331 Exam 2

When calculating the theoretical capacity of a manufacturing facility, operating time for holidays and weekends is subtracted. T or F

False

From the Lenovo assembly video featured in this learning block, the laptop assembly consists of roughly ___ inventory items sourced from across the globe. a. 20 b. 15 c. 22 d. 18

a. 20

From the Lenovo assembly video featured in this module, the laptop assembly consists of roughly ___ inventory items sourced from across the globe. a. 20 b. 15 c. 22 d. 18

a. 20

In its simplest form, the total cost independent inventory can be determined as: a. Carrying Cost + Order Costs b. Square Root of 2AD/VR c. Standard deviation of daily demand * square root (lead time in days) d. Daily demand * average lead time (in days) + (Z * standard deviation of demand during lead time)

a. Carrying Cost + Order Costs

Maintenance systems are critical to successful manufacturing and service operations. The most basic maintenance system is focused on repairing equipment after experiencing a breakdown. This type of maintenance system is called: a. Corrective b. Probabilistic c. Preventative d. Autonomous

a. Corrective

___________________ is demand for raw materials, parts, and work-in-process components based on the level of demand for finished goods consisting of these materials. a. Dependent demand b. Independent demand c. Consumer demand d. Product demand

a. Dependent demand

The video about Boeing 737 manufacturing is an example of: a. Discrete manufacturing b. Continuous or process manufacturing

a. Discrete manufacturing

With all other factors held constant, ________ minimizes the total of order costs and carrying cost to the firm: a. Economic order quantity (EOQ) b. Safety stock c. Periodic inventory control d. Average cycle inventory

a. Economic order quantity (EOQ)

Design capacity is calculated as: a. Equipments design rate (unites/hour) x 24 hours/day x 365 days/year b. Equipment deign rate (unites/hour) x (number planned hours run/day) x (number planned days run/year) c. Demonstrate capacity / effective capacity d. Actual output / design capacity

a. Equipments design rate (unites/hour) x 24 hours/day x 365 days/year

Manufacturing and Service Operations is primarily about creating which type of utility. a. Form b. Time c. Place d. Electric

a. Form

Choose all of the following that represent a "leg" of manufacturing a. People b. Materials c. Money d. Information e. Equipment

a. People b. Materials d. Information e. Equipment

________ is the product placement concept that involves assigning SKUs to an appropriate storage or picking location by accounting for factors that influence the movement, staging, and storage of the SKU in the warehouse including volume and the variability of that volume. a. Product profiling b. Cross-docking c. Variability handling d. Product placement

a. Product profiling

According to the product vs. process matrix, low-volume products with high levels of customization often require what kind of approach? a. Project based b. Job shop c. Assembly line d. Continuous process

a. Project based

What type of warehouse has the advantages of minimizing labor disputes, economies of scale, and letting experts run the warehouse? a. Public b. Private c. Exempt d. Bonded logistics park e. Subcontracted

a. Public

The economic order quantity (EOQ) minimizes total cost of independent inventory, when total cost is calculated as the sum of carrying costs and order costs. The EOQ approach recognizes mathematically that holding costs and carrying costs work in contrast to each other, and that the minimum point on the total cost curve is where these two costs are equal. EOQ can be calculated as: a. Square Root of 2AD/VR b. Standard deviation of daily demand * square root (lead time in days) c. Daily demand * average lead time (in days) + (Z * standard deviation of demand during lead time) d. D/Q * E(Z) * K * SDDL

a. Square Root of 2AD/VR

Not having enough inventory on hand can lead to ____________ incurred from backordering an item and delivering it to a customer at a later date, or the cost of completely losing the order and forgoing any revenue or profit that might have been achieved by the sale of the item. a. Stock-out cost b. Carrying cost c. Purchase cost d. Order and setup cost

