Supply chain exam 3

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Accuracy in forecasting can be measured by: A. MSE. B. MRP. C. MPS. D. MTM. E. MTE.

A. MSE MSE is mean squared error.

Accuracy in forecasting can be measured by:

A. MSE MSE is mean squared error.

A formal way to document customer requirements is:

B. quality function deployment (QFD) QFD brings the voice of the customer into the design process.

In MRP, the gross requirements of a given component part are calculated from: A. net requirements + amount on-hand. B. gross requirements of the immediate parent. C. planned orders of the end item. D. net requirements of end item. E. planned orders of the immediate parent.

Right-sized equipment tends to be larger than equipment used in traditional process layout.

FALSE Right-sizing can lead to smaller equipment.

Service operations require additional inventory because of the unpredictability of consumer demand.

FALSE Service operations cannot use inventory as a hedge against unpredictable demand.

EOQ III

Quantity DISCOUNT model

The gross requirements at one level of an MRP plan determine the gross requirements at the next lower level continuing on down to the lowest levels shown on the bill of material.

FALSE Released order quantities at one level determine gross requirements at the next lower level.

A quantity discount will lower the reorder point.

FALSE The reorder point is independent of quantity discounts.

Before a schedule receipt can take place, and order must be placed with a vendor.

TRUE A scheduled receipt is an order that has already been placed.

The purpose of the forecast should be established first so that the level of detail, amount of resources, and accuracy level can be understood.

TRUE All of these considerations are shaped by what the forecast will be used for.

Monitoring inventory turns over time can be used as a measure of performance.

TRUE Greater turnover often implies better performance.

Solving quality problems can lead to lower inventory levels.

TRUE Leaning out the organization can be facilitated by solving quality problems.

Profit margins tend to be inversely related to inventory turns.

TRUE This is typically the case.

A characteristic that was once an order winner may become an order qualifier, and vice versa.

TRUE Order qualifiers and order winners are shaped by the environment.

A robot consists of three parts: a power supply, a controller, and a mechanical arm.

TRUE Robots consist of a few broad components.

Backward pass

takes smallest numbers

Forward pass

takes the largest numbers

What is a touch point?

A touch point is a method of interaction with the customer, such as telephone, e-mail, customer service desk, conventional mail, Facebook, Twitter, Web site, wireless device, or retail store.

The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2):

A. computers.

Forecasting techniques generally assume:

B. continuity of some underlying causal system. Forecasting techniques generally assume that the same underlying causal system that existed in the past will continue to exist in the future.

The _________ of ERP makes it valuable as a strategic planning tool. A. Internet base B. Rapid Batch capability C. Employee focus D. Real-time aspect E. Database structure

A legally binding document that signals to a supplier that goods and services are needed is a(n): Purchase requisition. Electronic data interchange. Purchase order. Supplier relationship management document.

Purchase order

The identification, evaluation, selection and management of suppliers is called:

Sourcing.

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 Trends move the time series in a long-term direction.

Which term most closely relates to associative forecasting techniques?

E. predictor variables Associative techniques use predictor variables.

In many organizations, information flows much more freely within functions than it does across functions. __________ represents an expanded effort to overcome this tendency. A. MRP B. ERP C. CRP D. MRPII E. DRP

ERP

Software that consolidates all of the business planning systems and data throughout an organization is:

ERP An ERP system consolidates all of the business planning systems and data throughout an organization.

Negotiation is typically used when: Price is the most important factor. There are many equally qualified suppliers who are willing to compete. Early supplier involvement is needed in new product development.

Early supplier involvement is needed

Negotiation is typically used when

Early supplier involvement is needed in new product development.

Benefits of ERP systems include all of the following EXCEPT: More informed business decisions. Fewer data entry errors. Easy implementation. Improved customer service.

Easy implementation. ERP systems are complex and can be difficult to implement.

EOQ II

Economic Production Model SET UP COSTS RUNS

The increasing size of container ships is being driven by:

Economies of scale.

A forecast method is generally deemed to perform adequately when the errors exhibit an identifiable pattern.

FALSE Forecast methods are generally considered to be performing adequately when the errors appear to be randomly distributed.

The single-period model can be very helpful in determining when to order.

FALSE The single-period model helps determine how many to order.

A retail store that carries twice as much inventory as its competitor will provide twice the customer service level.

FALSE There is a limit to how high service level can go; if the competitor's service level is 90 percent, the retailer can't double that.

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

FALSE Total cost curves will differ across the price levels.

Productivity tends to be only a very minor factor in an organization's ability to compete.

FALSE An organization's ability to compete is directly affected by its productivity.

Productivity is defined as the ratio of input to output.

FALSE Productivity is the ratio of outputs to inputs.

As long as we match a competitor on quality and price we will gain market share.

FALSE We usually have to better a competitor to win market share.

"Balance delay" is another name for the percentage of idle time in a process layout.

FALSE Balance delay is applicable in product layouts.

Basic research is done with the expectation that discoveries will have near-term commercial application

FALSE Basic research is done with no clear expectations regarding commercial application.

The term computer aided manufacturing (CAM) refers primarily to the use of robotics in process control.

FALSE CAM involves using computer technology to control various facets of the manufacturing process.

Standardization can at times lead to serious difficulties and competitive struggles, particularly when systems are running under different conditions.

FALSE It is the lack of standardization that can at times lead to serious difficulties and competitive struggles.

Taguchi design methods involve identifying the optimal operating or environmental conditions for a given product.

FALSE Taguchi design methods involve designing products that are relatively insensitive to environmental factors.

The word "technology" is used only to refer to "information technology."

FALSE Technology also refers to the technology involved in resource transformations.

The goal in line balancing is to obtain a reasonable allocation of work to each station.

FALSE The goal in line balancing is to arrive at a reasonable balance of work across the stations.

The percentage of idle time in an assembly line is called cycle time.

FALSE This is called balance delay.

A popular visual tool for planning and scheduling simple projects, and for monitoring progress, is the:

Gantt Chart

__________ use(s) a built-in or learned knowledge base to carry out specific, repetitive, and predictable tasks for an individual user, business process, or software application.

Intelligent agents

ERP represents an expanded effort to integrate standardized record-keeping that shares information among different areas of an organization.

TRUE ERP is intended to facilitate consistent decision-making across the organization.

Environmental scanning is a search for events or trends that present either threats or opportunities to the organization.

TRUE These events or trends should be taken into account when strategy is being formulated.

The majority of our textbook deals with tactical operations that support established functional strategies.

TRUE This represents the majority of ongoing decision making in operations.

Many US manufacturers are now shifting their focus from products to both product and process improvements.

TRUE Both product and process must be considered in the product/service design question.

Service design often must take into account the degree of customer contact required.

TRUE Customer contact is a critical service design issue.

A disadvantage of standardization is the possibility of standardizing designs too early, which may make it difficult to modify in the future.

TRUE Standardization locks firms into designs that aren't easily changed.

Lumpy demand for components required for finished goods results primarily from the periodic scheduling of batch production of the goods

True

MRP requires information on

True

The output of MRP is:

a schedule of requirements for all parts and end items; MRP schedules part and end item requirements.

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of: A. 20. B. square root of 200. C. 200. D. 400. E. 600.

A. 20. Use the base EOQ formula.

Which of the following is not a step in the forecasting process?

B. Eliminate all assumptions. We cannot eliminate all assumptions.

Which of the following best describes an e-tailer business model?

An e-tailer sells physical products directly to consumers or to individual businesses.

Which of the following statements best describes an expert system?

An expert system is an intelligent technique for capturing tacit knowledge in a very specific and limited domain of human expertise.

An organization's mission statement serves as the basis for:

E. organizational goals. Organizations' missions serve as the broad underpinning for their goals.

Value added can be calculated by:

E. outputs minus inputs. Value added represents the change in value of the original inputs.

Which of the following is not one of the phases of product design and development?

E. performance applied research Product design and development begins after applied research has been done.

Exponential smoothing adds a percentage (called alpha) of the last period's forecast to estimate the next period's demand.

FALSE Exponential smoothing adds a percentage to the last period's forecast error.

Once accepted by managers, forecasts should be held firm regardless of new input since many plans have been made using the original forecast.

FALSE Flexibility to accommodate major changes is important to good forecasting.

Understocking an inventory item is a sure sign of inadequate inventory control.

FALSE Having an occasional stockout is not necessarily a sign of inadequate inventory control.

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

FALSE If quantity discounts are offered, the EOQ might vary based on different holding costs

Low level coding represents items less than $18 per unit.

FALSE Low-level coding codes items at their lowest BOM levels.

An inventory buffer adds value and lowers cost in all supply chains.

FALSE Many buffers increase costs across supply chains.

A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average.

FALSE More data points reduce a moving average forecast's responsiveness.

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the hybrid plan: Multiple Choice Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan. Has higher hiring/layoff cost than the chase plan and higher inventory carrying cost than the level plan. Has lower inventory carrying cost than the chase plan and higher hiring/layoff cost than the level plan. None of these selections.

Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

Load reports show capacity requirements for departments or work centers which may be more or less than the capacity available in that work center.

TRUE

Which of these products would be most likely to have dependent demand?

automobile engines; Engines would only be necessary when automobiles were being produced.

Which one of the following most closely describes net material requirements?

gross requirements - amount on-hand - scheduled receipts; On-hand and scheduled receipts must be subtracted from gross requirements.

A __________ is an interactive computer-based system for facilitating the solution of unstructured problems by a set of decision makers working together as a team in the same location or in different locations.

group decision-support system

The purpose of cycle counting is to:

reduce discrepancies between inventory records and actual quantities.

When should an order for carved chocolate eggs be released? A. at the start of week 2 B. at the start of week 3 c. at the start of week 4 D. at the start of week 5 E. at the start of week 6

start week 4

MRP output reports are divided into two main groups, daily and weekly.

FALSE

42. Monitoring inventory turns over time can be used as a measure of performance.

44. The basic EOQ model ignores the purchasing cost.

45. When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill.

network diagram

A schematic display of the logical relationships or sequencing of project activities

Which one of the following is not an input in an MRP system?

A. planned-order schedules

Generally, the most expensive transportation mode (from among the following choices) is

Air

__________ refers to the development of information systems by end users with little or no formal assistance from technical specialists.

And-user development

Inventory levels:

Are higher when rail rather than truck transportation is used.

Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following? A. gross requirements B. net requirements C. economic order quantity D. gross requirements and net requirements E. net requirements and amount on hand

__________ state(s) that the actual behavior of managers appears to be less systematic, more informal, less reflective, more reactive, and less well organized than previously thought.

Behavioral models

Which of the following does the scenario illustrate?

Behavioral targeting

Which of the following is not usually necessary in order to have an effective MRP system? A. a computer and software B. an accurate bill of materials C. lot-for-lot ordering D. an up-to-date master schedule E. integrity of file data

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

C. 5 Convert each error into an absolute value and then average.

Trend

Gradual, long-term movement in time-series values is called

Many times forecasters can make a good approximation of a trend by simply hand-drawing a line through the data to estimate a trend.

True

What is machine learning?

It is the study of how computer programs can improve their performance without explicit programming.

__________ is especially well-suited for location-based applications, such as finding local hotels and restaurants, monitoring local traffic and weather, and providing personalized location-based marketing.

M-commerce

For purposes of comparability across products, forecasters sometimes adjust the MAD to create a related metric, the _______.

MAPE

Outsourcing is often a good choice when:

The planned order releases in week 5 are 100 units. Each unit must be processed for 5 minutes at the work station. If the available capacity at the work station is one hour:

Overtime will be needed.

The entire time period covered by the MPS is the:

Planning horizon. The entire time period covered by the MSP is the planning horizon.

Most of the tools and techniques used in lean systems seek to:

Reduce variability from the system

22. Annual ordering cost is inversely related to order size.

A bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item.

TRUE

The inventory records contain information on the status of each item by time period.

TRUE

A system that is flexible, uses minimal resources, and produces high-quality goods or services is called:

a lean system

In the __________, Web sites send visitors to other Web sites in return for a referral fee or percentage of the revenue from any resulting sales.

affiliate revenue model

65. Dairy items, fresh fruit and newspapers are items that:

are subject to deterioration and spoilage

Dairy items, fresh fruit, and newspapers are items that:

are subject to deterioration and spoilage.

lamda

arrival rate

The most common form of information technology-enabled organizational change is __________.

automation

Which of the following most closely describes dependent demand? A. demand generated by suppliers B. estimates of demand using regression analysis of independent variables C. derived demand D. demands placed on suppliers by their customers E. net material requirements

derived demand

60. Which of the following is not one of the assumptions of the basic EOQ model?

quantity discounts are available

What is a paradigm shift?

A paradigm shift offers high rewards with substantial chances of risk.

If you are evaluating whether a supplier's workforce is receiving fair wages, you are most likely doing a(n):

Assessment of sustainability. Wage disputes can affect the ability of a supplier to deliver on its commitments.

If no variations in demand or lead time exist, the ROP will equal: A. the EOQ. B. expected usage during lead time. C. safety stock. D. the service level. E. the EOQ plus safety stock.

B. expected usage during lead time.

In a product layout, the task of deciding how to assign work to specific stations is referred to as: A. process balancing B. task allocation C. line balancing D. work allocation E. station balancing

C. line balancing Line balancing allocates work to work stations.

Outsourcing tends to improve quality but at the cost of lowered productivity.

FALSE Outsourcing can lead to both quality and productivity improvements.

Cycle counting can be used in motorcycle inventory control.

TRUE Cycle counting can also be used in automobile inventory control.

Productivity is defined as the ratio of output to input.

TRUE Divide outputs by inputs to get productivity.

Safety time is sometimes used in MRP rather than safety stock quantities.

TRUE Safety time is a substitute for safety stock.

Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast.

TRUE Seasonal relatives are used to deseasonalize data to forecast future values of the underlying trend, and they are also used to reseasonalize deseasonalized forecasts.

lack of memory property

The fact that the probability of an arrival in the next minute is completely uninfluenced by when the last arrival occurred

Outsourcing is least likely when:

The process in highly innovative.

The break-even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit. True or False?

True

Waiting line analysis can be useful for capacity design, especially for service systems. True or False?

True

An example of an operational operations management decision is inventory level management.

True Inventory management is an operational decision.

An example of a strategic operations management decision is the choice of where to locate.

True Location decisions are strategic in nature.

An intelligent technique for capturing tacit knowledge in a very specific and limited domain of human expertise is called __________.

an expert system

moving average forecasting method

averages the data for only the most recent time periods. n = Number of recent periods to consider as relevant for forecasting Forecast = Average of last n values

The choice stage of the decision-making process __________.

consists of choosing among solution alternatives

service rate

Which of the following is least likely to be included in order costs?

temporary storage of delivered goods.

The gross requirements at one level of an MRP plan determine the gross requirements at the next lower level continuing on down to the lowest levels shown on the bill of material.

FALSE

Decoupling operations applies to the railroad industry.

FALSE Decoupling refers to buffering operations in manufacturing.

Discrete stocking levels are used when an organization does not want visibility of inventory levels.

FALSE Discrete stocking refers to having to stock a discrete number of units.

In MRP, EOQ models tend to be less useful for materials at the lowest levels than for upper level assemblies of the bill of materials since higher-level assemblies have larger dollar investments.

FALSE EOQ is more useful at lower levels since lower-level items often have less lumpy demand.

EOQ inventory models are basically concerned with the timing of orders

FALSE EOQ models are concerned with the size of orders.

Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making.

FALSE Ethics issues are touching on all areas of management, including operations.

Forecasts based on time-series (historical) data are referred to as associative forecasts.

FALSE Forecasts based on time-series data are referred to as time-series forecasts.

The naive forecast is limited in its application to series that reflect no trend or seasonality.

FALSE When a trend or seasonality is present, the naive forecast is more limited in its application.

An organization that is twice as productive as its competitor will be twice as profitable.

FALSE Productivity advantages don't necessarily translate into profitability advantages.

A master production schedule shows the beginning inventory is 50 units, the forecast is 80 units and actual customer orders are 70 units. Using a lot-for-lot rule, what is the MPS quantity for period 1?

The responsibilities of the operations manager are:

B. planning, organizing, staffing, directing, and controlling The scope of operations management ranges across the organization.

4. Taxes and insurance costs are an example of which of the following costs? A. Ordering cost. B. Governmental costs. C. Carrying (or holding) costs. D. None of these.

C. Carrying (or holding) costs.

Government statistics are a good source of data about productivity trends in the service sector.

False The service sector is often omitted in government statistics.

Which of the following statements about an enterprise system is true?

It helps find ways to increase accurate on-time shipments of a company.

In MRP, EOQ models tend to be less useful for materials at the lowest levels than for upper-level assemblies of the bill of materials since higher-level assemblies have larger dollar investments.

FALSE

Independent demand tends to be more "lumpy" than dependent demand, meaning that we need large quantities followed by periods of no demand.

FALSE

Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods (such as two or three) that extend beyond the orders already received for those periods.

FALSE

Low-level coding represents items less than $18 per unit.

FALSE

MRP II is simply an improved version of MRP that processes more quickly and can plan for a larger number of end items.

FALSE

MRP, considering inventory position, bills of material, open purchase orders, and lead times guarantees a feasible production plan if the inputs to MRP are accurate.

FALSE

The bill of materials contains information on lead times and current inventory position on every component required to produce the end item.

FALSE

The bill of materials indicates how much material will be needed to produce the quantities on a given master production schedule.

FALSE

Benefits of single sourcing include all of the following EXCEPT:

Less supply risk. Single sourcing increases supply risk.

Williams Inc. has acquired software to help manage interactions with its supply base. This suggests that Williams Inc. is involved in:

Supplier relationship management.

Putting forecast errors into perspective is best done using A. exponential smoothing. B. MAPE. C. linear decision rules. D. MAD. E. hindsight.

B. MAPE. MAPE depicts the forecast error relative to what was being forecast.

What is the part-period method lot size for the order for the first period? A. 120 B. 200 C. 280 D. 350 E. 450

Which is true of a net-change MRP? A. It is a batch-type system which is updated periodically. B. It generates exception reports. C. The basic production plan is modified to reflect changes as they occur. D. It is used to authorize the execution of planned orders. E. It indicates the amount and timing of future changes.

Time-series techniques involve the identification of explanatory variables that can be used to predict future demand.

FALSE Associative forecasts involve identifying explanatory variables.

Capacity requirements planning (CRP) is an important feature in MRP+.

FALSE CRP is a feature of MRP II.

A control chart involves setting action limits for cumulative forecast error.

FALSE Control charts set action limits for the tracking signal.

Independent demand tends to be more 'lumpy' than dependent demand meaning that we need large quantities followed by periods of no demand.

FALSE Dependent demand is more lumpy.

Improving efficiency will guarantee a similar improvement in productivity.

FALSE Efficiency is narrower than productivity.

The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations. True or False?

False

Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs. True or False?

True

Capacity increases are usually acquired in moderately large "chunks" rather than in smooth increments. True or False?

True

Dependent demand is derived demand.

True

For a given component in an MRP plan, under lot-for-lot ordering, planned order sizes are equal to net requirements

True

For relatively stable situations, a net-change MRP is better suited than using regenerative MRP

True

Increasing productivity and quality will result in increased capacity. True or False?

True

The term capacity refers to the maximum quantity an operating unit can process over a given period. True or False?

True

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

True

Forecasts based on an average tend to exhibit less variability than the original data.

TRUE Averaging is a way of smoothing out random variability.

Lumpy demand for components results primarily from the periodic scheduling of batch production.

TRUE Batch production leads to lumpy demand for components.

Bias is measured by the cumulative sum of forecast errors.

TRUE Bias would result in the cumulative sum of forecast errors being large in absolute value.

In order to compute seasonal relatives, the trend of past data must be computed or known, which means that for brand-new products this approach cannot be used.

TRUE Computing seasonal relatives depends on past data being available.

MRP II did not replace or improve the basic MRP.

TRUE MRP II incorporates basic MRP.

MRP works best if the inventory items have dependent demand.

TRUE MRP is best for dependent demand scenarios.

Which of the following statements is true of a geoinformation service?

Waze is an example of a geoinformation service.

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago.

TRUE Weighted moving averages can be adjusted to make more recent data more important in setting the forecast.

Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation.

TRUE Time- and quality-based strategies are more recent developments.

Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary pressures on a nation's economy.

TRUE True increases in standards of living come about through productivity improvements.

An idle percentage of zero means a line is perfectly balanced.

TRUE All workstations would be occupied 100% of the time.

Flexibility can be used as a competitive strategy.

TRUE Flexibility is a key competitive dimension.

The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management.

TRUE Pareto phenomena can be observed in a wide variety of organization situations.

Decisions being made about the aggregate production plans represent what type of planning?

Tactical Planning

Which of the following is not uncovered during a market analysis?

Which of the company's current purchases are from which supplier.

An organizational culture is shaped by: -The experiences of certain charismatic leaders -The organization's value statement or motto -Leadership memos and meeting statements -The actions taken by leadership

The actions taken by leadership

A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the purchasing company has begun:

Supplier certification.

Which of the following best describes the balanced scorecard method?

The balanced scorecard method refers to a framework for operationalizing a firm's strategic plan by focusing on measurable financial, business process, customer, and learning and growth outcomes of firm performance.

33. Solving quality problems can lead to lower inventory levels.

41. The single-period model can be very helpful in determining how much to order.

50. The calculation of safety stock requires knowledge of demand and lead time variability.

51. The two basic issues in inventory are how much to order and when to order.

52. Cycle counting can be used in motorcycle inventory control.

53. Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered.

6. To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: the timing and size of orders.

A manufacturing cell allows the production of a wide-range of very different products.

FALSE A cell is for a modest variety of output within a product family.

A regenerative MRP is one that is updated continuously

False

A tracking signal is the ratio of the MAD to a running total of forecast error that indicates when the pattern of forecast error is changing significantly.

False

According to the reading on restaurant sourcing practices, only fast food restaurants are able to 'bring' in outsourced foods. True or False?

False

MRP II is simply a label for current, more advanced versions of software applications for MRP

False

Morale problems can be a reason for redesign of a facility layout.

TRUE A layout redesign can lead to improved morale.

Random Corp. offers logistics services such as storage, transportation, and information processing to its customers. Random is known in industry as a(n):

Integrated service provider.

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

46. In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.

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

8. DVD recorders would be an example of independent demand items.

One important use of inventories in manufacturing is to decouple operations through the use of work in process inventories.

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

TRUE Pegging ties items to their parents.

Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed.

TRUE Productivity trends direct attention toward problems and opportunities.

Strategy includes both organizational and functional strategies.

TRUE Organizational strategies shape functional strategies.

Standardization has the advantage of reducing variability.

TRUE Standardization leads to reduced variability.

The main issue in the design of process layouts concerns the relative positioning of the departments involved.

TRUE Designing process layouts involves the relative positioning of the departments involved.

The MRP requires a list of the individual parts that will be converted to finished goods.

True

The part-period method for lot sizing attempts to balance setup and holding costs

True

Maintenance includes _________.

changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency

Which of the following is least likely to be a key consideration when a company chooses a supplier?

current inventory

Variability

customer unknown when they will come unknown how long they will be there

The external elements of SWOT analysis are:

C. opportunities and threats. Opportunities and threats relate to the organization and its external environment.

Which of the following is not a characteristic of service operations?

D. easy measurement of productivity The productivity of service operations is often hard to measure.

The maximum possible output given a product mix, scheduling difficulties, quality factors, and so on, is: A. utilization B. design capacity C. efficiency D. effective capacity E. available capacity

D. effective capacity

The ratio of actual output to effective capacity is: A. design capacity B. effective capacity C. actual capacity D. efficiency E. utilization

D. efficiency

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time?

D. safety time

Where a firm locates would typically not affect that firm's:

D. strategy. Typically, strategy dictates where firms will locate, rather than location dictating strategy.

When MRP II systems include feedback, they are known as: A. MRPIII B. Enterprise resource planning C. Circular MRP D. Feasible MRP E. Closed Loop MRP

Which of the following interactions with vendors would potentially lead to inventory reductions?

reduced lead times.

lean operations

reduction of inputs to maintain flexibility in the process

queue

waiting line

What does the R stand for in CPFR? -Repeat. -Re-design. -Re-evaluate. -Replenish.

replenish

In MRP, under lot-for-lot ordering, "planned-order receipts" are:

identical to "planned-order releases"; Planned receipts would be equal to planned releases under any lot sizing rule.

The __________ stage of the decision-making process involves making the chosen alternative work and continuing to monitor how well the solution is working.

implementation

In the __________ role, managers act as figureheads for the organization when they represent their companies to the outside world and perform symbolic duties.

interpersonal

pipeline

inventory that has left but hasn't arrived (in transit)

The MRP input storing information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size) is the:

inventory-records

Which of the following is not true of vendor analysis?

it involves and examination of the function of purchased parts or raw materials

Which one of the following is not an input in an MRP system?

planned-order schedules; Planned-order schedules are outputs from MRP.

MM1

one server

exponential smoothing method

provides a more sophisticated version of the moving-average method. It gives the greatest weight to the last month and then progressively smaller weights to the older months.

28. When to order can be calculated by the ROP and expressed as a quantity.

What is the economic part-period (EPP) for ordering this item? A. 2 B. 50 C. 100 D. 150 E. 200

Jones Corp. has noticed that sales of its product seem to be related to a variable it calls Gamma. It has developed the data shown below. Develop a simple linear regression from the data and tell Jones what the sales forecast will be if Jones expects Gamma to be 16 (round your forecast to the nearest number of whole units). 31 33 28 34

Each Deluxe Basket contains: 2 dark chocolate truffles & 4 carved chocolate eggs; additionally 1 bottle of Alka-Seltzer is included for those who overindulge. How many dark chocolate eggs should be ordered? a. 310 B. 450 C. 500 D. 550 E. 600

310

Which of these items would be most likely to have dependent demand? A. Xbox batteries B. toy trains C. flowers D. chocolate chip cookies E. wrist watches

Which of the following factors should be considered when one designs a forecasting process?

All the answers are correct.

Which of the following sells physical products directly to consumers or to individual businesses?

An e-tailer

An online auction used for sourcing:

Can hurt supplier relationships. Online auctions can damage supplier relationships. Typically, online auctions drive prices down; they are used in the same situations as competitive bidding, and the software can consider factors other than price.

Sustainability:

Can lower a company's total cost. Sustainability can reduce a company's total costs by reducing waste and avoiding problems.

Cross-docking:

Combines break-bulk and consolidation activities.

Preparing an RFQ or RFP is an important step in: Negotiation. Online reverse auctions. Supplier scorecards. Competitive bidding.

Competitive bidding

Richard's Rollerskate Company relies on Simon's Trucking to transport all of their products. Simon's Trucking is the only shipping company for RRC, and all products are shipped in trucks that look like giant roller skates with Richard's Rollerskate branding on the trucks. Richard's Rollerskate is likely using which carrier type?

Contract carrier.

Which of the following statements best describes counterimplementation?

Counterimplementation is a deliberate strategy to thwart the implementation of an information system or an innovation in the organization.

