Supply Chain Quiz #2 Review

The following contains data which might be necessary to calculate EOQ The total annual usage for part X is 1000 parts Your company's cost of placing an order is $75 Your company holding cost is 3% The cost the particular part you are buying is $20 each Based on the above data what is the EOQ A. 250,000 B. 500 C. 2,236 D. 87

B - 500 sqrt of [ (2 x 1000 x 75) / (20 x 0.03) ] sqrt of [ 2 x demand x cost to place a single order / holding cost (% x price) ]

A carrier who offers transportation services to all shippers at published rate is referred to as A. Contract Carrier B. Common Carrier C. Exempt Carrier D. Private Carrier E. Rail Carrier

B - Common Carrier

All of the following are elements of Just-in-Time (JIT) EXCEPT A. Waste Reduction B. Lean Layouts C. Additional workforce D. Continuous Improvement E. Small Batch Scheduling

C - additional workforce

Six Sigma is described by which of the following statements A. A statistics based process to make quality improvements B. Near quality perfection C. Six times improvement over a defined period of time D. All of the above E. A and B

E - A and B

In ABC Analysis which of the following are true A. B and C items generally account for about 80% of the items in units B. C items are ignored C. A items are given the highest priority and attention D. None of the above E. A and C

E - A and C

what is kanban

Kanban is a tool used with lean and just in time production, it is a scheduling system that helps determine what to produce, when to produce and how much to produce. Kanban maintains inventory levels by sending visual signals for production and delivery of new shipment as material is consumed.

what is the distinction between MPS and MRP?

MPS plans items that have independent demand

A demand planner could use what tools to determine if the forecast is within acceptable control limits a. A tracking signal b. collaborative planning, forecasting and replenishment c. simple moving average d. all of the above e. none of the above

a - a tracking signal

Mixed Production Strategy a. includes aspects of both Chase and Level strategies b. use P-Cards c. outsources all the time to solve capacity issues d. all of the above e. none of the above

a - includes aspects of both chase and level strategies

A farmer's growing some apples, what strategy would they follow?

chase

"give me an order for 10, and I'll make 10" is an example of what production strategy?

chase produce only enough goods to meet or exactly match the demand for goods

Toyota makes a hybrid car called a Prius. What is the planning factor for the wheels? a. 1 b. 2 c. 3 d. 4 e. 1/4

d - 4

what is ERP

enterprise resource planning, software tools to help manage information

which production strategy sets production at a fixed rate (usually to meet average demand) and uses inventory to absorb variations in demand

level

lean is

produces just what and how much is needed, when it is needed, and where it is needed.

Here are the part that are needed to make a simple table lamp lamp base which supports the lamp wood from which the base is made light bulb lamp shade electric cord which plugs into the wall outlet If the finished table lamp is level 0, then which of the following items would not be the first level in a planning BOM

wood from which the base is made?

A products' Direct Cost consists of A. Costs directly traceable to the product produced and the labor and material that is used to make the part or final product B. Costs of transportation C. The cost of renting or owning the building in which the part of final product is made D. All of the above E. None of the above

A - Costs directly traceable to the product produced and the labor and material that is used to make the part or final product

If you practice the Kaizen process of improvement which of the following describes your approach to solving problems A. Slow and steady wins the race B. The faster the better C. Inspect all of the parts to make sure its excellent quality D. If I don't get this done right away then my competition will get my customers

A - Slow and Steady wins the race

I showed 2 slides in class of a river with rocks in it. I was trying to explain: A. That inventory can cover up (hide) problems B. How companies plan C. That inventory helps meet customer demands D. How JIT works E. Why its good to have lost of inventory

A - that inventory can cover up (hide) problems

As a CFO you would like lower inventory turns at your company A. TRUE B. FALSE

B - False

Indirect costs can be traced directly to the unit produced A. True B. False

B - False

Why would a company want to use ABC analysis when managing their inventory A. Because it's the best way to determine EOQ B. So they can focus their attention on the parts that have the highest inventory value C. Because it's the only technique that works D. Because all ERP systems require it E. All of the above

B - So they can focus their attention on the parts that have the highest inventory value

I asked you to read an article posted on BB titled "Transforming Traditional Lean Principles". This was a good example of: A. Using Lean principles to solve a manufacturing problem B. Using Lean principles to solve a service industry problem C. How Lean principles are not really used very well in service industries D. Why Lean could not be used to solve their problems E. None of the above.

