SCM 310 Exam 2

What needs to be done to prove a process' capability? a. Place customer-specific stickers on boxes of product. b. Make decisions or activities to make a product secure. c. Assess a supplier's available capacity and meet the investigating organization's requirements. d. Collect data on the process by performing a trial run or pilot test.

d. Collect data on the process by performing a trial run or pilot test.

Which of the following is NOT a potential source of variation in the Ishikawa cause-and-effect diagram? a. Materials b. Measurements c. Environment d. Prices

d. Prices

Which of the following is NOT a good reason to carry inventory? a. Prepare for demand growth b. Manage supply/demand uncertainty c. Meet customer demand quickly d. Reduce wastes

d. Reduce wastes

Which of the following is not a dimension of quality? a. Performance b. Conformance c. Reliability d. Traceability

d. Traceability

What is a source of uncertainty that comes from on the supply side? a. Unpredicted customer demands b. Internal process inefficiency c. The fast changing customer needs d. Unreliable suppliers

d. Unreliable suppliers

Creating a positive work environment creating longevity in employee retention describes which lean operation competitive advantage? a. the customer rules b. low inventory c. zero-waste d. respect for all employees

d. respect for all employees

Lean operations should begin with a. Understanding customer needs b. Eliminating process waste c. Eliminating waste in time and space d. Applying continuous improvement

a. Understanding customer needs

Recognizing that many customers want their shoes made in the USA is an example of this step in the continuous lean journey? a. identity customer value b. map the value stream c. flow the process d. pull demand through the system

a. identify customer value

Visual management refers to a. seeing and making sense of an activity or process. b. inventory buffers. c. cross-training. d. Six-sigma.

a. seeing and making sense of an activity or process.

The primary objective of inventory management is a. total cost minimization. b. warehouse expansion. c. warehouse utilization. d. inventory minimization.

a. total cost minimization

If annual demand is 24,000 units, and the order quantity is 3,000 units, then which of the following is true? a.) The annual number of order placements will be 8, and average inventory levels will be 1,500. b.) The annual number of order placements will be 8, and average inventory levels will be 3,000. c.) The annual number of order placements will be 12, and average inventory levels will be 12,000. d.) The annual number of order placements will be 24, and average inventory levels will be 12,000.

a.) The annual number of order placements will be 8, and average inventory levels will be 1,500.

Which of the following is true if annual demand for a given product is 1,800 units, and the EOQ is 300 units? a. An order will be placed every two months. b. The average length of an order cycle will be five months. c. There will be three order placements per year. d. An order will be placed once per quarter.

a. An order will be placed every two months.

Which "Quality of Product" dimension would you be assessing when asking the question, "Does the product conform to design specifications?" a. Conformance b. Durability c. Performance d. Serviceability

a. Conformance

In Japanese, Kaizen means: a. Continuous Improvement b. Go and see c. Wasteful activity d. Mistake proof

a. Continuous Improvement

Eliminating process waste includes: a. Eliminating all activities that don't add value and increasing efficiency. b. Go and see for yourself and increasing efficiency. c. Increasing efficiency and increasing effectiveness. d. Increasing effectiveness and go and see for yourself.

a. Eliminating all activities that don't add value and increasing efficiency

Which of the following is NOT a danger of too high turnover rates a. Increased excessive inventory b. Possible lowered sales volume due to running out of needed items c. Increased cost of goods sold due to inability to produce d. Increased costs and time related to purchasing, ordering, and receiving

a. Increased excessive inventory

What is the goal of theory of constraints? a. Maximize throughput while minimizing inventory and operating expense. b. Maximize Operating expense while minimizing accounts payable, and throughput. c. Minimizing Activity analysis, while maximizing throughput and Inventory. d. Minimizing throughput while maximizing inventory and operating expense.

a. Maximize throughput while minimizing inventory and operating expense.

Which of the following does the basic EOQ model help inventory managers accomplish? a. Minimize the sum of inventory holding and order placement costs. b. Maximize total logistics costs. c. Minimize inventories. d. Maximize revenues.

a. Minimize the sum of inventory holding and order placement costs.

Building a one-of-a-kind output is an example of which process? a. Project. b. Job Shop. c. Batch Process. d. Assembly Line.

a. Project.

Which of the following is the most effective and productive way to reduce the optimal order quantity (Q)? a. Reduce order or set-up costs b. Reduce total demand c. Reduce the cost of carrying inventory d. Increase the unit price

a. Reduce order or set-up costs

Which of the three processes define and deploy business strategies? a. Strategic Processes. b. Operational Processes. c. Enabler Processes. d. Human Processes.

a. Strategic Processes.

The International Organization for Standardization (ISO) built its quality certification ISO 9000 on which core principles? a. Total Quality Management (TQM) b. Automated Manifest Systems (AMS) c. Automated Storage/Retrieval System (AS/RS) d. Business Continuity Planning (BCP)

a. Total Quality Management (TQM)

How did Toyota outproduce some of the largest carmakers in the world? a. Toyota managed processes not functions. b. Toyota used a global strategy. c. Toyota used a green strategy. d. Toyota used the human factor design.

a. Toyota managed processes not functions.