Which of the following are NOT often associated with a vendor-managed-inventory (VMI) arrangement? Long-term commitments from both parties. Supplier representative located at the customer site. Customer recommend to supplier's how they should schedule production. Supplier places replenishment orders. All options are typically associated with a VMI arrangement.

Customer recommend to supplier's how they should schedule production

Which of the following are NOT often associated with a vendor-managed inventory (VMI) arrangements?

Customers recommend to suppliers how they should schedule production.

The ________ develops forecasts by asking a panel of experts to individually respond to a series of questions.

Delphi method

Proportionality

Diminishing marginal returns violates which assumption of linear programming

Zanda Corp. had outsourced its production to a company located in Asia. Recently it decided to continue to outsource but bring the production back to a company located in the United States. This decision was likely made after Zanda:

Examined total cost of ownership.

Examined total cost of ownership. The decision to bring production closer to home could only come after an analysis of total cost of ownership.

Expected number of customers in the queue, which excludes customers being served.

Expected number of customers in the system, including those being served (the symbol L comes from Line Length)

one over mu

Expected service time or mean of service time distribution

___________ inventory is the costliest form of inventory one can hold.

Finished goods

35. Profit margins tend to be inversely related to inventory turns.

All of the following are outputs from an MRP system EXCEPT:

Forecasts. Outputs Order releases. Change orders. Exception reports. Forecasts are inputs to an MRP system.

Which of the following best describes formal planning tools?

Formal planning tools are a project management technique that structures and sequences tasks, budgeting time, money, and technical resources required to complete the tasks.

__________ is rule-based AI that tolerates imprecision by using nonspecific terms called membership functions to solve problems.

Fuzzy logic

Which of the following statements best describes geographic information systems (GIS)?

Geographic information systems (GIS) provide tools to help decision makers visualize problems that benefit from mapping.

Which of the following can tell you where your friends are meeting?

Geosocial service

A forecasting technique that seeks inputs from people who are in close contact with customers is known as: Historical analogy. Focused forecasting. Grassroots forecasting. Marketing research.

Grassroots forecasting.

S&OP has both "hard" and "soft" benefits. Which of the following is not considered a "soft" benefit of S&OP? Multiple Choice Greater accountability for results Enhanced teamwork at both the executive and operating levels Better decisions with less effort Higher sales and enhanced quality

Higher sales and enhanced quality

What is done in the planning phase for the development of an e-commerce presence for a start up company?

In this phase you would envision your Web presence and write a Web mission statement.

In examining the data below, the manager exclaimed that he was very happy to see no bias in the forecasts. How would you respond to the manager? I'm sorry, but there appears to be a very strong positive bias.

I'm sorry, but there appears to be a very strong positive bias.

Which of the following best describes the free/freemium revenue model?

In the free/freemium revenue model, firms offer basic services or content for free, while charging a premium for advanced or special features.

A company requires its suppliers to make its products in at least three different locations around the world. Which supply management goals does this BEST accomplish?

Identifying, assessing, and mitigating supply chain risk.

A company that had been using single sourcing, decided to add a second supplier for one of its key raw materials. Which supply management goal does this BEST accomplish?

Identifying, assessing, and mitigating supply chain risk.

Increasing the value of alpha (α) in an exponential smoothing model would produce which of the following results?

Increase the sensitivity of the forecast process to recent changes in demand

Within the hierarchy of planning, the Sales & Operations Planning system occurs at which of the following levels?

Intermediate range

Which of the following best describes internal integration tools?

Internal integration tools are a project management technique that ensures that the implementation team operates as a cohesive unit.

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true?

Inventory will fluctuate significantly during the year.

Supply management:

Is essential for an organization to attain its strategic objectives.

Supply management:

Is essential for an organization to attain its strategic objectives. Supply management plays a strategic role in an organization.

__________ provide tools for the management, delivery, tracking, and assessment of various types of employee learning and training.

Learning management systems

A bill-of-materials file contains:

Lists of materials required to produce end item products.

A bill-of-materials file contains:Invoices for materials that

Lists of materials required to produce end item products. The BOM lists all of the materials required to produce an item.

Which of the following is an advantage of a chase production strategy (as compared to a level plan)?

Lower inventory investment.

Which of the following is NOT a benefit of outsourcing? Greater flexibility to change product specifications Better access to market information Lower supply management costs Less capital needed for investment

Lower supply management costs

Which of the following statements best describes the classical model of management?

Management focused on its formal functions of planning, organizing, coordinating, deciding, and controlling

The TQM view of organizational structure states that: -Employees must support management decisions. -Middle management must support and enforce top management decisions. -Management must support employees. -Customers want quality products.

Management must support employees

The primary purpose of an MRP system is to:

Match supply and demand. The primary purpose of an MRP system is to match supply and demand.

lambda

Mean arrival rate for customers coming to the queueing system

Mean service rate, or Expected service completions per unit time for a single busy server

39. The fixed-order interval model requires a larger amount of safety stock than the ROP model for the same risk of a stockout.

Floor cleaning supplies for an elementary school would be considered to be:

Noncritical

Floor cleaning supplies for an elementary school would be considered to be:

Noncritical.

Which of the following statements is true regarding a periodic review inventory system?

None of the other selections are true.

Suppose a chief supply chain officer takes the total of all purchasing managers' annual salaries and divides this number by the number purchase orders placed in a year. This calculation would provide insight into what kind of inventory cost?

Ordering costs

The identification of parent items is called:

Pegging; Pegging links children to parents.

Alpha Company has a performance standard of 97 percent fill rate. Last month it achieved a 94 percent fill rate. This is an example of:

Performance Gap

Materials requirement planning (MRP) systems are used primarily to: Plan materials. Plan lead time. Plan production. Plan distribution. A and C

Plan materials. MRP is a system for planning materials

In this scenario, which of the following most likely caused the failure of the organization's systems development project?

Poor project management

A company decides to reduce its number of warehouse locations (logistically postpone). This decision would result in ___________ or ___________.

Poorer service to customers or higher transportation cost

The types of costs included in a cost of quality analysis include: -Direct and indirect. -Production, delivery, and marketing. -Internal and external. -Prevention, appraisal, and failure.

Prevention, appraisal, and failure.

The identification, acquisition, positioning, and management of resources and capabilities that a firm needs to attain it strategic objectives is:

Supply management.

Which of the following is not one of the assumptions of the basic EOQ model?

Quantity discounts are available.

A postponable product is one that can be configured to its final form ______ and ______ once actual customer demand is known.

Quickly, inexpensively

The _________ of ERP makes it valuable as a strategic planning tool.

Real-time aspect; ERP provides real-time, consistent guidance to decision-making.

From an operations perspective, companies should strive to:

Realize different customer management approaches may be appropriate for different customers.

Rough-cut capacity planning does all of the following EXCEPT: Uses planned order releases and scheduled receipts to estimate work center loads. Develops a load profile. Determines if a work center has the capacity to implement the MRP plan. Recalculates the MRP plan.

Recalculates the MRP plan

Systems analysis is best described by which of the following?

Systems analysis is the analysis of a problem that the organization will try to solve with an information system.

Returned products are generally handled at a warehouse that provides:

Reverse logistics support.

__________ details how a system will meet the information requirements as determined by the systems analysis.

Systems design

The demand for housing is characterized by a regular pattern of increasing to a peak, then falling. When the demand reaches a low point, it then repeats the pattern. This pattern usually takes place over a three- to five-year period. This is an example of which type of demand pattern? Autocorrelation Step change Trend Seasonality and cycles

Seasonality and cycles Seasonality and cycles are regular patterns of repeating highs and lows, as described in this example

Google Apps, Photobucket.com, and Dropbox are all examples of which e-commerce business model?

Service provider

Logistics is responsible for all of the following EXCEPT:

Setting product quality standards.

Squeaky Klean, a small consumer products company, purchases custom-designed plastic bottles for its cleaning products that are made at a single plant in Cleveland, Ohio. To make these bottles, specialized tooling must be purchased at a high cost and installed at a supplier's plant. Its sourcing strategy for bottles should be to:

Single Source

Process Design

Small lot sizes Setup time reduction Manufacturing cells Quality improvement Production flexibility A balanced system Little inventory storage Fail-safe methods

The identification, evaluation, selection and management of suppliers is called:

Sourcing. Sourcing is the identification, evaluation, selection of and management of suppliers.

Aspen Corporation has discovered that it uses 10 different suppliers for a particular type of item, has bought 20 different models of that item, and total expenditures last year for the item were $100,000. Aspen most likely is conducting: Supplier audits. Spend analysis. Supplier certification. Make or buy analysis.

Spend analysis

The process of understanding how a firm is spending its money and with which suppliers is called: Strategic sourcing. Make or buy analysis. Market analysis. Spend analysis.

Spend analysis

The capability to resist and recover from supply chain disruptions is:

Supply chain resilience.

23. The total cost curve is relatively flat near the EOQ.

Which of the following indicates that String is using the systems life cycle methodology when building the information system?

String uses a phased approach to create the information system in distinctly different stages.

Determining the right number of supplier that a company should use is:

Supply base optimization.

Initially, a master production schedule—the output from MRP—may not represent a feasible schedule.

TRUE

Texas Manufacturing has decided to triple the number of distribution centers it operates around North America in order to locate inventories within 500 miles of each major city. What effects should they expect?

The required safety stock will increase.

Which of the following best defines m-commerce?

The use of handheld wireless devices for purchasing goods and services from any location

With respect to transportation regulation today in the United States:

There is more safety/social regulation than ever before.

Long-term/strategic demand planning is typically done using what units? Sales at a given location Total business unit sales Total product item sales Total product family sales

Total business unit sales Strategic demand planning supports total business level decisions.

Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.

false

In MRP, under lot-for-lot ordering, planned-order receipts are: A. identical to scheduled receipts. B. identical to planned-order releases. C. open orders (that is, ordered before the first time bucket, but not delivered yet). D. gross requirements. E. available-to-promise inventory.

identical to planned-order releases.

ERP implementation probably won't require:

just a few weeks to install; ERP implementation can take years.

Fixed Quantity system

same quantity (Fixe)

Management focused on its formal functions of planning, organizing, coordinating, deciding, and controlling describes __________.

the classical model of management

que discipline

the order in which customers are processed

The tracking signal will suggest to a manager that Demand for an item is changing. A forecast mode's parameters may need adjustment. There is seasonality in demand. All of these

A forecast mode's parameters may need adjustment. Tracking signal suggests to a manager that model parameters may need adjustment.

__________ is a problem-solving method that promotes the evolution of solutions to specified problems using the model of living organisms adapting to their environment.

A genetic algorithm

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 items.

Demand planning for the intermediate term (tactical plans) would be done using dollar or unit sales for:

A product family in a region

Outsourcing is often a good choice when:

A product is in the mature phase of the life cycle.

Outsourcing is often a good choice when: There are only a few suppliers. A product is in the mature phase of the life cycle. Technology is new. The product is critical to a firm's competitiveness.

A product is in the mature phase of the life cycle.

The primary difference between seasonality and cycles is:

A. the duration of the repeating patterns. Seasons happen within time periods; cycles happen across multiple time periods.

If the planning horizon is 12 weeks, the cumulative lead time must be:

Less than or equal to 12 weeks.

John Jones of Jones Corporation determined that the cost related to processing an invoice from a supplier was approximately $100 per invoice. This cost is an example of: Inventory investment Inventory holding (or carrying) cost Order cost Wasted expense

Order cost

__________ refers to a framework for operationalizing a firm's strategic plan by focusing on measurable financial, business process, customer, and learning and growth outcomes of firm performance.

The balanced scorecard method

__________ measures the number of customers who stop using or purchasing products or services from a company.

The churn rate

Which of the following statements about the just-in-time strategy is true?

The just-in-time strategy is a scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line.

When you need to identify a supplier for a new purchase, the FIRST place that you should look is:

The list of your company's current suppliers.

An example of an external factor that influences effective capacity is government safety regulations. True or False?

True

Every project is constrained by three fundamental factors

__________.:time, cost, and scope

A stock or store of goods is called a(n):

inventory.

In their interpersonal role, managers _________.

act as figureheads for the organization to the outside world and perform symbolic duties

In their informational role, managers __________.

act as the nerve centers of their organizations, receiving the most concrete, up-to-date information and redistributing it to those who need to be aware of it

Partner relationship management is a comprehensive CRM package that will __________.

best assist a company in enhancing its collaboration with distributors and retailers

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the: A. master production schedule. B. bill of materials. C. inventory records. D. assembly time chart. E. net requirements chart.

bill of materials.

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the:

bill-of-materials; This is the bill of materials.

In enterprise applications, tools for flexible reporting, ad hoc analysis, interactive dashboards, what-if scenario analysis, and data visualization are a part of __________.

business intelligence tools

Competitive bidding should be used when:

Product specifications are known and clear.

The multiplication process used by MRP to determine lower-level requirements is called:

E. exploding.

Cycle stock inventory is intended to deal with:

Expected demand

Splitting shipments into individual orders and arranging them for local delivery to customers is:

Break-bulk.

The output of MRP is:

C. a schedule of requirements for all parts and end items.

Independent Demand items

ready to be sold/used by a customer

62. A non-linear cost related to order size is the cost of:

receiving

What is the mean absolute deviation (MAD)?

200

Which of the following factors should be considered when one designs a forecasting process?

All of these.

Backflushing takes place:

C. after production has been completed.

CPM

Critical Path Method used with deterministic time

56. All stock outs must be avoided.

One of the supporting goals of JIT is:

to make the system flexible

Which phrase/word best captures what lean is?

A corporate philosophy.

__________ consists of computer-based systems (both hardware and software) that attempt to emulate human behavior.

Artificial intelligence (AI)

EOQ I

economic order quantity where the order size minimizes the total annual cost

phases

number of steps in the process

One of the building blocks of JIT is:

product design

A batch of Raisin Bran that has been made at Kellogg's but not yet packaged in its final cereal box would be an example of what type of inventory? -Maintenance, repair, and operating supplies (MRO) -Raw material -Finished goods -Work in process

work in process inventory

A net-change MRP system is one that is updated periodically but not less frequently than once a week.

FALSE

A regenerative MRP system is one that is updated continuously, every time there is a schedule change.

FALSE

An assembly-time chart indicates gross and net requirements taking into account the current available inventory.

FALSE

Capacity requirements planning is an important feature in MRP+.

FALSE

Which of the following provide tools to help decision makers visualize problems that benefit from mapping?

Geographic information systems

The identification of parent items is called:

B. pegging.

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. CHASE PLAN Picture What is the total cost of hiring and firing the workers in a chase plan which uses only hiring and firing?

$5,000 Hiring/firing cost = (14 hires ×$300) + (4 ×$200) = $5,000

Over a six-month period, the demand for a product has been: June = 200, July = 210, August = 240, September = 240, October = 260, and November = 280. The three-month moving average forecast for December is 260. 300. 280. 240.

(240 + 260 + 280)/3 = 260

_______ is choosing how many to order or make

Lot sizing ; Lot sizing sets the order or batch quantity.

Which phrase most closely describes the Delphi technique?

C. series of questionnaires The questionnaires are a way of fostering a consensus among divergent perspectives.

Bill's Food Emporium uses the periodic system to order cans of Cajun seasoning every 30 days. It typically takes the supplier 10 days to resupply Bill. Sales average 8 units per day with a standard deviation of 2 units per day. Bill does not carry any safety stock of Cajun seasoning. If he runs out for a period of time, he doesn't care. Bill just counted his inventory of Cajun seasoning and found 22 cans on the shelf. How many cans should Bill order?

. 298

Blue Star Co. has been using the production order quantity inventory model. If annual demand, daily demand, and the production rate increase to 4 times their original amounts, which of the following is/ are possible consequence(s)?

. The order quantity will double

The table below shows quarterly sales data over four years. Using the average demand as the base, what is the seasonal index for the 3rd quarter (pick the answer that is closest to the correct number)?

0.84

In an A-B-C system, the typical percentage of the number of items in inventory that is classified as A items is about:

An office manager forecasts demand for office stationery by exponential smoothing, with alpha = 0.4. Actual demand two weeks ago (i.e., the week before last) was 12 boxes, but the forecast for that period was only 10. Actual demand last week was 7. What was the forecast for last week? 11.0 11.2 8.2 10.8 8.8

10.8 Forecast = 10 + .4(12 - 10) = 10.8

Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, 60 units in week 5, If a fixed-period, 3-period lot-sizing method is used what will be the qty. of the first planned receipt? A. 60 b. 100 C. 160 D. cannot be determined E. none of the choices

100

Using the BOM, if 2 units of A are needed, how many used of K will be required? Assume that there is no on-hand inventory of any items.

104 Ks are used in B and C. In B, 4 Ks are needed (4 × 1). For C, the number of Ks is 4 × 4 = 16. To make one A requires 1 B and 3 Cs, so the number of Ks is 4 × 1 + 3 × 16 = 52. Two As requires 52 × 2 = 104 Ks.

A node has one entering activity, a, and two leaving activities, b and c. Given the following information, determine the latest starting time for activity a: EFb = 15, EFc = 17, LFb = 24, LFc = 27; activity times are a = 4, b = 6, c = 8.

What is the net requirement for dark chocolate truffles to fill this order? A. 100 B. 140 c. 150 D. 180 E. 200

150

Jones Company uses widgets as component parts. In a particular week it has gross requirements for 250 units of widgets, beginning inventory of 50 widgets, and scheduled receipts of 350 widgets. Available inventory for the next period is:

150 Beginning inventory (50) + scheduled receipts (350) − gross requirements (250) = 150.

Using the data shown below, the forecast for week 5 using a 3-period moving average model is:

152

The total annual acquisition cost for Book Store at that quantity is closest to:

16,018,000

A company has the information shown in the chart below regarding its forecast performance in the past three periods. Picture What is the mean absolute deviation (MAD)?

200 Summing the absolute values of the errors and determining the average results is (300 + 200 + 100)/3 = 200.

The efficiency of a productive unit is 60%. The unit produces an average of 20 forklift trucks per day. Determine the effective capacity of the unit.

33.33

Activity C has an early start time of 8, an early finish time of 12, a latest start time of 13, and a latest finish time of 17. Its slack is:

A master production schedule shows the following information: Picture Using a lot-for-lot rule, what is the MSP quantity for week 4?

500 The MPS in week 4 is 500, which is the greater of the forecast or actual orders.

The utilization of a machine is 50%. The machine has a design capacity of 70 units per hour and an effective capacity of 60 units per hour. Find the efficiency of the machine.

58.33

A master production schedule shows the beginning inventory is 40 units, the forecast is 100 units and actual customer orders are 80 units. What is the quantity that is available to promise in period 1?

A company has forecasted next year's demand to be 400. What is the seasonally adjusted forecast for Quarter 1 (choose the closest answer).

Using the data below, the company has forecasted next year's demand to be 400. What is the seasonally adjusted forecast for Quarter 1 (choose the closest answer). 71 73 75 125

73 Average/quarter = 100, seasonal adjustment for Q1 = 100(0.732) = 73.2.

Pegging is used primarily for which one of the following purposes? A. Identifying parent items that have generated a certain set of requirements for an item. B. Identifying the supplier of a given component. C. Identifying the supplier of a given component's parent. D. Periodically update material requirements as conditions change. E. Obtaining exception reports due to periodic changes in material requirements.

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the: A. master production schedule. B. bill-of-materials. C. inventory-records. D. assembly-time chart. E. net-requirements chart.

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the: A. master schedule B. bill-of-materials C. inventory-records D. assembly-time chart E. net-requirements chart

The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2): A. computers B. development of the EOQ model C. inventory control systems D. blanket purchase orders E. the internet

Which of the following is true concerning sales and operations planning?

A benefit of the process is that the firm should achieve high service levels with lower inventory. False By keeping the schedule stable, production can be optimized. There is a specific set of steps all firms should follow in the sales and operations planning process. Once the plan is finalized, it should not be changed during the planning period.

Which of the following statements is true of a change agent?

A change agent is the systems analyst in the implementation process.

With respect to lead-time performance, most customers would prefer which of the following from a supplier?

A consistent three-day lead time

Which of the following best describes a genetic algorithm?

A genetic algorithm is a problem-solving method that promotes the evolution of solutions to specified problems using the model of living organisms adapting to their environment.

What is a portfolio analysis?

A portfolio analysis will best help management determine the optimal mix of investment risk and reward for the firm, balancing riskier high-reward projects with safer lower-reward ones.

Which of the following statements best describes a private industrial network?

A private industrial network is owned by the buyer, and permits the firm and designated suppliers, distributors, and other business partners to share product design and development, marketing, production scheduling, inventory management, and unstructured communication, including graphics and e-mail.

Zanda Corp. is considering trying to develop a full partnership with a particular supplier. This suggests that the item Zanda buys from the supplier is:

A strategically important part.

A small business owner is contemplating the addition of another product line. Capacity increases and equipment will result in an increase in annual fixed costs of $50,000. Variable costs will be $25 per unit. A) What unit-selling price must the owner obtain to break-even on a volume of 2,500 units a year? B) Because of market conditions, the owner feels a revenue of $47 is preferred to the value determined in part A. What volume of output will be required to achieve a profit of $16,000 using this revenue?

A. 45 B. 3,000

Suppose management decides it wants to offer a 95% service level. That is, Cooper Company is willing to experience a stock-out probability of 5% during the order cycle. What is the annual cost of this safety stock policy?

A. $82.50

When calculating a Reorder Point (ROP), which of the following factors WOULD NOT affect the calculation?

A. Item's EOQ

Product design and choice of location are examples of _______ decisions.

A. strategic These decisions are made high in the hierarchy.

__________ focuses on the rapid delivery of working software by breaking a large project into a series of small subprojects that are completed in short periods of time using iteration and continuous feedback.

Agile development

Managers can manage demand by: A) Influencing the timing or quantity of demand through pricing changes B) Influence the timing of order fulfillment C) Encourage customers to shift their orders from one product the another D) All of the above E) None of the above

All of the above

The following table shows capacity requirements data for making table tops. Picture Which of the following is TRUE?

All of the excess demand in days 4 and 5 can be shifted to day 3.

The following table shows capacity requirements data for making table tops. Picture Which of the following is TRUE?

All of the excess demand in days 4 and 5 can be shifted to day 3. With the current capacity, exactly 48 units can be made each day. The demand in day 4 is 6 and in day 5 is 2. These units can be shifted to day 3, and capacity would exactly meet demand in days 3 through 5.

Which of the following factors should be considered when one designs a forecasting process? Time horizon for planning. Level of detail for planning. Availability of data. All of these

All of these Forecasting systems should be tailored to the users' needs.

Which of the following might a company try to do to reduce the total amount of safety stock it holds?

All of these selections.

Which of the following best defines an electronic data interchange (EDI)?

An electronic data interchange (EDI) enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bills of lading, shipments schedules, and purchase orders.

Which of the following statements best describes and information systems plan?

An information systems plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals.

If you are evaluating whether a supplier's workforce is receiving fair wages, you are most likely doing a(n):

Assessment of sustainability.

If you are evaluating whether a supplier's workforce is receiving fair wages, you are most likely doing a(n): Spend analysis. Assessment of sustainability. ISO 9000 assessment. Total cost of ownership assessment.

Assessment of sustainability.

If the cumulative lead time is 8 weeks, to be feasible the MPS planning horizon must be:

At least 8 weeks. The MPS planning horizon must be equal to or greater than the cumulative lead time to ensure that there is enough time to plan, order, receive material, and make the end items.

What might a company do to reduce the amount of cycle stock it holds?

Attempt to reduce order costs.

-------describes the relationship of current demand with past demand.

Autocorrelation

_____ describes the relationship of current demand with past demand.

Autocorrelation

A visual depiction of the subassemblies and components that are needed to produce and/or assemble a product is called a(n): A. assembly time chart B. product structure tree C. MRP II D. pegging E. Gantt chart

Comparing known and expected capacity requirements with projected capacity availability is the job of: A. planned releases. B. load reports. C. lot sizing. D. work loading.

ERP implementation probably won't require: A. cross functional teams B. just a few weeks to install C. intensive training D. high funding for both initial cost and maintenance E. frequent upgrades after installation

A service organization (for example, a hospital) is likely to use a ________ layout because of variability in customer processing requirements. A. project B. process C. flow D. assembly E. non-repetitive

B. process A process layout is capable of providing more variety.

The ratio of good output to quantity of raw material input is called

B. process yield. This is sometimes a useful productivity measure in service industries.

A visual depiction of the subassemblies and components that are needed to produce and/or assemble a product is called a(n):

B. product structure tree.

Which of the following is typically the largest of all inventory costs? A. shortage cost B. purchase cost C. holding cost D. ordering cost E. pipeline cost

B. purchase cost

The two general approaches to forecasting are: A. mathematical and statistical. B. qualitative and quantitative. C. judgmental and qualitative. D. historical and associative. E. precise and approximation.

B. qualitative and quantitative. Forecast approaches are either quantitative or qualitative.

The two general approaches to forecasting are:

B. qualitative and quantitative. Forecast approaches are either quantitative or qualitative.

Stainless steel is an important raw material for an appliance company. Steel accounts for a high level of spend and is critical to customer satisfaction. Further, only three suppliers worldwide can produce steel to meet the company's quality standards. Which is appropriate in this situation?

Build collaborative partnerships with suppliers.

Which of the following lean principles best communicates the notion of demand synchronization?

Build only as quickly as customers want them

When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as:

Bullwhip effect

Customer service levels can be improved by better: A. mission statements. B. control charting. C. short-term forecast accuracy. D. exponential smoothing. E. customer selection.

C. short-term forecast accuracy. More accurate short-term forecasts enable organizations to better accommodate customer requests.

Customer service levels can be improved by better:

C. short-term forecast accuracy. More accurate short-term forecasts enable organizations to better accommodate customer requests.

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

C. shortage costs

Job shops tend to be __________ while continuous processes tend to be __________. A. in services; in manufacturing B. short-term and capital intensive; long-term and labor intensive C. small scale and flexible; large-scale and inflexible D. standardized; customized E. low cost-per-unit; high cost-per-unit

C. small scale and flexible; large-scale and inflexible

Which one of the following would not generally be classified under the heading of transformation?

C. staffing Staffing doesn't involve transforming resources so much as it involves acquiring them.

Which of the following is a recent trend in business?

C. supply chain management Supply chain management involves a broader systemic view of operations.

Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision-makers to consider ______________ in response to the ___________.

C. sustainability; threat of global warming Sustainability is a relatively recent operations management consideration.

Which of the following is NOT one of the costs considered in aggregate production planning? Multiple Choice Subcontracting cost. Capital equipment cost. Inventory cost. Firing (layoff) cost.

Capital equipment cost.

Which of the following would NOT be a step in conducting an insourcing/outsourcing analysis?

Conducting a detailed internal audit of purchasing practices All are steps in make/buy analysis except reviewing internal purchasing practices.

