MANG 3402 FINAL EXAM
Which of the following is a function of inventory? A. to take advantage of quantity discounts B. to decouple various parts of the production process C. to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand D. to hedge against inflation E. All of the above are functions of inventory.
All of the above are functions of inventory.
Which of the following represents an opportunity for generating a new product? A. understanding the customer B. economic change, such as rising household incomes C. changes in professional standards D. demographic change, such as decreasing family size E. All of the above are such opportunities.
All of the above are such opportunities.
Which of the following represents the FIRST step to crash a project? A. Find the critical path(s) in the project network. B. Update all activity times. C. Select the best activity to be crashed and crash it by one period. D. Compute the crash cost per week for each activity in the network.
Compute the crash cost per week for each activity in the network.
Apple generates almost 60% of its revenue from products launched in the past 4 years.
True
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
True
Every network has at least one critical path.
True
In ABC analysis, "A" items are the most tightly controlled.
True
One function of inventory is to take advantage of quantity discounts.
True
One responsibility of a project manager is to make sure that the project meets its quality goals.
True
Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
True
Rapidly developing products and moving them to the market is part of time-based competition.
True
Slack is the amount of time an activity can be delayed without delaying the entire project.
True
The reorder point is the inventory level at which action is taken to replenish the stocked item.
True
A supply chain ends with: A. distributors. B. manufacturers. C. a satisfied customer. D. suppliers.
a satisfied customer.
What are cooperative agreements that allow firms to remain independent, but pursue strategies consistent with their individual missions? A. enhancements and migration B. joint ventures C. acquisitions D. alliances
alliances
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 dollar volume. D. annual demand.
annual dollar volume.
Which of these statements regarding time-cost tradeoffs in CPM networks is true? A. Crashing a project often reduces the length of long-duration, but noncritical, activities. B. Activities not on the critical path can never be on the critical path, even after crashing. C. The crash time always exceeds the normal time. D. Crashing is not possible unless there are multiple critical paths. E. Crashing shortens the project duration by assigning more resources to one or more of the critical tasks.
Crashing shortens the project duration by assigning more resources to one or more of the critical tasks.
A project organization works best for an organization when the project resides in only one of its functional areas.
False
ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.
False
At the economic order quantity, holding costs are equal to product costs.
False
Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.
False
In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.
False
Rapidly developing products and moving them to the market is part of time-based competition.
False
Shortening the project's duration by deleting unnecessary activities is called "project crashing."
False
Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.
False
The critical path can be determined by use of either the "forward pass" or the "backward pass."
False
The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.
False
With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.
False
Work-in-process inventory is devoted to maintenance, repair, and operating materials.
False
Manufacturability and value engineering has which of the following benefits? I. Reduced complexity of the product II. Reduction of environmental impact III. Additional standardization of components IV. Robust design V. Improved job design and safety A. I, III, IV B. IV C. I, II, III, IV, V D. I, III, V E. II, IV
I, II, III, IV, V
In a PERT network, non-critical activities that have little slack need to be monitored closely: A. because PERT treats all activities as equally important. B. because they have a high risk of not being completed. C. because slack is undesirable and needs to be eliminated. D. because near-critical paths could become critical paths with small delays in these activities. Your answer is correct. E. because they are causing the entire project to be delayed.
because near-critical paths could become critical paths with small delays in these activities. Your answer is correct.
Which of the following is NOT one of the phases of project management? A. controlling B. budgeting C. scheduling D. planning E. All of the above are project management phases.
budgeting
The appropriate level of safety stock is typically determined by A. minimizing the expected stockout cost. B. taking the square root of the economic order quantity. C. choosing the level of safety stock that assures a given service level. D. carrying sufficient safety stock so as to eliminate all stockouts.
choosing the level of safety stock that assures a given service level.
The purpose of safety stock is to: A. eliminate the likelihood of a stockout due to erroneous inventory tally. B. control the likelihood of a stockout due to variable demand and/or lead time. Your answer is correct. C. eliminate the possibility of a stockout. D. replace failed units with good ones. E. protect the firm from a sudden decrease in demand.
control the likelihood of a stockout due to variable demand and/or lead time.
What is the shortest duration required to complete an activity? A. optimistic time B. most likely time C. pessimistic time D. crash time
crash time
Self-checkout at a grocery store is an example of A. focus B. delayed customization. C. separation D. customer participation in service delivery.
customer participation in service delivery.
