SCM 303 Exam 2

STUDY SWINK CH 7 HW: QUESTION 8

***Know Economic order quant, Average inventory, Inventory Turnover, Total annual cost

Good reasons to reduce your setup times in a factory are: Check All That Apply A down machine has no output.A down machine has no output. Throughput increases after a machine change-over.Throughput increases after a machine change-over. Setup times are constant and cannot be controlled.Setup times are constant and cannot be controlled. Long setup times create additional inventory.

A down machine has no output long setup times create additional inventory

Which of the following is not a purpose of APS planning charts? Facilitate decision making for optimal results. Assist planners with evaluating cost procurement. Aid employees in understanding production purposes. Identify various stages within the supply chain.

Aid employees in understanding production purposes.

Which of the following must a firm consider before APS implementation? (Select all that apply) Check All That Apply Benefits. Costs. Applications. Characteristics.

Benefits Applications Characteristics

Which of the following lean principles best communicates the notion of demand synchronization? Multiple Choice Produce only the products that the customer wants. Build with perfect quality. Build only as quickly as customers want them. Build only with features that the customers want and no others.

Build only as quickly as customers want them.

What is another name for the "Q-system" of inventory?

Continuous Review Inventory System

The newsvendor model balances which two costs Check All That Apply Fixed cost of ordering Cost of ordering too many Variable cost of shelving items Overhead of facility operations Running out and losing profits

Cost of ordering too many Running out and losing profits

The Critical Fraction formula balances which two costs Check All That Apply Fixed cost of ordering (submitting an order) Cost of over stock (ordering too many) Variable cost of shelving items (stocking items) Overhead of facility operations Cost of ordering too few (under stock)

Cost of over stock Cost of ordering too few

Which of the following is a/are reason(s) that APS emerged? (Select all that apply) Check All That Apply Declining costs of computers. Advances in networking capabilities. Need for inventory management

Declining costs of computers. Advances in networking capabilities. Need for inventory management

What does DMAIC stand for in six sigma?

Define, Measure, Analyze, Improve, Control

Which two things drive the need for safety stock? (choose two)? Check All That Apply Demand variability Warehouse space Delays Manufacturing speed Customer choice

Demand Variability Delays

When lead time and demand are both variable, the formula we use consists of which two parts? (select two) Check All That Apply Demand variability Lead time variability Order period variability Accounting irregularities

Demand and Lead time variability

The critical fraction gives us a probability because:

Demand is unknown

Lean design strives to achieve which of the following objectives? Multiple Choice Design products with the fewest number of options Design products that exactly meet customers' needs Design products at the lowest cost Design products that can be built with existing equipment

Design products that exactly meet customers' needs

Which of the following is not a practical element that influences forecasting? Multiple Choice Promotions. Financial requirements. Discontinued products. Competitive actions.

Discontinued Products

What helps a person most with their forecasting abilities?

Experience

A Push system requires a high degree of coordination between production stations. True or False

False

An offered discount makes no change to determining optimal order quantity. True or False

False

Design-for-Six-Sigma programs offer a set of quality standards accepted by all industries. True or False

False

Ordering cost only consists of the shipping cost from supplier to customer. True or False

False

Scheduling major change-overs sequentially helps to shorten overall setup times for the factory. True or False

False

The P-system of inventory submits inventory orders at random times. True or False

False

The standard deviation of demand during lead time is the same whether or not lead time is variable. True or False

False

The time value of money, opportunity cost, is not part of the calculation of EOQ holding cost (T/F)

False

Holding cost is which type of cost?

Fixed

Which of the following is not a characteristic of advanced planning and scheduling (APS)? Multiple Choice Requires high data integrity and accuracy. Forecasts are not necessary. Integrated supply chain decision making. Constrained resource planning.

Forecasts are not necessary

Which of the following is not a benefit of CPFR? (Select all that apply) Check All That Apply Coordinates manufacturer promotions with retailer promotions. Forecasts are used to guide the business practice. Items from different suppliers are consistent.

Forecasts are used to guide the business practice. Items from different suppliers are consistent.

What are the three main challenges of the Q-system? (select three) Check All That Apply Inventory monitoring system Unhappy customers Having enough when you order Figuring out how much to order Orders getting lost in the system

Inventory monitoring system Having enough when you order Figuring out how much to order

S&OP is an integrated combination of three things. Which of the following is not included? Multiple Choice Logistical shortfall assessment. Organizational processes. Personal responsibility and accountability. Information systems.

Logistical shortfall assessment

Total Quality Management: (Choose all that apply) Is managed proactively Involves only production processes Focuses on the customer Ensures on-time delivery

Managed Proactively Focuses on the customer

Why is product quality sometimes poorly defined in a firm?

Managers are not clear on what characteristics customers care most about. Holistic measures of quality are difficult to develop. Managers in different functional areas tend to emphasize different dimensions of quality. All these answers are correct.

Lean systems applications have found the most acceptance and adoption in:

Manufacturing firms.