a. Stock-out cost

Best Buy has a warehouse containing TVs, video game consoles, and movies. The TVs sell slowly, the consoles sell periodically, and the movies sell quickly. How should Best Buy arrange its warehouse? a. TVs in the back, consoles in the middle, movies in the front b. TVs in the front, consoles in the back, movies in the middle c. Movies in the front, TVs in the middle, consoles in the back d. Movies and consoles in the middle, TVs in the front

a. TVs in the back, consoles in the middle, movies in the front

Under which scenario should a company consider buying a product from an external supplier rather than making it themselves? a. The company has limited capacity in terms of people and equipment to produce in-house b. The company is able scale production to meet demand c. The company has invested in proprietary technology to produce the product d. The company has the technical knowledge to produce the product

a. The company has limited capacity in terms of people and equipment to produce in-house

Using Little's Law, work-in-process (or inventory) can be calculated as a. Throughput x Lead Time b. Throughput / Lead Time c. Lead Time / Throughput d. Demonstrated capacity x actual demand

a. Throughput x Lead Time

Samsung wants to transport a load of 52-inch HDTVs from Carlsbad, California, to San Francisco. What method of transportation should Samsung use? a. Truck b. Water c. Pipeline d. Air

a. Truck

Which of the following does not change from year to year, but remains constant and is rooted in a company's history and culture? a. Values b. Priorities c. Operations d. Strategies

a. Values

______ + ______ = Rate bargaining power when negotiating rates. a. Volume + Consistency b. Technology + Consistency c. Rates + Consistency d. Volume + Good Relationships e. Volume + Value Density

a. Volume + Consistency

______ + ______ = Rate bargaining power when negotiating rates. a. Volume + Consistency b. Technology + Consistency c. Rates + Consistency d. Volume + Good e. Relationships f. Volume + Value Density

a. Volume + Consistency

With all other factors held constant, ________ minimizes the total of order costs and carrying cost to the firm. a. economic order quantity (EOQ) b. safety stock c. periodic inventory control d. average cycle inventory

a. economic order quantity (EOQ)

Toyota has implemented a system in the manufacturing process in which the right materials are delivered, where they are meant to be, and when they are needed. This is referred to as: a. just-in-time principle. b. a job shop. c. anticipatory inventory. d. a push system.

a. just-in-time principle.

Production managers often use a ___________________, which essentially schedules inventory requirements backward, in reverse chronological, to identify when dependent demand inventory is needed to fill future demand for higher assemblies and finished goods. a. master production schedule (MPS) b. bill of materials c. periodic inventory control d. economic order quantity (EOQ)

a. master production schedule (MPS)

Managing closed-loop supply chains are more complex than traditional forward supply chains because: a. product, information, and finances have to all be managed bi-directionally in an integrated manner. b. only some products come back up the supply chain, and it's hard to keep track of which ones will come back. c. it's hard to keep track of when customers become suppliers.

a. product, information, and finances have to all be managed bi-directionally in an integrated manner.

Which mode of transportation is best used to transport each of the products listed below? a. Heavy Equipment b. Short distance consumer finished goods c. Long distance containerized goods d. High value good e. Petroleum or mineral slurry

a. rail b. motor c. water d. air e. pipeline

What type of warehouse has the advantage of minimizing labor disputes, facilitating economies of scale, and letting experts run the warehouse? a.Public b. Private c. Exempt d. Bonded logistics park e. Subcontracted

a.Public

When demand for inventory items is dependent on the demand for a higher assembly or finished good, firms may use a ___________, which provides details about the number of components and parts that make up a finished good. a. Economic order quantity (EOQ) b. Bill of materials c. Periodic inventory control d. Total value optimization

b. Bill of materials

What warehouse automation system is used for high assortment, low volume SKUs and for maximizing space usage? a. Conveyors b. Carousel c. Item bins d. Automated storage/retrieval system e. Forklifts

b. Carousel

What warehouse automation system is used for high-assortment, low-volume SKUs and maximizes space use? a. Conveyors b. Carousel c. Item bins d. Automated storage/retrieval system e. Forklifts

