the customer service level? Stock out duration is immaterial as it is not related to the number of exposures to stock out. Stock out duration is most likely associated with the number of orders shipped late. Stock out duration is assumed to be constant so variability affects customer service level. Stock out duration is important because customer service isn't 100% until all line items ship.

Stock out duration is immaterial as it is not related to the number of exposures to stock out. Stock out duration is the amount of time an item is stocked out and is not available for sales. Stock out duration directly impacts the number of orders that are shipped on time. The stock out duration is relative and not constant. Stock out duration is not the measurement used to calculate customer service. Stock out duration is directly related to the number of exposures to stock out.

A company produces some of its 20 top sellers every day, and has a customer service policy of 99.5%, with next day shipments for each order. What is the most likely reason for not carrying safety stock on their highest volume products? Producing some of each item every day guarantees no stockouts It is acceptable to have stockouts because service level policy is not 100% Not carrying safety stock improves inventory turns Stockout duration will be short and few orders will be affected

Stockout duration will be short and few orders will be affected Shipments can still occur by next day due to the daily production of top sellers

The focus of Hoshin planning is on developing which of the following? Future employee skills requirements Training procedures Strategies to address critical business needs Definitions of standard work

Strategies to address critical business needs Hoshin planning is a Japanese strategic planning process to identify and address critical business needs.

In TOC, which of the following actions best reduces work-in-process (WIP) inventory on the shop floor? Decide how to exploit the constraint. Elevate the constraint to the system. Subordinate all else to the constraint to the system. Identify the constraint to the system.

Subordinate all else to the constraint to the system. Once a process constraint has been identified, WIP is reduced by reducing all load to be equal to the allowable capacity found at the constrained process. Any load released to the manufacturing floor that is greater than the constrained process capacity will simply end up as excess load. Identifying process constraints is the first step in WIP reduction. Maximizing the constraint means that planners will search for alternative methods for working around the constraint so that productivity can actually be increased.

Production becomes less synchronous the lower in a bill of material the part is due to Machining and assembly occurring in batch to reduce setups Successive lot quantities decoupling demand from supply Bills of material typically excluding floor stock at lower levels Cumulative lead times introducing a measure of variability

Successive lot quantities decoupling demand from supply Different lot quantities support production, but are often not directly in sync with the sequence in which the end item is produced.

Changing plant layout to a manufacturing cell arrangement to attain faster plant throughput requires Extra capacity available Pull system in place Sufficient demand for product Supplier delivery direct to work center

Sufficient demand for product Sufficient production volume of the family must be available to justify pulling equipment together.

The distribution center servicing a corner store chain initiated isolating food groups by storage temperature. This action represents competing with Product speed Varying product volumes Products at lower costs Superior quality products

Superior quality products A convenience store chain's distribution center operations team isolated food groups by storage temperature. From a competitive perspective this facilitated the company's ability to deliver quality products.

The goal of which of the following is to streamline and make more effective the processes between an enterprise and its suppliers? Supply chain visibility Supplier relationship management (SRM) Supplier-managed inventory Customer relationship management (CRM)

Supplier relationship management (SRM) SRM is a comprehensive approach to managing an enterprise's interactions with the organizations that supply goods and services to it. The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers. CRM relates to an enterprise's customers, not suppliers. Supplier-managed inventory is a relationship where the buyer maintains inventory at their facility. Supply chain visibility is the ability of supply chain partners to access demand and production information from trading partners.

To eliminate waste, purchase orders can be replaced with Pegging reports Action lists Supplier capacity requirements Supplier schedules

Supplier schedules Supplier schedules provide the supplier with the requirements of deliveries including items, quantities and dates.

A benefit of supplier partnerships is Having a dedicated resource for price negotiations Easier expediting of late materials Suppliers are encouraged to invest in product development The ability to use blanket orders with multiple releases

Suppliers are encouraged to invest in product development Supplier partnerships denote long-term agreements, which encourage suppliers to invest in joint product development.

Which of the following data requires no disaggregating to develop the master schedule from the sales and operations plan and check for feasibility? Volume Demand Supply Mix

Supply Supply, or capacity, is shared across product families. The other responses all relate specifically to a product family, so would have to be disaggregated to end units for the master scheduled.

Which of the following reasons is most likely the cause for using safety lead time instead of safety stock? Carrying safety stock is too expensive Demand variability is too biased Supply delivery reliability is the concern The part stocks out too frequently

Supply delivery reliability is the concern Using safety lead time will cause the order to be delivered earlier, minimizing the supplier delivery unreliability issue.

Which of the following reasons is most likely the cause for using safety lead time instead of safety stock? The part stocks out too frequently Supply delivery reliability is the concern Carrying safety stock is too expensive Demand variability is too biased

Supply delivery reliability is the concern Using safety lead time will cause the order to be delivered earlier, minimizing the supplier delivery unreliability issue.

Which of the following is the MOST likely reason for using a safety lead time instead of a safety stock? Carrying safety stock is too expensive. Supply variability is the concern. The part stocks out too frequently. Demand variability is too biased.

Supply variability is the concern. Because of variability in the supplier lead time exits, the problem is one of timing and not of quantity. Therefore, a safety lead time would be a valid reason for using safety lead time. Safety lead time is mostly used to deal with supplier variability.

The strategic risk plan must have go/no-go guidelines for The legal community Customer contracts Switching from problem mitigation to recovery Make or buy decisions

Switching from problem mitigation to recovery The strategic risk plan asks the questions; At what point do we reach the limit of avoidance and mitigation strategies before we start to rely on recovery strategies?

Which of the following environments is most unlike the others from an operational perspective? Repetitive manufacturing Batch processing Discrete manufacturing Synchronized production

Synchronized production Synchronized production is a philosophy that can be implemented in a number of ways; the other responses are all production processes.

In its haste to roll out new products, marketing often sells product too early and promises delivery dates that are unworkable. A good way to prevent this type of failure is to Systematically prevent any orders from being accepted until the product is fully released, carefully monitor published lead times and ensure operations has a say in the release. Punish the marketing people with a negative hit to their bonus's. Track how often marketing sells product prematurely and use as justification to introduce remedial training. Appease the effected customers with promises of future discounts.

Systematically prevent any orders from being accepted until the product is fully released, carefully monitor published lead times and ensure operations has a say in the release. It is always better to prevent a problem than to deal with the negative consequences after a problem occurs.