Persons with responsibilities in which business function will make decisions regarding new product testing programs?

Marketing

Which of the following would be considered part of Ordering Cost? Check All That Apply Minimum shipping charge Postage to mail the order to a supplier (who still lives in the early 20th century) Renting a truck to haul the order (and only this order, no other business is used for this truck's one time rental) Cost of the office building housing your employees.

Minimum Shipping charge Renting a truck to haul the order

If I calculate the EOQ with the new, discounted material cost and the resulting quantity is enough to get the discount, what should I do?

Order the discounted EOQ amount

What is another name for the "P-system" of inventory?

Periodic Review inventory system

In the end, the point of using the EOQ formula is to

Point us toward the possible lowest cost option

Kaizen events are most effective when applied to problems involving which of the following elements? Multiple Choice Products Customers Processes Measures

Processes

Which of the following statements is true of Push and Pull systems? Multiple Choice Push and Pull systems are only good for controlling machines on a shop floor Push and Pull systems are opposite but can still be used together Push and Pull systems are opposites and can not be used together Push and Pull systems are essentially the same system

Push and Pull systems are opposite but can still be used together

Which of the following would be considered a direct holding cost? Check All That Apply Refrigeration costs Disposal cost after the unit is removed from inventory Purchasing cost of a new forklift for the warehouse Weekly inventory quality checks for every unit in inventory

Refrigeration costs Weekly inventory quality checks for every unit in inventory

What is the great benefit of the Q-system?

Responsiveness

All of the following represent external failure cost EXCEPT the cost of: Scrapping defective raw material. Repairing items covered by warranty. Replacing defective items found by customers. Loss of goodwill and reputation.

Scrapping Defective Raw Material

What is the great benefit of the P-system?

Simplicity in managing the system

Rachel loves to bake cookies, but she has an old oven that has trouble maintaining a constant temperature. If the acceptable temperature range for making the cookies is 350 plus or minus 5 degrees, what is the allowable standard deviation in the temperature of her oven in order to achieve a Six Sigma level of quality? Standard Dev = ???

Standard Dev = .833 degrees = 10 degree range / (6*2)

Suppose that the Dallas School District wants to achieve Six Sigma quality levels of performance in delivering students to school. They have established a 33-minute window as an acceptable range within which buses carrying students should arrive at school. a. What is the maximum allowable standard deviation of arrival times required in order to achieve this standard of quality? (Round your answer to 2 decimal places.) Standard Dev= ??? b. If they achieve this standard, about how many times out of a million deliveries will a bus deliver students either too early or too late? (Round your answer to 1 decimal place.) # of Times= ???

Standard Dev= 2.75 Mins =33/12 # of Times= 3.4 Times

Finding average demand during lead time involves doing which of the following? Summing the daily average demand per day Squaring average demand per day and summing Summing the square root of average demand per day and summing Integrating average daily demand from zero to four

Summing the daily average demand per day

_________ involves ensuring that the enterprise is prepared to meet the forecasted demand by generating a constrained, optimal plan using response buffers of inventory and capacity.

Supply Planning

As lean systems thinking is implemented, the amount of training that employees receive:

Tends to increase

Which of the following statements is true when comparing the total cost curve for a product without discounting and the total cost curve with discounting? The discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount The discounted curve is always below the undiscounted curve The undiscounted curve is always below the discounted curve The undiscounted curve is always below the discounted curve but does not really exist for values less than the minimum order amount to receive the discount.

The discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount

The "right" amount of safety stock is often a function of Service Level. Service Level is:

The probability of meeting demand during a delay

A Pull system is likely to struggle to meet demand during demand spikes. True or False

True

Safety stock is inventory held to guard against uncertainty True or False

True

The Q-system of inventory submits inventory orders at random times. True or False

True

The newsvendor model works well for perishable products True or False

True

Ordering cost is which type of cost?

Variable

Since standard deviations don't sum, we have to sum which thing instead?

Variance

Which of the following is an important belief found in lean cultures? Multiple Choice Waste is a symptom. Inventory is to be reduced. Cost must be reduced. Management must be done through the use of appropriate tools and procedures.

Waste is a symptom

The resource management module of an advanced planning and scheduling (APS) system ______.

defines and coordinates supply chain system resources and constraints

Which of these is not a cost of quality? External failure cost Prevention cost Design cost Inspection cost

design cost

The critical fraction formula output is the optimal quantity to order in a newsvendor model. True or False

false

Which of the following is not a demand planning requirement?

handle time fences

The optimization module of an advanced planning and scheduling (APS) system ______.

is the computational engine of the supply chain planning system

What are the two main challenges of the P-system? (select two) Check All That Apply Unhappy customers Length of review period Figuring out when to order Computers Amount of inventory to have

length of review period Amount of inventory to have

The basic calculation in the newsvendor model will result in a calculation of:

optimal probability of running out

Which of these is a concept for reducing setup times? Multiple Choice Single minute exchange of die Manufacturing production processes Multi-product factories RFID tags

single minute exchange or die