b. Carousel

Which is part of a quick response system where inbound shipments of bulk items are not stored long term but instead broken into smaller quantities, mixed together, and quickly shipped to individual stores? a. Warehouse b. Crossdock c. Combine d. Picking operation

b. Crossdock

Effective capacity is calculated as: a. Equipments design rate (unites/hour) x 24 hours/day x 365 days/year b. Equipment deign rate (unites/hour) x (number planned hours run/day) x (number planned days run/year) c. Demonstrate capacity / effective capacity d. Actual output / design capacity

b. Equipment deign rate (unites/hour) x (number planned hours run/day) x (number planned days run/year)

Design capacity includes which of the following items? a. Time for holidays b. Equipment design rate times 24 hours/day times 365 days/year c. Rate of the constraint times operational efficiency d. A solid forecast of next year performance by the plant manager e. Individual rates set by each plant

b. Equipment design rate times 24 hours/day times 365 days/year

____________ is part of the supply chain involved in managing the forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customers' requirements. a. Procurement b. Logistics c. Transportation d. Negotiation

b. Logistics

What warehouse activity includes identifying the location of the product required to fill an order? a. Shipping b. Order picking c. Put away d. Shipment assembly e. Towline

b. Order picking

What warehouse activity includes identifying the location of the product required to fill an order? a. Shipping b. Order picking c. Put-away d. Shipment assembly e. Towline

b. Order picking

Which of the follow maintenance strategies was NOT discussed? a. Corrective b. Probabilistic c. Preventative d. Predictive e. Autonomous

b. Probabilistic

Which type of equipment should a manufacturer select for a new facility that will produce state-of-the-art batteries for electric vehicles which have been designed and developed by the company's research team? a. Industry standard b. Proprietary c. Used d. Reconditioned

b. Proprietary

The advantage of proprietary equipment is: a. less capital required b. Provides a competitive advantage c. Faster delivery time d. Less technical support required e. Less unique spare parts

b. Provides a competitive advantage

The advantage of proprietary equipment is: a. Less capital required b. Provides competitive advantage c. Faster delivery time d. Less technical support required e. Less unique spare parts

b. Provides competitive advantage

A current best practice strategy that focuses on equipment maintenance is: a. RtT b. TPM c. Lean d. PtD

b. TPM

A current best practice strategy that focuses on equipment maintenance is: a. RtT b. TPM c. Lean d. PtD e. Six Sigma

b. TPM

Transportation costs per unit of freight increase at a decreasing rate with increasing volume, increasing distance traveled, and higher weight density. This defines what theory? a. Weighing out theory b. Transportation cost theory c. Cube standpoint theory d. Intermediary theory

b. Transportation cost theory

The subcomponents of Boeing 787 Dreamliner such as the fuselage, wings, and landing gear that all come together for final assembly represent what kind of inventory? a. Raw material b. Work in process c. Safety stock d. Finished goods

b. Work in process

The subcomponents of Boeing's 787 Dreamliner such as the fuselage, wings, and landing gear that all come together for final assembly represent what kind of inventory? a. Raw material b. Work in process c. Safety stock d. Finished goods

b. Work in process

When demand for inventory items is dependent on the demand for a higher assembly or finished good, firms may use a ___________, which provides details about the number of components and parts that make up a finished good. a. economic order quantity (EOQ) b. bill of materials c. periodic inventory control d. master production schedule (MPS)

b. bill of materials

The cost of tying up capital in inventory that does not provide an immediate return for the firm is considered: a. order and setup cost. b. opportunity cost. c. inventory cost. d. safety stock cost.

b. opportunity cost.