In a min-max inventory system, inventory equal to the order point plus a variable order quantity is the Hybrid inventory level Periodic inventory level Target inventory level Part period inventory level

Target inventory level A target inventory level, in a min-max inventory system, is the equivalent of the maximum. The target inventory is equal to the order point plus a variable order quantity.

In a min-max inventory system, inventory equal to the order point plus a variable order quantity is the Part period inventory level Periodic inventory level Hybrid inventory level Target inventory level

Target inventory level A target inventory level, in a min-max inventory system, is the equivalent of the maximum. The target inventory is equal to the order point plus a variable order quantity.

A company is developing a new transmission product, and needs to automatically pick up the final assembly via an overhead monorail for transport to shipping. Which of the following types of partnerships is most appropriate? Operational Strategic Technical Financial

Technical The monorail carrier will need to pick up the transmission using several lifting points; this is a technical challenge that requires collaborative effort.

The gateway work center performs the operation That is first in a routing That is just prior to final assembly That feeds a bottleneck That consumes the most capacity

That is first in a routing A gateway work center is a work center that performs the first operation of a particular routing sequence.

Which of the following planning functions is one of the direct inputs to the other planning process shown? The Production plan is a direct input to the master schedule Material requirements planning is a direct input into the strategic plan The Production plan is a direct input into the material requirement plan The Business plan is a direct input into the master schedule

The Production plan is a direct input to the master schedule The planning hiearchy starts with the Business plan which inputs into the S&OP plan which inputs into the production plan which inputs into the master production schedule which inputs into the material requirement plan.

A component stockout has occurred, and production has substituted a higher-priced alternate. What is the effect on cost variance? The alternate is charged at standard cost so there is a total cost variance The alternate is charged at the original part's standard cost so there is no variance The alternate is charged at standard cost so there is no variance There is no cost variance due to the second part being a valid alternate

The alternate is charged at standard cost so there is a total cost variance Expected cost is based on the original lower-cost component.

Developing corporate strategy ideally starts at the top cascading downward throughout the organization and ultimately reaching The associated functional and operating levels The HR department for further input The front line employees for review and approval Key buyers and customers

The associated functional and operating levels As a general rule strategy-making must start at the top and then proceed downward from corporate levels to the business levels then down to the associated functional and operational levels

A primary element for consideration when selecting a new supplier is The ability to perform all communication electronically Close proximity to the manufacturing facility The capability and reliability to make parts to the specification Lowest price for the goods to be purchased

The capability and reliability to make parts to the specification If a supplier is not able to provide goods to the specifications, no other elements should even be considered.

Which of the following statements defines required capacity? The capacity of a system or resource needed to produce a desired output in a given time period. Output in comparison to the capacity plans and adjusted for corrective action. The amount of released or planned work assigned to a specific operation. The limits or levels of capacity in order to execute all manufacturing schedules.

The capacity of a system or resource needed to produce a desired output in a given time period. Required capacity is the capacity of a system or resource needed to produce a desired output in a particular time period.

The best reason for a company to use multiple suppliers for the same part is Competing suppliers have quoted the same price, lead time and quality The company has multiple divisions with geographically separate locations The company has a decentralized purchasing function It is a complex product that requires no special skills to produce

The company has multiple divisions with geographically separate locations Geographically dispersed companies may find that total purchased cost is lower by buying from local sources; decentralized purchasing can still use the same suppliers.

If a company's design cycle is less than that of its competitors, which of the following statements would most likely be true? The product's life cycle will be longer The forecasting horizon will be shorter The company's products will reach the market sooner The competitor's product will have more features

The company's products will reach the market sooner A company that gets products to market faster than competitors has a strong competitive advantage. This can be accomplished through activities such as concurrent engineering.

Which of the following statements is most true of the differences between the inventory turns in a distribution center compared to the manufacturer of the goods in the distribution center? Manufacturers typically approximate work in process value so inventory turns tend to be more accurate in a distribution environment Distribution environments tend to have lower turns because they don't carry any raw material inventory The distribution environment has a higher cost of goods sold than does the manufacturer for the exact same finished good. Distribution environments tend to have higher turns because inventory remains in stock only a short time compared to a manufacturer

The distribution environment has a higher cost of goods sold than does the manufacturer for the exact same finished good. Distribution cost of goods sold includes the cost to buy or transfer it from the warehouse, as well as the additional material handling costs. DC's carry inventory longer as it is based on a forecast, whereas the manufacturer would ship directly to the DC based on demand. WIP is not typically included in cost of goods sold.

Which of the following statements about the final assembly schedule (FAS) is true? The final assembly schedule is the same as the production plan The final assembly schedule only includes final operations The final assembly schedule is the same as the master production schedule The final assembly schedule is separate from the MPS and serves a completely different purpose

The final assembly schedule is separate from the MPS and serves a completely different purpose The FAS plans and controls final assembly, which is different from the MPS; it is typically driven by customer demand not the forecast, and is for end items; it may include other operations than simply the final ones, depending on where the assemblies from the MPS are located in the structure.

The frequency that material requirements should be replanned is determined by The total manufacturing lead time The frequency of bill of material changes The frequency that requirements and/or priorities change The amount of forecast error

The frequency that requirements and/or priorities change MRP is used to maintain priorities of manufacturing and purchase orders. As demand changes, so do priorities, so MRP should be run to re-balance supply and demand.

Whether a company's internal weaknesses make it competitively vulnerable depends upon Customer perceptions Product, price, promotion and place The importance of the liability and if negated by a strength The competitor's strength in this area

The importance of the liability and if negated by a strength Nearly all companies have competitive liabilities. Whether a company's internal weaknesses make it competitively vulnerable depends upon how much they matter in the marketplace and whether they are offset by the company's strengths.

The best time to measure master scheduling performance is The last period where actual production can be compared to company-planned targets Between the current period and the demand time fence to encompass released and firm-planned orders Over the entire planning horizon to provide forward planning visibility to the organization Between the current period and planning time fence to encompass the cumulative lead time

The last period where actual production can be compared to company-planned targets Performance can only be measured after production has occurred; the other responses do not have performance measures.

The purpose of using flow path lines on a process flow chart is The lines graphically differentiate among value and non value-added processes The line weight represents the cost of non value-added operations The lines ensure that no reverse flows or pseudo operations exist in the process Solid lines indicate the primary path and dashed lines indicate alternate routings

The lines graphically differentiate among value and non value-added processes The lines show the non value-added processes so that as improvements occur the non-value added process can be eliminated and the flow path is straighter.