The degree to which the product meets its' design specifications is called: -Total quality -Aesthetic quality -Performance quality -Conformance quality -Perceived quality

Conformance quality

Correct Answer All of the selections are true. Jones will have higher hiring and firing costs. Jones will have higher investment in plant and equipment. Jones will have lower inventory carrying costs.

Which of the following is NOT an input into the S&OP?

Correct Answer: Lot Sizing Logic What is a part of S&P? Spare Parts Demand Promotion Safety Stocks

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences?

Correct answer: Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts Non differences Sales prefers many product variations, operations prefers few variations. Sales prefers rapid response, operations prefers stable production schedules. Sales emphasizes revenue, operations emphasizes cost minimization. Generally, the sales function only wants aggregate forecasts, while operations needs detailed forecasts for planning purposes.

The use of Lean and Lean Systems is most supportive of which of the following competitive priorities, as described in Chapter 2? -Timeliness -Innovation -Quality -Cost

Cost

The longest lead time path in the BOM is the:

Cumulative lead time. The cumulative lead time is the longest lead time path in the BOM.

The difference between a "customer success" focus and a "customer satisfaction" focus is that:

Customer satisfaction deals with expectations, customer success deals with requirements.

Jones Company makes every effort to consistently meet the expectations of all of its customers. It is clear that Jones Company is focused on:

Customer satisfaction.

Which of the following is NOT often associated with supplier-managed inventory (SMI) arrangements? -Supplier representative located at the customer site. -Long-term commitments from both parties. -Supplier places replenishment orders. -Customers recommend to suppliers how they should schedule production. -All of these are typically associated with SMI.

Customers recommend to suppliers how they should schedule production.

A process designed to handle purchasing and scheduling the production of dependent-demand components is: A. economic part-period (EPP). B. lot-for-lot (LFL). C. economic order quantity (EOQ). D. material requirements planning (MRP). E. economic run size (ERS).

An MRP system whose records are updated continuously is referred to as a(n): A. regenerative system. B. batch-type system. C. Plossl-Wright system. D. net-change system. E. gross-change system.

An MRP system whose records are updated continuously is referred to as a(n): A. regenerative system B. batch-type system C. Plossl-Wright system D. net-change system E. gross-change system

Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is:

Executive judgment.

The positioning and replenishment of finished goods inventories at the retail level can be determined using: MRP. RFID. CRP. DRP.

DRR DRP (distribution requirements planning) is the system used to help in positioning and replenishing finished goods inventory in a system.

What is the primary tool for structured analysis that graphically illustrates a system's component processes and the flow of data between them?

Data flow diagram (DFD)

The primary difference between demand management and demand forecasting is Forecasting is only possible when quantitative data are available. A firm cannot execute both approaches simultaneously. Demand management is proactive, while forecasting attempts to predict. One approach deals with uncertainty, while the other deals with known demand.

Demand management is proactive, while forecasting attempts to predict. Demand management proactively attempts to influence demand, while forecasting simply tries to predict demand.

What is the relationship between demand management and demand forecasting? The two planning activities are managed independently. Demand management plans are usually an input to demand forecasting. Demand management is done by operations managers, while demand forecasting is done by marketing managers. Both B and C are correct.

Demand management plans are usually an input to demand forecasting. Demand management plans such as pricing and promotion are inputs needed to forecast demand.

Which of the stages of the decision-making process involves identifying and exploring various solutions to the problem?

Design

Lean design strives to achieve which of the following objectives?

Design products that exactly meet customers' needs

__________ classify, store, and distribute digital objects such as photographs, graphic images, video, and audio content.

Digital asset management systems

Which of the following statements best describes digital asset management systems?

Digital asset management systems help companies to classify, store, and distribute digital objects such as photographs, graphic images, video, and audio content.

In a lean system, waste is any action that

Does not generate value.

The center-of gravity method of determining a facility location:

Does not require that qualitative factors be considered in location decisions.

Which of the following is/are a primary input into capacity, sales, and production planning? A. product design B. market share C. ethics D. globalization E. demand forecasts

E. demand forecasts Demand forecasts are direct inputs into capacity, sales, and production plans.

Which of the following statements about the implementation of enterprise applications is true?

Enterprise applications require not only deep-seated technological changes but also fundamental changes to the way the business operates.

_________ include corporate repositories of documents, reports, presentations, and best practices, as well as capabilities for collecting and organizing semistructured knowledge such as e-mail.

Enterprise content management systems

Which of the following best describes enterprise content management systems?

Enterprise content management systems help organizations manage both structured and semistructured knowledge, and they have capabilities for knowledge capture, storage, retrieval, distribution, and preservation to help firms improve their business processes and decisions.

Which of the following statements best describes enterprise-wide knowledge management systems?

Enterprise-wide knowledge management systems are general-purpose firmwide efforts to collect, store, distribute, and apply digital content and knowledge.

Benefits of ERP systems include all of the following EXCEPT:

Except: Easy implementation. Benefits More informed business decisions. Improved customer service. Fewer data entry errors. ERP systems are complex and can be difficult to implement.

__________ are independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing.

Exchanges

Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is: Exponential smoothing. Time-series. Executive judgment. Moving average. Regression.

Executive judgment. Radically new products do not have any data to support quantitative forecasting. Only executive judgment is a qualitative technique.

Expected waiting time in the queue (excludes service time) for an individual customer.

Expected waiting time in the system (including service time) for an individual customer (the symbol W comes from Waiting time).

What helps a person most with their forecasting abilities? -Technique. -Training. -Data. -Experience. -Education.

Experience

Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs.

FALSE Special-purpose technology typically reduces costs through standardization.

In general, Job-Shop systems have a lower unit cost than continuous systems do because continuous systems use costly specialized equipment.

FALSE Specialized equipment can lead to lower unit cost.

A forecasting technique that seeks inputs from people who are in close contact with customers is known as:

Grassroots forecasting.

Which of the following is true about the use of weighted scoring models for supplier selection? Once developed, the model weights should never change. The supply management department should determine the weights. The highest-scoring supplier should always be selected to receive the business.

Highest scoring supplier should be chosen

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing:

Hiring and layoff costs.

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing: Multiple Choice Inventory carrying costs. Hiring and layoff costs. Cost of quality defects. Lost sales costs

Hiring and layoff costs.

All of following can increase supply chain risk except:

Holding higher levels of inventory of critical materials.

Which of the following is (are) advantages of full partnerships with suppliers, as compared to traditional adversarial relationships? I. They help reduce uncertainties for both buyer and supplier. II. The full partnership is easier to establish and maintain than other relationships, so more suppliers can be dealt with. III. The full partnership assures the lowest material price.

I only

To reduce waiting times by actively managing system constraints, managers could consider: (I) using temporary workers. (II) shifting demand from high-demand periods to low-demand periods. (III) offering more service variety. (IV) discovering bottlenecks.

I, II, and IV

Which of the following is a direct input into capacity requirements planning? (I) the master production schedule (II) routing information (III) current shop loads (IV) planned-order releases A. II, III, and IV only B. I, II, and IV only C. I, III, and IV only D. I and II only E. I, II, III, and IV

II, III, and IV only

A=B

In a BIP problem, 1 corresponds to a yes decision and 0 to a no decision. If there are two projects under consideration, A and B, and either both projects will be undertaken or no project will be undertaken, then the following constraint needs to be added to the formulation:

Which of the following statement best describes a pull-based model?

In a pull-based model, production master schedules are based on forecasts or best guesses of demand for products, and products are `pushed` to customers.

Which of the following statement best describes a push-based model?

In a push-based model, actual customer orders or purchases trigger events in the supply chain.

A difference between periodic review and continuous review inventory systems is:

In one system, time triggers orders, in the other, quantity triggers orders

Which of the following would you NOT expect to find in a company attempting to implement lean/just-in-time production?

Inspections after each piece is produced

Which of the following is true of end-user development?

It poses organizational risks due to inadequate control over data that is outside traditional information systems.

Which statement concerning MRP II is false?

It produces a production plan which includes all resources required.

Which of the following statements about an enterprise system is true?

It provides firmwide information to help managers make better decisions.

Which of the following is true of the effect of the ubiquitous nature of the Internet on e-commerce?

It reduces transaction costs for a customer.

When calculating a reorder point (ROP), which of the following factors WOULD NOT affect the calculation?

Item's EOQ

Which of the following represents an unstructured decision in this scenario?

Jaden's interest in expanding business into the Asian market

Which of the following is a technique used to accelerate the generation of information requirements and to develop the initial systems design?

Joint application design

__________ refers to the set of business processes developed in an organization to create, store, transfer, and apply knowledge.

Knowledge management

A company recently lowered its service performance from 99 percent product availability to 97 percent product availability. The change saved the company exactly $1 million per year in inventory carrying cost. Senior management now wants to lower the service level to 95 percent from 97 percent. Such a further change is likely to save:

Less than $1 million.

Which type of aggregate production plan is likely to have the LEAST negative impact on the local community and the workforce?

Level plan Chase with hiring/firing or with overtime both have potential negative impacts on the community and/or the workforce. Level plans tend to minimize these.

The available capacity of a worker, machine, work center or facility during a specific period of time is compared against the capacity needed for a specific work schedule in a:

Load profile. A load profile compares weekly capacity needs against the actual capacity that is available.

A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries. What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables? Local, close to its production plant when possible. National, using suppliers within each country. Global, using the same suppliers across the world. Low-cost country sourcing.

Local

Local, close to its production plant when possible.

The quantities of end items to be completed in each time period into the future is shown in a(n): ERP. MPS. BOM. MRP.

MPS. An MPS shows the quantities of end items that are to be completed during each time period over the planning horizon

Gathering data on the supply market's structure, price forecasts, and supply chain risk are assessed during a/an:

Market analysis. Gathering data on the supply market's structure, price forecasts, and supply chain risk are assessed during a/an market analysis.

How does aggregate planning for services differ from aggregate production planning for products? Multiple Choice There is no difference. Demand for products typically is stated as the number of hours of labor required, whereas demand for services is generally stated as the number of units of service desired. Most service plans are based primarily on labor requirements. Service plans make extensive use of inventory to meet demand.

Most service plans are based primarily on labor requirements.

Designing postponable products has the potential to allow operations managers to:

Move from build-to-stock to assemble or make-to-order operations.

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to:

Multiple Source

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to: Multiple source. Increase efficiencies. Build partnerships. Consolidate purchases.

Multiple source

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low. A recommended sourcing strategy for Jones is to:

Multiple source.

Which of the following would NOT be a step in conducting an insourcing/outsourcing analysis?

NOT: Conducting a detailed internal audit of purchasing practices Steps Assessing quantitative costs of outsourcing Evaluating new suppliers who could make the SKU Assessing the relationship of the product to the firm's core competencies All are steps in make/buy analysis except reviewing internal purchasing practices.

If a company has some customers who express that they are satisfied with the company's performance, the company can count on the fact that:

None of these selections

Which of the following is NOT included in the information about the inventory records file for an item?

Not Net requirements Included Safety stock Preferred order quantity Lead time

In determining the number of facility locations, the lowest total cost is typically:

Not the lowest cost of either transportation or inventory.

nonpreemptive priorities

Once a server has begun serving a customer, the service must be completed (even if a higher priority customer arrives). However, once service is completed, priorities are applied to select the next one to begin service.

of the following is true of an application software package?

Once an organization buys an application software package, it can customize the source code further to match user requirements.

Order-to-delivery lead time generally would be longest for which type of product?

One that is engineered to order

An initial step in implementing lean is: -Increase the contribution margin of product being sold. -Outsource any non-core activity that can be done more efficiently by a supplier than by the firm. -Lower the break-even point so smaller quantities can be economically produced. -Empower Kaizen teams to improve specific processes/activities.

Outsource any non-core activity that can be done more efficiently by a supplier than by the firm

The ABC analysis used for analyzing inventory is an example of? Pareto's Law Inventory carrying cost Safety stock calculation Regression analysis

Pareto's Law

Which of the following comprehensive CRM packages will best assist the company in enhancing its collaboration with distributors and retailers?

Partner relationship management

Which of the following information is NOT contained in a MRP secondary report?

Planned order releases. Planned order releases are contained in primary reports not secondary reports.

MRP is a process that would be most applicable in which situation? Planning requirements for repair parts for production equipment in a manufacturing plant. Planning requirements for safety stocks of finished goods in a distribution center . Planning requirements for bicycle seats in a bicycle production plant. A and C. None of these.

Planning requirements for bicycle seats in a bicycle production plant. MRP is used for dependent demand items

MRP is a process that would be most applicable in which situation?

Planning requirements for bicycle seats in a bicycle production plant. MRP is used for dependent demand items, such as planning requirements for bicycle seats in bicycle production.

A standard electrical plug fits into an outlet in only one way because one of the two prongs is larger than the other. This ensures that people will insert the plug properly to create a grounded circuit. This is an example of:

Poka-yoke

How does product design affect forecasting accuracy?

Postponable product designs remove the need to forecast demand for final product configurations.

__________ is the use of data mining techniques, historical data, and assumptions about future conditions to predict outcomes of events, such as the probability a customer will respond to an offer or purchase a specific product.

Predictive analytics

Which of the following statements is true of predictive analytics?

Predictive analytics is the use of data mining techniques, historical data, and assumptions about future conditions to predict outcomes of events, such as the probability a customer will respond to an offer or purchase a specific product.

__________ refers to the ease with which consumers can find out the variety of prices in a market.

Price transparency

The process of replanning each period for a given number of periods into the future is referred to as which of the following terms?

Rolling planning horizon

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

Processes

We observe a man working on a setup. During the process of setting up, the man positions the die at a first position. He then runs through a few pieces to check whether or not they are acceptable. He then repositions the die and repeats the process. What we have observed is which of the following forms of waste?

Processing waste

Competitive bidding should be used when:

Product specifications are known and clear Competitive bidding is used when price is the most important factor, the specifications are known and clear, the spend level is large enough, and there are a number of equally qualified suppliers who are willing to compete.

Which of the following is LEAST likely to be considered when determining total landed costs?

Product warranty costs.

Which of the following would benefit the most from MRP:

Production of Vacuum Cleaners

Which activity is most likely to be outsourced by an automotive company such as Ford Motor Co.?

Production of tires.

PERT

Program Evaluation and Review Technique

The programming stage of the systems development process is best described by which of the following?

Programming translates the system specifications prepared during the design stage into program code.

Which of the following statements best describes project management?

Project management activities include planning the work, assessing risk, estimating resources required to accomplish the work, organizing the work, acquiring human and material resources, assigning tasks, directing activities, controlling task execution, reporting progress, and analyzing the results.

Which of the following alternative methods for building information systems can be called an iterative process?

Prototyping

McGreen Burger Shop sells about two burgers per minute. Although the cook can cook up to 10 burgers per minute, he starts to cook another burger only after the salesperson removes a burger from the ramp. The ramp is large enough to hold only five burgers and keep them warm until a sale is made. This is an example of a:

Pull system

A legally binding document that signals to a supplier that goods and services are needed is a(n):

Purchase order.

A legally binding document that signals to a supplier that goods and services are needed is a(n):

Purchase order. A legally binding document that signals to a supplier that goods and services are needed is a purchase order.

The _________ gives an approximation of the forecast error standard deviation

RMSE

63. In a two-bin inventory system, the amount contained in the second bin is equal to the:

ROP

Programs such as Total Quality Management and Six Sigma emphasize which of the following organizational changes?

Rationalization of procedures

____________ inventory is the costliest form of inventory one can hold. Raw Materials Finished Goods Work-in-Process

Raw materials

Each month the sales and operations team at Johnson Company meets to develop plans for each of the next six months. This process is known as:

Rolling planning horizons.

Capacity requirements planning does all of the following EXCEPT:

Recalculates the MRP plan. Planning requirements Develops a load profile. Determines if a work center has the capacity to implement the MRP plan. Uses planned order releases and scheduled receipts to estimate work center loads. Rough-cut capacity planning does not revise the MRP.

All of the following are true about supplier scorecards EXCEPT: They reduce the need for incoming quality inspection. They are used to provide performance feedback to suppliers. They are often used to categorize suppliers based on an overall score. They are used to measure supplier performance based on key performance indicators.

Reduce the need for incoming quality

What is an effect of the universal technical standards of the Internet and e-commerce on customers?

Reducing search costs

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences? Multiple Choice Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts. Sales prefers many product variations; operations prefers few variations. Sales emphasizes revenue; operations emphasizes cost minimization. Sales prefers rapid response; operations prefers stable production schedules.

Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts.

A primary reason for using global suppliers is to: Improve sustainability. Reduce transportation costs. Take advantage of free trade agreements such as NAFTA. Work with the same suppliers in many different regions of the world.

Same suppliers in different regions of the world

Which of the following will best help Z-Gadgets to select projects with multiple criteria?

Scoring model

Implementation of a Six Sigma program typically involves: -Applying for the Malcolm Baldrige Award. -None of these are usually involved in implementing Six Sigma. -A cost of quality analysis. -Setting up training at various levels including green belt and black belt training.

Setting up training at various levels including green belt and black belt training.

Planning for which of the following products would see the LEAST benefit from the use of an MRP system?

Shampoo

Planning for which of the following products would see the LEAST benefit from the use of an MRP system? Power lawnmowers Microwave ovens Shampoo Mobile phones

Shampoo The greatest benefit from MRP is attained when planning complex, discrete products that are assembled such as microwave ovens, mobile phones, and power lawnmowers.

25% rule

Since sales are relatively stable through the year except for a substantial increase during the Christmas season, assume that each quarter's call volume will be the same as the preceding quarter, except for adding 25 percent for Quarter 4.

Single

Williams Inc. has acquired software to help manage interactions with its supply base. This suggests that Williams Inc. is involved in: Vendor-managed inventory. Supplier relationship management. Online reverse auctions. Supplier auditing.

Supplier relationship management

A comprehensive system, facilitated by software, that management the firm's interactions with its supply base is:

Supplier relationship management. A comprehensive system, facilitated by software, that management the firm's interactions with its supply base is supplier relationship management.

Which of the following best describes supply chain execution systems?

Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner.

Which of the following best describes supply chain planning systems?

Supply chain planning systems enable a firm to model its existing supply chain, generate demand forecasts for products, and develop optimal sourcing and manufacturing plans.

Constant changing of the master schedule and the resulting changes in the requirements for components is referred to as:

System nervousness.

Most of the time what is called product or service design is actually a redesign of an existing product or service.

TRUE Usually the core product or service remains relatively unchanged even though other features are modified or enhanced.

__________ refers to knowledge that encompasses the insights, judgment, creative processes, and wisdom that come from learning and long experience in a field, and from many trials and errors.

Tacit knowledge

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

Tends to increase

In the FITt formula, Ft is:

The "base" forecast for period t from the simple exponential smoothing model

Qualitative factors that should be assessed when making an insourcing/outsourcing decision include all of the following EXCEPT:

The costs incurred at the start of the contract

takt time

The cycle time needed to match customer demand for final product

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true?

The firm likely will have higher capital investment than if it followed a level plan.

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true? Multiple Choice Inventory will fluctuate significantly during the year. The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year. It will be easy to keep the workforce size stable. The firm likely will have higher capital investment than if it followed a level plan.

The firm likely will have higher capital investment than if it followed a level plan.

one over lambda

The mean of the probability distribution of inter arrival times, or expected inter arrival time, is

Which of the following defines rapid application development?

The process of creating workable systems in a very short period of time

Johnson Manufacturing has decided to consolidate its warehouses and reduce the number of locations from 12 to four. However, Johnson desires to maintain the same service level in terms of the risks of running out of stock in attempting to meet customer demand. As a result, Johnson can expect that:

The required safety stock will decline by approximately 58 percent.

Johnson Manufacturing has decided to consolidate its warehouses and reduce the number of locations from twelve to four. However, Johnson desires to maintain the same service level in terms of the risks of running out of stock in attempting to fill customer demand. As a result, Johnson can expect that

The required safety stock will decline by approximately 58%.

Which of the following statements best describes a structure chart?

The structure chart is system documentation showing each level of design, the relationship among levels, and the overall place in the design structure.

Which of the following best describes the concept of total landed cost?

The sum of all product-related and logistics-related costs.

__________ is the oldest method for building information systems and its methodology is a phased approach to building a system, dividing systems development into formal stages.

The systems life cycle

Strategic demand planning would best be utilized:

To decide whether or not to close a manufacturing plant.

strategic demand planning would best be utilized: All of these. To determine plans for hiring or laying off employees. To determine plans for employee overtime. To decide whether or not to close a manufacturing plant. To direct day-to-day operations in a manufacturing plant.

To decide whether or not to close a manufacturing plant. Strategic demand planning is necessary for long-term decisions such as building or closing a plant. The others described are shorter-term decisions.

Safety stock exists for which of the following reasons? To allow less expensive purchases by buying more. To allow for transportation time. To provide protection against the uncertainties of supply and demand. Safety stock exists for none of these reasons.

To provide protection against the uncertainties of supply and demand

Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate?

Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year.

A bill of material contains a listing of all the raw materials, parts, and subassemblies needed to produce one unit of an end item.

True

An approach to reducing the variability in processing times might include greater standardization.

True

Capacity planning requires an analysis of needs; what kind, how much and when. True or False?

True

Configuring the ERP software involves reengineering established business processes to align with the ERP's procedural settings

True

Dependent demand tends to be intermittent, whereas independent demand tends to be more stable.

True

Design capacity refers to the maximum output that can possibly be attained. True or False?

True

ERP automates the tasks involved in performing a business process, such as order fulfilment and financial reporting

True

ERP involves software that is used to manage and coordinate all the resources, information, and functions of an organization from a shared database

True

ERP packages are intended to fit established ways of doing business, but some modifications to business processes or the ERP software are typically required

True

Load reports of capacity may be misleading as they do not consider queuing delays

True

Load reports show capacity requirements for departments or work centres

True

MRP II involves an expanded approach to production planning and scheduling than MRP

True

One of the primary reports of MRP concerns changes to open orders

True

Which of the following is an important belief found in lean cultures?

Waste is a symptom.

Independent demand inventory models can be used to determine

When to buy and how much to buy. B. How to reduce stockouts. C. Stock levels for regular and one-time buys. D. All of the options are correct

A batch of Raisin Bran that has been made at Kellogg's, but not yet packaged in its final cereal box would be an example of what type of inventory? Raw Material Maintenance, repair and operating supplies (MRO) Work-in-process Finished Goods

Work in process

A primary reason for using global suppliers is to:

Work with the same suppliers in many different regions of the world.

You are sitting next to a person in business class on a flight from Los Angeles to Sydney, Australia. You mention to that person that you got your ticket two months ago for only $12,500. The person responds that she bought her ticket two days ago for $7,800. This sometimes happens because airlines often use an approach called:

Yield management.

Fuzzy logic can describe _________.

a particular process or phenomenon linguistically and then represent that description in a small number of flexible rules

The output of MRP is: A. gross requirements. B. net requirements. C. a schedule of requirements for all parts and end items. D. inventory reorder points.

a schedule of requirements for all parts and end items

Steve's shop sells sea shells by the sea shore. Steve buys shells from local collectors for an average price of $0.50 per shell. Steve sells on average 1000 shells each month. Each time he orders shells from collectors, there is a $20.00 shipping and handling fee. Steve estimates a unit holding cost of $0.50 per shell per year (many of them get broken if held in inventory too long). How often should Steve order sea shells?

about 1 time each month

balance system

achieves a smooth, rapid flow of material and work through the system

Backflushing takes place: A. when inventory records need updating. B. after some bills of material have been found to be inaccurate. C. after production has been completed. D. when customer orders are being reconciled. E. when previous periods' planned releases are converted to scheduled receipts.

after production has been completed

Which of the following is not a theoretical factor of forecasting? -Cyclical. -Seasonal. -Amount. -Trend.

amount

We have a situation where we have many different processes; high quantities are required to deliver the product's value both on the factory floor and in the customer's use. Which of the following categories of waste in product design have we encountered in this situation? -Danger -Sensitivity -Precision -Complexity

complexity

The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2): A. computers. B. development of the EOQ model. C. inventory control systems. D. blanket purchase orders.

computers

The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2):

computers; Computer technology made MRP feasible.

The resource management module of an advanced planning and scheduling (APS) system ______. -develops the requirement projections for the planning horizon -defines and coordinates supply chain system resources and constraints -is the computational engine of the supply chain planning system -specifies the resource assignments and communicates them to the ERP system

defines and coordinates supply chain system resources and constraints

Which of the following most closely describes dependent demand?

derived demand; Dependent demand results from decisions to produce parent items.

An application of the DMAIC process to product design is known as: -Design for Six Sigma. -Quality Function Deployment. -Design for Quality. -None of these answers are correct.

design for six sigma

A(n) __________ is an integrated suite of business applications for virtually every department, process, and industry, allowing companies to integrate information across operations on a company-wide basis using one large database.

enterprise system

The multiplication process used by MRP to determine lower level requirements is called:

exploding; Bills of material are exploded into gross requirements for lower level items.

Event-response capability is the advanced planning required to respond to planned events such as receiving a scheduled shipment.

false

Traffic management refers to truck movement within our parking areas

false

___________ inventory is the costliest form of inventory one can hold. -Components -Finished goods -Work-in-process -Raw materials

finished goods

Companies implementing lean systems typically build close vendor relationships with vendors who are expected to provide

frequent small deliveries of high-quality goods

An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:

greatly decreased quantity orders

Which of the following stages is that one in which the project's expected costs, benefits, and risks are assessed?

initiating

Scheduled receipts differ from planned receipts in that scheduled receipts: A. have longer lead times. B. involve orders that have not yet been placed. C. have not been pegged with actual customer orders. D. involve orders that have already been placed. E. involve exceptions to order quantity policies.

involve orders that have already been placed

ERP implementation probably will not require: A. cross-functional teams. B. just a few weeks to install. C. intensive training. D. high funding for both initial cost and maintenance. E. frequent upgrades after installation.

just a few weeks to install

In the lean systems approach, as a system improves, it should have ____________ inventory on hand

less

64. When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves:

line up

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the: A. master schedule. B. bill of materials. C. inventory records. D. assembly time chart. E. net requirements chart.

master schedule

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the:

master schedule; This is the master schedule.

computer-based information system designed to handle ordering and scheduling of dependent-demand inventories is: A. computer-aided manufacturing. B. computer-integrated manufacturing. C. economic order quantity. D. material requirements planning. E. economic run size.

material requirements planning

mean square error

measures the average of the square of the forecasting error.

An approach to systems development that uses the object as the basic unit of systems analysis and design is called __________.

object-oriented development methodology

mg1

one server exponential

In MRP, scheduled receipts are: A. identical to planned-order receipts. B. identical to planned-order releases. C. open orders (that is, ordered before the first time bucket, but not delivered yet). D. net requirements. E. available-to-promise inventory.

open orders (that is, ordered before the first time bucket, but not delivered yet).

In MRP, "scheduled receipts" are:

open orders (that is, ordered before the first time bucket, but not delivered yet); Scheduled receipts are orders that have already been placed.

