isds exam 3 quizzes
Which choice best describes level scheduling? A. Inventory goes up or down to buffer the difference between demand and production. B. Daily production is variable from period to period. C. Overtime is used to handle seasonal demand fluctuations. D. Price points are calculated to match demand to capacity. E. Subcontracting, hiring, and layoffs manipulate supply.
A. Inventory goes up or down to buffer the difference between demand and production.
Which of the following is FALSE regarding the links between JIT and quality? A. JIT increases the cost of obtaining good quality. B. Inventory hides bad quality; JIT immediately exposes it. C. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. D. JIT reduces the number of potential sources of error by shrinking queues and lead times. E. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory
A. JIT increases the cost of obtaining good quality.
Which of the following is NOT a type of inventory? A. MRP B. finished goods C. work-in-process D. raw material
A. MRP
A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution is referred as A. a probabilistic model. B. a robust model. C. a quantity discount model. D. the EOQ.
A. a probabilistic model.
Which of the following aggregate planning strategies is a capacity option? A. changing inventory levels B. influencing demand by changing price C. influencing demand by extending lead times D. influencing demand by back ordering E. counterseasonal product mixing
A. changing inventory levels
The concept of ABC category analysis is based on A. controlling the maximum amount of money with minimal effort. B. controlling the maximum number of inventory items with minimal effort. C. controlling the maximum number of inventory items with moderate effort. D. statistical sampling, i.e., sampling a few items to get control of the whole inventory
A. controlling the maximum amount of money with minimal effort.
Inventory control models assume that demand for an item is A. either independent of or dependent on the demand for other items. B. identical to the demand for other items. C. always independent on the demand for other items. D. always dependent on the demand for other items.
A. either independent of or dependent on the demand for other items.
An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following? A. facility capacity B. inventory levels C. labor levels D. production rates E. overtime work
A. facility capacity
The objective of aggregate planning is usually to A. meet forecast demand while minimizing cost over the planning period. B. specify what is to be made and when. C. to determine which plans are feasible in the coming months and which are not. D. provide input to material requirements planning systems.
A. meet forecast demand while minimizing cost over the planning period.
Which of the following types of inventory describes inventory that has been purchased but not processed? A. raw material inventory B. finished-goods inventory C. maintenance/repair/operating supply inventory D. work-in-process inventory
A. raw material inventory
Which one is NOT an application of lean principle in services? A. securing more inventory to prepare for disruption in production B. scheduling personnel availability at 15 minute increments to meet demand fluctuations C. inventory sharing among members of the pharmaceutical network D. JIT in food supply management E. improving kitchen layout at McDonald's to drive seconds out of the production process
A. securing more inventory to prepare for disruption in production
What is the cost to prepare a machine or process for production? A. setup cost B. ordering cost C. holding cost D. preparation cost
A. setup cost
Which of the following actions is consistent with the use of level scheduling? A. use inventory to meet demand requirements B. vary work force to meet demand requirements C. vary production levels to meet demand requirements D. use overtime to meet higher-than-average demand requirements E. none of the above
A. use inventory to meet demand requirements
Which of the following aggregate planning strategies is known to lower employee morale? A. varying work force size by hiring or layoffs B. back ordering during high demand periods C. yield management D. changing inventory levels E. counterseasonal product and service mixing
A. varying work force size by hiring or layoffs
Which of these is among the demand options of aggregate planning? A. back-ordering during high-demand periods B. varying workforce size C. varying production rates through overtime or idle time D. subcontracting E. changing inventory levels
A. back-ordering during high-demand periods
In MRP, system nervousness is caused by: A. management's attempt to continually respond to minor changes in production requirements. B. the use of phantom bills of material. C. management's attempt to evaluate alternative plans before making a decision. D. the use of the lot-for-lot approach. E. management's marking part of the master production schedule as "not to be rescheduled".
A. management's attempt to continually respond to minor changes in production requirements.
Which of the following is NOT one of the features that an S&OP process needs to generate a useful aggregate plan? A. A model that combines forecasts and costs. B. A forecast of demand for a reasonable long-term planning period in aggregate terms. C. A method to determine the relevant costs. D. A logical unit for measuring sales and output.
B. A forecast of demand for a reasonable long-term planning period in aggregate terms.
Which of the following is NOT one of the assumptions of fixed-period systems? A. The only relevant costs are the ordering and holding costs. B. Lead times are variable. C. Items are independent of one another. D. Lead times are known.
B. Lead times are variable.
Which of the following statements regarding a pull system is TRUE? A. Large lots are pulled from upstream stations. B. Problems become more obvious. C. Work is pulled to the downstream stations before it is actually needed. D. Manufacturing cycle time is increased. E. None of the above is true of a pull system.
