MKT 411

1. Quantitative forecasts use mathematical techniques that are based on: a. Historical data b. Sales force knowledge of the market c. Expert opinions d. Surveys

A: Historical Data

1. Cyclical variations are longer than a year and can be influenced by: a. Political factors b. Imbalances in supply and demand c. Events such as natural disasters d. Population growth

A: Political factors

1. When there is not a lot of currently relevant data available it is generally best to use: a. Qualitative forecasting b. Simple moving average forecasting c. Time series forecasting d. Naive forecasting

A: Qualitative forecasting

Which one of the following is NOT a type of qualitative forecasting? a. Simple moving average b. Sales force composite c. Jury of executive opinion d. Consumer survey

A: Simple moving average

In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. a. Stockouts b. The bullwhip effect c. Price reductions d. Excess stock

A: Stockouts

1. The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue a. True b. False

A: True

1. The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock. a. True b. False

B: False

1. The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods. a. True b. False

B: False

1. Inaccurate forecasts can result in negative outcomes like: a. High inventory costs and increased profits b. Imbalances in supply and demand c. Material shortages and decreased costs of obsolescence d. Low inventory costs and stockouts

B: Imbalances in supply and demand

1. Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series. a. Cyclical Variations b. Trend Variations c. Seasonal Variations d. Random Variations

B: Trend Variations

1. Random variations in a Time Series component are due to: a. Inaccurate responses of the expert participants b. Unpredictable events c. Population growth d. Using a large value for the exponential smoothing constant

B: Unpredictable events

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. Delphi method b. Mean deviation c. Bullwhip effect d. CPFR effect

C: Bullwhip effect

All the following may influence demand and should be considered when developing a forecast EXCEPT a. New competition b. Emerging markets c. Ergonomic condition d. Supplier quality

C: Ergonomic condition

Which of the following is a benefit of CPFR? a. Integrates planning, forecasting and logistics activities b. Provides an analysis of key performance metrics c. Uses joint planning and promotions management d. All of these choices are correct.

D: All of these choices are correct

1. When linear trend forecasts are developed, demand would typically be: a. The passive variable b. The lead variable c. The independent variable d. The dependent variable

D: The dependent variable

1. When using the ABC Inventory Classification, A items typically account for about: a. 80% of the annual dollar usage. b. 15% of the overstocked items. c. 80% of the items. d. 20% of the annual dollar usage.

a. 80% of the annual dollar usage.

1. The formula for forecast error is calculated by using the equation: a. Actual demand for period t minus the forecasted demand for period t b. Actual demand for period t divided by the forecasted demand for period t c. Actual demand for period t plus the forecasted demand for period t d. The average of Actual demand for period t and forecasted demand for period t

a. Actual demand for period t minus the forecasted demand for period t

1. Which of the following would be considered a dependent demand item? a. Bicycle tires used to assemble a bicycle b. Televisions c. Furniture d. Retail customers

a. Bicycle tires used to assemble a bicycle

1. In forecasting, a tracking signal is used to: a. Determine if the forecast bias is within the acceptable control limits b. To route the products on a different mode of transportation c. Measure the underlying changes in demand d. Estimate the demand for the next period

a. Determine if the forecast bias is within the acceptable control limits

1. Which of the following is a reason firms are migrating to ERP systems? a. ERP systems use a centralized database system to tie the entire organization together b. ERP systems are easy to implement, particularly in large organizations c. ERP systems are inexpensive to implement d. ERP systems are successful with two-dimensional processes

a. ERP systems use a centralized database system to tie the entire organization together

1. Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries b. Flexible enough that it allows different companies with different business models to mold the new ERP system to fit the company's business model c. Fairly inexpensive to purchase and implement d. All these choices are correct.

a. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries

1. Too much inventory creates: a. Excess carrying cost. b. Excess ordering cost. c. Excess setup cost. d. Excess stockout cost.

a. Excess carrying cost.

