TEC 370 Final EXAM Study SetCPFR is defined as: A. Collaborative forecasting which involves collecting and reconciling information from inside and outside an organization to come up with a single demand project B. Non-collaborative forecasting, which in

Which of the following is NOT an assumption used to calculate EOQ? A. A changing rate of demand over time B. a constant and known replenishment C. the satisfaction of all demand D. A constant cost that is independent of the order quantity or time

A. A changing rate of demand over time

The best approach to achieve consensus for creating and finalizing the demand plan uses which approach? A. Collaboration B. Management directives C. Email D. Social media

A. Collaboration

Who is responsible for managing procurement activities within a firm? A. Vice President B. Chief Procurement Officer C. Supply Chain Manager D. Senior Procurement Adviser

B. Chief Procurement Officer

Strategic sourcing is based on which type of relationship? A. Competitive B. Cooperative C. Adversarial D. Distant

B. Cooperative

One issue with offering price discounts on a regular basis is: A. Buying behaviors may change B. Demands will be more difficult to forecast C. Customers may delay purchasing goods until prices are increased D. Sales will plummet

B. Demands will be more difficult to forecast

Identify the system that integrates the individual demand forecasts and plans. A. Materials Requirements Planning (MRP) B. Enterprise Resource Planning (ERP) C. Distribution Requirement Planning (DRP) D. Capacity Requirement Planning (CRP)

B. Enterprise Resource Planning (ERP)

Procurement employees are often part of a team to determine which type of decision management process? A. Pass to make B. Make or buy C. Bid or auction D. Store and distribute

B. Make or buy

Which of the following statements describe(s) the factors that contribute to the bullwhip effect? Choose ALL the right answers. A. Equipment utilization is low. B. Product lead times are inaccurate. C. Demand information is not up-to-date. D. Companies in the supply chain do not communicate effectively

B. Product lead times are inaccurate. C. Demand information is not up-to-date. D. Companies in the supply chain do not communicate effectively

What is the difference between push and pull systems? A. Push systems are driven by customer demand while pull systems depend on anticipated demand B. Push systems are more proactive while pull systems are more reactive C. Pull systems focus on measures such as efficiency and number of units produced D. Pull systems are more common in the manufacturing sector

B. Push systems are more proactive while pull systems are more reactive

What might a manufacturing company need to have as additional inventory if there is a problem with late supplier deliveries? A. finished goods B. Raw materials C. work in process inventory D. reorder point

B. Raw materials

Which of the following is correct on "demand sensing"? A. It allows demand planners to update the demand plan. B. Social media can be used to investigate trending products. C. It could trigger the price increase. D. It influences customers with promotional incentives.

B. Social media can be used to investigate trending products.

Daily demand for a chocolate bar is 26 bars. The lead time for the procurement of the chocolate bar is 3.5 days. Each bar costs $1.25 which is sold in stores nationwide. What is the reorder point for the chocolate bar? A. 130 B. 32.5 C. 91 D. 113.75

C. 91

Demand shaping involves: A. Influencing customer orders B. Reducing the uncertainty of when the order will occur C. A) and B) are both correct D. None of them are correct

C. A) and B) are both correct

A collaborative process used to create an accurate demand plan enables a company to: A. Increase inventory B. Expand its ERP system C. Achieve a competitive edge D. Increase the sales force

C. Achieve a competitive edge

____________________ drives the demand plan and the supply plan. A. MRP B. MPS C. Business plan D. Procurement

C. Business plan

Dynamo is a company that manufactures laundry detergent. The company has an excess of finished goods for its family size laundry detergent which has not been selling as well as expected. In order to reduce the level of inventory, Dynamo ran a 2 week promotion across stores nationwide selling its family size detergent at the same price as its personal size detergent. Which of the following best describes Dynamo's strategy? A. Qualitative forecasting B. Service differentiation C. Demand shaping D. Capacity planning

C. Demand shaping

Which replenishment method results in the same amount of product being ordered each time? A. Safety stock B. Fixed order interval C. Fixed order quantity D. Moving average

C. Fixed order quantity

Demand planning can present a number of difficulties due to the volatility of demand. Which of the following is NOT one of the problems associated with demand planning? A. Lack of coordination and communication between key functional departments B. Limited availability of sales information due to erratic fluctuations in demand C. Limited resources available such as skilled employees and advanced technology D. A high frequency of errors and fluctuations in long-term forecast data