A __________ is owned by the buyer, and permits the firm and designated suppliers, distributors, and other business partners to share product design and development, marketing, production scheduling, inventory management, and unstructured communication, including graphics and e-mail.

private industrial network

Demand planning for the intermediate term (tactical plans) would be done using dollar or unit sales for:

product family in a region

A visual depiction of the subassemblies and components that are needed to produce and/or assemble a product is called a(n):

product structure tree

A visual depiction of the subassemblies and components that are needed to produce and/or assemble a product is called a(n): A. assembly time chart. B. product structure tree. C. MRP II. D. pegging. E. Gantt chart.

product structure tree.

pull system

In a(n) __________ model, actual customer orders or purchases trigger events in the supply chain. Transactions produce and deliver only what customers have ordered and move up the supply chain from retailers to distributors to manufacturers and eventually to suppliers.

pull-based

In a(n) __________ model, production master schedules are based on forecasts for best guesses of demand for products, and products are pushed to customers.

push-based

Which of the following is not one of the assumptions of the basic EOQ model?

quantity discounts are available

information velocity

rate at which information is communicated through the supply chain

Inventory Velocity

rate at which inventory goes through the supply chain

The ability to include demand, capacity, material requirements, and constraints in defining alternatives is referred to as ______ -planning -visibility -simultaneous resource consideration -resource utilization

simultaneous resource consideration

Tools enabling a business to link customer conversations, data, and relationships from social networking sites to CRM processes are called __________.

social CRM

Intelligent agents are _________.

software programs that use a built-in or learned knowledge base to carry out specific, repetitive, and predictable tasks for an individual user, business process, or software application

t or f: Forecasting should be done monthly rather than quarterly

Location analytics refers to __________.

the ability to gain business insights from the geographic component of data, including location data from mobile phones, output from sensors or scanning devices, and data from maps

Behavioral models state that __________.

the actual behavior of managers appears to be less systematic, more informal, less reflective, more reactive, and less well organized than the classical model would have us believe

causal forecasting

this type of forecasting obtains a forecast of the quantity of interest (the dependent variable) by relating it directly to one or more other quantities (the independent variables) that drive the quantity of interest.

lead time

time interval between ordering and receiving the order

Examination of the sources of supply for purchased parts or materials in order to improve performance is called:

vendor analysis

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

waste is a symptom

The development and application of MRP is primarily associated with two developments: (1) managers recognizing the need to differentiate between independent and dependent demand, and (2) ___________. A. increased reliance on computers for record keeping B. development of the EOQ model C. the need for inventory control systems D. the emergence of ERP systems E. accounting systems

ABC Classification

A - very important B - moderately important C - least important

In our accounting department one of the actions taken by a clerk has been to identify the most frequently used forms and to put them in an area where they can be easily accessed. The other less frequently used forms have been tagged and put in their own separate area. This action likely occurred from the use of which lean tool?

A 5-S program

Which phrase/word best captures what lean is? -A set of effective, well defined tools designed to reduce waste -A procedure to be used within operation management and supply chain systems -A corporate philosophy -A quantitative methodology for attacking variance

A corporate philosophy

The tracking signal will suggest to a manager that

A forecast mode's parameters may need adjustment.

Which of the following best describes a supply chain?

A supply chain is a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers.

Which of the following describes joint application design (JAD)?

A technique used to accelerate the generation of information requirements and to develop the initial systems design

Gantt chart

A time and activity bar chart that is used for planning, managing, and controlling major programs that have a distinct beginning and end.

Given the following information, what would utilization be? Effective capacity = 20 units per day Design capacity = 60 units per day Actual output = 15 units per day A. 1/4 B. 1/3 C. 1/2 D. 3/4 E. none of these

A. 1/4

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about: A. 10. B. 30. C. 50. D. 70. E. 90.

A. 10. Class A items represent a relatively small portion of items.

7. Next year a tire company wants to have an inventory turnover rate of 22 times per year. To achieve this turnover rate, what should be the average number of days of supply? A. 16.6 days B. 36 days C. 0.6 days D. 22 days

A. 16.6 days

If 40 Ps are needed, and on-hand inventory consists of 15 Ps and 10 each of all other components and subassemblies, how many Cs are needed? A. 340 B. 350 C. 380 D. 400 E. 590

If the firm is using lot size for a fixed period of two, what is the order size for the first order? A. 120 B. 200 C. 280 D. 160 E. 150

Production units have an optimal rate of output where: A. total costs are minimum B. average unit costs are minimum C. marginal costs are minimum D. rate of output is maximum E. total revenue is maximum

B. average unit costs are minimum

Which of the following is not a strategy to manage service capacity? A. hiring extra workers B. backordering C. pricing and promotion D. part time workers E. subcontracting

B. backordering

Cellular layout is a term associated with: A. wireless telecommunication B. part families C. functional (or process) layouts D. assembly lines E. job shops

B. part families Part families are produced on cells.

The output of MRP is: A. gross requirements B. net requirements C. a schedule of requirements for all parts and end items D. inventory reorder points E. economic order quantities and reorder points

Which of the following are accurate statements concerning MPS, MRP and capacity requirements planning (CRP)?I) CRP is equivalent to a master production schedule (MPS).II) CRP is needed to determine if an MPS is feasible.III) CRP is an input to MRP.IV) Planned-order releases from MRP are the inputs for CRP. A. I and II B. I, II, and III C. II and IV D. II, III, and IV E. I, II, III, and IV

Which of the following lot sizing methods does not attempt to balance ordering (or setup) and holding costs? A. economic order quantity B. economic run size C. lot-for-lot D. part-period E. all of the above

Which of the following most closely describes dependent demand? A. Demand generated by suppliers. B. Sales forecasts. C. Derived demand. D. Demands placed on suppliers by their customers. E. Net material requirements.

How many Wherezats should be ordered? A. 400 B. 450 C. 500 D. 550 E. 600

In an MRP master production schedule, the planning horizon is often separated into a series of times periods called: A. pegging. B. lead times. C. stacked lead times. D. time buckets. E. None of the choices.

In an MRP master schedule, the planning horizon is often separated into a series of times periods called: A. pegging B. lead times C. stacked lead times D. time buckets E. firm, fixed and frozen

Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called: A. pegging. B. planned order releases. C. net-change MRP. D. regenerative MRP. E. exception report.

Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called: A. pegging B. planned order release C. net change D. regenerative E. exception report

Which of the following is not a process commonly considered in making products or delivering services? A. continuous B. batch C. repetitive D. job shop E. subcontracting

E. subcontracting Subcontracting isn't a process type.

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 C items typically represent about 60 percent of the number of items and about 15 percent of the dollar usage.

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

26. In the quantity discount model, the optimum quantity will always be found on the lowest total cost curve.

27. ROP models indicate to managers the time between orders.

3. A retail store that carries twice the inventory as its competitor will provide twice the customer service level.

31. Safety stock is held because we anticipate future demand.

34. ROP models assume that demand during lead time is composed of a series of dependent daily demands.

36. In the fixed-order interval model, the order size is the same for each order.

37. The fixed-order interval model requires a continuous monitoring of inventory levels.

38. Discrete stocking levels are used when an organization doesn't want visibility of inventory levels.

40. The single-period model can be very helpful in determining when to order.

43. A single-period model would be used mainly by organizations going out of business.

47. A quantity discount will lower the reorder point.

48. It is critical that the exact quantity calculated in the EOQ model be ordered.

49. Safety stock eliminates all stock outs.

54. The cycle time represents the time between reorder point and receipt of order.

55. The cost of placing an order is a function of order size.

57. In the basic EOQ model, annual holding cost is one-half of the total annual cost for all items purchased.

58. Quantity discounts are generally given for large number of orders.

59. The larger the number of orders placed, the larger the average level of inventory.

7. In the EOQ formula, holding costs under 10% are expressed as percentages, above 10% are expressed as annual unit costs.

9. Reorder point models are primarily used for dependent demand items.

Net requirements equal gross requirements minus safety stock.

FALSE

The gross requirements value for any given component is equal to the net requirements of that component's immediate parent multiplied by the quantity per parent.

FALSE

A net-change MRP system is one that is updated periodically but not less frequently than once a week.

FALSE A net-change system is updated as transactions occur.

An assembly-time chart indicates gross and net requirements taking into account the current available inventory.

FALSE Assembly-time charts have to do with capacity, not inventory.

When new products or services are introduced, focus forecasting models are an attractive option.

FALSE Because focus forecasting models depend on historical data, they're not so attractive for newly introduced products or services.

It is critical that the exact quantity calculated in the EOQ model be ordered.

FALSE Because the total cost curve is flat, modest rounding of the EOQ is permissible.

The fixed-order-interval model requires a continuous monitoring of inventory levels.

FALSE The fixed-order-interval model leads to periodic monitoring of inventory levels.

The naive approach to forecasting requires a linear trend line.

FALSE The naive approach is useful in a wider variety of settings.

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

FALSE The objective of inventory management is to allow satisfactory customer service while keeping costs down.

In the quantity discount model, the optimum quantity will always be found on the lowest total cost curve.

FALSE The optimum quantity might actually be when the discount is passed up.

A single-period model would be used mainly by organizations going out of business.

FALSE The single-period model applies to many regularly occurring circumstances.

MRP output reports are divided into two main groups - daily and weekly.

FALSE The two groups are primary and secondary.

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

FALSE These are ordering costs.

Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods using forecasted demand to extend beyond the orders already received for those periods.

FALSE This is fixed-period ordering.

Forecasting techniques that are based on time-series data assume that future values of the series will duplicate past values.

FALSE Time-series forecasts assume that future patterns in the series will mimic past patterns in the series.

Trend-adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's actual demand.

FALSE Trend-adjusted smoothing smoothes both random and trend-related variation.

If people would only work harder, productivity would increase.

FALSE Working harder can actually reduce productivity in some cases.

Competitiveness relates to the profitability of an organization in the marketplace.

FALSE Competitiveness relates to how effectively an organization meets the wants and needs of customers relative to other organizations that offer similar goods or services.

Global competition really only applies to multinational organizations.

FALSE Domestic-only organizations experience competition from organizations in other countries.

Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy.

FALSE Functional strengths and weaknesses serve as the building blocks of organizational strategy.

Mission statements should be as specific as possible regarding exactly how they will be accomplished.

FALSE Mission statements are very long-term and should provide enough room to accommodate major changes in direction.

A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout.

FALSE A product layout is more susceptible to these.

Avoiding bottlenecks is the primary goal of product design.

FALSE Avoiding bottlenecks is a primary consideration in facilities layout.

Concurrent Engineering is another term for sequential development.

FALSE Concurrent engineering involves simultaneous product and production development.

The three R's - Reduce, Re-use and Recycle - are more applicable in service design than in product design.

FALSE Services cannot be re-used or recycled.

'Value added' by definition is always a positive number since 'added' implies increases.

FALSE Some transformations result in the output being worth less than the inputs.

One of the main advantages of standardization is that it increases the potential variety of products

FALSE Standardization reduces the variety of products.

A 'House of Quality' is achieved when no department in a single location has more than 15% rejects.

FALSE The house of quality is a means of integrating the voice of the customer into the product or service development process.

The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities.

FALSE The operations manager plays a role in these decisions but is not primarily responsible for them.

There are three basic process types - Input, Processing and Output.

FALSE There are five basic process types: job shop, batch, repetitive, continuous and project.

Accounting, purchasing, and inventory control are fairly routine with process layouts.

FALSE They are more routine in product layouts.

A cafeteria line would be an example of a process focused layout.

FALSE This would be an example of a product focused layout.

Global teams provide diversity while eliminating conflicts and miscommunication.

FALSE Using globally diverse design teams increases the risks of conflicts and miscommunication.

End item A is made by assembling 2 of part B and 3 of part C. Part C is made from 2 of component D and 2 of component E. Component D is considered to be a:

Level 2 input.

End item A is made by assembling 2 of part B and 3 of part C. Part C is made from 2 of component D and 2 of component E. Component D is considered to be a:

Level 2 input. Component D is needed to make part C, which is a level 1 input to the end item. Thus, component D is a level 2 input.

The following table shows capacity requirements data for making Blodgetts. Picture A load profile would show:

Load below capacity in periods 1 and 3.

Which of the following refers to the ability of firms to profitably market goods to very small online audiences, largely because of the lower costs of reaching very small market segments (people who fall into the long tail ends of a Bell curve)?

Long tail marketing

Which of the following best describes long tail marketing?

Long tail marketing refers to the ability of firms to profitably market goods to very small online audiences, largely because of the lower costs of reaching very small market segments (people who fall into the long tail ends of a Bell curve).

Which of the following is NOT a benefit of outsourcing?

Lower supply management costs Benefit Greater flexibility to change product specifications Better access to market information Less capital needed for investment When outsourcing, a company has to spend more time and effort managing a supplier, so supply management costs are likely to increase rather than to decrease.

Gathering data on the supply market's structure, price forecasts, and supply chain risk are assessed during a/an:

Market analysis.

Designing postponable products has the potential to allow operations managers to: Ignore forecasts. Move from build-to-stock to assemble or make-to-order operations. Influence the timing of demand. All of these.

Move from build-to-stock to assemble or make-to-order operations. Postponable products obtain final form after customer demand is actually known. Some forecasts are still necessary (for components), and the timing of demand is not changed.

The ___________ forecasting model computes a forecast as the average of demands over a number of immediate past periods.

Moving average

Building a lean production system requires that a firm identify and eliminate

Muda

Advanced Manufacturing Company is evaluating two suppliers for a component sourcing. After much internal discussion, AMC's management has determined that the critical factors in choosing suppliers are: quality, delivery, price, and service. Further, management has rated the importance of these factors as 0.4, 0.3, 0.2, and 0.1, respectively. On a scale of 1 to 5, Supplier A is rated at 5, 3, 3, and 3, respectively. Supplier B's ratings are 4, 4, 3, and 4. Which supplier has the better weighted score? Supplier A Supplier B Neither, they both have the same weighted score.

Neither

Neither, they both have the same weighted score.

Which of the following is NOT included in the information about the inventory records file for an item? Preferred order quantity Safety stock Lead time Net requirements

Net requirements Net requirements are an output of MRP and are not in an inventory records file.

Commitment to "customer success" is likely the best approach for a firm to use with:

None of these selections

Which of the following is NOT an input to an MRP system?

Order releases. Order releases are outputs from an MRP system.

Which of the following is the creation of new standard operating procedures and business processes that reflect an organization's experience?

Organizational learning

Which of the following best describes organizational learning?

Organizational learning is the creation of new standard operating procedures and business processes that reflect an organization's experience.

Which of the following is not typically considered as a component driver of demand?

Perturbation

Which of the following is NOT an input into the MRP? Inventory records file Planned order release Master production schedule Bill of materials

Planned order release The BOM, inventory records file, and the MPS are the inputs.

Which of the following can be used to evaluate alternative system projects once the overall direction of systems development is determined?

Portfolio analysis

How does product design affect forecasting accuracy? A popular product design improves the demand volume and forecast. None of these statements are true. Forecast accuracy is not related to product design. Postponable product designs remove the need to forecast demand for final product configurations.

Postponable product designs remove the need to forecast demand for final product configurations. Postponements allow forecasting at the component level, which is more accurate.

Suppose you were the logistics manager for Way-Off Manufacturing and Marketing, a manufacturer of mosquito repellant. Further suppose that Way-Off markets its products in the entire United States. However, in each geographic region of the country, Way-Off only needs to warehouse products for two months during each year. Way-Off probably would use what type of warehousing?

Public

All of the following are supply management goals EXCEPT:

Purchase at the lowest price. Goals Ensure timely availability of resources. Enhance quality. Assess technology and innovation.

Zanda Corp. has been testing the performance of two different forecasting models to see which it should adopt for use. It wants to choose the model that has the smaller standard deviation of the forecast errors. Zanda should compare which of the following to make its choice? MAPE of the two models MFE of the two models RMSE of the two models MAD of the two models

RMSE of the two models RMSE provides a good approximation of the standard deviations of a model's forecast errors.

Which of the following is a tangible benefit?

Reduced rate of growth in expenses

Local sourcing:

Reduces delivery costs. Because of proximity, local sourcing reduces delivery costs.

Which of the following statements best describes scope?

Scope defines what work is or is not included in a project.

Seasonality and cycles

Footprinting is an example of which of the following elements of the 5-S program? -Seiketsu/Systematize/Confirm -Seiton/Straighten/Configure -Seiri/Sort/Clear out -Seiso/Scrub/Clean and check

Seiton/Straighten/Configure

Which of the following is NOT a role of logistics management?

Selecting raw material suppliers.

Which of the following concern(s) situations where only part of the problem has a clear-cut answer provided by an accepted procedure?

Semistructured decisions

__________ is a model that asks what-if questions repeatedly to predict a range of outcomes when one or more variables are changed multiple times.

Sensitivity analysis

Which of the following statements best describes sensitivity analysis?

Sensitivity analysis is a model that asks what-if questions repeatedly to predict a range of outcomes when one or more variables are changed multiple times.

Which of the following best describes social CRM?

Social CRM is tools enabling a business to link customer conversations, data, and relationships from social networking sites to CRM processes.

Spend analysis.

The process of understanding how a firm is spending its money and with which suppliers is called:

Spend analysis. Spend analysis refers to analyzing the dollars spent with which suppliers.

Product Design

Standard parts Modular design Highly capable systems with quality built in Concurrent engineering

Which approach is likely to be used for leverage purchases?

Standardizing purchases

Which approach is likely to be used for leverage purchases? Purchasing cards Vendor-managed inventory Using executive champions Standardizing purchases

Standardizing purchases

Which of the following indicates that String is using the prototyping approach?

String initially creates a demo application and then adds more functionality based on user feedback.

Which of the following statements best describes structured decisions?

Structured decisions are repetitive and routine decisions which are handled procedurally.

__________ is explicit knowledge that exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors.

Structured knowledge

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

TRUE A consensus among divergent perspectives is developed using questionnaires.

The greater the degree of customer involvement, the more challenging the design and management of operations.

TRUE Greater customer involvement leads to more complexity in the design and management of operations.

Reliability refers to the ability of a product to perform its intended function under normal conditions.

TRUE Greater reliability translates into a greater likelihood of the product working in normal conditions.

"Balance delay" is another name for the percentage of idle time in a product layout.

TRUE Greater utilization implies a smaller balance delay.

The demand for a product and the rate of technological change have significant impact on the length of a given phase of the product life cycle.

TRUE How long a product stays in a particular phase of its life cycle depends greatly on the rate of technological change.

One concern in the design of production systems is the degree of standardization.

TRUE How standardized outputs will be is a critical consideration in the system design question.

What is the bullwhip effect?

The bullwhip effect is a phenomenon in which information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain.

Which of the following is true of digital goods?

The cost of producing the original first unit of a digital good is nearly the total cost of the product.

Suppose you are shipping 1,000 pounds of product to a customer location that is 500 miles away from you. The customer calls you and increases the order size to 10,000 pounds. In this case:

The cost per pound of transportation for the order will decrease.

As the shipping distance increases

The cost per unit of distance decreases.

Given the data below, the bias of these forecasts is: There is no bias. Positive. Negative.

The error for period 1 is −300, therefore the MFE is −66.7. This is a negative bias. Negative.

preemptive priorities

The lowest priority customer being served is preempted (ejected back into the queue) whenever a higher priority customer enters the queueing system.

Which of the following pieces of information is identified in the original 12 digit UPC code? Product price Where product was manufactured The manufacturer of the item Product price AND where the product was manufactured All of the listed pieces of information are identified in the UPC

The manufacturer of the item

Covariance of return

The measure of risk for pairs of stocks in a portfolio selection problem is called:

Which of the following is true about the use of weighted scoring models for supplier selection?

There is a good deal of subjectivity in developing and using the model.

Which of the following is true about the use of weighted scoring models for supplier selection?

There is a good deal of subjectivity in developing and using the model. Both the weights (which should be developed by a team that includes the key departments influenced by the purchase) and the supplier ratings are subjective. Judgment should be used to make the final selection decision. Weights should change when company priorities change.

Which of the following statements is true of information systems projects in organizations?

There is a very high failure rate among information systems projects.

What are prediction markets?

They are established peer-to-peer betting markets where participants make bets on specific outcomes.

Which of the following statements best describes virtual reality systems?

They are interactive graphics software and hardware that create computer-generated simulations that provide sensations that emulate real-world activities.

Which of the following statements best describes knowledge network systems?

They provide an online directory of corporate experts and their profiles, with details about their job experience, projects, publications, and educational degrees.

All of the following are true about supplier scorecards EXCEPT:

They reduce the need for incoming quality inspection. True They are used to provide performance feedback to suppliers. They are used to measure supplier performance based on key performance indicators. They are often used to categorize suppliers based on an overall score.

Safety stock exists for which of the following reasons? -None of these selections. -To allow for transportation time. -To provide protection against the uncertainties of supply and demand. -To allow less expensive purchases by buying more

To provide protection against the uncertainties of supply and demand.

Long-term/strategic demand planning is typically done using what units?

Total business unit sales

Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate? Total number of desktops to be sold next year. Total number of laptops to be sold next month. Total number of computers (laptops and desktops) to be sold next month. Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year.

Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year. The more detailed the forecast, the less accurate it is likely to be. D is the most detailed.

Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate?

Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16x DVD drive to be sold next year.

ERP systems are based on software modules for various functional areas of a business such as purchasing, production planning, and supply chain management

True

Fixed-interval ordering in MRP places orders that cover a predetermined number of periods.

True

Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.

True

Load reports compare planned capacity requirements with projected capacity and availability

True

Safety time is sometimes used in MRP rather than safety stock.

True

The master production schedule (MPS) states which end items are to be produced

True

The planned-order releases at one level of an MRP plan determine the gross requirements at the next level down in the bill of material

True

The planning horizon for the master production schedule (MPS) should cover or be longer than the cumulative lead time necessary to produce the end items

True

The ultimate goal of demand management is to match demand and operational capacity in order to attain the business's competitive objectives.

True

In which operational setting has lean/just-in-time experienced the lowest levels of acceptance/implementation? -Across the supply chain -Manufacturing -Services -Turbulent business settings

Turbulent business settings

Identify the statement that best describes unstructured decisions.

Unstructured decisions are nonroutine, and there is no agreed-on procedure for making them.

Advanced planning and scheduling systems:

Use a simpler logic than the logic used in MRP.

Which of the following is not a supply chain planning application? -Production. -Logistics. -Demand. -Competition.

competition

A master production schedule shows the following information: Using a lot-for-lot rule, what is the MPS quantity for period 1?

correct 80 The MPS quantity in period 1 is the greater of the forecast or actual orders minus the beginning inventory. The actual orders are the greatest, so the MPS is 100 - 20 = 80.

the longest lead time path in the BOM is the: Planning horizon. Cumulative lead time. Time window. Time bucket.

correct Cumulative lead time. The cumulative lead time is the longest lead time path in the BOM.

Project management triangle

cost schedule (time) quality (performance)

holding/carrying costs

cost to carry an item in inventory for a length of time, usually a year

ordering costs

costs of ordering and receiving inventory

shortage costs

costs when demand exceeds supply

The EOQ model is most relevant for which one of the following?

determining fixed order quantities.

Fixed period method

different quantities but orders occur at the same time

The intelligence stage involves __________.

discovering, identifying, and understanding the problems occurring in the organization—why a problem exists, where, and what effects it is having on the firm

A(n) __________ enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bills of lading, shipments schedules, and purchase orders.

electronic data interchange

An organizational impact analysis _________.

explains how a proposed system will affect organizational structure, attitudes, decision making, and operations

random arrival times

having ______ means that interarrival times are completely unpredictable, in the sense that the chance of an arrival in the next minute is always just the same. The only probability distribution

The design stage of the decision-making process involves _________.

identifying and exploring various solutions to the problem

Which of the following is NOT a role of inventory? -Increasing quality of finished goods -Balancing supply and demand -Enabling geographical specialization -Buffering uncertainty in supply or demand

increasing quality of finished goods

An alternative strategy to increase the capacity of a service system is:

increasing the processing rate

Bull Whip Effect

information being shared through a whole line of people with in a supply chain

Many times forecasters can make a good approximation of a trend by simply hand-drawing a line through the data to estimate a trend.

true

The ultimate goal of demand management is to match demand and operational capacity in order to attain the business's competitive objectives

true

Capacity requirements planning helps managers reconcile __________ with __________. A. what is needed; what has been done B. what is needed; what is possible C. what has been done; who will be doing it D. what needs to be done; where it will be done E. what has been done; how much what needs to be done will cost

what is needed, what is possible

higher

will higher or lower values cause exponential smoothing to respond the most quickly to forecast errors?

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as:

Bottleneck.

2. The objective of inventory management is to minimize the cost of holding inventory.

21. Understocking an inventory item is a sure sign of inadequate inventory control.

24. Because price isn't a factor in the EOQ formula, quantity discounts won't affect EOQ calculations.

Commonality of components is beneficial for manufacturing but not for services.

FALSE Services can benefit from commonality in service elements.

Which of the following statements best describes the phenomenon called "the wisdom of crowds"?

"Wisdom of crowds" refers to the belief that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts.

A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method.

$1.61

For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: 1. $250,000 2. $190,000 3. $300,000 4. $280,000 Using a moving average with n = 3 terms, what would be the forecast for week 5? $256,667 $232,124 $246,667 $255,000

$256,667 (190,000 + 300,000 + 280,000)/3 = 256,667

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. LEVEL PLAN Picture What is the total cost of the level plan?

$260,700 Inventory carrying cost = 800 units ×$10 = $8,000 Hiring cost = 9 hires ×$300 = $2,700 Regular production cost = 5,000 units ×$50 = $250,000 Total cost = $8,000 + $2,700 + $250,000 = $260,700

Platinum Nugget uses a three-period weighted moving average to forecast demand, with at = 0.6, at-1 = 0.3, and at-2 = 0.1. What is the forecast for week 5?

$277,000

For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: 1. $250,000 2. $190,000 3. $300,000 4. $280,000 Platinum Nugget uses a three-period weighted moving average to forecast demand, with at = 0.6, at-1 = 0.3, and at-2 = 0.1. What is the forecast for week 5? $295,000 $237,000 $232,000 → $277,000

$277,000 (.6(280,000) + .3(300,000) + .1(190,000))/3 = 277,000

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. Picture What is the total cost of a CHASE plan (using hiring/firing)?

$380,300

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. Picture The total inventory carrying cost of a chase plan is:

$4,000

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: Picture What is the total cost if Dave hires one more full-time employee to meet additional demand?

$40,750 Full-time cost = 4 employees ×$1,500/month ×6 months = $36,000 Part-time cost = 190 total hours ×$25/hour = $4,750 Total cost = $40,750

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: Picture What is the total cost if Dave relies on part-time employees to meet additional demand?

$43,500

A master production schedule shows the following information: Picture What is the available to promise for period 2?

20. The available to promise in period 2 is the forecast minus the actual customer orders, which is 200 - 180 = 20.

A company has the following information regarding its forecast performance in the past three periods. What is the mean absolute deviation (MAD)? 225 200 −66.67 1200

200 Summing the absolute values of the errors and determining the average results in (300 + 200 + 100)/3 = 200.

ones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Picture Given this data, what is the total cost of a LEVEL plan?