1. The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from: a. Exchange of forecasting information b. Sophisticated forecasting algorithms c. Both "Sophisticated forecasting algorithms" and "Exchange of forecasting information" d. None of these choices are correct.

a. Exchange of forecasting information

1. The real value of CPFR comes from: a. Firms exchanging forecasting information b. Reverse logistics programs c. Centralized purchasing and forecasting relationships d. Sophisticated forecasting algorithms

a. Firms exchanging forecasting information

1. Which of the following is NOT a benefit of better forecasts? a. Improved corporate image among regulators b. Reduced stock outs c. Improved customer service d. Smoother production plans

a. Improved corporate image among regulators

1. According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Lack of communication within an organization b. Organizations tend to spend too much time and money training their employees on the new system c. Top management becomes overcommitted to the point where they constantly encourage the employees during implementation d. All these choices are correct.

a. Lack of communication within an organization

1. Which of the following is NOT a common module of ERP systems? a. Marketing Resources Management b. Human Resources Management c. Supply Chain Management d. Customer Relationship Management

a. Marketing Resources Management

1. Which of the following is very detailed and specifies the end-product to be made, how many units are required and when they need to be completed? a. Master production schedule b. Aggregate production schedule c. Bill of materials d. Capacity requirements schedule

a. Master production schedule

1. Which strategy uses overtime and subcontracting to cope with the high demand periods a. Mixed Production Strategy b. The Aggregate Production Strategy c. The Level Production Strategy d. The Chase Production Strategy

a. Mixed Production Strategy

1. If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the: a. Most recent positive ATP b. Bill of materials c. Beginning inventory d. Master Production Schedule

a. Most recent positive ATP

1. According to the text, which of the following is NOT one of the top three challenges for CPFR a. Sophisticated forecasting algorithms b. Trust c. Cost d. Difficulty making internal changes

a. Sophisticated forecasting algorithms

1. An RFID system consists of: a. The tag, reader, communication network, and software. b. The code, band, writer, and reader. c. The standards, the equipment, the software, and the printer. The header, manager, object, and serial number.

a. The tag, reader, communication network, and software.

1. While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? a. The year 2000 millennium bug b. The trend for companies to eliminate their supply chain partners c. The increased use of email during the 1990's All of these choices are correct

a. The year 2000 millennium bug

1. A positive error implies that a forecast was? 1. A positive error implies that a forecast was? a. Too low b. Too high c. Neither too high or too low d. The sign of an error gives no information as to the direction of the error.

a. Too low

1. Which of the following is true under the Periodic Review System? a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system b. a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system c. there are no discrepancies between physical inventory and the stock record d. The only uncertainty is the magnitude of demand during the delivery lead time e. it is more expensive to administer compared to the Continuous Review System

a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

1. Which of the following describes the capacity planning horizon order from long to short range? a. 1st - Rough-cut capacity plan (RCCP), 2nd - Resource requirements plan (RRP), 3rd - Capacity requirements plan (CRP) b. 1st - Resource requirements plan (RRP), 2nd - Rough-cut capacity plan (RCCP), 3rd - Capacity requirements plan (CRP) c. 1st - Capacity requirements plan (CRP), 2nd - Resource requirements plan (RRP), 3rd - Rough-cut capacity plan (RCCP) None of these choices are correct.

b. 1st - Resource requirements plan (RRP), 2nd - Rough-cut capacity plan (RCCP), 3rd - Capacity requirements plan (CRP)

1. The __________ specifies which end product is to be made, how many are required, and when they need to be completed. a. Bill of material b. Aggregate production plan c. Super bill of materials d. Master production schedule

b. Aggregate production plan

1. Enterprise systems made from applications purchased from multiple vendors over time may be referred to as: a. Best-in-class b. Best-of-breed c. Mix-and-match d. All of these choices are correct

b. Best-of-breed

1. Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. Multi-modular solution b. Best-of-breed solution c. Elite integrator solution d. Premier application solution

b. Best-of-breed solution

1. Which of the following basic production strategies works best with make-to-order manufacturing firms? a. Mixed production Strategy b. Chase Production Strategy c. Level Production Strategy d. Capacity Production Strategy

b. Chase Production Strategy

1. A company is conducting forecasting that revolves around the global recession and real estate crises. This type of forecasting can be referred to as what component of a time series? a. Trend Variations b. Cyclical Variations c. Random Variations d. Seasonal Variations

b. Cyclical Variations

1. Which of the following is a time-phased finished-goods inventory replenishment plan in a distribution network? a. Aggregate distribution plan b. Distribution resource plan c. Discrete available-to-promise plan d. Distribution requirements plan

b. Distribution resource plan

1. Which production planning strategy maintains a core workforce while using overtime, temporary, or part-time workers to manage demand fluctuations? a. Level production strategy b. Mixed production strategy c. Chase production strategy d. No strategy exists that varies production to match demand.