B. Problems become more obvious.
Which of the following statements is true regarding the leverage of supply chain savings? A. Supply chain leverage is about the same for all industries. B. Supply chain savings exert more leverage as the firm's net profit margin decreases. C. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. D. Supply chain leverage depends only upon the percent of sales spent in the supply chain. E. None of the above is true.
B. Supply chain savings exert more leverage as the firm's net profit margin decreases.
Which of the following statements is NOT true regarding the master production schedule? A. The master production schedule is a timetable that specifies what is to be made and when. B. The master production schedule is a sales forecast. C. The master production schedule is a result of disaggregation. D. The master production schedule provides input to material requirements planning systems
B. The master production schedule is a sales forecast.
A system that triggers ordering on a uniform time basis is called A. a fixed-quantity system. B. a fixed-period system. C. a reorder point system. D. an EOQ system.
B. a fixed-period system.
The appropriate level of safety stock is typically determined by A. minimizing the expected stockout cost. B. choosing the level of safety stock that assures a given service level. C.carrying sufficient safety stock so as to eliminate all stockouts. D. taking the square root of the economic order quantity.
B. choosing the level of safety stock that assures a given service level.
In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will: A. increase by 200%. B. increase by about 41%. C. either increase or decrease. D. increase, but more data is needed to say by how much. E. increase by 100%
B. increase by about 41%.
Aggregate planning is concerned with determining the quantity and timing of production in the A. short term. B. intermediate term. C. next term. D. long term.
B. intermediate term.
By convention, what is the top level in a product structure? A. level 10 B. level 0 C. level T D. level 100 E. level 1
B. level 0
When quantity discounts are allowed, the cost-minimizing order quantity: A. is always an EOQ quantity. B. minimizes the sum of holding, ordering, and product costs. C. minimizes the unit purchase price. D. may be a quantity below that at which one qualifies for that price. E. minimizes the sum of holding and ordering costs.
B. minimizes the sum of holding, ordering, and product costs.
What is the practice of keeping a product generic as long as possible before customizing? A. vendor-managed inventory B. postponement C. backward integration D. keiretsu E. forward integration
B. postponement
For seasonal products, the service level should be set to equal A. overage cost / (overage cost minus shortage cost). B. shortage cost / (overage cost + shortage cost). C. shortage cost / (overage cost minus shortage cost). D. overage cost / (overage cost + shortage cost
B. shortage cost / (overage cost + shortage cost).
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. hiring and laying off B. subcontracting C. back ordering during high demand periods D. using part-time workers E. varying production rates through overtime or idle time
B. subcontracting
One use of inventory is A. to tightly synchronize production and distribution processes. B. to provide a hedge against inflation. C. to tightly synchronize a firm's production with its customers' demand. D. to ensure that item cost is maximized.
B. to provide a hedge against inflation.
Which of these aggregate planning strategies is a capacity option? A. changing price B. using part-time workers C. promotion D. counterseasonal product mixing E. back ordering
B. using part-time workers
Which of the following aggregate planning strategies is known to lower employee morale? A. back ordering during high demand periods B. varying work force size by hiring or layoffs C. changing inventory levels D. yield management E. counterseasonal product and service mixing
B. varying work force size by hiring or layoffs
Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? A. Material requirements planning (MRP) B. Just-in-time (JIT) C. Lean operations D. kanban E. Toyota Production System (TPS)
B. Just-in-time (JIT)
Job assignments are a focused issue in which of the following? A. long-range plans B. short-range plans C. intermediate plans D. sales and operations planning
B. short-range plans
Which of the following statements about aggregate planning is TRUE? A. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. B. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. C. A pure chase strategy allows lower inventories when compared to a pure level scheduling. D. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. E. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise.
C. A pure chase strategy allows lower inventories when compared to a pure level scheduling.
If a factory wants to cut its current lot size in half, by what proportion must setup cost change? A. Setup cost must also be cut in half from its current value. B. Cannot be determined. C. Setup cost must be cut to one fourth its current value. D. Setup cost must quadruple from its current value. E. Setup cost must double from its current value.
C. Setup cost must be cut to one fourth its current value.
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. B. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. C. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. D. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. E. All of the above are true.
C. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.
What directly results from disaggregation of an aggregate plan? A. priority scheduling B. a capacity-demand matrix C. a master production schedule D. detailed work schedules E. a transportation matrix
C. a master production schedule
Which of the following is NOT one of the Seven Wastes? A. motion B. transportation C. assignment D. overproduction E. defective product
C. assignment
Disaggregation: A. converts product schedules and labor assignments to a facility-wide plan. B. transforms the master production schedule into an aggregate plan. C. breaks the aggregate plan into greater detail. D. calculates the optimal price points for yield management. E. is an assumption required for the use of the transportation model in aggregate planning.