B - Using Lean principles to solve a service industry problem

If a buyer and seller agree that the terms will be FOB origin then the following is true A. The buyer owns the product when the seller delivers it to the buyers location B. The buyer owns the product when the seller delivers the product to the trucker C. The buyer and the sells share the transportation costs D. The seller owns the product until it's delivered to the buyer or where its drop shipped

B - the buyer owns the product when the seller delivers the product to the trucker

When we refer to "set up" costs in manufacturing we are talking about A. The material and labor cost to produce the finished product B. The cost associated in making the necessary equipment changes to make a different model or different product on that equipment. C. The act of planning the capacity of the equipment D. The act of planning for the MRP E. All of the above

B - the cost associated in making the necessary equipment changes to make a different model or different product on that equipment

If these are the basic steps for deciding which parts are A, B and C for an A,B,C analysis 1. Calculate the cumulative % 2. Sort the items by descending dollar amount and determine the % of the total for each item 3. Calculate the annual inventory value for each item Then what is the order or sequence that you have to do each of the above steps A. 1 then 2 then 3 B. 2 then 3 then 1 C. 3 then 2 then 1 D. 2 then 1 then 3

C - 3, 2, 1

The difference between TL and LTL is A. TL is only used to short distances B. LTL allows larger shipments to be transported for less money C. LTL is good for companies shipping less weight or volume that can't fill a truck D. TL is always the least costly method of motor carriers E. LTL is always the least costly method of motor carriers

C - LTL is good for companies shipping less weight or volume that can't fill a truck

If my company had unique delivery and handling requirement for my product which would be the best type of carrier to use A. Ocean B. Common Carrier C. Contract Carrier D. Rail E. Air

C - contract carrier

The difference between a Physical Inventory and a Cycle Count is A. Physical Inventory is a less costly approach B. Cycle counts are more disruptive to the companies daily operations C. Cycle counts use a small subsets of inventory that are counted on given day D. Physical Inventory takes a lot less time

C - cycle counts use a small subsets of inventory that are counted on given day

MRP is a a. short range planning tool b. tool used to plan components and parts to build the product c. long range planning tool d. A and B e. none of the above

D - A and B

3PL's can provide which of the following services A. Act as a customs broker B. Negotiate and manage transportation services C. Manage DC's and Warehouses D. All of the above E. None of the above

D - All of the above

Kanban Cards used in a manufacturing line are meant to do what A. Show how the part is assembled B. Create a "pull" system within the production line so parts are only produced when needed C. Show in a very visible way when parts are needed within the production line D. B and C E. All of the above

D - B and C

Which is the most expensive category of inventory A. Maintenance repair & operating (MRO) B. Work-in-process (WIP) C. Raw material D. Finished goods

D - Finished Goods

When dealing internationally freight terms are much more complicated. For that reason there are international terms known as A. International Norms B. FOB expanded C. International Terms D. Inco terms E. 3PL terms

D - Inco Terms

If your company used seasonal weather patterns to forecasts, it is taking into account A. Dependent demand B. Parent and component relationships C. MRP D. Independent demand E. None of the above

D - Independent Demand

Six Sigma is a very process driven approach. In DMAIC which of the following is not part of the process. A. Define B. Measure C. Analyze D. Inspect all parts E. Improve

D - Inspect all parts

If a company wants to make large improvements regarding its inventory turns is should A. Benchmark other companies in their industry B. Establish VMI with key suppliers C. Take ABC analysis seriously D. All of the above E. None of the above

D - all of the above

A producer has to ship some heavy product (100,000 pounds) from NJ to California. What would most likely be the lowest cost. A. TL B. LTL C. Air D. Inter Modal E. Boat or ship

D - inter modal

Dependent Demand includes all of the following EXCEPT: A. Internal Demand for parts based on the demand of the final product for which parts are used B. Demand for subassemblies used in the final product C. Demand for raw materials used in the final product D. Movements in Gross Domestic Product (GDP) E. Demand for components used in the final product

D - movements in Gross Domestic Product

Reorder point (ROP) formulas are used in determining when to reorder a part. While there are multiple statistical reorder points formulas what is the person using these formulas trying to accomplish? A. The highest inventory level at which to order a part in order to make sure there is enough safety stock B. The optimal quantity of parts to order when an order is placed C. That their manufacturing process is in control D. The lowest inventory level at which the order must be placed to avoid a stock out E. All of the above