$5,110,000

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Picture Given this data, what is the inventory carrying cost of a LEVEL plan?

$70,000 Inventory carrying cost = 7,000 ×10/unit = $70,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. LEVEL PLAN Picture What is the total inventory carrying cost for the level plan?

$8,000 Inventory carrying cost = 800 units ×$10 = $8,000

A company uses actual demand data to develop its seasonal indices. It has the data shown below for each quarter of the previous two years. 0.732 1.25 0.750 0.714

0.732 Year 1 average demand = (50 + 60 + 90 + 80)/4 = 70 Year 2 average demand = (60 + 70 + 100 + 90)/4 = 80 Quarter 1 SI for year 1 = 50/70 = 0.714. Q1 SI for year 2 = 60/80 = 0.75. Q1 average SI = 0.732.

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. LEVEL PLAN Picture What is the regular monthly actual production for a level plan?

1,250 5,000/4 = 1,250

Alpha Company sold 2,000 widgets yesterday. It had forecasted sales of 1,900 units. Using exponential smoothing with a smoothing constant of 0.6, what is the forecast for today's sales of widgets? 2,040 2,060 1,940 1,960

1,960 1,900 + 0.6(2,000 - 1,900) = 1,960

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

Jones Company had sales of $100,000 last week. The company had forecasted that sales would be $120,000. Using exponential smoothing with a smoothing constant of 0.2, what is the forecast for this week's sales?

116000

120,000 + .2(100,000 − 120,000) = 116,000

End item A is made by assembling 2 parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for end item A are 100 units. What is the net requirement for part C?

125 The gross requirements for A is 100, but there are 50 units of A in inventory, so only 50 units of A need to be produced. There are 4 Cs for each A, so the gross requirement for C is 4 × 50 = 200, but there are 75 units of C in inventory, so only 125 Cs must be produced.

End item A is made by assembling 2 parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for end item A are 100 units. Picture What is the net requirement for part C?

125 units The gross requirements for A is 100, but there are 50 units of A in inventory, so only 50 units of A need to be produced. There are 4 Cs for each A, so the gross requirement for C is 4 × 50 = 200, but there are 75 units of C in inventory, so only 125 Cs must be produced.

A master production schedule shows the beginning inventory is 50 units, the forecast is 200 units and actual customer orders are 220 units. What is the quantity that is available to promise in period 1?

170

Refer to this product tree: If 17 Ps are needed, & on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns, how many Cs are needed? A. 48 B. 144 c. 192 D. 212 E. 272

192

Alpha Company sold 2,000 widgets yesterday. It had forecasted sales of 1,900 units. Using exponential smoothing with a smoothing constant of 0.6, what is the forecast for today's sales of widgets?

1960

A company has the data in the table below concerning its forecast performance over the past four time periods. 10 20 2 100

A company has the data shown in the chart below concerning its forecast performance over the past four time periods. Complete the chart and compute the MAD.

A master production schedule shows the following information: Picture What is the available to promise for period 2?

20 The available to promise in period 2 is the forecast minus the actual customer orders, which is 200 - 180 = 20.

A master production schedule shows the following information: Picture Based on the information in the MPS, what is the amount that is available to promise in week 4?

500

Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, what is the BASE forecast for the next period? 206 236 210 226

206 Ft+1 = FITt + α (dt - FITt) = 200 + 0.20 (230 - 200) = 206

assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, what is the ADJUSTED forecast for the next period? 216.0 210.6 210.0 216.6

216.6 Tt+1 = Tt + β (Ft+1 - FITt) = 10 + 0.10 (206 - 200) = 10 + 0.6 = 10.6. FITt+1 = Ft+1 + Tt+1 = 206 + 10.6 = 216.6.

Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, if demand in period t+1 turned out to be 220, what is the adjusted forecast for period t+2 (choose the closes answer)? 217.3 221.3 227.3 215.9

227.3

End item A is made by assembling 2 parts of B and 4 parts of C. Part C is made from 3 parts of D and 2 parts of E. Gross requirements for end item A are 100 units. Picture What is the gross requirement for part E?

250

What is the reorder point for Jonson Company if Johnson decides on a 99% service level instead of the 95% service level?

257 units

What is the reorder point for the company if it decides on a 99 percent service level?

257 units

260

260. (240 + 260 + 280)/3 = 260

Refer to this product tree: If 17 Ps are needed, 7 NO ON-HAND INVENTORY EXISTS for any items, how many Cs will be needed? A. 8 B. 16 C. 136 D. 204 e. 272

272

Platinum Nugget uses a three-period weighted moving average to forecast demand, with at = 0.6, at-1 = 0.3, and at-2 = 0.1. What is the forecast for week 5?

277000

The Rodriguez Manufacturing Co. uses a weighted-point model to evaluate new suppliers. Based on its competitive priorities, quality performance is weighted 50%, delivery performance is 20%, and cost is 30%. On a 5-point scale, a supplier is rated, 3 on quality, 2 on delivery, and 5 on cost, what is its overall weighted score?

3.4

A process with Six Sigma quality is expected to produce how many defects? -Zero defects -3.4 defects per million opportunities -66,807 defects per million opportunities -6 defects per million opportunities

3.4 defects per million opportunities

Refer to this product tree: If 40 Ps are needed, & on-hand inventory consists of 15 Ps & 10 each of all other components and subassemblies, how many Cs are needed? A. 340 b 350 C. 380

350

Using the data below and the regression model, what is the sales forecast if Gamma is expected to be 21? (Round your forecast to the nearest number of whole units.) 39 48 36 42

39 Sales = 6.12 + 1.55(21) = 6.12 + 32.55 = 38.67

The Williams Manufacturing Co. uses a weighted-point model to evaluate new suppliers. Based on its competitive priorities, quality performance is weighted 40%, delivery performance is 30%, and cost is 30%. On a 5-point scale, a supplier is rated, 5 on quality, 3 on delivery, and 4 on cost, what is its overall weighted score?

4.1.

A master production schedule shows the beginning inventory is 200 units, the forecast is 600 units and the actual customer orders is 500 units. Using a lot-for-lot rule, what is the MPS quantity for period 1?

400

Using the data in the table below for Zanda, what is the linear regression forecast for period 5 (choose the nearest number of whole units)? 42 28 44 34

44 F5 = 16 + 5(5.6) = 44 units

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Picture If Jones prefers a level plan, what will be the regular production rate per quarter?

5,000 units 20,000/4 = 5,000

Zanda Corp. has experienced demand in the last four years shown in the table below. What is the trend value (b) in the data (choose the closest answer)? 2.5 units/period −1.25 units/period 2.87 units/period 5.6 units/period

5.6 units/period

Using the data below, what is the MAPE 5.0 percent correct 5.99 percent 7.25 percent 5.41 percent

5.99 percent

You have a one-time opportunity to buy an item. It costs $50 and sells for $100. It's disposal value equals its salvage value. What is the target service level?

50 percent

At each of its home games, the Washington Check-Kiters football team sells programs that give statistics of the teams involved in the current game's contest. Since each game brings a different visiting team, a program is only of value for one contest, and no returns will be accepted by the supplier. On a per program basis, the selling price is twice the cost. The Target Service Level that will yield the most profits is:

50%

A master production schedule shows the following information: Picture Using a lot-for-lot rule, what is the MSP quantity for week 4?

500

Alpha Company places 10 orders per year with its supplier. Each order is for an amount exactly equal to the EOQ. Alpha's order cost has been determined to be $50 per order. Alpha carries no safety stock at all. What is Alpha's annual inventory carrying cost? A. Cannot be determined without further information B. $50 C. $250 D. $500

500

An MRP record for a motor is shown in the following table. Picture What is the planned order release for week 4?

8,000

An MRP record for a motor is shown in the following table. Picture What is the planned order release for week 4?

8000 The net requirement in week 6 is 8,000 units. Working backward by the two-week lead time, an order must be released for 8,000 units in week 4.

Ignoring the possibility of safety stock requirements, which one of the following most closely describes the calculation of net requirements for an item in MRP? A. Gross requirements - projected on-hand - scheduled receipts B. Gross requirements - scheduled receipts C. Gross requirements - order releases + amount on-hand D. Gross requirements - planned order releases E. Gross requirements -projected on-hand + planned order releases

When should an order for Wherezats be released? A. At the start of week 2. B. At the start of week 3. C. At the start of week 4. D. At the start of week 5. E. At the start of week 6.

Which of these items would be most likely to have dependent demand? A. Xbox batteries B. toy trains C. flowers D. chocolate chip cookies E. wrist watches

Which of these products and services would be most likely to have dependent demand? A. Automobiles B. Frozen vegetables C. Flowers D. Lumber E. None of the choices

Which one of the following is not an input in an MRP system? A. planned-order schedules B. bill of materials C. master production schedule D. inventory records E. All are inputs.

Which one of the following is notan input in an MRP system? A. Planned-order releases B. Bill of materials C. Master production schedules D. Inventory on-hand, open orders and lead times E. All are inputs

Which one of the following most closely describes net material requirements? A. gross requirements - amount on-hand - scheduled receipts B. gross requirements - planned receipts C. gross requirements - order releases + amount on-hand D. gross requirements - planned order releases E. gross requirements - amount on-hand + planned order releases

The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend?

A. 2 Crews of two workers are most productive.

An investment proposal will have annual fixed costs of $60,000, variable costs of $35 per unit of output, and revenue of $55 per unit of output. (A) Determine the break-even quantity (B) What volume of output will be necessary for an annual profit of $60,000?

A. 3,000 B. 6,000

A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit. Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit. Alternative C would have fixed costs of $80,000 and variable costs of $30 per unit. Revenue is expected to be $50 per unit. (A) Which alternative has the lowest break-even quantity? (B) Which alternative will produce the highest profits for an annual output of 10,000 units? (C) Which alternative would require the lowest volume of output to generate an annual profit of $50,000?

A. 3,572 4,000 4,000 B. 180,000 180,000 120,000 C. 5,358 5,667 6,500

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 July would be period 3, so the forecast would be 40,000 + 150(3).

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 July would be period 3, so the forecast would be 40,000 + 150(3).

Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by:

A. 50 percent. Divide the difference in productivity by the original productivity.

Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5% is to be maintained, this means that this year's productivity will have to be _______.

A. 88.2 Multiply 84 by 1.05 and then subtract 84 from this product

Which closeness rating reflects the highest importance for two departments being close to each other? A. A B. E C. I D. U E. X Closeness ratings denoted "A" should be encouraged.

A. A (absolutely necessary) Closeness ratings denoted "A" should be encouraged.

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. A items.

Which one of these is a tool used to tell a machine the details of the operations to be performed? A. CNC B. CIM C. CAD D. CAM E. automation

A. CNC CNC stores and transmits instructions on operations that are to be performed.

9. A specific analysis of the total greenhouse gases caused directly or indirectly by a product is called: A. Carbon footprinting. B. Life cycle analysis. C. Life cycle waste assessment matrix. D. Cap and trade.

A. Carbon footprinting.

14. Which of the following sustainability issues has a significant impact on supply chain relationships? A. Culture B. Common usage of lean systems C. Location D. Governmental regulations and tariffs

A. Culture

Factors affecting the success of a TQM effort do not include: -An existing crisis -A charismatic leader -An uncomplicated product -Trust between labor and management

An uncomplicated product

One step that isn't part of service blueprinting is:

A. Eliminate boundaries for the service and decide on the level of interaction needed Defining boundaries is a critical part of service blueprinting.

1. When people and profit intersect, from a sustainability perspective, which of the following areas is most impacted? A. Equitability B. Sustainability C. Bearability D. Viability

A. Equitability

14. ___________ inventory is the costliest form of inventory one can hold. A. Finished goods B. Raw materials C. Components D. Work-in-process

A. Finished goods

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the hybrid plan: A. Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan. B. Has higher hiring/layoff cost than the chase plan and higher inventory carrying cost than the level plan. C. Has lower inventory carrying cost than the chase plan and higher hiring/layoff cost than the level plan. D. None of these selections.

A. Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

A. I, II, and IV only

Which of the following is a direct input into capacity requirements planning? (I) the master production schedule (II) routing information (III) current shop loads (IV) planned-order releases

A. II, III, and IV only

Which of the following might a company try to do to reduce the total amount of safety stock it holds?

A. Implement and use ABC analysis of inventory items. B. Attempt to reduce variation in supplier lead times. C. Implement demand management approaches. D. Implement and use ABC analysis of inventory items AND Attempt to reduce variation in supplier lead times E. All of the options are correct

2. Which of the following is NOT a role of inventory? A. Increasing quality of finished goods B. Balancing supply and demand C. Buffering uncertainty in supply or demand D. Enabling geographical specialization

A. Increasing quality of finished goods

3. Which of the following approaches provides management with an appropriate tool for assessing the full impact from "seed to sewer" (from creation to disposal)? A. Life cycle analysis B. Total cost of ownership C. Trade-off analysis D. Cost of quality analysis

A. Life cycle analysis

In a two-bin inventory system, the amount contained in the second bin is equal to the: A. ROP. B. EOQ. C. amount in the first bin. D. optimum stocking level. E. safety stock.

A. ROP.

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences? A. Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts. B. Sales prefers many product variations; operations prefers few variations. C. Sales emphasizes revenue; operations emphasizes cost minimization. D. Sales prefers rapid response; operations prefers stable production schedules.

A. Sales prefers detailed forecasts for setting bonuses; operations prefers aggregate forecasts.

Which of these items would be most likely to have dependent demand?

A. Xbox batteries

Which of these items would be most likely to be made with a fixed position layout? A. a Boeing 777 jet aircraft B. applesauce C. a computer chip D. toothpaste E. all of these

A. a Boeing 777 jet aircraft A fixed position layout brings the process to the product.

Efficiency is defined as the ratio of: A. actual output to effective capacity B. actual output to design capacity C. design capacity to effective capacity D. effective capacity to actual output E. design capacity to actual output

A. actual output to effective capacity

In trend-adjusted exponential smoothing, the trend-adjusted forecast consists of: A. an exponentially smoothed forecast and a smoothed trend factor. B. an exponentially smoothed forecast and an estimated trend value. C. the old forecast adjusted by a trend factor. D. the old forecast and a smoothed trend factor. E. a moving average and a trend factor.

A. an exponentially smoothed forecast and a smoothed trend factor. Both random variation and the trend are smoothed in TAF models.

In trend-adjusted exponential smoothing, the trend-adjusted forecast consists of:

A. an exponentially smoothed forecast and a smoothed trend factor. Both random variation and the trend are smoothed in TAF models.

The substitution of machinery that has sensing and control devices for human labor is best described by the term: A. automation B. feedback control C. computer-aided manufacturing D. computer-integrated manufacturing E. flexible manufacturing system

A. automation Automation involves the substitution of machinery that has sensing and control devices for human labor.

One reason for using the Delphi method in forecasting is to: A. avoid premature consensus (bandwagon effect). B. achieve a high degree of accuracy. C. maintain accountability and responsibility. D. be able to replicate results. E. prevent hurt feelings.

A. avoid premature consensus (bandwagon effect). A bandwagon can lead to popular but potentially inaccurate viewpoints to drown out other important considerations.

One reason for using the Delphi method in forecasting is to:

A. avoid premature consensus (bandwagon effect). A bandwagon can lead to popular but potentially inaccurate viewpoints to drown out other important considerations.

A persistent tendency for forecasts to be greater than or less than the actual values is called: A. bias. B. tracking. C. control charting. D. positive correlation. E. linear regression.

A. bias. Bias is a tendency for a forecast to be above (or below) the actual value.

A persistent tendency for forecasts to be greater than or less than the actual values is called:

A. bias. Bias is a tendency for a forecast to be above (or below) the actual value.

A product focused, single piece flow, pull production system would be called a: A. cellular layout B. job shop C. assembly line D. non-repetitive process E. continuous flow

A. cellular layout These are characteristics of cellular layouts.

Which of the following process types would be more likely to be used in the maturity phase of a product's life-cycle? A. continuous B. intermittent C. project D. batch E. job shop

A. continuous Continuous processes are more appropriate for highly standardized products in their maturity phase.

The type of processing system which is used for highly standardized products is: A. continuous B. intermittent C. project D. batch E. unit

A. continuous Continuous processing is for highly standardized products.

Which of the following would be least important in the pursuit of a time-based strategy?

A. cost minimization Many means for minimizing cost would have the effect of making a time-based strategy less feasible.

Which one of the following is not considered an important factor in service layout design? A. cost minimization and product flow B. frequency of orders C. customer attitude and image D. all are important E. none are important

A. cost minimization and product flow Service layout design is generally not all that focused on cost minimization.

Which is not a significant difference between manufacturing and service operations?

A. cost per unit Manufacturing operations aren't necessarily more or less efficient than service operations.

The maximum allowable cycle time is computed as: A. daily operating time divided by the desired output B. desired output divided by the daily operating time C. daily operating time divided by the product of the desired output and the sum of job times D. the product of desired output and the sum of job times divided by daily operating time E. 1.00 minus station time

A. daily operating time divided by the desired output If this is smaller than the minimum cycle time, extra workstations will be necessary.

In order to increase the responsiveness of a forecast made using the moving average technique, the number of data points in the average should be: A. decreased. B. increased. C. multiplied by a larger alpha. D. multiplied by a smaller alpha. E. eliminated if the MAD is greater than the MSE.

A. decreased Fewer data points result in more responsive moving averages.

In order to increase the responsiveness of a forecast made using the moving average technique, the number of data points in the average should be:

A. decreased Fewer data points result in more responsive moving averages.

Which of the following is not a criterion for developing capacity alternatives? A. design structured, rigid systems B. take a big-picture approach to capacity changes C. prepare to deal with capacity in "chunks" D. attempt to smooth out capacity requirements E. identify the optimal operating level

A. design structured, rigid systems

What is it about repetitive processes that make them appropriate for products in the maturity phase of their life cycle? A. efficiency B. general-purpose technology C. possible variety D. low risk E. flexibility

A. efficiency

What is it about continuous processes that make them appropriate for products in the maturity phase of their life-cycle? A. efficiency B. general-purpose technology C. possible variety D. low risk E. flexibility

A. efficiency Continuous processes are more appropriate for mature products, when efficiency is of paramount importance.

Given the same demand, setup/ordering costs, and carrying costs, the EPQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed. A. greater than the EOQ B. equal to the EOQ C. smaller than the EOQ D. greater than or equal to the EOQ E. smaller than or equal to the EOQ

A. greater than the EOQ

Which one of the following most closely describes net material requirements?

A. gross requirements - amount on hand - scheduled receipts

One way to increase reliability is to:

A. improve component design Another way is to add backup components.

The minimum possible cycle time in a product layout is determined by the: A. longest task time B. shortest task time C. average task time D. total task time E. none of the above

A. longest task time The longest task time represents the minimum cycle time.

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the:

A. master schedule.

An example of automated services is A. on-line banking B. build your own pizza C. haircuts D. massage parlors E. all are examples of automated services

A. on-line banking On-line banking has almost no human to human interaction.

Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the fixed-order-interval model is chosen in this instance, how often (on average) will this item be ordered? A. once a month B. once every other month C. twice a month D. twice every three months E. three times every two months

A. once a month The order interval is found by dividing the EOQ (in this case) 100 by the annual demand (1,200). In this case that leads to an optimal interval of 1/12th of a year (or one month).

With regard to operations strategy, organization strategy should, ideally, take into account:

A. operations' strengths and weaknesses. Formulation of organization strategy should take into account the realities of operations' strengths and weaknesses, capitalizing on strengths and dealing with weaknesses.

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management.

A. outsourcing; supply chain Supply chain management takes a more systemic view of the firm, its operations, and its suppliers.

Which term is most closely associated with cellular manufacturing? A. part families B. assembly line C. robotics D. CAD E. CAM

A. part families Part families are central to cellular manufacturing.

The method of financial analysis which focuses on the length of time it takes to recover the initial cost of an investment is: A. payback B. net present value C. internal rate of return D. queuing E. cost-volume

A. payback

Which of the following is least likely to affect the cost an organization incurs in producing its products or services?

A. price Relative to the other choices, price is least likely to affect cost.

The type of layout which features departments or other functional groupings in which similar activities are performed is: A. process B. product C. fixed-position D. mass E. unit

A. process Process layouts group similar activities.

In the additive model for seasonality, seasonality is expressed as a ______________ adjustment to the average; in the multiplicative model, seasonality is expressed as a __________ adjustment to the average. A. quantity; percentage B. percentage; quantity C. quantity; quantity D. percentage; percentage E. qualitative; quantitative

A. quantity; percentage The additive model simply adds a seasonal adjustment to the deseasonalized forecast. The multiplicative model adjusts the deseasonalized forecast by multiplying it by a season relative or index.

Which of the following interactions with vendors would potentially lead to inventory reductions? A. reduced lead times B. increased safety stock C. less frequent purchases D. larger batch quantities E. longer order intervals

A. reduced lead times

The more novel a new product or service design is, the more forecasters have to rely on: A. subjective estimates. B. seasonality. C. cyclicality. D. historical data. E. smoothed variation.

A. subjective estimates. New products and services lack historical data, so forecasts for them must be based on subjective estimates.

The more novel a new product or service design is, the more forecasters have to rely on:

A. subjective estimates. New products and services lack historical data, so forecasts for them must be based on subjective estimates.

The impact that a significant change in capacity will have on a key vendor is a: A. supply chain factor B. process limiting factor C. internal factor D. human resource factor E. operational process factor

A. supply chain factor

Business organizations consist of three major functions which, ideally:

A. support one another Finance, Marketing and Operations are these major functions.

The primary difference between seasonality and cycles is: A. the duration of the repeating patterns. B. the magnitude of the variation. C. the ability to attribute the pattern to a cause. D. the direction of the movement. E. there are only four seasons but 30 cycles.

A. the duration of the repeating patterns. Seasons happen within time periods; cycles happen across multiple time periods.

A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more _____________ than a firm pursuing a strategy based on low cost and high volume.

A. variation Customization and variety lead to variation that must be accommodated.

A productivity increase in one operation that does not improve overall productivity of the business is not

A. worthwhile. Only system-wide productivity improvement makes the organization more productive.

Intermodal transportation:

Achieves economies of scale and service availability.

A relationship with a supplier that is characterized by high levels of distrust, little communication, and short-term transactions is called a(n):

Adversarial relationship.

A relationship with a supplier that is characterized by high levels of distrust, little communication, and short-term transactions is called a(n):

Adversarial relationship. The characteristics describe an adversarial relationship (see Figure 10-4).

A "season" in the seasonality index can only occur:

All of the above

A "season" in the seasonality index can only occur: A) Daily B) Weekly C) Monthly D) In larger periods E) All of the above.

All of the above.

A forecasting system that changes the value of the alpha parameter in response to the level of forecast error is known as: An adaptive model. A trend enhanced exponential smoothing model. A tracking signal. A time series model. A causal regression.

An adaptive model Adaptive forecasting automatically adjusts smoothing coefficients in an exponential smoothing model in response to a tracking signal.

Which of the following is true of an application software package?

An application software package is evaluated based on a Request for Proposal submitted to a packaged-software vendor.

In MRP processing the difference between a planned-order release and the planned-order receipt is: A. level of safety stock. B. scheduled receipts of open orders. C. timing as per the lead time. D. a one is a forecast and the other is actual. E. the level of net requirements.

In MRP, under lot-for-lot ordering, "planned-order receipts" are: A. identical to "scheduled receipts" B. identical to "planned-order releases" C. open orders (that is, ordered before the first time bucket, but not delivered yet) D. "gross requirements" E. available to promise inventory

In MRP, under lot-for-lot ordering, the size of "planned-order receipts" are equal to: A. "scheduled receipts." B. "planned-order releases." C. open orders already scheduled to be delivered. D. "gross requirements." E. None of the choices.

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the: A. master production schedule B. bill-of-materials C. inventory-records D. assembly-time chart E. net-requirements chart

The hierarchical diagram that depicts the subassemblies and components that are needed to produce and/or assemble a product is called a(n): A. assembly time chart. B. product structure tree. C. MRP II. D. pegging. E. none of the choices.

The identification of parent items is called: A. Paternity B. Pegging C. Requirement I.D. D. Relationship tracking E. Master Scheduling

The input used in MRP that lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the: A. master production schedule. B. bill of material. C. inventory-records. D. assembly-time chart.

Under fixed-interval lot sizing, order sizes for component parts are determined based on which one of the following? A. Gross requirements for one period. B. Net requirements for some predetermined number of periods. C. Economic order quantity for one period. D. Gross requirements - net requirements for a predetermined number of periods. E. Net requirements - amount on-hand for a predetermined number of periods.

Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following? A. gross requirements B. net requirements C. economic order quantity D. gross requirements - net requirements E. net requirements - amount on-hand

Which of these products would be most likely to have dependent demand? A. refrigerators B. automobile engines C. televisions D. brownies E. automobiles

5. Johnson Company had beginning inventory of $1,000,000 and ending inventory of $1,200,000. Johnson has determined inventory carrying cost to be 25 percent. Johnson's inventory carrying cost was: A. $250,000. B. $275,000. C. $300,000. D. None of these.

B. $275,000.

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity?

B. 1.457 Calculate multifactor productivity for each week, then average the two.

In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is: A. 10. B. 12. C. 24. D. 72. E. 144.

B. 12. Use the base EOQ formula.

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation? A. 4 B. 3 C. 2.5 D. 2 E. 1

B. 3 Convert each error into an absolute value and then average.

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation?

B. 3 Convert each error into an absolute value and then average.

Suppose a four-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-4 = 0.1, wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.4. Demand observed in the previous four periods was as follows: At-4 = 380, At-3 = 410, At-2 = 390, At-1 = 400. What will be the demand forecast for period t? A. 402 B. 397 C. 399 D. 393 E. 403

B. 397 The forecast will be (.1 * 380) + (.2 * 410) + (.3 * 390) + (.4 * 400) = 397.

Given forecast errors of 5, 0, -4, and 3, what is the bias? A. -4 B. 4 C. 5 D. 12 E. 6

B. 4 Sum the forecast errors.

Given forecast errors of 5, 0, -4, and 3, what is the bias?

B. 4 Sum the forecast errors.

6. Suppose demand is 45 units a month, average inventory is 60 units, and unit cost is $20. What is the annual inventory turnover? A. 10 B. 9 C. 0.75 D. 15

B. 9

Weekly demand for a particular item averages 30 units, with a standard deviation of 4. This item is managed with a fixed-order-interval model. The order interval is three weeks, and this item has a certain lead time of one week. The desired service level is 97.5 percent. Assume that it is now time to place another order, and there are 43 units on hand. How many units should be ordered? A. 120 B. 93 C. 136 D. 46 E. 84

B. 93 Expected demand during protection interval [30*(3 + 1)] + safety stock [1.96*4*sqrt(3 + 1)] - on hand [43] = 120 + 15.68 - 43 ≈ 93.