The primary output of the capacity requirements planning process is The load profile for each work center A list of past due manufacturing orders The final assembly schedule Planned and firm planned orders

The load profile for each work center CRP generates a load profile for each work center showing the load versus the available capacity.

As operations capabilities are expanded, the risk is that Product baseline costs will rise The market will out-demand the operation, or the operation will outperform the market Product baseline costs will fall Quality will suffer as throughput increases

The market will out-demand the operation, or the operation will outperform the market As operations capabilities are scaled up to meet anticipated market share growth the operation's risks are that the market will out demand the operation, or the operation will out perform the market

Which of the following validations is most likely to be performed for measuring master scheduling performance as it relates to sales and operations planning in a make-to-stock company? Available to promise shows inventory for promising customer orders The inventory plan supports the finished goods portion of the business plan The bottleneck work center has a safety capacity to absorb unplanned demand The master schedule equals the production plan quantity

The master schedule equals the production plan quantity The MPS must closely match the production plan; the other responses are not relevant.

Which of the following statements about capacity is true? The number of machines in a machine shop is the primary determinant of capacity The master scheduler can schedule load above that indicated by rough-cut capacity planning Resource planning capacity is more accurate than rough-cut capacity planning due to aggregation Common units such as quantities or hours are used at all levels for consistency

The master scheduler can schedule load above that indicated by rough-cut capacity planning Rough cut capacity planning is a check of only critical resources; capacity at higher levels may not be in quantities or hours; aggregation is not a consideration for accuracy; operators can also be used as capacity determinants in a machine shop.

Which of the following situations is true when capacity requirements planning determines that the load at a work center is within the capacity for the period? The material plan is balanced, and both start and completion date will likely be met Overloads in adjacent periods can be moved to the period that is underloaded This is not a key work center and should be removed from the capacity requirements planning More orders can be added to the master production schedule

The material plan is balanced, and both start and completion date will likely be met The purpose of CRP is to verity that the material plan is balanced with capacity; there is no indication that there is an under-load condition.

A potential area of risk for distribution inventory is The need to relocate inventory based on poor planning Being located near other distribution centers Not having enough trained personnel Running out of warehouse space

The need to relocate inventory based on poor planning All may be slight risks, but the most potentially costly is having to relocate inventory to another DC based on poor planning.

In designing a forecasting system, which of the following is the primary consideration? The purpose of the forecast must be adequately defined. The data must be derived from the correct sources. The form of the data must be suitable for compilation. The sample must be representative.

The purpose of the forecast must be adequately defined. The overriding consideration in forecast system design is ensuring the forecast reflects the purpose planners feel meets company requirements. The other answers are all necessary for forecasts to work effectively, but they are not the prime consideration.

Efficiency is defined as The number of standard hours earned to the hours per shift per day The number of hours per shift per day to the number of standard hours earned The number of actual production hours consumed to standard hours earned The number of standard hours earned to actual production hours

The number of standard hours earned to actual production hours Efficiency is the standard hours earned to the production hours worked.

Under which of the following conditions is it most necessary to perform bottom-up replanning of an overloaded key work center? The overload is due to efficiency The overload exceeds rated capacity The overload exceeds standard hours The overload is due to utilization

The overload exceeds rated capacity If load exceeds rated capacity, the work center cannot produce the desired load.

A purchased component has a net requirement in period 4. It has a 6-period lead time and no scheduled receipts. Which of the following actions will be the result of material requirements planning? The planned order release is scheduled for period -2 and is overdue for release The planned order release in period 1 is rescheduled for receipt in period 6 The planned order is overdue and the planner will need to delay the master production schedule The planned order release is scheduled for period 1 and is due in period 4

The planned order release is scheduled for period 1 and is due in period 4 MRP will assume the plan can be executed, and will provide an action to release the overdue planned order; a second action messeage may be given to expedite. There are no past periods within MRP.

If it is assumed that final products and lower-level subassemblies are made both to stock and to order, which of the following final assembly schedule (FAS) practices should be adopted? The shipping schedule should correspond to the FAS with the required offset. The planning horizon of the FAS should be shorter than that of the master production schedule. Commitment to FAS should be made as early as possible. Order promising should not be tied to the FAS.

The planning horizon of the FAS should be shorter than that of the master production schedule. The question describes an assemble-to-order (ATO) environment. In an ATO environment the master schedule and the FAS are not the same thing. The MPS must produce the subassemblies and have them ready for any customer ATO order where they are brought together and finished. The FAS is said to relieve the MPS plan. The FAS should be committed as late as possible. The actual ship date is determined by the customer order and not the finishing schedule which might be earlier than but no later than the ship date. The date on the order will drive the latest date that the FAS can be scheduled.

Which of the following definitions best describes capacity planning? The resources needed to produce the projected level of work over a time horizon The ability to do rough-cut capacity planning using a simulated master production schedule The extra capacity that is added to a system after capacity for expected demand is calculated The process of determining the amount of capacity required to produce in the future

The process of determining the amount of capacity required to produce in the future The goal of capacity planning is determining how much capacity is going to be required of the plant to execute the firm's production plans.

If a point is outside of the upper control limit, which of the following statements is most applicable to the process? The process has gone out-of-control. The upper control limit may be set too tight for the process. The process shows an indication of being out-of-control. The point needs to be checked to see if it is a special cause.

The process shows an indication of being out-of-control. Until the trend or multiple points have gone outside the control limits, the process may only indicate it is out of control.

Which of the following best describes the results of total quality control? The cost of scrap and rework is below budget. The product meets the expectations of the customer. The number of inspection stations is decreased in the production process. Statistical tests of production identify sources of defects.

The product meets the expectations of the customer. The end-results of a total quality control effort should always be meeting the product quality expectations of the customer.The other answers are all true outputs of the total quality control effort, they are useless if the end result does not meet customer expectations.