Ted's Wicked Dive Shop buys goggles for $15. Goggles are top seller for Ted, and he typically sells 10,000 units per year. The cost to order a batch of goggles from his supplier is $37.50. The annual carrying cost to hold a pair of goggles is 20% of the purchase price. Ted typically orders 700 goggles each time he purchases a batch of goggles from his supplier. Using carrying costs and ordering costs, calculate the total cost Ted incurs with this order approach. a. $2,873 b. $987 c. $1,586 d. $3,621

c. $1,586

Ted's Wicked Dive Shop buys goggles for $15. Goggles are top seller for Ted, and he typically sells 10,000 units per year. The cost to order a batch of goggles from his supplier is $37.50. The annual carrying cost to hold a pair of goggles is 20% of the purchase price. Using the EOQ formula, calculate the economic order quantity, that is, the number of goggles Ted should order each time he purchases a batch of goggles from his supplier. a. 100 goggles b. 300 goggles c. 500 goggles d. 700 goggles

c. 500 goggles

What emerging trend will alleviate the need to carry certain inventory such as spare automotive or aircraft parts? a. Drones b. Automation in warehouses c. Additive manufacturing d. Digital supply chains e. People moving back to cities

c. Additive manufacturing

Incoming replenishment shipments are preassigned to actual demand orders, so that as soon as a product arrives in the facility it is already assigned to an order. This describes? a. Assortment b. Spot stocking c. Cross docking d. Break bulking e. Product life cycle management

c. Cross docking

Incoming replenishment shipments are preassigned to actual demand orders, so that as soon as a product arrives in the facility, it is already assigned to an order. This describes? a. Assortment b. Spot stocking c. Cross docking d. Break bulking e. Product life cycle management

c. Cross docking

Operating efficiency is calculated as: a. Equipments design rate (unites/hour) x 24 hours/day x 365 days/year b. Equipment deign rate (unites/hour) x (number planned hours run/day) x (number planned days run/year) c. Demonstrate capacity / effective capacity d. Actual output / design capacity

c. Demonstrate capacity / effective capacity

Crowded urban markets require innovative approaches for delivery in the "last mile" logistics initiative. One such solution would be: a. Bus b. Drop shipping c. Drones d. Blockchain

c. Drones

A GE refrigerator has a sensor that tracks milk consumption based on the weight of the container and automatically orders from a grocery store when it senses the milk is getting low. This is an example of what global trend? a. Drones b. Automation in warehouses c. Internet of Things (IoT) d. Digital supply chains e. People moving back to cities

c. Internet of Things (IoT)

Much of the progress made on quality improvement and control duing during the 20th Century, including Lean and Six Sigma, was based upon the work of: a. Peter Sellers b. Larry Ellison c. Joseph Juran d. Jack Welch

c. Joseph Juran

Maintenance systems are critical to successful manufacturing and service operations. A maintenance system that employs monitoring to signal when a failure will soon occur and then undertakes maintenance prior to a failure is called: a. Corrective b. Probabilistic c. Predictive d. Autonomous

c. Predictive

Maintenance systems are critical to successful manufacturing and service operations. A maintenance system that is focused on periodic maintenance based on a time schedule to prevent major equipment failures is called: a. Corrective b. Probabilistic c. Preventative d. Autonomous

c. Preventative

Which of these is not a key component of transportation management? a. Meet delivery promises b. Track and monitor goods in transport c. Process appropriate information to avoid regulatory approval d. Execute the move, ensuring goods are picked up and delivered on time and undamaged

c. Process appropriate information to avoid regulatory approval

Based on similar cost and service characteristics, which mode of transportation is the biggest competition for an inland water transport? a. Truck b. Pipeline c. Rail d. Air e. Forklifts

c. Rail

What mode of transportation is the biggest competition for an inland barge? a. Truck b. Pipeline c. Rail d. Air e. Forklifts

c. Rail

Firms hedge against variation in downstream customer demand and variation in delivery lead time from suppliers though the use of: a. Decoupling inventory b. Strategic inventory c. Safety stock d. Speculative inventory

c. Safety stock

Which of the following is NOT true about a value? a. Values reflect what the organization believes. b. Values depend on the history and culture of the enterprise. c. Values change with the priorities of the business. d. Values include safety, quality, and customer service. e. Values require ongoing leadership work to support them.

c. Values change with the priorities of the business.