16. As technology and cultures evolve, the best approach for operations managers is to: A. Work harder. B. Adapt their business models. C. Retire. D. Make their processes more efficient.

B. Adapt their business models.

The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the:

B. Pareto phenomenon Pareto phenomena direct our attention to the difference between the "important few" and the "trivial many."

15. When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as: A. Buffering. B. Bullwhip effect. C. Pareto effect. D. Vendor managed inventory.

B. Bullwhip effect.

Which of the following is NOT one of the costs considered in aggregate production planning? A. Subcontracting cost B. Capital equipment cost C. Inventory cost D. Firing (layoff) cost

B. Capital equipment cost

Designing for recycling helps facilitate ______.

B. Compliance with regulatory environments Regulatory environments are increasingly focused on encouraging recycling.

The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas:

B. Customers; Financial; Internal Business Processes; Learning and Growth These are the four core areas addressed by the Balanced Scorecard.

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

B. ERP

Which of the following is not a step in the forecasting process? A. Determine the purpose and level of detail required. B. Eliminate all assumptions. C. Establish a time horizon. D. Select a forecasting model. E. Monitor the forecast.

B. Eliminate all assumptions. We cannot eliminate all assumptions.

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing: A. Inventory carrying costs. B. Hiring and layoff costs. C. Cost of quality defects. D. Lost sales costs.

B. Hiring and layoff costs.

Capacity planning decisions have both long-term and short-term considerations. Which of the following statements are true? (I) Long-term considerations relate to the overall level of capacity. (II) Short-term considerations relate to the probable variations in capacity requirements. (III) Short-term considerations determine the "effective capacity." A. Only one of the three statements is true. B. I and II C. II and III D. I and III E. All three statements are correct.

B. I and II

6. Which of the following statements most accurately represents the challenge of being environmentally sustainable? A. The choices facing the firm are clear, and the obvious candidates for improvement can be easily identified. B. It is not easy to be environmentally responsible since the choices facing management involve trade-offs. C. This is a decision that firms must move on since the demand for environmental responsibility is driven by forces that cannot be ignored—governmental regulations, decreasing resource levels, and changing customer demands. D. Being environmentally responsible is simply a matter of complying with governmental regulations.

B. It is not easy to be environmentally responsible since the choices facing management involve trade-offs.

Which type of processing system tends to produce the most product variety? A. Assembly B. Job-Shop C. Batch D. Continuous E. Project

B. Job-Shop A Job-Shop provides low volume of high-variety goods.

"Must have", "expected" and "excitement" characteristics are categories in the ____ model.

B. Kano The Kano model is an alternative to "more is better" design approaches

Putting forecast errors into perspective is best done using

B. MAPE. MAPE depicts the forecast error relative to what was being forecast.

Which of the following is not typically considered a cure for poor competitiveness?

B. Minimize attention to the operations function. Operations is a prime area for improving competitiveness.

4. Over which stage of the product's life cycle does operations management have the greatest amount of direct control? A. Extraction B. Packaging/transportation C. Usage D. Disposal

B. Packaging/transportation

15. Zanda Corp. has always operated within one country. It is contemplating opening production facilities in another country. Zanda should realize: A. Production processes used domestically should work well in a different country. B. The means of motivating the workforce domestically may not work well in a different country. C. The technology used domestically is often the best to use in a different country. D. The same business model that is used domestically should apply to the foreign country.

B. The means of motivating the workforce domestically may not work well in a different country.

Service design generally differs from product design in which of the following ways?

B. There is less latitude in detecting and correcting errors prior to delivery. Often service design flaws are not discovered until some customers have been served.

3. A batch of Raisin Bran that has been made at Kellogg's but not yet packaged in its final cereal box would be an example of what type of inventory? A. Raw material B. Work-in-process C. Finished goods D. Maintenance, repair, and operating supplies (MRO)

B. Work-in-process

B. Yield management.

Which phrase most closely describes flexible manufacturing systems? A. a variation of CAD B. a more fully automated version of cellular manufacturing C. manufacturing resource planning D. a process layout with a manufacturing overlay E. an approach that allows workers to begin work at a time of their choosing

B. a more fully automated version of cellular manufacturing Flexible automation allows for greater variety within or across product families.

Using the latest observation in a sequence of data to forecast the next period is: A. a moving average forecast. B. a naive forecast. C. an exponentially smoothed forecast. D. an associative forecast. E. regression analysis.

B. a naive forecast. Only one piece of information is needed for a naive forecast.

Using the latest observation in a sequence of data to forecast the next period is:

B. a naive forecast. Only one piece of information is needed for a naive forecast.

Utilization is defined as the ratio of: A. actual output to effective capacity B. actual output to design capacity C. design capacity to effective capacity D. effective capacity to actual output E. design capacity to actual output

B. actual output to design capacity

Which of these products would be most likely to have dependent demand?

B. automobile engines

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as: Noncritical. Leverage. Bottleneck. Strategic.

Bottleneck

In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must: A. have the lowest total cost. B. be in a feasible range. C. be to the left of the price break quantity for that price. D. have the largest quantity compared to other EOQs. E. have smaller ordering costs than the others.

B. be in a feasible range.

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the:

B. bill of materials.

The grouping of equipment by the operations needed to perform similar work for part families is: A. product layout B. cellular manufacturing layout C. functional layout D. fixed-position layout E. process layout

B. cellular manufacturing layout Cellular layouts are organized around part families.

In the area of product and service design, the acronym CAD refers to:

B. computer aided design CAD can increase the productivity of product designers.

Forecasting techniques generally assume: A. the absence of randomness. B. continuity of some underlying causal system. C. a linear relationship between time and demand. D. accuracy that increases the farther out in time the forecast projects. E. accuracy that is better when individual items, rather than groups of items, are being considered.

B. continuity of some underlying causal system. Forecasting techniques generally assume that the same underlying causal system that existed in the past will continue to exist in the future.

Mobile phones have evolved from devices intended to place and receive phone calls into handheld multimedia communications devices, but in the eyes of some customers these new features make the phones less desirable. This is an example of _________.

B. creeping featurism Customer satisfaction isn't strictly dependent on the number of features a product offers.

A fill rate is the percentage of _____ filled by stock on hand. A. shipments B. demand C. inventory D. safety stock E. lead time

B. demand

Which of the following is not among the chief reasons organizations fail?

B. emphasizing labor productivity in labor-intensive environments In labor-intensive environments, emphasizing labor productivity is a good idea.

For firms competing in worldwide markets, conducting ______________ is more complex, since what works in one country or region might not work in another.

B. environmental analysis Environmental analysis takes into account the relevant factors in the environment; there are more of these if there are more markets to consider.

When determining the timing and degree of capacity change, one can use the approach of: A. lead time flexibility strategy B. expand early strategy C. wait-and-see strategy D. backordering E. delayed differentiation

B. expand early strategy

Although they do not guarantee optimal solutions, ______________ are useful in finding reasonable solutions when the number of possible options is overwhelming. A. cellular layouts B. heuristics C. logistics D. CAM E. CAD

B. heuristics Heuristics often provide workable solutions to complex problems.

In MRP, under lot-for-lot ordering, planned-order receipts are:

B. identical to planned-order releases.

In services, flowcharts are useful for ____________.

B. identifying and determining the sequence of customer and service actions and interactions The customer-service interaction is depicted using flowcharts.

One way to increase reliability is to:

B. improve preventive maintenance procedures Preventative maintenance leads to longer intervals between breakdowns.

ERP implementation probably will not require:

B. just a few weeks to install.

Marketing depends on operations for information regarding ___________.

B. lead time Marketing uses lead time information to make promises to customers.

The degree of management involvement in short-range forecasts is: A. none. B. low. C. moderate. D. high. E. total.

B. low. Short-range forecasting tends to be fairly routine.

The degree of management involvement in short-range forecasts is:

B. low. Short-range forecasting tends to be fairly routine.

Which of the following is used for constructing a control chart? A. mean absolute deviation B. mean squared error C. tracking signal D. bias

B. mean squared error The mean squared error leads to an estimate for the sample forecast standard deviation.

Which of the following is used for constructing a control chart?

B. mean squared error The mean squared error leads to an estimate for the sample forecast standard deviation.

Two widely used metrics of variation are the __________ and the _________.

B. mean; standard deviation The mean and standard deviation summarize important facets regarding the variation in a process.

A risk avoider would want ______ safety stock. A. less B. more C. the same D. zero E. 50 percent

B. more

Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following?

B. net requirements

Daily capacity of a product layout is determined by: A. cycle time divided by operating time B. operating time divided by cycle time C. operating time divided by total task time D. total task time divided by cycle time E. cycle time divided by total task time

B. operating time divided by cycle time This represents how many units are possible per day.

Scheduling personnel is an example of an operations management:

B. operational decision. Staffing-level decisions are made low in the hierarchy.

Manufacturing work sent to other countries is called:

B. outsourced Outsourcing is increasingly a part of operations management.

A managerial approach toward forecasting which seeks to actively influence demand is: A. reactive. B. proactive. C. influential. D. protracted. E. retroactive.

B. proactive. Simply responding to demand is a reactive approach.

A managerial approach toward forecasting which seeks to actively influence demand is:

B. proactive. Simply responding to demand is a reactive approach.

The primary method for associative forecasting is: A. sensitivity analysis. B. regression analysis. C. simple moving averages. D. centered moving averages. E. exponential smoothing.

B. regression analysis. Regression analysis is an associative forecasting technique.

The primary method for associative forecasting is:

B. regression analysis. Regression analysis is an associative forecasting technique.

Averaging techniques are useful for: A. distinguishing between random and nonrandom variations. B. smoothing out fluctuations in time series. C. eliminating historical data. D. providing accuracy in forecasts. E. average people.

B. smoothing out fluctuations in time series. Smoothing helps forecasters see past random error.

Averaging techniques are useful for:

B. smoothing out fluctuations in time series. Smoothing helps forecasters see past random error.

Which of the following is not a reason for redesigning a product or service?

B. to increase the level of employee satisfaction A product or service redesign does not necessarily involve improving employee satisfaction.

At the break-even point: A. output equals capacity B. total cost equals total revenue C. total cost equals profit D. variable cost equals fixed cost E. variable cost equals total revenue

B. total cost equals total revenue

Which is not a characteristic of exponential smoothing? A. smoothes random variations in the data B. weights each historical value equally C. has an easily altered weighting scheme D. has minimal data storage requirements E. smoothes real variations in the data

B. weights each historical value equally The most recent period of demand is given the most weight in exponential smoothing.

Which is not a characteristic of exponential smoothing?

B. weights each historical value equally The most recent period of demand is given the most weight in exponential smoothing.

Capacity requirements planning helps managers reconcile __________ with __________.

B. what is needed; what is possible

Which of the following statements about e-commerce and business-to-business transactions is true?

B2B e-commerce creates efficiencies by enabling companies to locate suppliers, solicit bids, place orders, and track shipments in transit electronically.

A detailed description of an "end item" along with a list of all of its raw materials, parts, and subassemblies is shown in a:

BOM

Which of the following statements best describes demand forecasting?

Better forecasts usually come from combinations of inputs.

Build collaborative partnerships with suppliers. The high value of spend and the high level of supply risk suggests that this is strategic situation. Building collaborative partnerships is appropriate in this situation.

Which of the following lean principles best communicates the notion of demand synchronization? -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

When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as: -Pareto effect. -Buffering. -Bullwhip effect. -Supplier-managed inventory.

Bullwhip effect

When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as: Vendor managed inventory Buffering Pareto effect Bullwhip effect

Bullwhip effect

__________ attempt(s) to systematically translate a firm's strategies into operational targets.

Business performance management

__________ reorganizes workflows, combining steps to cut waste and eliminate repetitive, paper-intensive tasks.

Business process redesign

ISO 9000 defines a set of internationally accepted standards for: -Product quality. -Quality control. -Business quality management. -Operations management quality.

Business quality management

. A recent effort to expand the scope of production resource planning by involving other functional areas in the planning process has been: A. material requirements planning B. capacity requirements planning C. manufacturing resources planning D. Just-In-Time planning E. multifunctional relationships planning

An effort to expand the scope of production resource planning by involving other functional areas in the planning process has been: A. material requirements planning. B. capacity requirements planning. C. manufacturing resources planning. D. just-in-time planning. E. multifunctional relationships planning.

For which period will the second order be submitted using the part period lot sizing method? A. Period 2 B. Period 3 C. Period 4 D. Period 5 E. Period 6

If 17 Ps are needed, and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms and 5 Ns, how many Cs are needed? A. 48 B. 144 C. 192 D. 212 E. 272

In MRP, "scheduled receipts" are: A. identical to "planned-order receipts." B. identical to "planned-order releases." C. open orders already scheduled to be delivered. D. "net requirements" in a time period. E. None of the choices.

In MRP, "scheduled receipts" are: A. identical to "planned-order receipts" B. identical to "planned-order releases" C. open orders (that is, ordered before the first time bucket, but not delivered yet) D. "net requirements" E. available to promise inventory

Independent demand tends to be ___________, while dependent demand tends to be __________. A. unstable; smooth B. unstable; stable C. stable; lumpy D. smooth; sawtooth E. sawtooth; smooth

The MRP input storing information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size) is the: A. master production schedule B. bill-of-materials C. inventory-records D. assembly-time chart E. net-requirements chart

What is the correct sequence to go from the broadest to the most detailed form of operations planning? A. MRP » MPS » ERP B. ERP » MRP » MPS C. ERP » MPS » MRP D. MPS » ERP » MRP E. MPS » MRP » ERP

What is the lot size for the second order using the part-period method? A. 80 B. 150 C. 170 D. 250 E. 230

What is the net requirement for Whatzats to fill this order? A. 100 B. 140 C. 150 D. 180 E. 200

Which is true of a net-change system? A. It is a batch-type system which is updated periodically. B. It is usually run at the beginning of each month. C. The basic production plan is modified to reflect changes as they occur. D. It is used to authorize the execution of planned orders. E. It indicates the amount and timing of future changes.

Which of the following are primary reports provided by MRP systems?I) Planned order releasesII) Immediate order releasesIII) Demand history reportsIV) Changes to open orders A. I and II only B. I, II, III only C. I, II, IV only D. II, III, IV only E. I, II, III, and IV

_______ is choosing how many to order or make. A. Quantity determination B. Package sizing C. Lot sizing D. Grouping E. Aggregation

Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to: A. .01. B. .10. C. .15. D. .20. E. .60.

C .15 A previous period's forecast error of 4 units would lead to a change in the forecast of 0.6 if alpha equals 0.15.

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:

C items.

A production line is to be designed for a job with three tasks. The task times are 0.3 minutes, 1.4 minutes, and 0.7 minutes. What is the minimum cycle time for this line? A. 0.3 minutes. B. 0.7 minutes. C. 1.4 minutes. D. 2.4 minutes. E. None of the above.

C. 1.4 minutes. The longest task time equals the minimum cycle time.

Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be:

C. 100.2. Multiply the previous period's forecast error (8) by alpha and then add to the previous period's forecast.

Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be: A. 80.8. B. 93.8. C. 100.2. D. 101.8. E. 108.2.

C. 100.2. Multiply the previous period's forecast error (8) by alpha and then add to the previous period's forecast.

In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five-day week. What is the labor productivity of this operation?

C. 15 chairs/worker/day Divide the output of 450 chairs by the inputs of 30 worker-days.

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters): From/TO I II III I - 10 20 II - 10 III - Flows (loads per week: From/TO I II III X - 60 90 Y 40 - 160 Z 110 140 - What is the distance (in meters) from area III to area I in this new facility? A. 0 B. 10 C. 20 D. 30 E. 40

C. 20

[The following information applies to the questions displayed below.] University Book Store buys women's polo T-shirts from a supplier according to the price schedule shown below. The store sells 500,000 T-shirts per year. The annual carrying cost of T-shirts is 25% and the ordering cost is $40. Answer the next two questions based on this information. What order quantity would give the Book Store the lowest total acquisition cost? A. 2139 B. 2237 C. 2500 D. 2614

C. 2500 EOQ @ $35 price = sqrt[(2 × 500,000 × $40)/($35 × .25)] = 2,138 units EOQ @ $32 price = sqrt[(2 × 500,000 × $40)/($32 × .25)] = 2,236 units; however you must order 2,500 to obtain the $32 price.

Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?

C. 5 Convert each error into an absolute value and then average.

An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is: A. 100 B. 2,000 C. 500 D. 1,000 E. none of these

C. 500

Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day A. 40% B. 50% C. 60% D. 80% E. 90%

C. 60%

Which of the following is not true about systems approach?

C. A systems approach concentrates on efficiency within subsystems. Subsystem efficiency doesn't necessarily translate into overall system efficiency.

Unbalanced systems are evidenced by A. Top heavy operations B. Labor unrest C. Bottleneck operations D. Increasing capacities E. Assembly lines

C. Bottleneck operations

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. C items.

16. Which of the following are NOT often associated with a vendor-managed inventory (VMI) arrangements? A. Long-term commitments from both parties. B. Supplier representative located at the customer site. C. Customers recommend to suppliers how they should schedule production. D. Supplier places replenishment orders. E. All of these are typically associated with VMI.

C. Customers recommend to suppliers how they should schedule production.

One of these is not a characteristic of a well-designed service system:

C. Distributed computer networks Well-designed service systems tend to be user friendly, robust, cost-effective and easy to sustain.

The focus of an aggregate production plan, in general, is on all of the following EXCEPT: A. The Intermediate-term future B. Product lines C. Facilities and capital equipment D. Inventory levels

C. Facilities and capital equipment

7. From an operations standpoint, sustainability means that: A. Profit is not an important goal. B. A company should focus its efforts on reducing pollution. C. Firms should pursue profit without damaging the environment or the well-being of future generations. D. The firm must improve how it manages its people resources since these are important to the long-term survival of the firm.

C. Firms should pursue profit without damaging the environment or the well-being of future generations.

Which of the following is true?

C. Functional strategies are shaped by corporate strategy. Corporate strategy shapes strategies at lower levels.

Which of the following features would not generally be considered common to all forecasts? A. Assumption of a stable underlying causal system. B. Actual results will differ somewhat from predicted values. C. Historical data is available on which to base the forecast. D. Forecasts for groups of items tend to be more accurate than forecasts for individual items. E. Accuracy decreases as the time horizon increases.

C. Historical data is available on which to base the forecast. In some forecasting situations historical data are not available.

Which of the following features would not generally be considered common to all forecasts?

C. Historical data is available on which to base the forecast. In some forecasting situations historical data are not available.

The advantages of automation include: (I) Reduced output variability. (II) Reduced variable costs. (III) Machines don't strike or file grievances. (IV) Machines are always less expensive than human labor. A. I and IV B. II and III C. I, II, and III D. I and III E. II and IV

C. I, II, and III Machines can be more expensive than human labor.

Which of the following statements is true regarding a periodic review inventory system?

C. Inventory replenishment orders are placed in equal increments of time.

8. Lean systems thinking in operations management can extend to sustainability in what way? A. Its focus on improving product quality. B. Its focus on delivering products to customers faster. C. Its focus on reducing waste of all types. D. Its focus on product innovation.

C. Its focus on reducing waste of all types.

_______ is choosing how many to order or make.

C. Lot sizing

Knowledge skills usually don't include:

C. communication skills Communication skills generally are considered to be people skills.

How does aggregate planning for services differ from aggregate production planning for products? A. There is no difference. B. Demand for products typically is stated as the number of hours of labor required, whereas demand for services is generally stated as the number of units of service desired. C. Most service plans are based primarily on labor requirements. D. Service plans make extensive use of inventory to meet demand.

C. Most service plans are based primarily on labor requirements.

Which is not a true assumption in the EOQ model? A. Production rate is constant. B. Lead time does not vary. C. No more than three items are involved. D. Usage rate is constant. E. No quantity discounts.

C. No more than three items are involved.

12. The ABC analysis used for analyzing inventory is an example of: A. Safety stock calculation. B. Regression analysis. C. Pareto's Law. D. Inventory carrying cost.

C. Pareto's Law.

12. The "triple bottom line" suggests that efforts should be devoted to assessing the impact of activities on: A. People, profit, processes. B. Profit, profit, profit. C. People, planet, profit. D. Profit, planet, processes.

C. People, planet, profit.

Laser technology used in surgical procedures is an example of technological advances in: A. Product B. Service C. Process D. Information E. Reverse Engineering

C. Process Laser technology represents a change in the fundamental surgical process.

Incorporating design for disassembly (DFD) principles in product design helps firms with ___________ design issues.

C. Re-use Refurbished products must first be disassembled.

Moving average forecasting techniques do the following: A. Immediately reflect changing patterns in the data. B. Lead changes in the data. C. Smooth variations in the data. D. Operate independently of recent data. E. Assist when organizations are relocating. Variation is smoothed out in moving average forecasts.

C. Smooth variations in the data. Variation is smooth out in moving average forecasts.

Moving average forecasting techniques do the following:

C. Smooth variations in the data. Variation is smooth out in moving average forecasts.

Which is true of a net-change system?

C. The basic production plan is modified to reflect changes as they occur.

13. Which of the following pieces of information is identified in the original 12-digit UPC code? A. Product price. B. Where product was manufactured. C. The manufacturer of the item. D. A and B. E. All of these are part of a UPC code.

C. The manufacturer of the item.

Detecting nonrandomness in errors can be done using: A. MSEs. B. MAPs. C. control charts. D. correlation coefficients. E. strategies.

C. control charts. Control charts graphically depict the statistical behavior of forecast errors.

Detecting nonrandomness in errors can be done using:

C. control charts. Control charts graphically depict the statistical behavior of forecast errors.

Which of the following would be an advantage of using a sales force composite to develop a demand forecast? A. The sales staff is least affected by changing customer needs. B. The sales force can easily distinguish between customer desires and probable actions. C. The sales staff is often aware of customers' future plans. D. Salespeople are least likely to be influenced by recent events. E. Salespeople are least likely to be biased by sales quotas.

C. The sales staff is often aware of customers' future plans. Members of the sales force should be the organization's tightest link with its customers.

Which of the following would be an advantage of using a sales force composite to develop a demand forecast?

C. The sales staff is often aware of customers' future plans. Members of the sales force should be the organization's tightest link with its customers.

1. Safety stock exists for which of the following reasons? A. To allow less expensive purchases by buying more. B. To allow for transportation time. C. To provide protection against the uncertainties of supply and demand. D. None of these.

C. To provide protection against the uncertainties of supply and demand.

5. BMW has introduced a program of covered scheduled maintenance for its cars. That is, when you bring in your vehicle for maintenance at a BMW dealership, BMW will cover the costs of everything (except for worn-out tires). This practice specifically targets which stage of the product life cycle? A. Extraction B. Packaging/transportation C. Usage D. Disposal

C. Usage

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true? A. Zanda will have higher investment in plant and equipment. B. Zada will have higher hiring and firing costs. C. Zada will have higher inventory carrying costs. D. Zada will have higher overtime costs.

C. Zada will have higher inventory carrying costs.

A 'product package' consists of:

C. a combination of goods and services Most firms are not pure service or manufacturing firms; they produce combinations of goods and services.

Which of the following is not a determinant of effective capacity? A. facilities B. product mix C. actual output D. human factors E. external factors

C. actual output

Dairy items, fresh fruit, and newspapers are items that: A. do not require safety stocks. B. cannot be ordered in large quantities. C. are subject to deterioration and spoilage. D. require that prices be lowered every two days. E. have minimal holding costs.

C. are subject to deterioration and spoilage.

Elements of the service process in which there is little to no contact with the customer are referred to as ____________.

C. back-of-the-house Those elements involving substantial contact with the customer are referred to as "front-of-the-house" operations.

Capacity in excess of expected demand that is intended to offset uncertainty is a: A. margin protect B. line balance C. capacity cushion D. timing bubble E. none of the above

C. capacity cushion

The process of comparing outputs to previously established standards to determine if corrective action is needed is called:

C. controlling Controls are used to maintain performance.

The two most important factors in choosing a forecasting technique are: A. cost and time horizon. B. accuracy and time horizon. C. cost and accuracy. D. quantity and quality. E. objective and subjective components.

C. cost and accuracy. More accurate forecasts cost more but may not be worth the additional cost.

The two most important factors in choosing a forecasting technique are:

C. cost and accuracy. More accurate forecasts cost more but may not be worth the additional cost.

The main issue in the design of process layouts for service operations concerns the relative positioning of: A. workstations. B. processing components. C. departments. D. entrances, loading docks, etc. E. manufacturing cells.

C. departments. In process layouts, departments and their relative locations are of primary concern.

Which of the following most closely describes dependent demand?

C. derived demand

The research and development activity which starts after positive research results are available and attempts to turn these results into useful commercial applications is:

C. development Development is the conversion of applied research into useful commercial applications.

If the output rate is increased but the average unit costs also increase we are experiencing: A. market share erosion. B. economies of scale. C. diseconomies of scale. D. value added accounting. E. step-function scale up.

C. diseconomies of scale.

When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves: A. line up. B. equal zero. C. do not line up. D. cannot be calculated. E. depend on the percentage assigned.

C. do not line up.

For an organization to grow its market share, it must:

C. exceed minimum standards of acceptability for its products or services. Only by exceeding standards can an organization grow its market share.

The key to successfully competing is understanding what customers want and then __________ satisfy those wants.

C. finding the best way to To successfully compete, two basic issues must be addressed: What do the customers want? What is the best way to satisfy those wants?

The type of layout in which workers, materials, and equipment are moved to the product as needed is: A. process B. product C. fixed-position D. batch E. mass

C. fixed-position The fixed position layout brings the processes to the product.

What is it about job shops that make them appropriate for products in the introductory phase of their life-cycle? A. efficiency B. technology C. flexibility D. high volume capacity E. rigidity

C. flexibility Job shop processes are more appropriate for relatively new products.

When the output is less than the optimal rate of output, the average unit cost will be: A. lower B. the same C. higher D. could be either higher or lower E. could be either higher, lower or the same

C. higher

Which of the following corresponds to the predictor variable in simple linear regression? A. regression coefficient B. dependent variable C. independent variable D. predicted variable E. demand coefficient

C. independent variable Demand is the typical dependent variable when forecasting with simple linear regression.

Which of the following corresponds to the predictor variable in simple linear regression?

C. independent variable Demand is the typical dependent variable when forecasting with simple linear regression.

Operations management involves continuous decision-making; hopefully most decisions made will be:

C. informed Informed decisions incorporate all relevant issues.

When buying component parts, risk does not include: A. loss of control B. vendor viability C. interest rate fluctuations D. need to disclose proprietary information E. all are risk factors

C. interest rate fluctuations

The method of financial analysis which results in an equivalent interest rate is: A. payback B. net present value C. internal rate of return D. queuing E. cost-volume

C. internal rate of return

Which of the following does not relate to system design?

C. inventory management Inventory management is a system operation decision area.

The MRP input storing information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size) is the:

C. inventory records.

The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements is called: A. fair employment practices B. idle time analysis C. line balancing D. cycle time optimization E. none of the above

C. line balancing The goal is to reasonably balance work across the workstations.

Which of the following lot sizing methods does not attempt to balance ordering (or setup) and holding costs?

