SCM 3650 Exam 3: Chapters 11, 12, S5

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Which of the following is true regarding corporate social​ responsibility?

A. The operations function plays a profound role in meeting corporate social responsibility. B. Corporate social responsibility means​ "doing what's​ right" and doing it​ properly, which can be beneficial to all stakeholders. C. Companies that practice corporate social responsibility introduce policies that consider​ environmental, societal, and financial impacts in their decision making.

Which of the following is an example of a​ fixed-period inventory​ system?

An administrative assistant orders more legal pads on the first day of each month.

Which of the following statements is​ true? A. ​"Reverse logistics" is the opposite of​ "closed-loop supply​ chain." B. A​ closed-loop supply chain prepares for returns prior to product introduction. This is the correct answer. C. A​ closed-loop suppy chain is designed to optimize only reverse flows. Your answer is not correct. D. Reverse logistics refers to the supplier selection process.

A​ closed-loop supply chain prepares for returns prior to product introduction.

Boreki Enterprise has the following 10 items in inventory. Theodore Boreki asks​ you, a recent OM​ graduate, to divide these items into ABC classifications. Fill in the blanks and then answer the following questions. ​(Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal​ places.)

Based on the percentages of dollar​ volume, item A2 should be classified as A. Part 4 Item F3 should be classified as C.

Which of the following statements is NOT true regarding channel​ assembly?

Channel assembly sends individual​ components, modules, and finished​ products, to the distributor.

L. Houts Plastics is a large manufacturer of​ injection-molded plastics in North Carolina. An investigation of the​ company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification​ system? ​(Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal​ places.)

For the following three​ questions, consider only items 1289​, 2349​, and 8210 from the above table for relative classification​ (these are some of the items for which you computed the​ metrics). Based on the percentages of dollar​ volume, item number 1289 should be classified as A. Part 4 Item number 2349 should be classified as B. Part 5 Item number 8210 should be classified as C.

Using the crossover mileage between the hybrid vehicle and the alternative vehicle from a competing auto manufacturer​ below, what is the crossover point in​ years?

Given that the crossover mileage is 28,235 ​miles, the crossover point in years is 1.821.82 years ​(round your response to two decimal​ places).

Which of the following is NOT one of the assumptions of​ fixed-period systems?

Lead times are variable.

Which of the following is NOT a type of​ inventory?

MRP

With regard to the​ cost-based price model negotiation​ strategy, which of the following is​ true?

Prices are based upon supplier costs.

The Brew House needs to decide which of two coffee maker designs is better environmentally. Using the following​ tables, determine which model is the better design alternative.

Revenue retrieval for Brew Master=​$5.535.53 ​(round your response to two decimal​ places). Part 3 Revenue retrieval for Brew Mini=​$7.657.65 ​(round your response to two decimal​ places). Part 4 The best design alternative is Brew Mini.

Prior to embarking on supply chain​ design, why do operations managers first consider​ "make-or-buy" and outsourcing​ decisions?

Some products or services may be better or less expensive if obtained externally.

Why might an organization strive to form​ long-term relationships with a few dedicated​ suppliers?

Suppliers are encouraged to provide design innovations and technological expertise.

Which of the following statements is true about​ sustainability? A. Green manufacturing requires the use of green labeling on products. B. Sustainability is often associated with corporate social responsibility. Your answer is correct. C. Exponential decay refers to climate change impacts on future generations and the ability to meet their needs. D. None of the above.

Sustainability is often associated with corporate social responsibility.

What is the crossover point in miles between the hybrid vehicle and the alternative vehicle from a competing auto​ manufacturer?

The crossover​ point, M, is 3710637106 miles ​(round your response to the nearest whole​ number).

Which of the following statements is NOT one of the differentiation strategy​ decisions? A. Minimize inventory to avoid product obsolescence. B. Gather and communicate market research data. C. Modular design to aid product differentiation. D. Use buffer stocks to ensure speedy supply.

Use buffer stocks to ensure speedy supply.

Chris Sandvig​ Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 800 ​valves; order cost is ​$12 per​ order; and annual inventory holding costs are ​$2.15 per unit.

Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total​ cost? Chris Sandvig Irrigation should order 400400 units at a time from Vendor B ​(enter your response as a whole​ number).