Safety stock depends on two factors: (1) the required customer service level, calculated as the number of standard deviations of demand during lead time that will guarantee a certain probability of availability of inventory, and (2) the amount of variation in demand during the lead time. These two factors are captured in the following equation: a. daily demand * average lead time (in days) + (Z * standard deviation of demand during lead time b. D * t /365 * V * Ron the total cost curve is where these two costs are equal. EOQ can be calculated as: c. Z * standard deviation of demand during lead time d. D/Q * E(Z) * K * SDDL

c. Z * standard deviation of demand during lead time

Inventory created due to the fact that customers preferred order cycle, or the amount of time they are willing to wait for a product, is often much shorter than the amount of time to source, manufacture, and supply the product to meet that order is called: a. safety stock. b. strategic inventory. c. anticipatory inventory. d. speculative inventory.

c. anticipatory inventory.

An ordering system based on set intervals with varying order sizes, determined by current inventory levels, is called: a. independent order control. b. opportunity cost. c. periodic inventory control. d. EOQ.

c. periodic inventory control.

Demand variation is decreased when inventory is: a. stored at various smaller facilities. b. manufactured using a push system. c. pooled and stored centrally. d. All of the above

c. pooled and stored centrally.

Demand variation is decreased when inventory is: a. stored at various smaller facilities. b. manufactured using a push system. c. pooled and stored centrally. d. manufactured using a batch production system.

c. pooled and stored centrally.

Firms hedge against variation in downstream customer demand and variation in delivery lead time from suppliers through the use of: a.decoupling inventory. b. strategic inventory. c. safety stock. d. speculative inventory.

c. safety stock.

Stock-out costs represent all the costs associated with: a.storage, tax, insurance, and obsolescence costs, and the opportunity costs over holding an item of inventory over a given period of time. b. labor, information technology, and material costs to research, place, and complete a transaction for the purchase of an item of inventory. c. the loss of current and future sales to a customer, contract penalties, and potential damage to brand and reputation d. inventory being carried by transportation vehicles in the logistics system

c. the loss of current and future sales to a customer, contract penalties, and potential damage to brand and reputation

Energy costs are significant in the processing of aluminum into beverage cans. How much energy can be saved when cans are recycled through closed-loop systems? a. 30 percent b. 45 percent c. 72 percent d. 95 percent

d. 95 percent

Typically, proprietary equipment is: a. Readily available for purchase through traditional market channels b. Accessible to competitors at an industry standard price c. Easy to design, procure, and manufacture d. Able to provide a competitive advantage because of its unique engineering

d. Able to provide a competitive advantage because of its unique engineering

Capacity utilization is calculated as: a. Equipments design rate (unites/hour) x 24 hours/day x 365 days/year b. Equipment deign rate (unites/hour) x (number planned hours run/day) x (number planned days run/year) c. Demonstrate capacity / effective capacity d. Actual output / design capacity

d. Actual output / design capacity

High-performance organizations typically adhere to the following best practices: a. Core Work is the top priority for everyone in the plant b. Everyone is expected to lead win some areas and follow in other areas c. Systems are focused on enabling personal growth and using the best everyone can offer d. All of the above

d. All of the above

A manufacturing facility that produces automobiles would be considered a discrete manufacturing facility because a. Automobiles proved form value b. Automobiles undergo continuous transformation during the manufacturing process c. Automobiles are produced by mixing inputs using a "recipe" or formula d. Automobiles are individual products produced by combining separable components

d. Automobiles are individual products produced by combining separable components