C. lot-for-lot

Which of the following is not usually necessary in order to have an effective MRP system?

C. lot-for-lot ordering

An effort to expand the scope of production resource planning by involving other functional areas in the planning process has been:

C. manufacturing resources planning.

In the 1970s and early 1980s in the United States, organizations concentrated on:

C. marketing and financial strategies. This led to U.S. firms being not very competitive with regard to their operations.

The mean absolute deviation is used to: A. estimate the trend line. B. eliminate forecast errors. C. measure forecast accuracy. D. seasonally adjust the forecast. E. compute periodic forecast errors.

C. measure forecast accuracy. MAD is one way of evaluating forecast performance.

The mean absolute deviation is used to:

C. measure forecast accuracy. MAD is one way of evaluating forecast performance.

A common goal in designing process layouts is: A. minimizing the number of workers B. minimizing idle time C. minimizing transportation costs D. maximizing work-station productive time E. maximizing transportation distances

C. minimizing transportation costs An efficient process layout minimizes transportation costs.

Which of the following factors would tend to reduce productivity?

C. more inexperienced workers More inexperienced workers tend to be less productive.

Farming is an example of:

C. non-manufactured goods Farm operations are not manufacturing operations.

One possible disadvantage of modular design is that:

C. number of configurations of modules decreases Modular designs do have the effect of reducing variety.

In MRP, scheduled receipts are:

C. open orders (that is, ordered before the first time bucket, but not delivered yet).

Years ago in the overnight delivery business, providing package tracking capability gave some firms a competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an example of ______________ becoming ____________ over time.

C. order winners; order qualifiers What is an order qualifier and what is an order winner changes over time.

Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be: A. smaller B. larger C. predictable D. controllable E. less frequent

C. predictable

Competitiveness doesn't include:

C. profitability. A company can be competitive relative to similar companies and still be unprofitable if the competitive environment is inherently unprofitable.

The structural approach for integrating customer requirements into every aspect of product development is known as:

C. quality function deployment Quality Function Deployment brings the voice of the customer into the product development process.

Dealing with the fact that certain aspects of any management situation are more important than others is called:

C. recognition of priorities Solutions tend to be targeted toward higher priority aspects of a situation.

The purpose of cycle counting is to: A. count all the items in inventory. B. count bicycles and motorcycles in inventory. C. reduce discrepancies between inventory records and actual quantities. D. reduce theft. E. count 10 percent of the items each month.

C. reduce discrepancies between inventory records and actual quantities.

The process of dismantling and inspecting a competitor's new or revised product for the purpose of gleaning design ideas is called:

C. reverse engineering Reverse engineering can be a good source of ideas for product design.

Short-term considerations in determining capacity requirements include: A. demand trend B. cyclical demand variations C. seasonal demand variations D. mission statements E. new product development plans

C. seasonal demand variations

Forecasts based on judgment and opinion do not include: A. executive opinion. B. salesperson opinion. C. second opinions. D. customer surveys. E. Delphi methods.

C. second opinions. Second opinions generally refer to medical diagnoses, not demand forecasting.

Forecasts based on judgment and opinion do not include:

C. second opinions. Second opinions generally refer to medical diagnoses, not demand forecasting.

Which phrase most closely describes the Delphi technique? A. associative forecast B. consumer survey C. series of questionnaires D. developed in India E. historical data

C. series of questionnaires The questionnaires are a way of fostering a consensus among divergent perspectives.

Product design and process selection are examples of _______ decisions.

C. system design These major decisions affect decisions made at lower levels.

When MRP II systems include feedback, they are known as:

Closed Loop MRP

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is: A. sales force opinions. B. consumer surveys. C. the Delphi method. D. time series analysis. E. executive opinions.

C. the Delphi method. Anonymity is important in Delphi efforts.

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:

C. the Delphi method. Anonymity is important in Delphi efforts.

Technology choices seldom affect:

C. union activity. Union activity can affect a firm's technology choices, but not the other way around.

Layout design has many objectives, one of which is ______. A. reduce bottlenecks B. move materials and workers simultaneously C. use workers and space efficiently D. hold material handling costs to 27% or less E. install computer terminals every 500 feet

C. use workers and space efficiently Layout design is focused on the efficient placement of human and other assets.

A software company is weighing whether to release a new version of its software. The company can go ahead and release the version now and correct flaws with subsequent patches or upgrades, or it can wait until the new version is reasonably bug-free. This is an example of _____.

C. vaporware Vaporware is attractive from some perspectives but not from others

An online auction used for sourcing: Typically drives prices up as suppliers compete against each other. Is used in situations similar to negotiation. Can hurt supplier relationships. Can only consider price.

Can hurt supplier relationships

Outsourcing:

Can reduce a company's capital requirements

Outsourcing:

Can reduce a company's capital requirements Outsourcing reduces a company's capital requirements because it does not need to invest in equipment or facilities to make the sourced product.

Jones Company has calculated that the EOQ for a particular item is 1,000 units. However, Jones does not have enough capital to order that many units each time, so it only orders 250 units at a time. This will result in:

Cannot be determined

With respect to the following operating service characteristics of the modes of transportation, which combination is INCORRECTLY specified?

Capability: pipeline is best; water is worst.

__________ are one of several techniques used to measure the value of investing in long-term capital investment projects.

Capital budgeting models

Which of the following is NOT one of the costs considered in aggregate production planning?

Capital equipment cost. What is considered? Firing (layoff) cost. Subcontracting cost. Inventory cost.

Which of the following is artificial intelligence technology that represents knowledge as a database of cases and solutions?

Case-based reasoning (CBR)

Significant changes in an MPS quantity several weeks into the planning horizon can:

Cause inconsistencies in the MRP. Changes in the MPS during the planning horizon can cause nervousness, which cam cause inconsistencies in the MRP plan.

Significant changes in an MPS quantity several weeks into the planning horizon can: Cause inconsistencies in the MRP. Make the MRP more accurate. Increase safety stock. Reduce stockouts.

Cause inconsistencies in the MRP. Changes in the MPS during the planning horizon can cause nervousness, which is inconsistencies in the MRP plan.

Which term best describes Harry's role?

Change agent

Which of the following statements most accurately describes the outcome of using a simple moving average model to forecast demand that has a strong trend?

Changes in forecasts produced by a moving average model will lag behind changes in demand.

Which stage of the decision-making processes consists of choosing among solution alternatives?

Choice stage

Which activity is a university least likely to outsource?

Classroom Instruction.

Collaborative planning, forecasting, and replenishment.

In recent years some companies have begun to work closely with their customers and/or suppliers by sharing information to develop demand plans and execute those plans. The procedure they are following is known as: Collaborative planning, forecasting, and replenishment. Conjoint analysis and forecasting. Joint planning of demand forecasts. Coordinated fore planning of requirements.

Collaborative planning, forecasting, and replenishment. Collaborative planning, forecasting, and replenishment is a process for sharing information and plans with supply chain partners.

A trucking company which provides shipping services to the public is a:

Common Carrier

Jones Company promised a customer that the customer would receive at least 98 percent of all items ordered. In fact, the customer received 95 percent of the items. This is an example of which "gap" in the customer satisfaction model?

Communications Gap

___________ expedites application development by grouping pre-existing objects into suites of software components that can be combined to create large-scale business applications.

Component-based development

Which of the following is a kind of knowledge work system that automates the creation and revision of designs using computers and sophisticated graphics software?

Computer-aided design (CAD)

Which of the following would NOT be a step in conducting a make/buy analysis? Assessing quantitative costs of outsourcing Evaluating new suppliers who could make the SKU Assessing the relationship of the product to the firm's core competencies Conducting a detailed internal audit of purchasing practices

Conducting a detailed internal audit

Which of the following statements about the "wisdom of crowds" and crowdsourcing is true?

Crowdsourcing utilitizing the "wisdom of crowds" helps companies learn from customers in order to improve product offerings and increase customer value.

The use of technology to collect and analyze data concerning customers' buying behavior is an important aspect of:

Customer relationship management.

A computer-based information system designed to handle ordering and scheduling of dependent-demand inventories is: A. computer aided manufacturing (CAM) B. computer integrated manufacturing (CIM) C. economic order quantity (EOQ) D. material requirements planning (MRP) E. economic run size (ERS)

Budget overruns when implementing ERP systems are typically caused by:I) high equipment costs.II) high training costs.III) high capital interest charges. IV) costs of integrating and testing A. I only B. I and III only C. I, II, IV only D. II and IV only E. I, II, and IV only

ERP's primary value comes from applications: A. deployment. B. development. C. interfaces. D. integration. E. networking.

The MRP approach that immediately updates only those records directly affected by a change is referred to as a(n): A. regenerative MRP. B. batch-type MRP. C. Plossl-Wright system. D. net-change MRP. E. gross-change MRP.

The _________ of ERP makes it valuable as a strategic planning tool. A. Internet base B. rapid batch capability C. employee focus D. real-time aspect E. database structure

Which of the following represents an attempt to balance the benefits of stability against the benefits of responding to new information? A. safety stock B. safety time C. bills of material D. time fences E. fixed-period lot sizing

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time? A. Pegging B. Safety stock C. Increased order sizes D. Safety time E. Low-level coding

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time? A. pegging B. safety stock C. increased order sizes D. safety time E. low-level coding

In the use of closeness ratings for process layouts, the code "U" means the closeness between two departments is: A. (U)nknown B. (U)nusually important C. of (U)sual importance D. (U)nimportant E. (U)ndesirable

D. (U)nimportant Close department pairings denoted "U" should be avoided.

A production line is to be designed for a job with three tasks. The task times are 0.4 minutes, 1.2 minutes, and 0.5 minutes. The maximum cycle time in minutes is: A. 0.3 B. 0.7 C. 1.4 D. 2.1 E. 0.8

D. 2.1 Add all task times

Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.5. Demand observed in the previous three periods was as follows: At-3 = 2,200, At-2 = 1,950, At-1 = 2,050. What will be the demand forecast for period t? A. 2,000 B. 2,095 C. 1,980 D. 2,050 E. 1,875 The forecast for will be (.2 * 2,200) + (.3 * 1,950) + (.5 * 2,050) = 2,050.

D. 2050 The forecast for will be (.2 * 2,200) + (.3 * 1,950) + (.5 * 2,050) = 2,050.

In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately: A. 11. B. 20. C. 24. D. 28. E. 375.

D. 28. Use the base EOQ formula.

10. The following environmentally responsible process/material matrix was developed for Zanda Corp. Zanda has determined that a score of 40 is its goal at this time, but efforts to lower its score will continue regardless. What is Zanda's current score, and what is your conclusion? (ADD ALL THE NUMBERS) A. 53, Zanda is doing better than its goal. B. 53, Zanda is doing worse than its goal. C. 47, Zanda, is doing better than its goal. D. 47, Zanda is doing worse than its goal.

D. 47, Zanda is doing worse than its goal.

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is: A. 1,000 B. 1,250 C. 2,250 D. 5,000 E. none of these

D. 5,000

Given the following information, what would efficiency be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48% A. 20% B. 35% C. 48% D. 60% E. 80%

D. 60%

For the data given below, what would the naive forecast be for period 5? 1 - 58 2- 59 3 - 60 4 - 61

D. 61 Period 5's forecast would be period 4's demand.

For the data given below, what would the naive forecast be for period 5?

D. 61 Period 5's forecast would be period 4's demand.

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing? A. 36.9 B. 57.5 C. 60.5 D. 62.5 E. 65.5

D. 62.5 Multiply the previous period's forecast error (-5) by alpha and then add to the previous period's forecast.

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

D. 62.5 Multiply the previous period's forecast error (-5) by alpha and then add to the previous period's forecast.

Given the following historical data, what is the simple three-period moving average forecast for period 6? A. 67 B. 115 C. 69 D. 68 E. 68.67 Average demand from periods 3 through 5.

D. 68 Average demand from periods 3 through 5.

Given the following historical data, what is the simple three-period moving average forecast for period 6?

D. 68 Average demand from periods 3 through 5.

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters): From/TO I II III I - 10 20 II - 10 III - Flows (loads per week: From/TO I II III X - 60 90 Y 40 - 160 Z 110 140 - If departments X, Y, and Z were to be located in areas I, II, and III, respectively, what would be the total distance (in meters) loads would be moved each week? A. 4,000 B. 4,500 C. 7,000 D. 8,000 E. 9,000

D. 8,000

Which of the following is not a benefit of using models in decision making?

D. All of the above are benefits Models are useful tools for making decisions without confronting the actual situation with all of its complexity.

8. Independent demand inventory models can be used to determine: A. When to buy and how much to buy. B. How to reduce stockouts. C. Stock levels for regular and one-time buys. D. All of these.

D. All of these.

Which of the following statements about variation is FALSE?

D. Any variation makes a production process less productive. The choice to offer customers greater variety might increase variation but increase productivity even more.

10. What might a company do to reduce the amount of cycle stock it holds? A. Attempt to reduce supplier lead time. B. Always take advantage of supplier quantity discounts. C. Attempt to reduce demand variation. D. Attempt to reduce order costs. E. All of these.

D. Attempt to reduce order costs.

What might a company do to reduce the amount of cycle stock it holds?

D. Attempt to reduce order costs.

In which type of processing system would gasoline be produced from crude oil? A. Job Shop B. Batch C. Assembly D. Continuous E. Project

D. Continuous Oil refining is an example of a continuous process.

A disadvantage of global teams for product design is that:

D. Ease of face to face meetings is absent since members are located everywhere If face to face interaction is required, global design teams might not be a viable option.

13. Which of the following programs/initiatives strives to improve the lives of suppliers and their families? A. ISO 14000 B. Responsible Care C. LEED D. Fair Trade

D. Fair Trade

S&OP has both "hard" and "soft" benefits. Which of the following is not considered a "soft" benefit of S&OP? A. Greater accountability for results. B. Enhanced teamwork at both the executive and operating levels. C. Better decisions with less effort. D. Higher sales and enhanced quality.

D. Higher sales and enhanced quality.

Heuristic rules are used primarily in which of these types of layouts? (I) Product (II) Process (III) Fixed-position A. I B. II C. I and III D. I and II E. II and III

D. I and II Heuristics help in formulating reasonably good product and process layouts.

The advantages of standardization include which of the following? (I.) The opportunity to freeze design at a very early stage (II.) Fewer parts to deal with in inventory (III.) Reduced training cost and time (IV.) Purchasing is more routine

D. II, III, IV Standardization doesn't necessarily help in freezing designs early.

Layout planning is required because of: (I) Efficient operations (II) Accidents or safety hazards (III) New products or services (IV) Morale problems A. I and II B. II and IV C. I and III D. II, III, and IV E. I, II, III, and IV

D. II, III, and IV A number of factors affect layout planning.

11. Walmart has announced that suppliers must attempt to improve their efforts in environmental management. In this announcement, Walmart could have included a requirement that suppliers meet the standards of: A. ISO 9000. B. ISO 2011. C. ISO 9002. D. ISO 14000.

D. ISO 14000.

Which of the following is not true about re-manufacturing?

D. It produces high quality products easily. Re-manufacturing can be a very difficult and costly process.

2.. Which of the following environmental initiatives/programs deals most specifically with building design and construction? A. The Kyoto Protocol B. Responsible Care C. ISO 14000 D. LEED certification

D. LEED certification

Heuristic rules are usually applied when: A. an optimum is necessary B. a computer program isn't available C. a problem has a small number of alternatives D. a problem has a large number of alternatives E. other approaches have failed

D. a problem has a large number of alternatives As the number of alternatives grows, the use of heuristics becomes more attractive.

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. Customers themselves may be unclear regarding what they'd like to do versus what they'll actually do.

Which of the following is a potential shortcoming of using sales force opinions in demand forecasting?

9. Which of the following statements is true regarding a periodic review inventory system? A. Safety stock is not needed when periodic review systems are used. B. The same quantity of inventory is ordered each time an order is placed. C. Inventory replenishment orders are placed in equal increments of time. D. None of the selections are true.

D. None of the selections are true.

Outsourcing some production is a means of _________ a capacity constraint. A. Identifying B. Modifying C. Supporting D. Overcoming E. Repeating

D. Overcoming

Which of the following is not one of the assumptions of the basic EOQ model? A. Annual demand requirements are known and constant. B. Lead time does not vary. C. Each order is received in a single delivery. D. Quantity discounts are available. E. Ordering and holding costs have been estimated reasonably accurately.

D. Quantity discounts are available.

Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of __________________:

D. Revenue management Revenue management is used to ensure that as much perishable capacity as possible is sold.

17. Which of the following terms best describes the impact of sustainability initiatives on the business model? A. Sustainability affects primarily the capabilities offered by the supply chain. B. Sustainability helps the firm to change its value proposition. C. Sustainability impacts primarily the customers that we serve. D. Sustainability affects the entire business model.

D. Sustainability affects the entire business model.

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true? A. Inventory will fluctuate significantly during the year. B. The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year. C. It will be easy to keep the workforce size stable. D. The firm likely will have higher capital investment than if it followed a level plan.

D. The firm likely will have higher capital investment than if it followed a level plan.

Which of the following is not true for the economic production quantity model? A. Usage rate is constant. B. Production rate exceeds usage rate. C. Run size exceeds maximum inventory. D. There are no ordering or setup costs. E. Average inventory is one-half maximum inventory.

D. There are no ordering or setup costs.

Which closeness rating reflects indifference on the nearness or lack of nearness of two departments? A. A B. E C. I D. U E. X

D. U Closeness ratings denoted "U" are neither desirable nor undesirable.

15. 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.

Which one of the following is not common to product layouts? A. a high rate of output B. specialization of labor C. low unit costs D. ability to adjust to changes in demand E. all are common

D. ability to adjust to changes in demand Product layouts are not flexible with respect to volume.

A basic question in capacity planning is: A. what kind is needed B. how much is needed C. when is it needed D. all of the above E. none of the above

D. all of the above

Which of the following is the case where capacity is measured in terms of inputs? A. hospital B. theater C. restaurant D. all of the above E. none of the above

D. all of the above

Which of the following is a primary concern for process selection? A. variety in products/services B. flexibility of equipment C. volume of output D. all of the above E. none of the above

D. all of the above All of these enter into the process selection decision.

A forecast based on the previous forecast plus a percentage of the forecast error is: A. a naive forecast. B. a simple moving average forecast. C. a centered moving average forecast. D. an exponentially smoothed forecast. E. an associative forecast.

D. an exponentially smoothed forecast. Exponential smoothing uses the previous forecast error to shape the next forecast.

A forecast based on the previous forecast plus a percentage of the forecast error is:

D. an exponentially smoothed forecast. Exponential smoothing uses the previous forecast error to shape the next forecast.

What is credited with gains in industrial productivity, increased standards of living and affordable products?

D. assembly lines Mass production has played a prominent role in increasing standards of living.

Which technique is used in computing seasonal relatives? A. double smoothing B. Delphi C. mean squared error D. centered moving average E. exponential smoothing

D. centered moving average The centered moving average serves as the basis point for computing seasonal relatives.

Which technique is used in computing seasonal relatives?

D. centered moving average The centered moving average serves as the basis point for computing seasonal relatives.

Unique attributes of firms that give them a competitive edge are called:

D. core competencies. Core competencies can be translated into competitive advantage.

The term 'degrees of newness' is associated with:

D. degree of design change Superficial design changes are low in 'degrees of newness.

Measurements taken at various points in the transformation process for control purposes are called:

D. feedback Feedback is used to monitor and improve processes.

Budgeting, analysis of investment proposals, and provision of funds are activities associated with the _______ function.

D. finance These are the primary tasks for the finance function.

In a supermarket, a vendor's restocking the shelves every Monday morning is an example of: A. safety stock replenishment. B. economic order quantities. C. reorder points. D. fixed order intervals. E. blanket ordering.

D. fixed order intervals.

An MRP system that is updated periodically to account for all changes which have occurred within a given time interval is called a(n) ________ system.

D. regenerative

If there are shipping cost economies that result from bundling orders for different items together, the __________ model becomes a relatively more attractive option. A. multi-period B. reorder-point C. fixed-order-quantity D. fixed-order-interval E. multi-item

D. fixed-order-interval

An operations strategy for process selection should recognize that: A. process selection seldom requires technical expertise B. engineering "white elephants" are uncommon C. there is little need to manage technology D. flexibility is not always the best choice E. most technical skills can be contracted out to consultants

D. flexibility is not always the best choice Flexibility isn't so valuable if efficiency is at a premium.

Scheduled receipts differ from planned receipts in that scheduled receipts:

D. involve orders that have already been placed.

Minimizing the sum of the squared deviations around the line is called: A. mean squared error technique. B. mean absolute deviation. C. double smoothing. D. least squares estimation. E. predictor regression.

D. least squares estimation. Least squares estimations minimize the sum of squared deviations around the estimated regression function.

Minimizing the sum of the squared deviations around the line is called:

D. least squares estimation. Least squares estimations minimize the sum of squared deviations around the estimated regression function.

Which of the following is not necessarily an element of a good forecast? A. estimate of accuracy B. timeliness C. meaningful units D. low cost E. written A good forecast can be quite costly if necessary.

D. low cost A good forecast can be quite costly if necessary.

Which of the following is not necessarily an element of a good forecast?

D. low cost A good forecast can be quite costly if necessary.

Which of the following is not an ongoing trend in manufacturing?

D. mass production for greater economies of scale Manufacturers are moving away from mass production for economies of scale.

A computer-based information system designed to handle ordering and scheduling of dependent-demand inventories is:

D. material requirements planning.

The fundamental purpose for the existence of any organization is described by its:

D. mission statement. A mission statement is the organization's attempt to justify its existence.

An MRP system whose records are updated continuously is referred to as a(n):

D. net-change system.

Productivity is expressed as:

D. output divided by input. Productivity is the ratio of outputs to inputs.

Increasing the service offered to the customer makes it more difficult to compete on the basis of:

D. price. More extensive service can be more costly, and more costly outputs make price-based strategies more difficult.

Products or services with a high degree of similarity of features and components are called:

D. product family's Delineating product families helps lead to component commonality.

Maximum capacity refers to the upper limit of: A. inventories B. demand C. supplies D. rate of output E. finances

D. rate of output

The _________ of ERP makes it valuable as a strategic planning tool.

D. real-time aspect

A nonlinear cost related to order size is the cost of: A. interest. B. insurance. C. taxes. D. receiving. E. space.

D. receiving.

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will: A. double. B. increase, but not double. C. decrease by a factor of 2. D. remain the same. E. increase, but more information is needed to calculate exactly how much.

D. remain the same.

Which is not a characteristic of simple moving averages applied to time series data? A. smoothes random variations in the data B. weights each historical value equally C. lags changes in the data D. requires only last period's forecast and actual data E. smoothes real variations in the data

D. requires only last period's forecast and actual data Simple moving averages can require several periods of data.

Which is not a characteristic of simple moving averages applied to time series data?

D. requires only last period's forecast and actual data Simple moving averages can require several periods of data.

The benefits of flexible manufacturing systems (FMS) include: A. reduced labor costs B. higher flexibility than automation C. quick changeover from part to part D. significantly lower unit costs E. all of the above

D. significantly lower unit costs Reduced labor costs and consistent quality and quick changeover time provide lower unit costs.

Which of the following is not a reason for poor performance of our organization in the marketplace?

D. taking advantage of strengths/opportunities, and recognizing competitive threats Taking advantage of strengths/opportunities and recognizing competitive threats would enable good performance.

In an MRP master schedule, the planning horizon is often separated into a series of time periods called:

D. time buckets.

Gradual, long-term movement in time series data is called:

D. trend Trends move the time series in a long-term direction.

Which one of the following is not a factor of successful product and service design?

D. use computerized design techniques Computerized design techniques don't necessarily lead to successful product and service design.

Which of the following is not a characteristic of layout decisions in system design? A. substantial investment of both money and effort B. long-term commitment C. significant impact on short-term efficiency D. usually well-received by operative personnel E. all of the above

D. usually well-received by operative personnel Layout decisions can lead to conflict from those who are affected by them.

Zanda Company is looking for a requirements planning system to help plan replenishment of its finished goods throughout its network of distribution centers. The type of system Zanda should consider is known as:

DPR RP (distribution requirements planning) is the system used to help in positioning and replenishing finished goods inventory in a system.

DRP

The positioning and replenishment of finished goods inventories at the retail level can be determined using:

DRP. DRP (distribution requirements planning) is the system used to help in positioning and replenishing finished goods inventory in a system.

The primary difference between demand management and demand forecasting is

Demand management is proactive, while forecasting attempts to predict.

The primary difference between demand management and demand forecasting is:

Demand management is proactive, while forecasting attempts to predict.

What is the relationship between demand management and demand forecasting?

Demand management plans are usually an input to demand forecasting

What is the relationship between demand management and demand forecasting?

Demand management plans are usually an input to demand forecasting.

__________ determines how much product a business needs to satisfy all of its customers' demand.

Demand planning

Which of the following statements best describes demand planning?

Demand planning determines how many product a business needs to satisfy all of its customers' demands.

The type and level of assessment of suppliers during the selection process:

Depends upon factors such as the level of spend and type of relationship desired.

16. EOQ inventory models are basically concerned with the timing of orders.

A report that compares known and expected future capacity requirements with projected available capacity is a: A. master production schedule. B. bill of material report. C. inventory status report. D. MRP schedule. E. load report.

If 17 Ps are needed, and no on-hand inventory exists, how many Cs will be needed? A. 8 B. 16 C. 136 D. 204 E. 272

The gross requirements of a given part or component are determined from: A. net requirements + amount on-hand. B. gross requirements of the immediate parent(s). C. planned order releases of the end item. D. net requirements of the end item. E. planned order release of the immediate parent(s).

The multiplication process used by MRP to determine lower level requirements is called: A. time-phasing B. pegging C. netting D. projecting E. exploding

The multiplication process used by MRP to determine lower-level requirements is called: A. time-phasing. B. pegging. C. netting. D. projecting. E. exploding.

When MRP II systems include feedback, they are known as: A. MRP III. B. enterprise resource planning. C. circular MRP. D. feasible MRP. E. closed loop MRP.

Which action can managers take if capacity requirements planning (CRP) indicate one or more work stations are projected to be under loaded or over loaded? A. Shifting some orders to adjacent periods. B. Transferring employees from other areas. C. Scheduling overtime. D. Revise the MPS and MRP. E. All of the choices are options.

17. The average inventory level is inversely related to order size.

Which statement concerning MRP II is false? A. It is basically a computerized system. B. It can handle complex planning and scheduling quickly. C. It involves other functional areas in the production planning process. D. It involves capacity planning. E. It produces a production plan which includes all resources required.

Which of the following possible values of alpha would cause exponential smoothing to respond the most quickly to forecast errors?