A system that keeps track of each withdrawal or addition to inventory continuously is

a perpetual inventory system.

William​ Beville's computer training​ school, in​ Richmond, stocks workbooks with the following​ characteristics: Demand D 19,600 ​units/year Ordering cost S ​$23​/order Holding cost H ​$5​/unit/year

a) The EOQ for the workbooks is 425425 ​(round your response to the nearest whole​ number). Part 3 ​b) What are the annual holding costs for the​ workbooks? ​$10621062 ​(round your response to the nearest whole​ number). Part 4 ​c) What are the annual ordering​ costs? ​$10621062 ​(round your response to the nearest whole​ number).

M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 700 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is ​$45​, and annual holding cost per unit is ​$7.

a) What is the economic order quantity if price is not a​ consideration? 329329 units ​(round your response to the nearest whole​ number). Part 3 ​b) Which​ supplier, based on all options with regard to​ discounts, should be​ used? Allen Mfg. Part 4 ​c) What is the optimal order quantity and total annual cost of​ ordering, purchasing, and holding the​ component? The optimal order quantity is 10001000 with a total cost of ​$129878129878 ​(round your responses to the nearest whole​ number).

Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.​ Thomas's fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is ​$99​, and the inventory carrying cost is ​$11 per unit per year. The average ordering cost is ​$31 per order. It takes about 5 days for an order to​ arrive, and the demand for 1 week is 120 units.​ (This is a corporate​ operation, and there are 250 working days per​ year).

a) What is the​ EOQ? 183.90183.90 units ​(round your response to two decimal​ places). Part 3 ​b) What is the average inventory if the EOQ is​ used? 91.9591.95 units ​(round your response to two decimal​ places). Part 4 ​c) What is the optimal number of orders per​ year? 32.6332.63 orders ​(round your response to two decimal​ places). Part 5 ​d) What is the optimal number of days in between any two​ orders? 7.667.66 days ​(round your response to two decimal​ places). Part 6 ​e) What is the annual cost of ordering and holding​ inventory? ​$2022.982022.98 per year ​(round your response to two decimal​ places). Part 7 ​f) What is the total annual inventory​ cost, including the cost of the 6,000 ​units? ​$596022.98596022.98 per year ​(round your response to two decimal​ places).

Jenna​ Baker, CEO of Baker Mfg​ Inc., wishes to compare her​ company's inventory turnover to those of industry​ leaders, who have turnover of about 13 times per year and 8​% of their assets invested in inventory.

a) What is​ Baker's inventory​ turnover? 15.6715.67 times per year ​(round your response to two decimal​ places). Part 3 ​b) What is​ Baker's percentage of assets committed to​ inventory? 7.377.37​% ​(enter your response as a percentage rounded to two decimal​ places). Part 4 ​c) How does​ Baker's performance compare to the industry​ leaders? Better

Kamal Fatehl production manager of Kennesaw​ Manufacturing, finds his profit at ​$19,600 ​(as shown in the statement​ below) inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to ​$29,600 so he can obtain the​ bank's approval for the loan.

a) What percentage improvement is needed in a supply chain strategy for profit to improve to ​$29,600​? What is the cost of material with a ​$29,600 ​profit? A decrease of 4.94.9​% in​ supply-chain costs is required to yield a profit of ​$29,600​, for a new cost of supply chain purchases of ​$191600191600. ​(Enter your response for the percentage decrease to one decimal place and enter your response for the new supply chain cost as a whole​ number.) Part 3 ​b) What percentage improvement is needed in a sales strategy for profit to improve to ​$29,600​? What must sales be for profit to improve to ​$29,600​? An increase of 21.021.0​% in sales is required to yield a profit of ​$29,600​, for a new new level of sales of ​$338,824338,824. ​(Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole​ number.)