Maintenance systems are critical to successful manufacturing and service operations. A current best practice is to employ ongoing maintenance of equipment performed by equipment operators, as opposed to dedicated maintenance personnel, to eliminate equipment stops. This type of maintenance system is called: a. Corrective b. Probabilistic c. Predictive d. Autonomous

d. Autonomous

Carriers will give you better rates if you give them revenue miles in ______________. a. Both cash and prizes b. Both cash and bonuses c. More delivery time d. Both directions e. Dollars

d. Both directions

Carriers will offer better rates if clients give them revenue miles in ______________. a. Both cash and prizes b. Both cash and bonuses c. More delivery time d. Both directions e. Dollars

d. Both directions

Core work refers to the activities in a manufacturing operation that: a. Are the most routine and easily replicable b. Are most likely to be outsourced to non- specialist suppliers c. Are typically the focus of continuous cost cutting and other efficient related efforts d. Comprise the most important value-adding element of an operation

d. Comprise the most important value-adding element of an operation

The labor, information technology, and material costs to research, place, and complete the transaction related to each order results in what kind of cost for a firm? a. Transportation cost b. Stock-out cost c. Carrying cost d. Order and setup cost

d. Order and setup cost

Warehouses play a critical role in the supply chain system by: a. Enabling diseconomies of scale in sourcing, manufacturing, and transportation b. Preventing the consolidation of materials from multiple suppliers c. Providing an inflexible and high-cost capability for customizing products d. Placing a buffer between supply and demand

d. Placing a buffer between supply and demand

Safety is a value because: a. Priorities change from day to day. b. Everyone likes a safe operation. c. The federal government has mandated safety as a value. d. Safety's importance does not vary with time or situation. e. Safety normally is the top priority.

d. Safety's importance does not vary with time or situation.

How does Caterpillar create a competitive advantage through its closed-loop remanufacturing process? a. Stocking clothing far in advance of sales to ensure in-stock availability b. Only providing new components for its engine rebuilds c. Minimizing the transportation of its engines in the recycling process d. Salvaging components for reuse when rebuilding an engine

d. Salvaging components for reuse when rebuilding an engine

What invention by Malcolm McLean revolutionized how products are shipped and reduced cost so that it is considered a key facilitator of global trade? a. Drones b. Driverless trucks c. TARS from the movie Interstellar d. Shipping containers e. Forklifts

d. Shipping containers

What invention by Malcolm McLean revolutionized how products are shipped at reduced cost, considered a key facilitator of global trade? a. Drones b. Driverless trucks c. TARS from the movie Interstellar d. Shipping containers e. Forklifts

d. Shipping containers

From a purely financial sense, inventory can be classified and carried on the financial records of a company as which type of asset: From a purely financial sense, inventory can be classified and carried on the financial records of a company as which type of asset: a. raw material b. work-in-process c. finish goods d. all of the above

d. all of the above

Lead time variation can be attributed to: a. inconsistent suppliers b. manufacturing delays c. vehicle congestion d. all of the above

d. all of the above

Lead time variation can be attributed to: a. inconsistent suppliers. b. manufacturing delays. c. vehicle congestion. d. all of the above

d. all of the above

Manufacturing often has a high level of emphasis within the supply chain because a. It usually employs many people. b. It is often the constraint in the supply chain. c. It s often capital intensive d. all of the above

d. all of the above

Firms in the automotive, consumer package goods, aerospace, and many other industries use _____________________ to produce high volumes of standard quality goods at a low cost. a. project based production processes b. job shop production processes c. continuous flow production processes d. assembly line production processes

d. assembly line production processes

In a push inventory system, production of an inventory item: a. is initiated by a downstream demand from the customer. b. occurs only after customer demand signals generate the need for that item. c. can be part of the manufacture of large volumes of finished goods with relatively stable demand. d. occurs in anticipation of customer demand.

d. occurs in anticipation of customer demand.

Manufacturing is referred to as the "center" of the supply chain due to: a. Most people b. Most equipment c. Most resources d. Usually is the supply chain constraint e. All of the above

e. All of the above

What type of storage technique assigns a specific location for each SKU every time it is stored? a. Assortment b. Random c. Product profiling d. Spot stocking e. Dedicated

e. Dedicated