As new products are being rolled out, in addition to emphasizing order qualifier traits and order winning features, marketing must also be aware that Cost, quality and speed are the key competitive variables Speed to market and to customer is the key competitive benefit The product or service delights customers Product cost is the key driver for sales

The product or service delights customers During the introduction stage of the product life cycle, current thinking is that in addition to the traditional order qualifier and order winner criteria that product or service delights are a third category one must consider

An indication on the sales and operations plan of a make-to-stock company that a chase production strategy is being employed is The backlog plan remains level as production level changes The production plan closely approximates the sales plan The inventory plan increases and decreases along with sales The quality plan closely approximates the sales plan

The production plan closely approximates the sales plan The chase strategy means that sales and production plans approximate each other; the inventory plan will remain fairly stable and acts as safety stock; make-to-stock companies do not use backlog plans

Material requirements planning has calculated a gross demand of 50 units in period 4. The net requirement and safety stock are -0-. The order quantity is 100 units. If the next net demand is 20 units in period 6, The projected available balance will be 80 in period 6 The projected available balance will be 100 in period 5 A planned order receipt for 100 is suggested in period 4 The net demand in period 6 will be 80

The projected available balance will be 80 in period 6 Since there is no net demand or safety stock in period 4, no action is required. The net demand of 20 in period 6 will cause a planned order of 100 to be ordered leaving a projected available balance of 20.

Which of the following statements is correct when the stocking unit of measure is different from the purchasing unit of measure? The bill of material will be in the purchasing unit of measure The purchase order receipt will be in the purchasing unit of measure Issues of inventory will be in the purchasing unit of measure The standard cost will be in the purchasing unit of measure

The purchase order receipt will be in the purchasing unit of measure The purchase order will be in the purchasing unit of measure, as will the receiving documents; everything else will be in the stocking unit of measure.

Which of the following factors generally applies to only a limited number of parts when determining the number of kanban containers and their quantities? The number of kanbans is a function of the amount of work in process target The number of production kanbans is reduced through continuous improvement efforts The quantity per kanban may be a range between a 1 hour and 20 day supply The quantity per kanban should ensure that move frequency remains constant

The quantity per kanban should ensure that move frequency remains constant Move frequency is only an issue with long-distance moves where multiple parts are picked up and moved per a schedule, and does not apply to kanbans in general. The other answers are true of most kanbans.

Which of the following results is indicated as the standard deviation becomes smaller through continuous improvement efforts? The range related to deviation is being systematically reduced Chance causes of variation are being systematically reduced The entire process is moving from non-capable to capable The sample mean is moving closer to the standard deviation

The range related to deviation is being systematically reduced The range is a measure of +/- 3 standard deviations; it gets smaller as the standard deviation gets smaller; chance variation cannot be systematically reduced; the mean is the base from which the standard deviation is measured; the process moving to capable cannot be determined from the question.

A work center is consistently overloaded to the point where overtime is required nightly and on weekends. This seems to be a problem for only this work center. The most likely reason is The work center is overloaded due to the 100% load on a bottleneck work center The rated capacity is understated The orders being processed do not account for setup time The work center is not considered a key work center for capacity planning

The work center is not considered a key work center for capacity planning Capacity is not being checked against the master production schedule, meaning it is not a key work center; rated capacity may be understated, but should correct itself over time, and this is an ongoing problem; there is no information regarding setup; this work center is the bottleneck.

Which of the following situations is indicated if efficiency is consistently above 110%? The operators have become more efficient at setting and up running orders Setup improvements have reduced actual total setup times by approximately 80% The work center is further on the learning curve than when the standard was established The standard was set too high due to not using an "average" operator

The work center is further on the learning curve than when the standard was established Efficiency varies based on experience; proper procedures would have prevented using a sub-average operator; there is not information in the question to assume that improvements in setup have been accomplished.

Which type of capacity is the best indicator that the material plan is infeasible if it equals the required capacity at a particular work center? Theoretical Rated Bottleneck Demonstrated

Theoretical Theoretical capacity is an ideal and usually not attainable; if equal to the required capacity, the work center is overloaded; the other responses indicate there is probably sufficient capacity for the material plan.

A company has made process improvements that reduced shift lengths from 10 to 8 hours while maintaining production rates and material delivery schedules. What is the general effect on the level of raw material? It reduces by 20% It reduces by 25% It increases by 20% There is no change

There is no change Daily production rate and material delivery schedules are the same, so levels will not change.

Which of the following statements describes the reason why resource planning is difficult to apply in an engineer-to-order environment where a final assembly schedule is used in place of a master production schedule? Resource planning is designed to close the loop with master scheduling, but not with final assembly scheduling There may be little or no order history because of dissimilarity among orders upon which to base hours per key work center The final assembly schedule only applies to final assembly and that may not be where the constraining work centers are Resource planning is an iterative process but final assembly scheduling is only performed once for a customer order

There may be little or no order history because of dissimilarity among orders upon which to base hours per key work center Resource planning requires a resource profile, and lack of history may prevent one from existing; resource planning is used at the production level, not the MPS; resource planning would not necessarily be iterative in an engineer-to-order environment.

Which of the following statements is true about companies that begin to automate before implementing lean production? They tend to have a higher success rate. They find that the conversion to automation goes faster. They find that the conversion to lean production goes faster. They tend to spend more money on material handling.

They tend to spend more money on material handling. Companies that automate before moving to lean will normally be using technologies to solve process problems. This will result in the addition of unnecessary technologies. The success of their automation project would be greater if they had first implemented lean. An automation program will achieve better results if lean is implemented first.

A company that uses a supply chain partner for warehouse and delivery services is using a Extended enterprise partner Virtual warehouse provider Third party logistics (3PL) provider Nominal trading partner

Third party logistics (3PL) provider Third-party logistics (3PL) provides product delivery services. This third party may provide added supply chain expertise.

A company is considering the adoption of a highly automated form of manufacturing technology that will have a major impact on its production process. Which of the following situations will most likely cause the longest delay in the implementation of this new technology? The company has too few skilled technicians and experienced implementers of this type of new technology. The proposed changes will cause a mismatch between products and processes. This technology conflicts with the company's capabilities and culture. The necessary support and maintenance systems do not currently exist and must be developed.

This technology conflicts with the company's capabilities and culture. All four of the possible answers will hinder the speedy implementation of a complex technology. Maintenance systems, products and processes, and new people skills will all be needed to implement the new technology and the less the company has of each the longer it will take to fully implement the new technology. However, technology conflict with the company's existing capabilities and culture will most likely cause the longest delay because this has to do with changing the people side of the organization.

Which of the following is a tool for reducing material requirements planning (MRP) system nervousness? Scheduled downtime Dynamic lot sizing Pull signals Time fences

Time fences Nervousness in this context refers to instability when changes in higher-level records cause significant changes in lower-level schedules or orders. Devices such as time fences, which restrict changes, introduce stability into the master schedule. Dynamic lot sizing creates an order quantity that is subject to recalculation. Pull signals are used to indicate when to produce or transport an item in a pull production system. Scheduled downtime refers to planned shutdown of equipment for maintenance.