Operation of a hair salon is an example of A. modularization. B. automation. C. delayed customization. D. an assembly line.
delayed customization.
Which of the following statements regarding critical paths is true? A. Every network has only one critical path. B. Some activities on the critical path may have slack. C. The duration of the critical path is the average duration of all paths in the project network. D. The shortest of all paths through the network is the critical path. E. On a specific project, there can be multiple critical paths, all with exactly the same duration.
On a specific project, there can be multiple critical paths, all with exactly the same duration.
Which of the following would likely cause a change in market opportunities based upon levels of income and wealth? A. economic change B. political change C. legal change D. technological change E. sociological and demographic change
economic change
The advantage of having few suppliers is to
form a long-term relationship.
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? A. forward integration B. keiretsu C. backward integration D. current transformation E. horizontal integration
forward integration
Which of the following is NOT a service design technique used to increase service efficiency? A. automation B. modularization C. limit the options D. delay customization E. increase customer interaction
increase customer interaction
Which of the following does NOT belong to ordering costs? A. order processing B. cost of inspection C. interest payments D. clerical support E. restocking
interest payments
In which stage of the product life cycle should product strategy focus on process modifications as the product is being"fine-tuned" for the market? A. decline B. maturity C. growth D. incubation E. introduction
introduction
If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* = SQUARE ROOT OF 2DS/H A. goes down if the holding cost per unit goes down. B. is smaller than the holding cost per unit. C. goes down if the setup cost per order goes up. D. is zero. E. is one-half of the economic order quantity.
is one-half of the economic order quantity.
If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* = SQUARE ROOT OF 2DS/H A. goes down if the holding cost per unit goes down. B. is smaller than the holding cost per unit. C. goes down if the setup cost per order goes up. D. is zero. E. is one-half of the economic order quantity.
is one-half of the economic order quantity.
Which of the following is an external product development strategy? A. migrations of existing products B. new internally developed products C. enhancements to existing products D. joint ventures
joint ventures
Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain?
landscaping contractors
Which sourcing strategy is particularly common when the products being sourced are commodities? A. keiretsu B. virtual companies C. vertical integration D. few suppliers E. many suppliers
many suppliers
A network has been crashed to the point where all activities are critical. Additional crashing: A. is prohibitively expensive. B. may require crashing multiple tasks simultaneously. C. is impossible. D. is unnecessary. E. can be done, but all critical tasks must be reduced in duration.
may require crashing multiple tasks simultaneously.
Which of the following represents an internal product development strategy? A. joint ventures B. migration of existing products C. purchase technology or expertise by acquiring the developer D. alliances
migration of existing products
Policies based on ABC analysis might include investing A. extra care in forecasting for C items. B. the most time and effort verifying the accuracy of records for B items. C. more in inventory security for C items. D. more in supplier development for A items.
more in supplier development for A items.
Which of the following product development strategies has the highest product development risk? A. new internally developed products Your answer is correct. B. acquiring the developer C. alliances D. purchasing technology E. joint ventures
new internally developed products
The advantage of having many potential suppliers is their willingness to
offer lower prices in the short term.
Which of the following does NOT belong to holding costs? A. order processing B. insurance on inventory C. pilferage, scrap, and obsolescence D. storage costs
order processing
What is transferring a firm's activities that have traditionally been internal to external suppliers?
outsourcing
The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is: A. a standard use of the make-or-buy decision. B. offshoring. C. outsourcing. Your answer is correct. D. not allowed by the ethics code of the Supply Management Institute. E. keiretsu.
outsourcing.
Among the following, critical path and slack time analysis MOST help A. point out who is responsible for various activities. B. managers define the project activities. C. highlight relationships among project activities. D. pinpoint activities that need to be closely watched.
pinpoint activities that need to be closely watched.
Which of the following best describes vertical integration? A. sell products to a supplier or a distributor B. produce goods or services previously purchased C. develop the ability to produce the specified good more efficiently than before D. develop the ability to produce products that complement the original product E. build long-term partnerships with a few suppliers
produce goods or services previously purchased
Listing products in descending order of their individual dollar contribution to the firm is called A. product-by-value analysis. B. brainstorming. C. product decision. D. product life cycle.
product-by-value analysis
The analysis tool that lists products in descending order of their individual dollar contribution to the firm is: A. breakeven analysis. B. product life cycle analysis. C. Pareto analysis. D. product-by-value analysis. E. decision tree analysis.
product-by-value analysis.