C. breaks the aggregate plan into greater detail.
Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A. distant relationships with skepticism B. close relationships with skepticism C. close relationships with trust D. distant relationships with trust E. none of the above
C. close relationships with trust
Which of the following is not a goal of JIT partnerships? A. removal of in-plant inventory B. removal of in-transit inventory C. inspect all incoming shipments to ensure zero defects D. removal of unnecessary activities E. All of the above are goals of JIT partnerships.
C. inspect all incoming shipments to ensure zero defects
Which of the following does NOT belong to ordering costs? A. cost of supplies B. clerical support C. interest payments D. order processing
C. interest payments
Which of the following plans are the job of the operations manager, working with other functional areas of the firm? A. long-range plans B. short-range plans C. intermediate plans D. All three: short-range, intermediate, and long-range plans.
C. intermediate plans
Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A. kaizen B. samurai C. keiretsu D. poka-yoke E. kanban
C. keiretsu
Which of the following does NOT belong to holding costs? A. storage costs B. pilferage, scrap, and obsolescence C. order processing D. insurance on inventory
C. order processing
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A. phantom bill B. modular bill C. planning bill D. component bill E. low-level bill
C. planning bill
Which one of the following is a characteristic of a JIT partnership? A. maximal product specifications imposed on supplier B. frequent deliveries in large lot quantities C. removal of incoming inspection D. active pursuit of vertical integration E. third-party logistics never used
C. removal of incoming inspection
The proper quantity of safety stock is typically determined by: A. using a single-period model. B. minimizing total costs. C. setting the level of safety stock so that a given stockout risk is not exceeded. D. multiplying the EOQ by the desired service level. E. carrying sufficient safety stock so as to eliminate all stockouts.
C. setting the level of safety stock so that a given stockout risk is not exceeded.
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. using part-time workers B. varying work force size by hiring or layoffs C. subcontracting D. varying production rates through overtime or idle time E. changing inventory level
C. subcontracting
How can a reduction of in-transit inventory be encouraged? A. high setup costs B. use of trains, not trucks C. supplier location near plants D. low-cost, global suppliers E. low carrying costs
C. supplier location near plants
ABC analysis is based upon the principle that: A. more time should be spent on class "C" items because there are many more of them. B. as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items. C. there are usually a few critical items, and many items that are less critical. D. all items in inventory must be monitored very closely. E. an item is critical if its usage is high.
C. there are usually a few critical items, and many items that are less critical.
Which of the following is NOT a source of variability? A. Drawings or specifications are incomplete. B. Employees, machines, and suppliers produce units late. C. Employees, machines, and suppliers produce units that conform to standards. D. Engineering drawings are inaccurate. E. Customer demand is unknown.
C. Employees, machines, and suppliers produce units that conform to standards.
A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans? A. A line of 5 people in the Chinese department signaling the department to heat 5 Crab Rangoon. B. An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. C. A red light on top of the cashier's lane signals that the cashier needs additional change replenished. D. The meat department stocking up on turkeys before Thanksgiving. E. All of the above are kanban applications.
D. The meat department stocking up on turkeys before Thanksgiving.
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. Just-in-time (JIT) B. kanban C. Lean operations D. Toyota Production System (TPS) E. Material requirements planning (MRP)
D. Toyota Production System (TPS)
A system that keeps track of each withdrawal or addition to inventory continuously is A. a fixed period system. B. a continuous inventory system. C. a constant monitoring system. D. a perpetual inventory system
D. a perpetual inventory system
ABC analysis divides an organization's on-hand inventory into three classes based upon A. unit price. B. the number of units on hand. C. annual demand. D. annual dollar volume.
D. annual dollar volume.
Which of the following is NOT a capacity option of aggregate planning? A. subcontracting B. varying production rates through overtime or idle time C. changing inventory levels D. back ordering during high-demand periods
D. back ordering during high-demand periods
In the single-period inventory model, the overage cost is A. sales price per unit minus cost per unit. B. cost per unit minus sales price per unit. C. salvage value per unit. D. cost per unit minus salvage value per unit.
D. cost per unit minus salvage value per unit.
Which choice below best describes the counterseasonal product demand option? A. producing such products as lawnmowers and sunglasses during the winter B. the breaking of the aggregate plan into finer levels of detail C. lowering prices when demand is slack D. developing a mix of products that smoothes out their demands E. using subcontractors only when demand is excessive
D. developing a mix of products that smoothes out their demands
A single-period inventory model is NOT applicable for A. milk. B. seasonal goods. C. newspapers. D. furniture.
D. furniture.
Kanban is associated with all EXCEPT which of the following? A. reductions in inventory B. moving inventory only as needed C. signals, such as cards, lights, or flags D. increased material handling E. small lot sizes
D. increased material handling
Inventory record accuracy would be decreased by A. ABC analysis. B. cycle counting. C. reorder points. D. increasing stockroom accessibility.