Which of the following information is necessary for determining the production planning horizon? Timeframe for acquiring additional capacity Financial year end cycle Cumulative lead time Product life cycle

Timeframe for acquiring additional capacity The production plan has to reach far enough into the future to be able to acquire additional capacity if needed to produce the plan.

Which of the following problems can be identified and adjusted at the rough-cut capacity planning level? Overloads at all work centers Excessive queues at suppliers Total hours of load in excess of plant capacity Underloads at all work centers

Total hours of load in excess of plant capacity Rough-cut capacity planning provides planners with the ability to easily identify overloads and underloads at critical work centers in the plant. Rough-cut capacity planning does not consider all work centers only key bottlenecks or critical work centers. Rough-cut does not manage the workloads of suppliers.

A primary reason for using an alternative means of transportation when a part is late is To ensure part delivery To meet the due date To meet the promised date To save shipping expense

To meet the promised date The promise date may or may not be the actual due date, but is the one that was communicated.

The primary purpose of the bill of material in the material requirements planning process is To generate a where-used list for all components To provide a structure for the explosion process To provide costing information To outline the production process in detail

To provide a structure for the explosion process MRP uses the bill of material to multiply the requirements by the usage requirements throughout the product structure.

The primary use of Activity based costing is When production is relatively simple and just a few well-defined activities are used in the transformation process Primarily in labor paced environments when employee activities are identifiable by granular job classifications To solve the problem of distorted product costs resulting from the use of traditional methods of assigning overhead costs to products When the company has many identifiable production activities that may also be costed

To solve the problem of distorted product costs resulting from the use of traditional methods of assigning overhead costs to products Activity based costing is used to solve the problem of distorted product costs resulting from the use of traditional methods of assigning overhead costs to products

Authorizing work in a push system in a make-to-order environment assumes which of the following available items? Tooling Material Capacity Information

Tooling Equipment tooling is assumed; the other responses are subject to orders and current conditions.

A process that was in control using control charts now has a mean that is trending to be out of control. The most likely reason is Tooling has begun to wear A different way of measuring The operator needs a refresher Machine error

Tooling has begun to wear If nothing else has changed, such as temporary operators or a change to the specs, the first place to look would be the tooling to determine wear or misalignment.

When allocated on the basis of historical direct labor hours, overhead will be properly absorbed if which of the following is true? Fixed costs decrease. Total volume remains unchanged. Total volume increases. Total volume decreases.

Total volume remains unchanged. If production volume remains stable, then the standard overhead that was originally calculated will also remain stable. A, B, and D are incorrect because changes to volume and fixed costs will require a new calculation of overhead absorption.

Which of the following would be most difficult to overcome while implementing lean principles? Setup time reduction Cost reduction Traditional performance measurements Workplace organization

Traditional performance measurements Some traditional measurements focus on the opposite of lean principles, such as full utilization of people and machines, rather than building to a schedule.

When a temporary underload of capacity is experienced, a company should consider Training production personnel Laying off personnel Selling off surplus equipment Taking annual physical inventory

Training production personnel If there is not enough work to keep present workforce occupied, it is a good time to upgrade skills and cross-train employees to prepare for a future increase in work as well as improve competence and flexibility.

The distribution and procurement functions are working together to coordinate incoming shipments. This action will most likely improve the management of Supplier quality Stockouts Transportation costs Inventory levels

Transportation costs Coordinating the transportation of both incoming materials from suppliers and shipments between warehouses and distribution centers can lower transportation costs.

A company's strategic objectives are not on target, and attainment of clearly stated goals is the objective. The company is inexperienced with what the effect of a suggested strategic change might be, so should consider The Delphi method Trial and error Competitive espionage Benchmarking

Trial and error If strategic objectives are relatively unambiguous, but the effect of interventions are not known and the activity is repetitive the organization can gain knowledge through trial and error.

A company has multiple distribution centers, with different levels of technology. Which of the following actions is the same whether automated or manual storage systems are used? Selection of storage location at receiving Update of the receipt to the inventory system Transport of pallets to the storage area Picking of items to fill orders

Update of the receipt to the inventory system Receipts of goods needs to be input regardless of the type of automation of storage equipment; the other responses would be based on automatic vs. manual technology

The best technique for ensuring master schedule stability for production is Use of a demand time fence Use of a production time fence Use of a planning time fence Use of a supply time fence

Use of a demand time fence A demand time fence identifies the point within which production changes need to be authorized by senior management; the planning time fence includes periods where production has not yet started, so changes are still OK; production and supply time fences do not exist.

The best technique for ensuring master schedule stability for production is Use of a planning time fence Use of a supply time fence Use of a demand time fence Use of a production time fence

Use of a demand time fence A demand time fence identifies the point within which production changes need to be authorized by senior management; the planning time fence includes periods where production has not yet started, so changes are still OK; production and supply time fences do not exist.

An action that most limits the effect of changes on a supplier is Establish due date reliability through the use of standard lead times Use of blanket orders and scheduled releases Relaxation of drawing specification tolerances Create order quantity stability through the use fixed quantities

Use of blanket orders and scheduled releases Blanket orders provide long term stability.

Which of the following conditions typically is necessary for a successful pull production system implementation? Variation in demand is low. Products are made to inventory. There are only assembly operations. Specialized machinery and skilled operators are used.

Variation in demand is low. In a pull system, items are produced only as demanded for use or to replace those taken for use, so pull systems are reactive and do not "look ahead." Therefore, the pull system works best when products are stable and predictable. Assembly operations are not necessarily required in a pull production system, although some downstream assembly may occur. Not all pull production systems rely on specialized machinery and skilled operators. Products in a pull production system are typically made for use or to replace those taken for use, not for inventory.

Which component control strategy can help mitigate the bullwhip effect when implemented properly? Vendor managed inventory processes Imposing strict territorial boundaries between retailers Backward horizontal integration Extending their forecast horizon

Vendor managed inventory processes A supply chain coordination activity that can help mitigate supply chain instability is to increase channel alignment via vendor managed inventory (VMI) processes.

A supplier has access to a customer's inventory data and is responsible for maintaining the inventory level required by a customer. The vendor reviews inventory on-site at the customer's location, restocks, and then invoices the customer. The inventory is termed: Cycle inventory Vendor-managed inventory Consignment inventory Fluctuation inventory

Vendor-managed inventory In vendor-managed inventory, the supplier has access to the customer's inventory data and is responsible for maintaining the inventory level required by the customer. In this case the supplier places goods at a customer location, but is not paid until after the goods are used or sold. Cycle stock is the portion of inventory that depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received. Fluctuation inventory is held as a cushion to protect against forecast error.

