Product and Operations Ch. 3, 12,13

A manager uses the following equation to predict monthly receipts: Yt=40,000+150t. What is the forecast for July if t=0 in April of this year? A. 40,450 B. 40,600 C. 42,100 D. 42,250 E. 42,400

A. 40,450 40,000 + 150 (3)

A persistent tendency for forecasts to be greater than or less than the actual values is called: A. Bias B. Tracking C. Control Chartering D. Positive correlation E. Linear Regression

A. Bias

If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is? A. 100 Units. B. 200 Units. C. 300 Units D. 600 Units E. 700 Units

700 units

In the A-B-C classification system, items which account for 60 percent of the total dollar volume for few inventory items would be classified as: A. A items B. B items C. C items D. A items plus B items E. B items plus C items

A items

True or False: The pegging refers to identifying the parent items that have generated a given set of material requirements for a part or subassembly

True

True or False: The shorter the forecast period, the more accurately the forecasts tend to track what actually happens

True

The identification of parent items is called

pegging

math problem Bunny Helper

when should an order be released

The primary difference between seasonality and cycle is: A. The duration of the repeating patterns B. Magnitude of Variation C. Ability to attribute the pattern to a cause D. Direction of the movement E. There are only four seasons but 30 cycles

A. The duration of the repeating patterns

The two General Approaches to forecasting are: A. Mathematical and Statistical B. Qualitative and Quantitative C. Judgemental and Qualitative D. Historical and Associative E. Precise and Approximation

B. Qualitative and Quantitative

The MRP input the assemblies, subassemblies, parts and raw materials needed to produce one unit of finished productis the

Bill of Materials

With the A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as: A. A B. B C. C

C item

In the A-B-C classification system, items which account for 15 percent of the total dollar volume for a majority of the inventory items would be classified as: A. A items B. B items C. C items D. A items plus B items E. B items plus C items

C items

Given forecast errors of 4, 8, -3, what is the mean absolute deviation? A. 4 B. 3 C. 5 D. 6 E. 12

C. 5

True or False: The master production schedule states which end itmes are to be produced in addition to when and how many

True

Which of the following is a potential shortcoming of using sales force opinions in demand forecasting? A. Members of the sales force often have substantial histories of working with and understanding their customers. B. Members of the sales force often are well aware of customers' future plans. C. Members of the sales force have direct contact with consumers. D. Members of the sales force can have difficulty distinguishing between what customers would like to do and what they actually will do. E. Customers often are quite open with members of the sales force with regard to future plans.

D. Members of the sales force can have difficulty distinguishing between what customers would like to do and what they actually will do.

Gradual, Long-term movement in time series data is called: A. Seasonal Variation B. Cycles C. Irregular Variation D. Trend E. Random Variation

D. Trend

In many organizations, information flows much more freely within functions than it does across functions. This represents an expanded effort to overcome this tendency

ERP

T/F Because price is not a factor in the EOQ formula, Quantity discount will not affect EOQ calculations.

False

T/F EOQ inventory models are basically concerned with the timing of orders.

False

T/F In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

False

T/F In the EOQ formula, holding costs under 10 percent are expressed as percentages, above 10 percent are expressed as annual unit costs.

False

T/F In the quantity discount model, if holding costs are given as a percentage of unit price, a graph of the total curves will have the same EOQ for each curve.

False

T/F The objective of inventory management is to minimize the cost of holding inventory.

False

True or False: A net change MRP system is one that is updated periodically but not less frequently than once a week

False

True or False: A regenerative MRP system is one that is updated continuously, every time there is a schedule change

False

True or False: Forecasts for groups of items tend to be less accurate than forecasts for indivdual items because forecasts for individual items don't include as many influencing factors

False

True or False: The bills of materials indicates how much material will be needed to produce the quantities on a given master production schedule

False

Scheduled receipts differ from planned receipts in that scheduled receipts

Involve orders that have already been placed

Math problem

P CHART

A visual depiction of the subassemblies and components that are needed to prodce and/or assemble a products is called

Product structure tree

Which of the following interactions with vendors would potentially lead to inventory reductions? A. Reduced lead time B. increased safety stock C. less frequent purchases D. Larger batch quanities E. longer order intervals

Reduced lead time

The primary method for associative forecasting is:

Regression Analysis

Even though it is often the case that no cash outflows result when demand exceeds capacity, __________ can nevertheless be experienced in those circumstances. A. Foreorder costs B. Service costs C. Shortage costs D. Holding costs E. setup costs

Shortage cost

True or False: MRP works best if the inventory items have dependent demand

TRUE

True or False: The inventory records contain information on the status of each item by time period

True

T/F The EOQ should be regarded as an approximate quantity rather than an exact quantity. thus, rounding the calculated value is acceptable.

True

T/F The basic EOQ model ignores the purchasing cost.

True

T/F The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

True

T/F The total cost Curve is relatively flat near the EOQ.

True

T/F The two main concerns of inventory control relate to the costs and the level of customer service.

True

T/F in the single period model, the service level is the probability that demand will not exceed the stocking level in any period.

True

True or False: The bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item

True

Which of the following is the most valuable piece of info the sales force can bring into forecasting situations?

What customers are more likely to do in the future.

math problem

filling orders

math problem

how many should be ordered

An MRP system whose records are updated continuously is referred to as an

net change system

An MRP system that is updated periodically to account for all changes which have occured within a given time interval is called

regenerative system