Hau Lee​ Furniture, Inc., spends 55​% of its sales dollars in the supply chain and finds its current profit of ​$20,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to ​$25,000 so he can obtain the​ bank's approval for the loan. ​

a) What percentage improvement is needed in the supply chain strategy for profit to improve to ​$25,000​? What is the cost of material with a ​$25,000 ​profit? A decrease of 9.099.09​% in material​ (supply-chain) costs is required to yield a profit of ​$25,000​, for a new material cost of ​$50,00050,000. ​(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole​ number.) Part 3 ​b) What percentage improvement is needed in the sales strategy for profit to improve to ​$25,000​? What must sales be for profit to improve to ​$25,000​? An increase of 16.716.7​% in sales is required to yield a profit of ​$25,000​, for a new new level of sales of ​$116667116667. ​(Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole​ number.)

The grocery industry has an annual inventory turnover of about 16 times. Organic​ Grocers, Inc., had a cost of goods sold last year of ​$10,670,000​; its average inventory was ​$989,770. What was Organic​ Grocers' inventory​ turnover, and how does that performance compare with that of the​ industry?

a) What was Organic​ Grocers' inventory​ turnover? 10.7810.78 times per year ​(round your response to two decimal​ places). Part 3 ​b) How does Organic​ Grocers' performance compare with that of the​ industry? It is worse than the industry.

What is a​ long-term purchase commitment to a supplier for items that are to be delivered against​ short-term releases to​ ship?

blanket order

What is one of the key compounds society is expecting to reduce as part of industrial greenhouse gas emission programs in the European Union and United​ States?

carbon dioxide

The cost to produce the goods or services sold for a given period is referred to as

cost of goods sold.

In the​ single-period inventory​ model, the overage cost is

cost per unit − salvage value per unit.

Which of the following statements is NOT generally an implication stemming from an increase in the number of​ facilities?

decreased total logistics cost

Supply chain managers outsource logistics to meet three​ goals:

drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed.

Which of the following tactics may reduce risks in supplier​ delivery, logistics, and​ distribution?

effective contracts with penalties

Inventory control models assume that demand for an item is

either independent of or dependent on the demand for other items.

The five core elements of ISO 14001 are

environmental​ management, auditing, performance​ evaluation, labeling, and life cycle assessment.

Which of the following is an advantage of shipping manufactured goods by​ truck?

flexibility

Which of the following inventory items warrants the use of a​ single-period inventory​ model?

fresh bread in a​ baker's case

A​ single-period inventory model is NOT applicable for

furniture.

Which of the following statements is NOT one of the response strategy​ decisions?

gather and communicate market research data

When an inventory manager uses ABC​ analysis, which of the following will they consider to be the most critical A​ item?

highest​ dollar-volume each year

Inventory record accuracy would be decreased by

increasing stockroom accessibility.

Which of the following should a company include as part of an​ item's holding​ cost?

investment​ costs, including taxes and insurance

Airfreight

is a​ fast-growing mode of shipping.

Which of the following strategies is part​ collaboration, part purchasing from few​ suppliers, and part vertical​ integration? Part 2 A. horizontal integration B. keiretsu networks Your answer is correct. C. virtual companies D. joint ventures

keiretsu networks

What is an analysis of environmental impacts of products from the design stage through​ end-of-life?

life cycle assessment

The advantage of having many potential suppliers is their willingness to

offer lower prices in the short term.

Question content area Part 1 Which of the following does NOT belong to holding​ costs? Part 2 A. storage costs B. order processing Your answer is correct. C. insurance on inventory D. ​pilferage, scrap, and obsolescence

order processing

What is transferring a​ firm's activities that have traditionally been internal to external​ suppliers?

outsourcing

Which of the following is a common measure of supply chain​ performance?

percentage invested in inventory

The​ do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to​ Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the​ do-it-yourselfer silently handed over sample​ 150C-1, Musical​ Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware​ store, so the paint manufacturer had created clever workaround. The workaround was a​ computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired​ shade, in this​ case, Musical Mist. The hardware store now needed to stock only the base​ paint, this​ machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. Prime example of

postponement.

What is the most critical phase in product life cycle​ assessment?

product design

Which of the following mitigation tactics could reduce economic​ risk?

purchasing contracts that address price fluctuations

Which three criteria should be considered when designing distribution networks to meet customer​ expectations?

rapid​ response, product​ choice, service

Which of the following types of inventory describes inventory that has been purchased but not​ processed?

raw material inventory

Supply chain management describes the coordination of all supply chain​ activities, starting with​ _______ and ending with​ _______.

raw​ materials; satisfied customers

What is the cost to prepare a machine or process for​ production?

setup cost

For seasonal​ products, the service level should be set to equal

shortage cost​ / (overage cost​ + shortage​ cost).