An appropriate objective for a buyer to pay a visit to a potential supplier is to Obtain information about the supplier's financial stability Assess the compatibility of the supplier's ERP system Determine their capability for vendor-managed inventory Verify the production and quality capabilities of the supplier

Verify the production and quality capabilities of the supplier It is important to ensure that the supplier is capable of producing to the required specification. On-site visits to ensure the capability exists and see the quality measures in place is often the last step in the supplier selection process.

Locating a customer-owned area within a supplier's facility enables the ability to achieve No improvements at all on quality metrics A significant savings in energy costs Very high performance scores on order delivery key performance indicators Significant abilities in changing mix SKU's at the last minute

Very high performance scores on order delivery key performance indicators When the market again rose they decided to not expand but build...big. Enough room for the largest machine of its kind and enough room to consolidate business and marketing team in the same [focused] facility. Their major customer liked what they saw and awarded them 100% of their orders over the next ten years. Success was achieved from day 1. Unfortunately the customer was 100 miles away. Shipping distance caused a number of problems including some damage in transit and delays in delivery. Eventually the customer / supplier team proposed to the supplier management team that the customer co-locate within a new expanded section of the new facility, again, success from day 1.

Process maps can be powerful tools to Visualize processes and improve them, such as streamlining processes to reduce unnecessary steps. Determine the root cause of an issue or problem. Prioritizing changes by identifying the problems that will be resolved by making these changes. Generate ideas on a particular subject. Each person on the team is asked to think creatively and write down as many ideas as possible.

Visualize processes and improve them, such as streamlining processes to reduce unnecessary steps. Process maps can be powerful tools to visualize processes and improve them, such as streamlining processes to reduce unnecessary steps or visualizing the causes of problems. The root cause of a problem is determined by the Five Whys or a Fishbone Diagram; Pareto analysis is used for prioritization; brainstorming is a way to generate a lot of ideas from a team.

Defect Information: 50 Weld is broken 15 Weld is cracked 4 Weld seam not ground smooth 1 Missing a part 1 Improper part alignment 1 Part warped 1 Part welded on backwards 1 Seam incompletely welded The data included was collected for a welding assembly. The Quality team used a Pareto analysis to prioritize the individual decisions that will most improve the situationUsing the Pareto principle, which of thes issues should be addressed first? Weld is broken Weld is broken plus weld is cracked plus weld seam is not ground smooth and Seam incompletely welded Weld is broken plus weld is cracked plus weld seam is not ground smooth Weld is broken plus Weld is cracked

Weld is br0ken plus Weld is cracked The Pareto principles is a concept developed by Vilfredo Pareto, an Italian economist, that states that a small percentage of a group accounts for the largest fraction of its impact or value. It is sometimes referred to as the 80/20 rule. In the case of a quality improvement process, that would mean that 20 percent of factors create 80 percent of the problems In this case, there are a total of 74 defects recorded, and Weld is broken plus Weld is cracked make up 65 of those 75 instances. Solving these two issues will eliminate just under 88% of the total defects.

In a kanban facility, production consists of machining or subassembly departments, with one final assembly line. A unit takes 5 days to complete. Department production is most likely reported When the product ships or enters finished goods Where there is planned buffer in the flow At each non-pseudo bill of material level At statistical process control operations

Where there is planned buffer in the flow Buffering decouples one department from another, and is a logical reporting point; bill of material levels are not the same as routing steps and could not be implemented. SPC operations may or may not have completed the part; at time of shipment is too late for reporting purposes for machining or subassembly.

Design of Experiments (DOE) is used to plan a test to determine clothes whitening by three laundry detergents on three types of washing machines. Which of the follow is the dependent variable in the experiment? Whiteness factor Laundry detergent Washing time Person conducting the experiments

Whiteness factor Whiteness is the output or effect, and is therefore the dependent variable. The other answers are inputs, or causes, or because they are not specified as outputs of the experiment and are not dependent variables.

A true statement about benchmarking is that it Most often leads to outsourcing and downsizing Identifies world class practices and therefore becomes the key contributor to the redesign of the company's value chain Is a tool best used to identify a company's internal core competencies Will ideally follow the completion of an internal value chain analysis

Will ideally follow the completion of an internal value chain analysis Once a company has identified good estimates for the costs & effectiveness of each of the major activities within its own value chain along with value chain data for key suppliers & distributors, it is ready to explore how it compares on these dimensions with its rivals

A manufacturing company implementing a focused factory strategy has likely come to the conclusion that a factory with a narrow focus Is more likely to recover from a market downturn Will likely suffer higher costs due to under capacity utilization if more diversified Will outperform a plant attempting a broader set of objectives Will gain significantly from bill of material modularization.

Will outperform a plant attempting a broader set of objectives The focused factory idea holds that those focusing on a narrow range of products aimed at a particular market will outperform a plant attempting a broader set of objectives.

Subdividing project tasks into a hierarchy of individual tasks is done using a Task list Resource graph Gantt chart Work breakdown structure

Work breakdown structure The work breakdown structure develops a structure of tasks by subdividing it into manageable tasks with resources.

Which of the following actions would result in shorter purchasing lead times? Using alternate suppliers Increasing the planning horizon Working with suppliers to reduce lot sizes Using premium transportation methods

Working with suppliers to reduce lot sizes Similar to manufacturing lot sizes, smaller lots sizes require less run time, so faster delivery.

Using the information provided, if the forecast is consumed by orders at the distribution warehouses, which warehouses will be placing orders? Warehouse: On hand, Forecast per week, ORder point, Order quantity, LEad time in days Warehouse X: 110, 75, 50, 150, 5 Warehouse Y: 90, 50, 35, 100, 4 Warehouse Z: 160, 100, 75, 200, 6 Central Warehouse: 525, 225, 225, 500, 15 X, Y, Z, Central X, Y, Z X, Z X, Z, Central

X, Z, Central X and Z will have reached their reorder point, so will place orders on the Central warehouse, which will cause the Central warehouse to reach its reorder point.

A company should use which of the following techniques to maintain control of a process? A3 problem solving Histograms Ishikawa diagram X-bar chart

X-bar chart An x-bar chart is a control chart in which the subgroup average, X-bar, is used to evaluate the stability of the process level.