C. Limited resources available such as skilled employees and advanced technology

What is a potential danger associated with too much supply in the market? A. Increased level of competition in the market resulting in price wars B. A potential market crash as firms are unable to recoup their investment due to supply which exceeds demand C. Products might become outdated as they sit unused in storage facilities D. Decreased level of innovation in the market due to a high number of standardized products

C. Products might become outdated as they sit unused in storage facilities

MRP software packages such as Oracle and SAP calculate which of the following? A. Wages of employees involved in the manufacturing process B. Rating level of vendors and suppliers involved in the procurement process C. Raw materials used in the manufacturing process D. Inventory levels of each product across storage centers worldwide

C. Raw materials used in the manufacturing process

The pull based method requires the use of automation and the flow of real-time information across the supply chain. True False

True

The total cost of ownership is a vital component as it calculates costs before and after a purchase order is awarded to a supplier. (T / F) True False

True

Uncertainty can result in supply chain variability. In order to combat this, organizations sometimes hold additional inventory called "safety stock." (T / F) True False

True

Buffer stock is useful to reduce the impact of late deliveries, incorrect quantities and wrong items. (T / F) True False

True

Companies can reduce uncertainty in demand planning by using a variety of techniques such as statistical forecasting, lead time analysis and economic order quantity. (T / F) True False

True

For companies to be successful with JIT, they must be their vendors number-one priority in terms of providing supplies. True False

True

Procurement activities are highly critical as they account for a large percentage of a product's total cost. (T / F) True False

True

Pull systems are able to react to sudden changes in demand more swiftly compared to push systems. (T / F) True False

True

The master production schedule is generated from the demand plan and contains information regarding the end number of units that must be produced. (T / F) True False

True

When you have a vast product offering with small volumes across that product offering, JIT is not going to work. True False

True

After purchase orders are awarded to suppliers, buyers have the additional role of ensuring that: A. Suppliers' pricing is accurate B. Disposal costs are invoiced correctly C. Purchase orders are tracked for on-time delivery D. Demand and sales plans are correlated

C. Purchase orders are tracked for on-time delivery

Demand is best divided into which two kinds? A. Collaboration and consensus B. Short-term and long-term C. Competitive and non-competitive D. Individual and market

D. Individual and market

Fast food restaurants operate on push systems and bakery services operate on pull systems. True False

False

Independent demand differs from dependent demand as it is based on the components needed to produce finished products to fulfill customer demand. (T / F) True False

False

Long-term strategic supply plan include purchase requisitions from the MRP system (T / F) True False

False

CPFR is defined as: A. Collaborative forecasting which involves collecting and reconciling information from inside and outside an organization to come up with a single demand project B. Non-collaborative forecasting, which involves collecting and reconciling information within an organization to come up with a single demand projection C. Collaborative forecasting, which involves collecting and reconciling information within an organization to come up with multiple demand projections D. Collaborative forecasting, which involves collecting and reconciling funds from inside and outside an organization to come up with a single demand projection

A. Collaborative forecasting which involves collecting and reconciling information from inside and outside an organization to come up with a single demand project

Which of the following is NOT part of the inventory carrying cost? A. Cost of ordering B. Cost of personnel to manage inventory C. Cost of space to store D. Cost of obsolescence

A. Cost of ordering

Sometimes, there is uncertainty in supply. A source of supply can be uncertain due to (choose ALL the correct answers): A. Instability of suppliers B. Reliability of transportation C. Not being able to know how many customers will buy D. Potential shortages in raw materials

A. Instability of suppliers B. Reliability of transportation D. Potential shortages in raw materials

Which of the following statement is incorrect about CPFR. A. It helps companies recruit and retain productive employees. B. It helps reduced the bullwhip effect. C. It helps reduce the amount of inventory. D. It aims to align forecasts, production, and orders accurately.