ABC classification relies on the Pareto Principle a. True b. False

a. True

The theory of constraints argues that all processes possess constraints that limit their capacity. a. True b. False

a. True

How many calls a customer service agent can handle per hour is an example of what? a. Inventory. b. Capacity. c. Hurdle Rate. d. Infinite Loading.

b. Capacity.

As companies started to seek scale economies and efficiency, their goal was to take advantage of ____________ in functional areas? a. ABC classification. b. Deep skills. c. Activity Based Costing. d. Common costs.

b. Deep skills.

Materials Requirement Planning deals with which of the following: a. Independent demand b. Dependent demand c. End-user demand d. Uncertain demand

b. Dependent demand

A good inventory manager will strive to minimize inventory holdings. a. True b. False

b. False

In the metaphor of the bottle for theory of constraints, to get water to flow out at a faster rate, you need to make the neck more narrow. a. True b. False

b. False

Inventory Turnover is defined as Current Inventory/Average Daily Usage a. True b. False

b. False

Quality must be defined by engineers. They are the only one who know what it means to be fit for use. a. True b. False

b. False

The key question inventory management is concerned with is: a. How do you price inventory for quick sale? b. How much inventory do you need? c. How do you move inventory faster through the supply chain? d. How do you reduce inventory carrying costs?

b. How much inventory do you need?

The "flow the process" step of lean production includes: a. Moving to a continuous flow production line. b. Level out the amount of work done at each work station. c. Using more automated equipment. d. Eliminating wastes.

b. Level out the amount of work done at each work station.

To improve the process capability ratio, you may need to find a supplier that operates a better or different process that can produce to your quality requirements. This is called? a. Modify the process b. Outsource c. Change the specifications d. Use the rule of eight

b. Outsource

Which of the following would occur if a firm chose not to hold inventory for a given product? a. Holding costs would increase. b. Stockout costs would increase. c. Order placement costs would increase. d. None of the above

b. Stockout costs would increase.

Making product when you only have demand is an example of this step in the continuous lean journey? a. map the value stream b. flow the process c. pull demand through the system d. continuous improvement

c. pull demand through the system

The economic order quantity minimizes a. the hidden costs. b. the ordering costs. c. the combined costs of ordering and holding inventory. d. the combined of orders and days of supply.

c. the combined costs of ordering and holding inventory.

What is guardbanding? a. Capturing mutual agreements on the work activity deliverables. b. When engineers set product specifications tighter than they need to be. c. Keeping the workplace clean and neat by making cleaning a daily activity. d. A practice that uses point-of-sale scanner data to manage payment, promotion and replenishment.

b. When engineers set product specifications tighter than they need to be.

Statistically, six-sigma performance produces fewer than _____ defects per million opportunities for an error for defect. a. 5.6 b. 6 c. 3.4 d. 4

c. 3.4

A bill of material is a. A nickname for materials inventory manager. b. A piece of legislation that applies to raw materials procurement. c. An illustration of how a finished product is manufactured. d. A supplier's invoice for a shipment of raw material.

c. An illustration of how a finished product is manufactured.

Automobile production is an example of which process? a. Job Shop. b. Batch Process. c. Assembly Line. d. Continuous Flow.

c. Assembly Line.

_______ is good for moderate volume and variety. Examples of this process is bakery, cinema, and university. a. Project. b. Job Shop. c. Batch Process. d. Continuous Flow.

c. Batch Process.

Which of the following is not one of the steps in W. Edward Deming's PDCA cycle? a. Plan b. Do c. Calculate d. Act

c. Calculate

Days of Supply is calcuated by a. Dividing current inventory by inventory ordered. b. Dividing average daily use by performance usage. c. Dividing current inventory by average daily usage. d. Dividing current inventory by performance usage.

c. Dividing current inventory by average daily usage.

Which of the following is NOT a heuristic or rule of thumb used to make inventory decisions? a. Lot for lot b. Period order quantity c. Flexible order quantity d. Fixed order quantity

c. Flexible order quantity

Which of the following is NOT a benefit of high turnover rates a. Increased sales volume b. Decreased expenses related to holding inventory c. Less risk of out-of stock d. Less risk of obsolescence

c. Less risk of out-of-stock

In Japanese, Kanban means a. continuous improvement. b. non-visual signal card. c. communicating what is needed between various stages of production. d. mistake proof.

c. communicating what is needed between various stages of production

Always getting better, adapting to external demands and employee insight describes which lean operation competitive advantage? a. low inventory b. zero-waste c. continuous improvement d. respect for all employees

c. continuous improvement

The main components of inventory holding costs are a. storage and stockout costs. b. order and backorder costs. c. physical and financial carrying costs. d. warehousing and housekeeping costs.

c. physical and financial carrying costs.