The following information is available for a work center on day 8. The start date and end days are based solely on internal setup and run time. Based on the critical ratio, which of the following jobs is the next to be started? Job: Start Work Day - End Work Day W: 11 - 14 X: 10 - 15 Y: 8 - 12 Z: 9 - 12 W X Y Z

Y Critical Ratio (CR) is time remaining / work remaining. It results in a ratio that shows the relative priority of the order to other orders at the work center. The rule is to sequence the order with the lowest ratio first. w = 7/4 = 1.75; x = 8/6 = 1.33; y = 5/5 = 1; z = 5/4 = 1.25. Y has the smallest CR of 1, which means it is on schedule, but it has the lowest CR and should be started first.

A company manufactures and assembles large systems with a lead time of four months. Shipments are scheduled toward the end of each month, and backlog ensures that shipments are fairly leveled each month. A weekly work in process report showing a decrease indicates that: a system has been completed. throughput is increasing. queue times are reducing. there is a reporting mistake.

a system has been completed. Work in process would reduce as a system completes and is shipped.

A good policy concerning a company's internal rate of return (IRR) is to exceed the cost of material labor and overhead prior to approval to reverse engineer competing products whenever possible approve the project if the IRR exceeds the cost of capital to set margins based on competitive analysis

approve the project if the IRR exceeds the cost of capital Internal rate of return is the rate of compound interest at which the company's outstanding investment is repaid by proceeds from a project.

A company investing in resources that enhance their value chain proficiency with the goal of attaining industry leading status is said to be developing their competitiveness market share core competency strategic plan

core competency Creating industry leading proficiency for tasks within the company's Value chain activities is a core competency enhancement.

A costing system measures the costs associated with manufacturing operations and a complete physical count of all work in process, semi finished goods and finished goods within the facility the valuation of labor and overhead for all jobs as they are completed a totaling of all time card hour reporting at the order number level assigns those costs to products

assigns those costs to products Costing systems are used to collect costs and assign them to the cost object. This is essentially a two step process: the measurement of costs that are applicable to manufacturing operations during a given accounting period and the assignment of these costs to products.

According to the waste hierarchy, the most sustainable approach to managing an organization's use of material is to develop a reverse logistics program avoid the use of certain materials entirely reduce the amount of materials used have an active, monitored recycling program

avoid the use of certain materials entirely The waste hierarchy is a sustainability concept that focuses on the use of materials, it is, according to the APICS Dictionary," a tool that ranks waste management options according to what is most environmentally sound. [It] gives top priority to preventing waste in the first place" (avoiding use of the material). If use of the material cannot be avoided, then, in descending order of desirablity, the company can consider ways to reduce the amount of material used, reuse the material, recycle the material, recover the material (e.g., break down product into recoverable materials) , and, as the last and least sustainable option, dispose the material responsibly.

A state of the art component within the company's new top-selling product line was found to be sole sourced. The supplier was thought to be leveraging their technology with higher than normal margins. To ensure future success top management should explore benchmark measures backward integration postponement concurrent engineering

backward integration Backward integration is the process of buying or owning elements of the production cycle and channels of the supply chain toward raw material suppliers.

Early due-diligence concerning a backward integration initiative is to complete an analysis of both company's corporate cultures cash flows balance sheets supplier relationships

corporate cultures A corporate culture includes a set of assumptions and values that members of the company share. These common assumptions influence the way the company operates.

By using the beginning inventory and the sales forecast for a particular end item, a master scheduler can: calculate the amount of production needed per period to meet the anticipated customer demand calculate the Available to Promise amount for that period in order to meet anticipated customer demand caclulate the safety stock level required for that item calculate the demand time fence for that family of items

calculate the amount of production needed per period to meet the anticipated customer demand By using the beginning inventory and the sales forecast for a particular end item, a master scheduler can calculate the amount of production needed per period to meet the anticipated customer demand. The other answers require different formulas and not all are done during the master scheduling process.

For a company to report on their environmental activities and results makes sustainability an issue most important to their suppliers employees regulators competitors

competitors successful green initiatives can be used as a competitive weapon.

Once the company's value chain has been documented and internal consensus gained the next best in using this analysis is complete a value chain analysis for the company's most significant competitors identify key functions and people within each step to facilitate duplication and fail-safe processes find overlapping activities and consolidate whenever possible isolate core from non core activities with the goal of outsourcing the non core

complete a value chain analysis for the company's most significant competitors The primary purpose of value chain analysis is to facilitate a comparison activity-by-activity of how effective a company is relative to their competitors.

Allowances for scrap/yield estimates in the manufacture of a component require over planning of: component planned releases parent planned releases component planned receipts parent safety stock

component planned releases Since the scrap/yield occurs on the component level, BOM issues will have to take this factor into account and over-issue component quantities.

When a company's competence in performing a certain task reaches the level of a competitively superior strength, this is a strategic imperative core competency technical advantage candidate for KPI monitoring

core competency Core competency is a proficiently performed task that is central to a company's strategy and competitiveness

A company has redesigned their packaging and saving tons of plastic annually. This is best understood as an example of cost improvement efforts design for environment (DFE) strategy corporate sustainability strategy common sense

corporate sustainability strategy Saving tons of plastic resin annually, and reducing the number of empty bottles, is a sustainable strategy to benefit the environment

Caution should be exercised in using value chain analysis alone in efforts to meet or beat top competitor's costs because competitors may spend more on sales and marketing; typically not revealed in value chain analysis cost and price differences may emanate from supplier and distribution superiority Financial and portfolio analysis are superior tools for cost reductions Value chain analysis often ignores purchasing

cost and price differences may emanate from supplier and distribution superiority Cost & price differences between competitors may have origins within activities performed by suppliers or by distribution allies.

A primary reason to use statistical process control on an operation that is in the state of statistical control is to: define the specification limits for parts. reduce the operation cycle time. detect special cause variation. track parts acceptance.

detect special cause variation. Statistical process control applies statistical methods to measuring and analyzing variation in a process and detects special (assignable) causes of variation. Reducing the operation cycle time is not a function of statistical process control. Statistical process control is not used to define specification limits for parts or to determine their acceptance.

A significant difference between absorption and variable costing is that variable costing: captures all costs of production. should not be used for make-or-buy decisions. does not assign fixed factory overhead to the product. assigns a portion of fixed factory overhead to the product.

does not assign fixed factory overhead to the product. Variable costing is an inventory valuation method in which only variable production costs are assigned to the product; fixed factory overhead is not assigned to the product. Not all costs of production, which would include fixed factory overhead, are assigned to the product. Variable costing, rather than absorption costing, should be used for make-or-buy decisions.