A. It helps companies recruit and retain productive employees.

In supply planning with suppliers, which of the following plans have to do with lowest level aggregation of demand (SKU) and line level plant operation? A. Master production schedule B. Strategic supply plan C. Mid-term supply plan D. Production plan

A. Master production schedule

Discussions between buyers and sellers to reach agreements are called: A. Negotiations B. Conversations C. Dialogs D. Suppliers

A. Negotiations

Uncertainty in supply can occur for all the following reasons EXCEPT A. Order cycle time B. Sudden and severe shortage of raw materials C. Suppliers who are unstable D. Transportation that cannot be relied upon

A. Order cycle time

Which of the following is considered to be a binding contract? A. Purchase order B. Supplier response to an RFP C. Purchase requisition D. Engineering drawing

A. Purchase order

The benefits of CPFR systems include (choose ALL the right answers): A. Reducing inventory cost B. Improving forecast accuracy C. Increasing in-stock percentages D. Lowering safety stock levels

A. Reducing inventory cost B. Improving forecast accuracy C. Increasing in-stock percentages D. Lowering safety stock levels

Identify which planning duration has the least uncertainty and lowest risk. A. Short-term B. Strategic C. Long-term D. Mid-term

A. Short-term

Which of the following is NOT TRUE regarding push systems? A. They rely on customer demand to provide products. B. Equipment utilization needs to be maintained at a high level. C. A master production plan is used to determine inventory needs. D. Inventory levels are based on anticipated customer demand.

A. They rely on customer demand to provide products.

EOQ balances the costs of ordering with: A. inventory carrying costs B. procurement costs C. inventory ordering costs D. manufacturing costs

A. inventory carrying costs

Businesses have to carry ______ because there are variations in demand, supply, and lead time. A. safety stock B. obsolescence stock C. seasonal stock D. raw materials

A. safety stock

Purchase orders sent to suppliers are non-binding and can be altered or cancelled by the buyer at any given time. (T / F) True False

False

It is vital that the procurement department includes suppliers in the planning process. What is the danger associated with not communicating with suppliers in the planning phase? (Choose best answer) A. Suppliers may decide to accept orders with buyers that are more communicative and collaborative B. Suppliers are unable to plan logistically and may not be able to deliver items as needed C. Suppliers may not possess the capacity or capability of required to produce items D. None of the answers above correct

B. Suppliers are unable to plan logistically and may not be able to deliver items as needed

Supply chains can best be defined as A. The process of delivering a customized product or service to a consumer B. The flow of supply and demand which impacts the procurement of materials C. The flow of materials, information, and finances from suppliers to manufacturers to retailers and customers D. The flow of information from a company to the final customer

B. The flow of supply and demand which impacts the procurement of materials

________ explains why sudden change in demand has a reverberating effect across the entire supply chain.

Bullwhip Effect

Qualitative forecasting relies on historical data instead of expert opinion for the launch of a new product. (T / F) True False

False

Which of the following correctly describes the ABC classification system? A. A items are the most complex, B items are slightly complex, C items are the least complex in inventory classification B. A items are the least critical, B items are slightly important, C items are the most important in inventory classification C. A items are the most expensive, B items are slightly expensive, C items are the least expensive in inventory classification D. A items are the most critical, B items are slightly important, C items are the least important in inventory classification

D. A items are the most critical, B items are slightly important, C items are the least important in inventory classification

The procurement department is responsible for all the following activities EXCEPT A. Acting as an intermediary between suppliers and companies B. Performing negotiations with suppliers and awarding purchase orders C. Acquiring and delivering goods, services and necessary equipment D. Planning factory layouts and coordinating machinery and labor

D. Planning factory layouts and coordinating machinery and labor

Which of the following is true regarding the expert forecasting method? A. The method is more time consuming and expensive compared to other methods B. The method tries to determine if a relationship exists between cause and demand C. The method leads to greater accuracy compared to causal forecasting D. The method relies on knowledge from employees who possess specialized skills

D. The method relies on knowledge from employees who possess specialized skills

Management and prioritization, or re prioritization, of demand should occur when it becomes evident that: A. All other actions have failed B. The company has become insolvent C. Demand is steady D. The volume, mix, and timing of actual demand differs from the demand plan

D. The volume, mix, and timing of actual demand differs from the demand plan

When a company has a fixed capacity and demand exceeds supply, the company may: A. Encourage customers to check availability at competing firms B. Do nothing to change demand C. decrease prices and increase marketing spending D. encourage customers to buy alternative products of which they may be a greater supply available

D. encourage customers to buy alternative products of which they may be a greater supply available

Several factors are critical to the success of, collaborative planning, forecasting, and replenishing including: A. excluding supplier inputs B. ignoring variability C. disallowing incentives D. sharing sales information

D. sharing sales information

The fixed order quantity is the least expensive reorder point as it requires less monitoring of inventory levels. (T / F) True False

False