b. Mixed production strategy

1. Which one of the following is NOT a type of qualitative forecasting? a. Delphi method b. Naïve method c. Consumer survey d. Jury of executive opinion

b. Naïve method

1. Which type of forecasting technique would a firm likely use when launching a new product and historical data does not exist? a. Time Series b. Qualitative c. Associative d. Quantitative

b. Qualitative

1. Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Utilizes multiple databases in order to provide up-to-date information b. Reduces the bullwhip effect c. Increases the bullwhip effect d. Minimal capital investment is needed to purchase and implement the system

b. Reduces the bullwhip effect

1. The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. Elite integrator b. Single integrator c. Premier application d. Best-of-breed

b. Single integrator

1. According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT: a. Costs b. Supplier lead times c. Trust between supply chain partners d. Making organizational and procedural changes

b. Supplier lead times

1. The cost of a product is $5, and the carrying cost rate is 20%; the cost of processing an order is $45 and the annual demand is 1000. What is the economic order quantity (EOQ)? a. 20 b. 200 c. 300 d. 5 e. 25

c. 300

1. Proper demand forecasting enables _____________________ for businesses to be competitive. a. High inventory costs and increased profits b. Stockouts and good responsiveness to market dynamics c. Better planning and utilization of resources d. Low inventory costs and increased costs of obsolescence

c. Better planning and utilization of resources

1. An advantage/benefit of utilizing an ERP system includes which of the following? a. ERP systems enable the firm to automate some of the steps of a manufacturing process b. ERP systems are designed to take advantage of Internet technology c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process" d. None of these choices are correct.

c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process"

1. Which production planning strategy varies production to match demand? a. Mixed production strategy b. Level production strategy c. Chase production strategy d. No strategy exists that varies production to match demand.

c. Chase production strategy

1. According to the text, for long-term forecasts, it is recommended that which type of forecasts be used? a. Qualitative b. Quantitative c. Combination of both qualitative and quantitative Forecasts cannot be developed for the long term

c. Combination of both qualitative and quantitative

1. Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: a. Computer assisted drawing and Photo enhancing b. Operating systems and Internet browsing c. Customer relationship management and Human resource management d. All of these choices are correct.

c. Customer relationship management and Human resource management

1. When General Motors purchases tires for their automobiles, this can be classified as: a. Continuous demand b. Customer demand c. Dependent demand d. Independent demand

c. Dependent demand

1. Each unit produced contains $1.25 in materials. This is an example of: a. Setup cost b. Carrying cost c. Direct cost d. Processing cost

c. Direct cost

1. CPFR relies heavily on? a. Firms acting independently b. Firms retaining information c. Firms sharing information d. Firms acting in their own best interest

c. Firms sharing information

1. Which production strategy is best suited for firms needing highly skilled labor where hiring and training costs are high? a. The aggregate production strategy b. Mixed production strategy c. Level production strategy d. The chase production strategy

c. Level production strategy

1. The ___________ planning horizon is shorter than the aggregate production plans, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? a. Material requirements plan b. Demand time fence c. Master production schedule d. Capacity Requirements Plan

c. Master production schedule

1. Which of the following is not a dependent demand item? a. Hamburger buns at McDonalds b. Raw materials at a manufacturer c. Retail goods at a department store d. Service parts at an auto repair shop

c. Retail goods at a department store

1. To check the feasibility of the Master Production Schedule, one would look to: a. Distribution Requirement Plan b. Capacity Requirement Plan c. Rough-Cut Capacity Plan d. Material Requirement Plan

c. Rough-Cut Capacity Plan

1. Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. Mixed Production Strategy b. The Chase Production Strategy c. The Level Production Strategy d. The Aggregate Production Strategy

c. The Level Production Strategy

1. What component of a time series is based on increasing or decreasing movements over many years and are due to factors such as population growth, population shifts, cultural changes, and income shifts? a. Seasonal Variations b. Cyclical Variations c. Trend Variations d. Random Variations

c. Trend Variations

1. If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that: a. Your order lot size was equal to the EOQ b. Your order size was lower than the EOQ c. Your order lot size was higher than the EOQ d. Nothing because there is insufficient information to discern where the EOQ would be.

c. Your order lot size was higher than the EOQ

1. If an item is ordered using its economic order quantity, the annual carrying cost should be: a. twice the annual purchase price. b. slightly less than the annual ordering cost. c. equal to the annual ordering cost. d. the square root of the annual ordering cost. None of these choices are correct

c. equal to the annual ordering cost.

1. Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? a. 80 percent of the unit cost accounts for 20 percent of the items. b. 20 percent of the items account for 80 percent of the tasks. c. 80 percent of the items account for 20 percent of the groups. d. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items. e. None of these choices are correct.

d. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items.

1. According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Lack of communication between the firm and its ERP software provider b. Management underestimates the training required to implement the system c. Top Management doesn't take an active role in the implementation process d. All of these choices are correct.

d. All of these choices are correct.

1. Legacy MRP systems had which of the following limitations? a. The systems needed continuous modifications b. The systems were designed to perform a very specific operational function c. The systems were not user-friendly d. All these choices are correct.

d. All these choices are correct.

1. Which of the following shows the parent-component relationships and the exact quantity of each component required for making a higher-level part? a. Master Production Schedule b. Distribution Requirement Plan c. Resource Requirement Plan d. Bill of Materials

d. Bill of Materials

1. Which forecasting method would use the size of the advertising budget as a variable in the forecasting technique? a. Random variation forecasting b. Time series forecasting c. Business cycle forecasting d. Cause-and-Effect forecasting

d. Cause-and-Effect forecasting

1. Why are firms migrating to ERP systems? a. ERP systems are easy to implement, particularly in large organizations b. ERP systems are inexpensive to implement c. ERP systems are successful with two-dimensional processes d. ERP systems tie together a variety of specialized systems

d. ERP systems tie together a variety of specialized systems

1. Which of the following is NOT a benefit of CPFR? a. Allows collaboration on future requirements and plans b. Provides analysis of sales and order forecasts c. Strengthens partner relationships d. Improved corporate image among regulators

d. Improved corporate image among regulators

1. Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or subassemblies over time period of few days to a few weeks? a. Resource requirements plan b. Master production schedule c. Rough-cut capacity plan d. Material requirements plan

d. Material requirements plan

1. The impact of poor communication and inaccurate forecasts along the supply chain can cause: a. Reverse Logistics b. Consumer's risk c. Economies of scale d. Material shortages

d. Material shortages

1. Which of the following systems allows changes and other modifications to be executed quickly to minimize delivery lead times? a. The Financial Analysis System b. The Master Production System c. The Aggregate Planning System d. The Enterprise Resource Planning System

d. The Enterprise Resource Planning System

1. Legacy MRP systems typically utilized multiple software packages and databases which caused: a. The system to crash often b. Planned order releases c. Data integrity d. The same information to be stored in multiple locations

d. The same information to be stored in multiple locations

1. Which one of the following is NOT a reason for firms to carry inventory? a. To meet variations in product demand b. To maintain independence of operations c. To take advantage of quantity discounts d. To increase production change/setup costs e. To allow for production scheduling flexibility

d. To increase production change/setup costs

1. Which of the following is a disadvantage of carrying too much inventory? a. It increases the need to purchase items. b. It leads to higher annual inventory ordering costs. c. It reduces the need to conduct cycle counts. d. It leads to lower average finished goods inventories. e. It creates an unnecessary waste of scarce resources.

e. It creates an unnecessary waste of scarce resources.

1. The primary purpose of the basic economic order quantity (EOQ) model is to: a. Maximize the customer service level b. Calculate the optimum safety stock level c. Calculate the reorder point, so that replenishments take place at the proper time d. Minimize the sum of purchase cost and holding cost e. None of these choices are correct.

e. None of these choices are correct.

1. Which of the following is NOT an assumption of the economic order quantity (EOQ) model? a. The only variable costs are setup cost and holding cost. b. Quantity discounts are not possible. c. Demand is known, constant, and independent. d. Lead time is known and constant. e. Production and use occur simultaneously.

e. Production and use occur simultaneously.