SCM Exam 2

Given the following information, find the break-even quantity using Break-even Analysis. Costs Make Option Buy Option Fixed Cost $100,000 $5,000 Variable Cost $12 $15 a. 31,667 units b. 25,000 units c. 33,333 units d. 35,000 units

a. 31,667 units

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

a. Better planning and utilization of resources

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. Estimate the demand for the next period d. Measure the underlying changes in demand

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

One of the primary goals of purchasing is to: a. Ensure uninterrupted flows of raw materials at the lowest total cost b. Help build the organization's public image and reputation c. Facilitate the processes of knowledge transfer between individuals and between organization d. Maximize stockholder wealth

a. Ensure uninterrupted flows of raw materials at the lowest total cost

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

a. Firms exchanging forecasting information

Two methods have been used to produce the following forecasts over the past four months. Which forecast is the best one? Demand Forecast A Forecast B 150 130 180 200 170 180 220 184 180 190 195 180 a. Forecast A b. Forecast B c. They are equally good. d. There is not enough information to tell.

a. Forecast A

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

a. Improved corporate image among regulators

Which of the following is NOT a factor to consider when selecting suppliers for important materials? a. Number of customers with which the supplier currently has contracts b. Supplier's distance from the manufacturing facility c. Reliable product quality level d. Supplier's willingness to share technologies

a. Number of customers with which the supplier currently has contracts

Use the following information to determine which supplier is more cost-effective using total cost analysis. Note: Late delivery of components would cause 50% lost sales and 50% back orders of finished goods. Order lot size 500 Annual Requirements 6,000 units Weight per steering wheel 20 pounds Order processing cost $125 Inventory carrying rate 20% per year Cost of working capital 10% per year Profit margin 20% Price of finished golf cart $5,000 Back order cost $15 per unit Unit Price Supplier 1 Supplier 2 1 to 999 units/order $50 $49.50 1000 to 2,999 units/order $49 $48.50 Tooling cost $1000 $1000 Terms 2/10 net 30 1/10 net 30 Distance 120 miles 100 miles Supplier Quality Rating 2% 3% Supplier Delivery Rating 1% 2% Truckload (TL ≥ 40,000 lbs): $0.90 per ton-mile Truckload Less-than-truckload (LTL): $1.10 per ton-mile Note: per ton-mile = 2,000 lbs. per mile; number of days per year = 365 a. Using Supplier 1 will save about $32,000 b. Using Supplier 2 will save about $20,000 c. Using Supplier 2 will save about $30,000 d. Using Supplier 1 will save about $41,000

a. Using Supplier 1 will save about $32,000

Data Set A1 Period Actual Sales Volume 1 10,000 2 11,400 3 14,550 4 15,050 5 17,250 6 18,500 7 15,700 8 19,500 9 22,200 10 21,550 Using Data Set A1, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.) a. 15,050 b. 14,420 c. 15,350 d. 14,575

b. 14,420

Data Set A1 Period Actual Sales Volume 1 10,000 2 11,400 3 14,550 4 15,050 5 17,250 6 18,500 7 15,700 8 19,500 9 22,200 10 21,550 Using Data Set A1, what would be the forecast for period 6 using a four period simple moving average? (Choose the closest answer.) a. 16,338 b. 14,563 c. 17,100 d. 16,625

b. 14,563

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

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

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

b. Firms sharing information

Which of the following is NOT used to calculate total transportation cost when using the Total Cost of Ownership concept? a. Distance to factory b. Gas prices c. Number of units d. Weight per unit

b. Gas prices

A(n) _______________ performs transactions for a fee, and does not take title to the goods. Instead, title passes directly from the seller to the buyer. a. Second-tier-supplier b. Import broker c. Leverage buyer d. Keiretsu

b. Import broker

If a firm manages to lower its purchase spend on materials by $10,000 then: a. Stockholders equity increases 20% b. Profits before taxes increase by $10,000 c. Cost of goods sold increases by $10,000 d. Return on investment increases by 10%