D - the lowest inventory level at which the order must be placed to avoid a stock out

Which of the following is most likely to use RFID A. For all the items in grocery store B. A large warehouse that receives and ships thousands of different parts C. Your EX pass for tolls on highways D. A and B E. B and C

E - B and C

what is the equation for EOQ

Q = the sq rt of (2DS/H) D = demand for units S = ordering cost H = carrying cost

When a planner talks about BOM explosion they are talking about a. demand for final products that are affected by trends, seasonal patterns, and general market conditions b. all the down under parts from the parent part. Used to see what is needed to make that parent part c. what parent parts use this down under part d. supplier will use value analysis and disassemble the part to see how it's made e. none of the above

b - all the down under parts from the parent part. Used to see what is needed to make that parent part

Which of the following is not a quantitative forecasting technique a. simple moving average b. Delphi method c. weighted moving average d. exponential smoothing e. regression analysis

b - delphi method

When managing inventory EOQ is used to A. Determine when to place you orders for parts B. Determine how many parts to order C. Determine which parts you should focus your attention on D. Only considers the cost to place an order

b - determine how many parts to order

the best reason a company might decide to ___________ is because they can't afford to invest in the technology to keep current with their competitors or the market demands a. insurance b. outsource c. the use of P-Cards d. implement Kaizen e. none of the above

b - outsource

In the context of planning the term "independent demand" refers to a. someone in the supply chain depending on your parts to show up so they can manufacture b. the demand to final products are affected by trends seasonal patterns and general marker conditions c. internal demand for parts are based on the demand of the final product for which the parts are used d. all of the above e. none of the above

b - the demand to final products are affected by trends seasonal patterns and general market conditions

"Time fence" is used in the planning process because a. often a company needs to fence off its valuable inventory so it does not get stolen b. to prevent change being made to the short term product schedule c. to help sales people sell products easier d. tool used as part of APP e. none of the above

b - to prevent change being made to the short term product schedule

APP is not used for determining a. production for new facilities b. expansion for existing facilities c. hiring temporary employees in the next 1-3 months d. major equipment purchases

c - hiring temporary employees in the next 1-3 months

A production planner might try various forecasting techniques and select a. the one that produces the most inventory b. the one that produces the least inventory c. the one that most closely matches the actual requirement d. the one that is the easiest

c - the one that most closely matches the actual requirement

ERP system can be useful to a business because all of the following except a. they can add visibility to help reduce supply chain inventories b. they can help to standardize manufacturing processes c. they don't cost much are and very easy to install and implement d. measure performance and communicate via a standardized method

c - they don't cost much and are very easy to install and implement

3rd party logistics companies can be useful for which of the following a. freight management b. product distribution c. warehousing d. all of the above

d - all of the above

as a buyer you want to classify the parts or services you will be purchasing because a. you need to be able to find them later in the warehouse b. so you know when to reorder more of them c. the "buy American" law requires it d. it's a critical step in developing a sourcing strategy e. ISO 9000 and ISP 14000 requires that you do this

d - it's a critical step in developing a sourcing strategy

Collaborative supplier/buyer relationships help a. encourage the sharing of information which helps both parties b. rarely used in SCM functions c. can reduce inventories and improve customer satisfaction d. all of the above e. A and C

e - a and c

A planner might run a "implosion from a BOM in order to a. determine all the arts necessary to make the parent products b. determine what the planning factor is when doing the MRP planning from the BOM c. determine if all the parts are available to meet MRP output d. determine what proper inventory level should be e. determine all the products or assemblies a particular part is used on before deciding if they can make changes to the part

e - determine all the products or assemblies a particular part is used on before deciding if they can make changes to the part

what does it mean for inventory turn?

how fast you move it

fob origin

indicates that the sale is considered complete at the seller's shipping dock, and thus the buyer of the goods is responsible for freight costs and liability during transport. you own the product the minute the seller puts it on the truck

SPC is a process to help a. make sure your process is under control b. make sure you have the right parts for your BOM c. elaborate method to sort out the good from the bad parts at the end of the production line d. you forecast your demand better none of the above

make sure your process is under control

fob destination

means that the buyer takes delivery of goods being shipped to it by a supplier once the goods arrive at the buyer's receiving dock. ... The seller pays and bears the freight charges and owns the goods while they are in transit.