The objective of inventory management is to

strike a balance between inventory investment and customer service.

Why might a company carry​ inventory?

to decouple steps in a production process

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 true regarding​ cross-sourcing? A. Cross-sourcing describes suppliers who become part of a company coalition. B. ​Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. C. ​Cross-sourcing uses one supplier for a component and a second supplier for another​ component, where each supplier acts as a backup for the other. Your answer is correct. D. ​Cross-sourcing enhances technological skills.

​Cross-sourcing uses one supplier for a component and a second supplier for another​ component, where each supplier acts as a backup for the other.

Jordin​ Henry's machine shop uses 2,450 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the​ brackets:

​a) What is the​ EOQ? 244.17244.17 units ​(round your response to two decimal​ places). Part 3 ​b) What is the average inventory if the EOQ is​ used? 122.09122.09 units ​(round your response to two decimal​ places). What would be the annual inventory holding​ cost? ​$183.12183.12 ​(round your response to two decimal​ places). Part 4 ​c) Given the​ EOQ, how many orders will be made​ annually? 1010 orders ​(round your response to two decimal​ places). What would be the annual order​ cost? ​$183.12183.12 ​(round your response to two decimal​ places). Part 5 ​d) Given the​ EOQ, what is the total annual cost of managing​ (ordering and​ holding) the​ inventory? ​$366.25366.25 ​(round your response to two decimal​ places). Part 6 ​e) What is the time between​ orders? 2525 days ​(round your response to two decimal​ places). Part 7 ​f) What is the reorder point​ (ROP)? 19.619.6 units ​(round your response to two decimal​ places)

Dara​ Jones, operations manager of Arrow Distributing​ Corp., likes to track inventory by using weeks of supply as well as by inventory turnover.

​a) What is its weeks of​ supply? 3.423.42 weeks ​(round your response to two decimal​ places). Part 3 ​b) What percentage of​ Arrow's assets are committed to​ inventory? 10.8410.84​% ​(enter your response as a percentage rounded to two decimal​ places). Part 4 ​c) What is​ Arrow's inventory​ turnover? 15.1815.18 times per year ​(round your response to two decimal​ places). Part 5 ​d) Suppose a manufacturer has an inventory turnover of 13.5 times per year.​ Arrow's supply chain performance relative to the​ manufacturer's, as measured by inventory​ turnover, is better.

If D​ = 7,800 per​ month, S​ = ​$46 per​ order, and H​ = ​$2.50 per unit per​ month,

​a) What is the economic order​ quantity? The EOQ is 536536 units ​(round your response to the nearest whole​ number). Part 3 ​b) How does your answer change if the holding cost​ doubles? The EOQ is 379379 units ​(round your response to the nearest whole​ number). Part 4 ​c) What if the holding cost drops in​ half? The EOQ is 758758 units ​(round your response to the nearest whole​ number).

Mattress​ Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last​ year, cost of goods sold was ​$7.52 million and inventory was ​$1.46 million. This​ year, costs of goods sold is ​$8.64 million and inventory investment is ​$1.61 million.

​a) What was its weeks of supply last​ year? 10.110.1 weeks ​(round your response to two decimal​ places). Part 3 ​b) What is its weeks of supply this​ year? 9.699.69 weeks ​(round your response to two decimal​ places). Part 4 ​c) Is Mattress Wholesalers making progress in its inventory reduction​ effort? Since the number of weeks that cover the supply has decreased​, Mattress Wholesalers is making progress in its​ inventory-reduction effort.

A response strategy requires suppliers be selected based primarily on

​capacity, speed, and flexibility.

What is a supply chain designed to optimize both forward and reverse​ flows?

​closed-loop supply chain

Which negotiation strategy bases price on a​ published, auction, or index​ price?

​market-based price model

What are the three Ps in the triple bottom line of the three P​s?

​people, planet, and profit

A lawnmower assembly plant uses a variety of​ nuts, bolts,​ screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule.

​vendor-managed inventory.


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