D. increasing stockroom accessibility.
A firm uses the chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy? A. add 100 units to inventory in the next period B. add 200 units to inventory in the next period C. hire workers to match the 100-unit difference D. lay off workers to match the 200-unit difference E. implement a lower price point to increase demand
D. lay off workers to match the 200-unit difference
Which of the following is characteristic of lean operations? A. no supplier partnerships B. easy, mindless jobs C. specialty workers with no cross-training D. low space requirements .E. inventory buffers between each workstation to minimize system downtime
D. low space requirements
The objective of inventory management is to A. provide a selection of goods for anticipated customer demand. B. decouple various parts of the production process. C. take advantage of quantity discounts. D. strike a balance between inventory investment and customer service.
D. strike a balance between inventory investment and customer service.
Manufacturing cycle time is best defined as the: A. sum of all the task times to make one unit of a product. B. length of the work shift, expressed in minutes per day. C. time it takes a unit to move from one workstation to the next. D. time from raw materials receipt to finished product exit. E. time between the start of one unit and the start of the next unit.
D. time from raw materials receipt to finished product exit
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of cars with a hi-fi stereo system to produce B. number of two-door vs. four-door cars to produce C. number of green cars to produce D. total number of cars to produce E. B, C, and D
D. total number of cars to produce
Which of these is among the demand options of aggregate planning? A. changing inventory levels B. varying workforce size C. varying production rates through overtime or idle time D. back-ordering during high-demand periods E. subcontracting
D. back-ordering during high-demand periods
In level scheduling, what is kept uniform from month to month? A. product mix B. sub-contracting levels C. inventory levels D. production/workforce levels E. demand levels
D. production/workforce levels
What is a system for ordering items that have little or no value at the end of a sales period? A. EOQ B. production order quantity model C. ROP D. single-period inventory model
D. single-period inventory model
Which of the following is consistent with a chase strategy? A. vary work force to meet demand requirements B. vary production levels to meet demand requirements C. vary production levels and work force to meet demand requirements D. little or no use of inventory to meet demand requirements E. All of the above are consistent with a chase strategy.
E. All of the above are consistent with a chase strategy.
Which of the following is NOT a goal of JIT partnerships? A. obtain improved quality and reliability B. removal of unnecessary activities C. removal of in-transit inventory D. removal of in-plant inventory E. All of the above are goals of JIT partnerships.
E. All of the above are goals of JIT partnerships.
Which of the following is TRUE regarding the steps to reducing setup times? A. The first step involves performing as much setup preparation as possible while the process/machine is operating. B. The standardization of both tooling and work procedures is advantageous to setup time reduction. C. Move material closer and improve material handling are done before operator training. D. The cycle of steps is repeated until setup time is reduced to under a minute. E. All of the above are true.
E. All of the above are true.
Which one of the following statements is TRUE about the kanban system? A. It is useful to smooth operations when numerous quality problems occur. B. It is associated with a push system. C. The quantities in the containers are usually large to reduce setup costs. D. The supplier workstation signals the customer workstation as soon as a batch is completed. E. The customer workstation signals to the supplier workstation when production is needed.
E. The customer workstation signals to the supplier workstation when production is needed.
Revenue management is MOST likely to be used in which one of the following situations? A. a shipping company that can change its fleet size easily B. a dental clinic that wants to fill its appointment book C. a fast food restaurant with wide demand fluctuations during the day D. a firm with a good counterseasonal product mix E. an airline attempting to fill "perishable" seats at maximum revenue
E. an airline attempting to fill "perishable" seats at maximum revenue
The main trait of a single-period model is that: A. the order quantity should usually equal the expected value of demand. B. it has the largest EOQ sizes. C. supply is limited. D. the cost of a shortage cannot be determined accurately. E. inventory has limited value after a certain period of time.
E. inventory has limited value after a certain period of time.
Which of the following is NOT an opportunity for effective management in the supply chain? A. CPFR B. accurate "pull" data C. postponement D. vendor-managed inventory E. local optimization
E. local optimization
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. using part-time workers B. back ordering during high demand periods C. hiring and laying off D. varying production rates through overtime or idle time E. subcontracting
E. subcontracting
The two most basic inventory questions answered by the typical inventory model are: A. timing of orders and cost of orders. B. order quantity and service level. C. ordering cost and carrying cost. D. order quantity and cost of orders. E. timing of orders and order quantity
E. timing of orders and order quantity
The minimum record accuracy required for successful MRP is approximately which of the following? A. lower than 90% B. 95% C. 97% D. 90% E. 99%
E. 99%
Which of the following lot-sizing techniques results in the lowest holding costs? A. Wagner-Whitin algorithm B. the quantity discount model C. EOQ D. POQ E. lot-for-lot
E. lot-for-lot
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage. True False
false
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration
true
Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers
true
The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems. True False
true