The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect and involving them in decision-making is: employee assistance program. employee involvement. employee stock ownership plan. employee empowerment.

employee involvement. Employee involvement uses the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes.

Management agrees that a good way to win sales for their products that compete in a market that has highly variable demand is to add capacity, even though it may be underutilized. The primary order winner for this product is most likely quality flexibility customization cost

flexibility Flexibility is the ability of the manufacturing system to respond quickly, in terms of range and time, to external or internal changes. Having excess capacity allows for changeover flexibility so that an organization can react to customer demand changes

The practice of reducing the forecast by actual customer orders is known as: demand commitment available-to-promise forecast consumption order integration

forecast consumption Available-to-promise is incorrect because it is defined as the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The question is the definition of forecast consumption, which is the correct answer.

Group technology may be used to identify the physical similarity of manufactured parts. A major benefit of this would be to facilitate formation of a dedicated manufacturing cell design modifications identification of obsolete parts modularity

formation of a dedicated manufacturing cell Group technology identifies the physical similarity of parts and establishes their effective production.

A company's final process is currently outsourced. The five year forecast suggests the company's shipment volumes will quickly cause the subcontractor to allocate time between all of its customers, extending lead time by 25%. A solution to consider is finite scheduling Less than truckload (LTL) shipping backward integration forward integration

forward integration Forward integration is the process of buying or owning elements of the production cycle and the channel of the supply chain toward the final customer.

The Global Reporting Initiative (GRI) guidelines concerning a company's environmental performance are a mandatory set of European Environment Agency (EEA) rules that EU based companies are required to follow preliminary set of rules that the US EPA is considering codifying into law set of rules that the EPA enforces for US based companies and their tier 1 suppliers framework around which a company can set its own goals

framework around which a company can set its own goals The GRI framework sets out the principles and performance indicators that organizations can use to measure and report their human rights, labor, environment, and anticorruption practices and outcomes.

The cash flow statement shows the cash inflows and outflows outflows only inflows only beginning cash, inflows and outflows

inflows and outflows The statement of cash flows presents the cash inflows and outflows.

The internal rate of return (IRR): equals the net present value. is the interest rate that makes the net present value of the investment equal to 1. is used to calculate the profitability index. is used when considering investing in projects.

is used when considering investing in projects. The IRR is the rate of compound interest at which the company's outstanding investment is repaid by proceeds from a project.

The most significant factor affecting the difference between planned lead time and actual lead time for a specific order or batch in a shop is: setup labor priority component availability

priority A planned order has its lead time calculated by reference to the product's standard routing. A released order can have its lead time altered by shrink queue, move, and wait times, the use of an alternate routing, order splitting and overlapping. The lead time reduction would be driven by the order's priority.

The use of U-lines promotes all of the following outcomes EXCEPT: production in a batch at each machine. more effective utilization of labor. reduction of inventory between operations. visibility of problems related to quality.

production in a batch at each machine. Because it is in the shape of a U, a U-line allows workers to easily perform several nonsequential tasks without much walk time. This means that inventory is reduced because there are no queues before operations; since workers are placed within a cell, production problems become very visible to operators; and labor is more efficiently utilized. A U-line will reduce queues and lead times because products can be produced in quantities as small as one unit rather than in a batch.

The length of a forecast horizon is determined primarily by the longest component lead time. delivery time allowed by the customer. length of the manufacturing cycle. purpose of the forecast.

purpose of the forecast. How far into the future a company wants to forecast is a critical decision determining the size of the forecast horizon.

Ensuring all customer needs are identified in an effort to solidify the product design is an example of the qualitative forecast technique process flow analysis methodology Delphi method quality function deployment (QFD) process

quality function deployment (QFD) process QFD is a methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the product design process.

Increased flexibility in order to meet customer demand changes can be achieved by: reducing scrap. increasing component inventory. increasing lot sizes. reducing lead times.

reducing lead times. Reducing lead times, and specifically setup times, allows for more frequent changes to adapt to changes in demand.

Various cost saving opportunities can be achieved from acquiring businesses with closely related financial calendars and accounting practices sales activities where products are sold to the same customers philosophies concerning borrowing for capital expenditures work force employees

sales activities where products are sold to the same customers Various cost saving opportunities spring from acquiring businesses with closely related sales and marketing activities where products are sold to the same customers. A single sales force can often reduce sales costs.

The current ratio is used to appraise the ability of the company to sustain its current rate of sales satisfy its current debt out of current assets attain its current year end earnings per share goal issue more founders stock

satisfy its current debt out of current assets The current ratio (current assets / current liabilities) is used to appraise the ability of the company to satisfy its current debt out of current assets.

Which of the following may be used as a measure of manufacturing process flexibility? low overhead costs output per employee skills per employee work center efficiency

skills per employee A key component in manufacturing process flexibility is the ability of operators to perform multiple processing tasks. Multiple skilled employees enable operators to be moved around in the plant to tackle bottlenecks.

Prior to constructing huge industrial power lines within pristine wilderness, the company sought input from various public groups. This is a perfect example of the company exhibiting its social responsibility product positioning public relations pro forma fiduciary responsibility

social responsibility Social responsibility is a commitment by management to behave ethically and to contribute to community development.

The integration effort of cable companies to diversity into providing internet and telephone services is an example of company seeking to become a monopoly strategic fit in R&D and technological activities larger company restraining industry opportunities need for more government regulations

strategic fit in R&D and technological activities Businesses with a strategic fit in R&D or technology activities perform better together than apart because of potential cost savings.

Once a company has identified a cost-based competitive advantage using value chain analysis and benchmarking every effort should be made to keep this advantage secret it should be the key driver for all future marketing campaigns as a superior differentiator the value chain activity may be a candidate for continuous cost reduction efforts this activity must be exploited by designing it in to all new products

the value chain activity may be a candidate for continuous cost reduction efforts Achieving a cost based competitive advantage requires a determined management efforts to be cost efficient in performing these tasks. The goal must be continuous cost reductions.

A company's key success factors should as a minimum include generous portions of narrative from the company's mission and vision statements the company's targeted year end stock price those attributes or strengths with the greatest impact on future success in the marketplace the internal rate of return (IRR) stated as a percent of earnings

those attributes or strengths with the greatest impact on future success in the marketplace Key success factors are the product attributes, organizational strengths, and accomplishments that have the greatest impact on future success in the marketplace.