Which of the following types of inventory describes inventory that has been purchased but not processed? A. raw material inventory B. work-in-process inventory C. maintenance/repair/operating supply inventory D. finished-goods inventory
raw material inventory
Which of the following is NOT a benefit generated by manufacturability and value engineering? A. improved job design and job safety B. reduced standardization of components C. reduced complexity of the product D. reduction of environmental impact
reduced standardization of components
Extra units that are held in inventory to reduce stockouts are called: A. reorder point. B. just-in-time inventory. C. demand variance. D. safety stock.
safety stock.
The proper quantity of safety stock is typically determined by: A. setting the level of safety stock so that a given stockout risk is not exceeded. Your answer is correct. B. carrying sufficient safety stock so as to eliminate all stockouts. C. multiplying the EOQ by the desired service level. D. using a single-period model. E. minimizing total costs.
setting the level of safety stock so that a given stockout risk is not exceeded.
The objective of inventory management is to A. take advantage of quantity discounts. B. strike a balance between inventory investment and customer service. C. provide a selection of goods for anticipated customer demand. D. decouple various parts of the production process.
strike a balance between inventory investment and customer service.
In general, the supply chain starts with A. final customers at the retail store. B. a distributor. C. research and development. D. the provider of basic raw materials.
the provider of basic raw materials.
The two most basic inventory questions answered by the typical inventory model are:
timing of orders and order quantity.
What is the primary purpose of the basic economic order quantity model shown below? Q* = SQUARE ROOT OF 2DS/H A. to calculate the optimum safety stock B. to minimize the sum of carrying cost and holding cost C. to minimize the sum of setup cost and holding cost Your answer is correct. D. to calculate the reorder point, so that replenishments take place at the proper time E. to maximize the customer service level
to minimize the sum of setup cost and holding cost
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor?
vertical integration
Which of the following statements is NOT true? A. A supply chain includes suppliers; manufacturers and/or service providers; and distributors, wholesalers, and/or retailers who deliver the product and/or service to the final customer. B. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer. C. There are three flows along the supply chain; information, product and payment. D. A supply chain rarely pays attention to intergraton of internal business functions such as purchasing department, production department, and deliverydepartment, etc. Your answer is correct. E. Supply chain management describes the coordination of all supply chain activities, starting with raw materials, and ending with a satisfied customer.
A supply chain rarely pays attention to intergraton of internal business functions such as purchasing department, production department, and delivery department, etc.
Outsourcing: A. allows the outsourcing firm to focus on its key success factors. B. utilizes the efficiency that comes with specialization. C. transfers traditional internal activities to outside vendors. D. All of the above are true of outsourcing. Your answer is correct.
A. allows the outsourcing firm to focus on its key success factors. B. utilizes the efficiency that comes with specialization. C. transfers traditional internal activities to outside vendors. D. All of the above are true of outsourcing. Your answer is correct.
Which one of the following is one of the sourcing strategies? A. negotiation with many suppliers B. all of the choices C. vertical integration D. short-term relationships with few suppliers
A. negotiation with many suppliers B. all of the choices C. vertical integration D. short-term relationships with few suppliers
The control of projects involves close monitoring of which of the following? A. quality B. resources C. budgets D. costs E. All of the above.
All of the above
Which of the following statements is TRUE regarding the approach Japanese organizations use for productdevelopment? A. Japanese organizations bypass the team issue by not subdividing organizations into research anddevelopment, engineering, production, and so forth. B. The Japanese approach to product development is an organization with distinct departments. C. Japanese organizations use teams to develop products. D. Japanese organizations assign a product manager to "champion" the product.
Japanese organizations bypass the team issue by not subdividing organizations into research anddevelopment, engineering, production, and so forth.
Which of the following is NOT a type of inventory? A. raw material B. work-in-process C. finished goods D. MRP
MRP
Which of the following is most closely related to the increased demand for international food in the US? A. understanding the customer B. Regulation change C. Society change D. Economic change E. Technology change
Society change
Which of the following statements is NOT true? A. The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage. B. The product decision includes the selection, definition, and design of products. C. Many service firms refer to their offerings as "products." D. The term "products" refers to tangible goods only.
The term "products" refers to tangible goods only.