b. Profits before taxes increase by $10,000

Petty cash is being phased out in favor of: a. Venmo b. Bitcoin c. P-cards d. Kanban

c. P-cards

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. Cyclical Variations b. Trend Variations c. Seasonal Variations d. Random Variations

b. Trend Variations

In 2016, ___________ was the leading market for U.S. exports. a. Mexico b. Japan c. Canada d. China

c. Canada

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

c. Cause-and-Effect forecasting

Making all the purchasing decisions, including order quantity, pricing policy, contracting, negotiations, and supplier selection and evaluation are the key characteristics of a. Single stage replenishment b. Logistics Management c. Centralized Purchasing d. Decentralized Purchasing

c. Centralized Purchasing

Purchasing activities include all the following EXCEPT: a. Contract administration b. Logistics considerations c. Franchising services d. Negotiations

c. Franchising services

Check My Work 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 d. Forecasts cannot be developed for the long term

c. Combination of both qualitative and quantitative

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. Random Variations b. Trend Variations c. Cyclical Variations d. Seasonal Variations

c. Cyclical Variations

More than a dozen presidential executive orders requiring federal purchasing officials to include environmental considerations and human health when making purchasing decisions can be attributed to a concept called: a. Buy America Act b. Counter Purchasing c. Green Purchasing d. Hybrid Purchasing

c. Green Purchasing

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

c. Qualitative

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

c. Sophisticated forecasting algorithms

Which of the following is an advantage to utilizing an e-procurement system? a. Time savings b. Mobility c. Cost savings d. All of these choices are correct

d. All of these choices are correct

Which of the following is a potential challenge for global sourcing? a. Currency exchange b. Political problems c. Dealing with duties d. All of these choices are correct.

d. All of these choices are correct.

Which of the following is NOT a reason for favoring multiple sourcing? a. Encourages competition among suppliers b. Spreads the risk of supply interruption c. Increases information about new processing technologies d. Less quality variability

d. Less quality variability

Which of the following is a reason that single sourcing is considered risky/bad? a. It is easier to establish a mutually beneficial strategic alliance b. Volume of order may be too small c. Firms cannot take advantage of transportation economies d. Poor supplier performance could result in plant shutdowns

d. Poor supplier performance could result in plant shutdowns

The purchasing and supply management function in the government and nonprofit sectors, such as educational institutions; hospitals; and federal, state, and local governments is called: a. Public spending b. Transactional procurement c. Competitive buying d. Public procurement

d. Public procurement

Using the actual demand shown in the table below, what is the forecast for June (round to whole number) using a 3-month weighted moving average and the weights 0.2, 0.3, 0.5 (remember how to apply them)? Dec. Jan. Feb. Mar. Apr. May 39 36 40 44 48 50 a. 48 b. 46 c. 52 d. 54

a. 48

If actual demand for a period was 108 and the forecast for that period was 103, what is the forecast error for the period? a. 5 b. 0 c. -5 d. Forecast error cannot be determined by the information given.

a. 5

Which of the following is an advantage of decentralized purchasing departments? a. Lower transportation costs b. Better knowledge of unit requirements c. Use of common supply base d. Avoids duplication

b. Better knowledge of unit requirements

A(n) ____________ purchase order is negotiated for repeated supply over a fixed time period, such as quarterly or yearly. a. Automatic b. Blanket c. Blank check d. Invitation for bid

b. Blanket

The total cost of ownership for Supplier 1 is $1,670,000. The total cost of ownership for Supplier 2 is $1,750,000. The total cost of ownership for Supplier 3 is $1,690,000. Using Total Cost Analysis, it will be more cost-effective to use a. Supplier 3 b. Supplier 2 c. Supplier 1 d. Cannot be determined.

c. Supplier 1

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

d. Improved corporate image among regulators

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

d. Material shortages

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

d. Naïve method