E. .15 Larger values for alpha correspond with greater responsiveness.

Which of the following possible values of alpha would cause exponential smoothing to respond the most quickly to forecast errors? A. 0 B. .01 C. .05 D. .10 E. .15

E. .15 Larger values for alpha correspond with greater responsiveness.

If a line is balanced with 90 percent efficiency, the "balance delay" will be: A. 20 percent B. depends on the next operation C. 80 percent D. unknown, since balance delay is not related to efficiency E. 10 percent

E. 10 percent

The president of State University wants to forecast student enrollments for this academic year based on the following historical data What is the forecast for this year using the least squares trend line for these data? A. 18,750 B. 19,500 C. 21,000 D. 22,650 E. 22,800

E. 22,800 Treat 5 years ago as period 0.

The president of State University wants to forecast student enrollments for this academic year based on the following historical data. What is the forecast for this year using the least squares trend line for these data?

E. 22,800 Treat 5 years ago as period 0.

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters): From/TO I II III I - 10 20 II - 10 III - Flows (loads per week: From/TO I II III X - 60 90 Y 40 - 160 Z 110 140 - What is the total flow (loads per week) between department Y and department Z? A. 140 B. 160 C. 200 D. 250 E. 300

E. 300

What is the break-even quantity for the following situation? FC = $1,200 per week VC = $2 per unit Rev = $6 per unit A. 100 B. 200 C. 600 D. 1,200 E. 300

E. 300

11. Which of the following might a company try to do to reduce the total amount of safety stock it holds? A. Implement and use ABC analysis of inventory items. B. Attempt to reduce variation in supplier lead times. C. Implement demand management approaches. D. A and B. E. All of these.

E. All of these.

The goal of value analysis is to find ways of _______. A. I. Reducing the cost of parts and materials B. II. Improving the performance of the product or service C. III. Incorporating multiple cultural values in global system design D. Both I and III E. Both I and II

E. Both I and II In value analysis an attempt is made to reduce the cost and/or improve the performance of the product.

Which of the following is not an approach that companies use to achieve a smooth flow of production? A. line balancing heuristics B. parallel workstations C. dynamic line balancing (Cross train workers) D. mixed model line E. Companies use all of these.

E. Companies use all of these. Any of these is a means to achieve smooth flow.

Which of the following are assumptions of the break-even model? I. Only one product is involved. II. Everything that is produced can be sold. III. The revenue per unit will be the same regardless of volume. A. I only B. I and II only C. II only D. II and III only E. I, II and III

E. I, II and III

E. III and IV only

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is: A. It doubles. B. It is four times its previous amount. C. It is half its previous amount. D. It is about 70 percent of its previous amount. E. It increases by about 40 percent.

E. It increases by about 40 percent.

Which of the following statements about CAD is not true?

E. It is used successfully by all manufacturing companies. Not all manufacturers use CAD.

Which statement concerning MRP II is false?

E. It produces a production plan which includes all resources required.

When considering re-use issues for a given product, an important factor to take into account is that product's _______.

E. None of the above Remanufacturing refers to refurbishing used products.

Product profiling links key product or service requirements to: A. Market conditions B. Order sizes C. Pricing strategies D. Schedule changes E. Process capabilities

E. Process capabilities Product profiling allows firms to match what they should (or must) do with respect to product or service requirements.

__________ is generally used to facilitate an organization strategy that emphasizes low cost.

E. Standardization Standardization is a powerful means of achieving low-cost production.

Which closeness rating reflects the undesirability of having two departments located near each other? A. A B. E C. I D. U E. X

E. X Undesirable

A group of machines including supervisory computer control, automatic material handling, and possibly robots is called: A. computer aided design B. a manufacturing cell C. computer-aided manufacturing D. computer-integrated manufacturing E. a flexible manufacturing system

E. a flexible manufacturing system FMS involve all these things.

Which of the following is not an information requirement for the design of a process layout? A. a list of departments or work centers B. a projection of work flows between the work centers C. the distance between locations D. the cost per unit of distance to move loads E. a list of product cycle times for every product manufactured

E. a list of product cycle times for every product manufactured Cycle times do not enter into the design of process layouts.

Which of these factors would be least likely to affect productivity?

E. advertising Advertising could increase the value of the outputs, but it is less likely to affect productivity than these other factors.

A reason for the importance of capacity decisions is that capacity: A. limits the rate of output possible B. affects operating costs C. is a major determinant of initial costs D. is a long-term commitment of resources E. all of the above

E. all of the above

Which of the following is a factor that affects service capacity planning? A. the need to be near customers B. the inability to store services C. the degree of volatility of demand D. the customer's willingness to wait E. all of the above

E. all of the above

Which of the following is a tactic that helps service capacity management? A. pricing B. promotions C. discounts D. advertising E. all of the above

E. all of the above

Which of the following is essential to consider with respect to managing a process to meet demand?

E. all of the above All of these play a role in determining whether a process can meet demand. (strategy, demand forecasts, capacity, random variability)

An advantage of a U-shaped production line is that it: A. is more compact. B. permits better communication among employees. C. facilitates teamwork among workers. D. increases flexibility of work assignments. E. all of the above

E. all of the above All of these are advantages of U-shaped lines.

Ideas for new or improved designs can come from:

E. all of the above Companies look to many sources for ideas for new or improved designs.

Which of the following is an issue that designers must take into account in product and service design?

E. all of the above Designs must reflect a large number of factors.

Which of these factors would not be subtracted from design capacity when calculating effective capacity? A. personal time B. maintenance C. scrap D. operating hours per day E. all of the above would be subtracted in the calculation

E. all of the above would be subtracted in the calculation

Which of the following is not a type of operations?

E. all the above involve operations All of these involve taking inputs and transforming them.

When MRP II systems include feedback, they are known as:

E. closed loop MRP.

In which type of operations are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment? A. a project B. a job shop C. repetitive production D. batch processing E. continuous production

E. continuous production In continuous production there is no variation in the product or service being produced.

Which of the following is not a key step toward improving productivity?

E. converting bond debt to stock ownership A firm's productivity is independent of its capital structure.

When choosing a forecasting technique, a critical trade-off that must be considered is that between: A. time series and associative. B. seasonality and cyclicality. C. length and duration. D. simplicity and complexity. E. cost and accuracy.

E. cost and accuracy. The trade-off between cost and accuracy is the critical consideration when choosing a forecasting technique.

When choosing a forecasting technique, a critical trade-off that must be considered is that between:

E. cost and accuracy. The trade-off between cost and accuracy is the critical consideration when choosing a forecasting technique.

Which of the following is/are a primary input into capacity, sales, and production planning?

E. demand forecasts Demand forecasts are direct inputs into capacity, sales, and production plans.

The EOQ model is most relevant for which one of the following? A. ordering items with dependent demand B. determination of safety stock C. ordering perishable items D. determining fixed-interval order quantities E. determining fixed order quantities

E. determining fixed order quantities

The term 'standardization' is closely associated with:

E. interchangeability Modular designs depend on standardized parts that are interchangeable.

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to:

E. internal audits. Internal audits have little to do with core value-adding efforts.

A stock or store of goods is called a(n): A. bundler. B. servicer. C. retailer. D. supply chain. E. inventory.

E. inventory.

Which of the following process types would be more likely to be used in the introductory phase of a product's life-cycle? A. continuous B. intermittent C. project D. batch E. job shop

E. job shop Job shop processes are more appropriate for relatively new products.

Operations and sales are the two ________ functions in businesses.

E. line Others are support functions.

Which of the following is not true about process layouts when they are compared to product layouts? A. higher in-process inventories B. lower span of supervision C. lower rates of output D. more involved cost accounting E. lower unit costs

E. lower unit costs Process layouts are not inherently more efficient that product layouts.

A cycle count program will usually require that A items be counted: A. daily. B. once a week. C. monthly. D. quarterly. E. more often than annually.

E. more often than annually.

In MRP, the gross requirements of a given component part are calculated from:

E. planned orders of the immediate parent.

Which term most closely relates to associative forecasting techniques? A. time series data B. expert opinions C. Delphi technique D. consumer survey E. predictor variables

E. predictor variables Associative techniques use predictor variables.

Computer-aided manufacturing (CAM) refers to the use of computers in: A. product design B. decision making C. data analysis D. quality control E. process control

E. process control CAM automates process control.

Which of the following is not a factor that affects productivity?

E. product price These don't lead to fundamental changes in operations.

Which one of the following is not generally a determinant of the reorder point? A. rate of demand B. length of lead time C. lead time variability D. stockout risk E. purchase cost

E. purchase cost

Core competencies in organizations generally do not relate to:

E. sales price. What a firm charges for its outputs is not a core competency. What it can charge, however, is potentially related to a core competency.

Which of the following is not a key factor of competitiveness?

E. size of organization Competitiveness often has nothing to do with organization size.

Production systems with customized outputs typically have relatively:

E. skilled workers Skilled workers are necessary to accommodate the variation inherent in customized outputs.

Which of the following is least likely to be included in order costs? A. processing vendor invoices for payment B. processing purchase order C. inspecting incoming goods for quantity D. taking an inventory to determine how much is needed E. temporary storage of delivered goods

E. temporary storage of delivered goods

Which of the following is not a type of judgmental forecasting? A. executive opinion. B. sales force opinions C. consumer surveys D. the Delphi method E. time series analysis

E. time series analysis Time series analysis is a quantitative approach.

Which of the following is not a type of judgmental forecasting?

E. time series analysis Time series analysis is a quantitative approach.

The introduction of quantity discounts will cause the optimum order quantity to be: A. smaller. B. unchanged. C. greater. D. smaller or unchanged. E. unchanged or greater.

E. unchanged or greater.

The ratio of actual output to design capacity is: A. design capacity B. effective capacity C. actual capacity D. efficiency E. utilization

E. utilization

Software that consolidates all of the business planning systems and data throughout an organization is:

ERP

__________ deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training.

Employee relationship management

Which of the following is NOT one of the product/process design principles associated with lean/just-in-time production?

Encourage use of unique components.

Customer relationship management attempts to:

Ensure the development of strategically appropriate relationships with customers.

__________ are general-purpose firmwide efforts to collect, store, distribute, and apply digital content and knowledge.

Enterprise-wide knowledge management systems

All of following can increase supply chain risk except:

Except: Holding higher levels of inventory of critical materials. Increase sc risk Single sourcing. Using suppliers in Thailand. Using a supplier that is having financial difficulty. Holding higher inventory levels is one way to mitigate supply chain risk.

Benefits of single sourcing include all of the following EXCEPT:

Except: Less supply risk. Benefits Better supplier relationships. Quantity discounts. More consistent quality. Single sourcing increases supply risk.

John Jones is a plant manager. He believes his plant is guilty of "waste of overproduction." Which of the following symptoms might he have observed that led to this belief?

Excess Inventory

Which of the following statements best defines the term exchanges?

Exchanges are independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing.

Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is:

Executive Judgement

Which of the following statements best describes explicit knowledge?

Explicit knowledge is knowledge that can be documented and codified, often stored in information systems, on Web sites, in spreadsheets, or in handbooks and manuals.

aDt + (1-a)Ft

Exponential smoothing forecast formula =

Demand-driven MRP:

Extends planning across the supply chain.

_________ are a project management technique that links the work of the implementation team to that of users at all organizational levels.

External integration tools

10. An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

11. Decoupling operations applies to the railroad industry.

13. The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as 'A' items and low cost items classified as 'C' items.

14. An inventory buffer adds value and lowers cost in all supply chains.

Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors.

FALSE Forecasting for an individual item is more difficult than forecasting for a number of items.

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

FALSE Holding costs are expressed in monetary terms, whether as a set value or as a percentage of the per-unit cost.

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

FALSE If growth is strong, alpha should be large so that the model will catch up more quickly.

Net requirements equal gross requirements minus safety stock.

FALSE If safety stock is required, net requirements will be higher.

The bill of materials contains information on lead times and current inventory position on every component required to produce the end item.

FALSE Inventory records contain this information.

Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions.

FALSE Just as other techniques do, quantitative techniques have limitations.

The lean production philosophy has been slow to be adopted in service industries.

FALSE Lean concepts apply very well in service industries.

MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD.

FALSE MAD is the mean absolute deviation.

MRP II is simply an improved version of MRP that processes faster and can plan for a larger number of end items.

FALSE MRP II takes into account capacity requirements.

MRP really doesn't apply to services since raw material isn't required.

FALSE MRP can be used in services.

MRP, considering inventory position, bills of material, open purchase orders and lead times guarantees a feasible production plan if the inputs to MRP are accurate.

FALSE MRP may lead to an infeasible production plan if capacity requirements are not considered.

As long as a forecast is plus or minus 10%, MRP works well.

FALSE MRP needs accurate forecasts.

A consumer survey is an easy and sure way to obtain accurate input from future customers since most people enjoy participating in surveys.

FALSE Most people do not enjoy participating in surveys.

National productivity is determined by averaging the productivity measures of various companies or industries.

FALSE National productivity is determined by dividing inputs by outputs across a national economy; averaging industry measures would lead to a distorted estimate.

Operations management and marketing are the two functional areas that exist to support activities in other functions such as accounting, finance, IT and human resources.

FALSE Operations management and marketing are supported by these functions.

Operations Management activities will be less important in the future because many firms are becoming service-oriented operations rather than goods producing operations.

FALSE Operations management is just as important for service firms.

In the fixed-order-interval model, the order size is the same for each order.

FALSE Order size varies from order to order in a fixed-order-interval model.

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

FALSE ROP models assume that demand during lead time is composed of a series of independent daily demands.

ROP models indicate to managers the time between orders.

FALSE ROP models indicate when, with regard to on-hand inventory, orders should be placed.

A regenerative MRP system is one that is updated continuously - every time there is a schedule change.

FALSE Regenerative systems are updated periodically.

The gross requirements value for any given component is equal to the net requirements of that component's immediate parent multiplied by the quantity per parent.

FALSE Released order quantities for the parent lead to gross requirements of the child.

Reorder point models are primarily used for dependent-demand items.

FALSE Reorder point models are primarily used for independent-demand items.

Safety stock is held because we anticipate future demand.

FALSE Safety stock is held because we anticipate fluctuations in future demand or in lead time.

Safety stock eliminates all stockouts.

FALSE Safety stock only ensures a given likelihood of stockouts.

A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a sudden change than a smoothing constant value of .3.

FALSE Smaller smoothing constants result in less reactive forecast models.

A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency.

FALSE Subsystem efficiency doesn't necessarily translate into overall efficiency.

The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as A items and low-cost items classified as C items.

FALSE The A-B-C approach classifies inventory according to some measure of importance.

The T in the model TAF = S + T represents the time dimension (which is usually expressed in weeks or months).

FALSE The T represents the trend dimension.

The average inventory level is inversely related to order size.

FALSE The average inventory level is positively related to order size.

The bill of materials indicates how much material will be needed to produce the quantities on a given master production schedule.

FALSE The bill of materials indicates how much material will be needed to produce one unit of the item in question.

"Concurrent engineering" means that at least two engineers are involved in product design at the same time.

FALSE Concurrent engineering means that engineers, marketing, manufacturing and purchasing personnel often are jointly involved in the product design.

Consumers tend to resist purchasing products containing recycled materials.

FALSE Consumers are beginning to respond positively when informed that their purchases contain recycled materials.

Continuous processing is the best way to produce customized output.

FALSE Continuous processing is best for standardized output.

The process of dismantling and inspecting a competitor's product to discover product improvement is called benchmarking.

FALSE Dismantling and inspecting a competitor's product to discover product improvement is called reverse engineering.

Flexible manufacturing systems (FMS) bring the benefits of automation to continuous processes.

FALSE FMS can bring the benefits of flexibility to continuous processes.

The term failure as applied to reliability means that a part or item does not function at all.

FALSE Failure means that the part or item does not function as it should.

Heuristic approaches to line balancing are the only approach that will guarantee an optimal solution.

FALSE Heuristic approaches cannot guarantee an optimal solution.

In cellular manufacturing, machines and equipment are grouped by type (e.g., all grinders are grouped into a cell).

FALSE In cellular layouts, machines and equipment are grouped by the needs of the product family.

Process layouts tend to have low in-process inventories.

FALSE In-process inventories are relatively high in process layouts.

A disadvantage of a product layout can be high in-process inventory costs.

FALSE In-process inventory is low with a product layout.

Information technology refers to competitive data.

FALSE Information technology refers to both data and systems.

A Job-Shop processing system generally requires less skilled workers than a continuous processing system.

FALSE Job shops require greater skill on the part of their workers.

Life-cycle assessment involves incorporating where the product or service is in its life-cycle into system-design decision-making.

FALSE Life-cycle assessment involves assessing the environmental impact of a product or service as it goes through its useful life.

Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials.

FALSE Materials cost must be considered in services as well.

The use of models will guarantee the best possible decisions.

FALSE Models are useful, but their use does not guarantee the best decisions.

Modular design increases costs of purchasing and controlling inventory compared to non-modular.

FALSE Modular designs make inventory management easier and cheaper.

Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used.

FALSE Most systems involve a blend of goods and services.

Goods producing organizations are not involved in service activities.

FALSE Most systems involve a blend of goods and services.

The design of service layouts, e.g., warehouse and supermarket layouts, focuses on cost minimization and product flow.

FALSE Often these are low-priority considerations.

Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services.

FALSE Operation managers are not responsible for promoting goods/services.

Most people encounter operations only in profit-making organizations.

FALSE Operations are also relevant to not-for-profit organizations such as the Red Cross.

Operations, marketing, and finance function independently of each other in most organizations.

FALSE Operations, marketing and finance are naturally dependent upon one another.

Product layouts can more easily adapt to variations in product requirements than process layouts can.

FALSE Process layouts are more adaptable.

Assembly lines achieved productivity but at the expense of standard of living.

FALSE Productivity and standard of living go hand in hand.

The quality function deployment (QFD) matrices are often referred to as the "House of Quality" because, when completed, they "house" all of the customer's quality requirements.

FALSE QFD matrices link customer requirements with other product/process design elements.

Quality function deployment (QFD) is based on a set of standards which relate customer requirements to company capabilities.

FALSE QFD relates customer requirements to product designs and the capabilities necessary to carry these designs out.

"Quality Function Deployment" is a structured approach that guarantees that the highest quality product or service will be designed.

FALSE Quality Function Deployment ensures that the voice of the customer is integrated into the product or service design question.

Repetitive processing systems usually produce goods specifically for customer orders rather than for inventory.

FALSE Repetitive processing systems usually produce goods for inventory.

Robust design describes a product that will perform satisfactorily so long as it is used in a very narrow range of conditions.

FALSE Robust designs perform satisfactorily across a wide range of conditions.

To save money, it is essential that designers revise the production capabilities to meet the requirements of the new products.

FALSE Saving money requires designers to ensure that new products can be produced using existing production capabilities.

The focus of an aggregate production plan, in general, is on all of the following EXCEPT:

Facilities and capital equipment rather than labor and inventory. Focus The intermediate-term future rather than the very short-term future. Product lines rather than specific items. Inventory levels rather than new plants.

The focus of an aggregate production plan, in general, is on all of the following EXCEPT: Multiple Choice The intermediate-term future. Product lines. Facilities and capital equipment. Inventory levels

Facilities and capital equipment.

A master production schedule (MPS) is the principal output developed from MRP systems

False

A net-change MRP is one that involves periodically updating all aspects of an MRP system.

False

A phantom bill is a special type of bill of material that is a combination of the bill of materials for a number of subassemblies.

False

An assembly-time chart indicates gross and net requirements

False

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations. True or False?

False

Cost and competitive priorities reduce effective capacities. True or False?

False

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

False

Gross requirements for components are equal to the gross requirements of their immediate parent multiplied by the quantity per parent

False

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs. True or False?

False

In cost-volume analysis, costs that vary directly with volume of output are referred to as fixed costs because they are a fixed percentage of output levels. True or False?

False

Increasing capacity just before a bottleneck operation will improve the output of the process. True or False?

False

Independent demand tends to be more sporadic or "lumpy" than dependent demand

False

Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods

False

MRP usually involves inventory items that have independent demand.

False

Outsourcing some production is a means of supporting a constraint. True or False?

False

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure. True or False?

False

The bill of material contains information on lead times

False

The emergence of ERP systems was primarily because they are less complex to use than MRP systems

False

The goal of waiting-line management is to eliminate customer waiting lines.

False

The greater the gap between current and desired capacity, the greater the opportunity for profit. True or False?

False

The master production schedule (MPS) states which product components are to be produced

False

The part-period method for lot sizing breaks the time periods into smaller units of time to create daily or hourly production schedules

False

The probability of occurrence of risk events is lower near the beginning of a project and higher near the end of the project since very few activities remain

False

The three basic inputs of MRP are: 1) the bill of material; 2) inventory on hand, open orders and lead times; and 3) planned order releases.

False

Typically the total cost of ownership (TCO) of ERP systems is clearly detailed and certain at the time a company makes the investment to acquire a system

False

Utilization is defined as the ratio of effective capacity to design capacity. True or False?

False

Which of the following best describes group decision-support systems (GDSS)?

Group decision-support systems (GDSS) are interactive computer-based systems that facilitate the solution to unstructured problems by a set of decision makers working together as a group.

One function of warehouses or distribution centers is "consolidation." This means that the warehouse/distribution center is used to:

Group small inbound loads into larger outbound loads.

An end item A is made by assembling 4 of component B and 1 of component C. Component B is made from 2 of part D and 4 of part E. Within the bill of materials, component B is considered to be

Level 1.

Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

A company's supplier for a critical part was selected based on the lowest purchase price. Six months later, the company's warranty costs began to rises because of defective parts. The company has experienced:

Higher total costs of ownership.

In examining the data below, the manager exclaimed that he was very happy to see no bias in the forecasts. How would you respond to the manager?

I'm sorry, but there appears to be slight positive bias

Which of the following is absolutely necessary for successful implementation and operation of MRP? (I) accurate inventory records (II) accurate demand forecasts (III) accurate holding and backordering costs (IV) accurate bills of materials A. I, II, and IV only B. I, III, and IV only C. I, II, and III only D. I and II only E. I, II, III, and IV

I, II, & IV only

MRP can apply to services, especially when it is focused on: (I) work-in-process inventory. (II) finished goods inventory. (III) service components. (IV) materials that are part of the service process. A. II and IV only B. I and III only C. I, II, and IV only D. I, III, and IV only E. III and IV only

III & IV only

Which of the following two areas does lean/just-in-time production focus its attention on? I. Cost II. Quality III. Variance IV. Waste

III and IV

__________ refers to all organizational activities working toward the adoption, management, and routinization of an innovation, such as a new information system.

Implementation

Which of the following is NOT a role of inventory? Enabling geographical specialization Balancing supply and demand Buffering uncertainty in supply or demand Increasing quality of finished good

Increasing quality of finished goods

Which of the following contains a statement of corporate goals and specifies how information technology will support the attainment of those goals?

Information systems plan

Which of the following statements about information technology and management decision making is true?

Information technology provides new tools for managers to carry out both their traditional and newer roles, enabling them to monitor, plan, and forecast with more precision and speed than ever before.

Which of the following would you NOT expect to find in a company attempting to implement lean/just-in-time production? -Frequent changeovers from one product to another -Inspections after each piece is produced -Emphasis on flexible, cross-trained workers -Emphasis on preventive maintenance for equipment

Inspections after each piece is produced

__________ cannot be immediately quantified but may provide quantifiable benefits in the future.

Intangible benefits

Which of the following statements is true of a geosocial service?

It can tell a person where friends are meeting.

Which of the following is NOT true with respect to an RFQ or RFP?

It is used to determine weights in supplier scorecards. Weights in supplier scorecards are determined based on the importance to the organization. An RFQ or RFP is used to communicate the purchase needs to suppliers usually electronically.

Applying lean systems to supply chain relationships has which of the following risks?

It makes the supply chain more vulnerable to performance breakdowns.

Which of the following best describes knowledge management?

Knowledge management refers to the set of business processes developed in an organization to create, store, transfer, and apply knowledge.

Which of the following provide an online directory of corporate experts and their profiles, with details about their job experience, projects, publications, and educational degree?

Knowledge network systems

__________ are specialized systems built for engineers, scientists, and other knowledge workers charged with discovering and creating new knowledge for a company.

Knowledge work systems

Which of the following best defines a knowledge work system?

Knowledge work systems (KWS) are specialized systems built for engineers, scientists, and other knowledge workers charged with discovering and creating new knowledge for a company.

Benefits of single sourcing include all of the following EXCEPT:

Less supply risk.

Which of the following statements best describes structured knowledge?

Structured knowledge is explicit knowledge that exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors.

__________ refers to techniques that are carefully drawn up, step by step, with each step building on a previous one.

Structured methodology

A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the purchasing company has begun: Spend analysis. Supplier certification. Process simplification. Time reduction analysis.

Supplier certification

The capability to resist and recover from supply chain disruptions is:

Supply chain resilience. Supply chain resilience is the capability to resist and recover from supply chain disruptions.

In its own country, a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company. This is an example of: Supply risk. Sustainability. Insourcing. Strategic sourcing.

Supply risk

In its own country, a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company. This is an example of:

Supply risk.

Constant changing of the master schedule and the resulting changes in the requirements for components is referred to as: Bad planning. Master schedule dynamics. System nervousness. MRP failure.

System nervousness. Changes in the MPS during the planning horizon can cause nervousness, which is inconsistencies in the MRP plan

Conducting a feasibility study and establishing the information requirements are parts of which stage of the systems development process?

Systems analysis

12. Interest, insurance, and opportunity costs are all associated with holding costs.

18. The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

19. The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable.

20. Carrying cost is a function of order size; the larger the order, the higher the inventory carrying cost.

29. The rate of demand is an important factor in determining the ROP.

30. The inventory value of the supply chain exceeds the inventory value of the organization's work in process inventory.

32. Variability in demand and/or lead time can be compensated for by safety stock.

ERP began in manufacturing organizations but has spread into service organizations.

TRUE

Lot-for-lot ordering in MRP eliminates the holding costs for parts that are carried over to other periods.

TRUE

Lumpy demand for components results primarily from the periodic scheduling of batch production.

TRUE

MRP II did not replace or improve the basic MRP.

TRUE

MRP is used within most MRP II and ERP systems.

TRUE

MRP works best if the inventory items have dependent demand.

TRUE

One of the primary output reports of MRP concerns changes to planned orders.

TRUE

One reason that accurate bills of material are important is that errors at one level become magnified at lower levels because of the multiplication process used by MRP.

TRUE

Project management approaches can help in a conversion to an ERP system.

TRUE

Safety time is sometimes used in MRP rather than safety stock quantities.

TRUE

The master production schedule states which end items are to be produced, in addition to when and how many.

TRUE

The master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items.

TRUE

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

TRUE

An advantage of trend-adjusted exponential smoothing over the linear trend equation is its ability to adjust over time to changes in the trend.

TRUE A linear trend equation assumes a constant trend; trend-adjusted smoothing allows for changes in the underlying trend.

Productivity is directly related to the ability of an organization to compete.

TRUE A more productive organization is a more competitive organization.

Bias exists when forecasts tend to be greater or less than the actual values of time series.

TRUE A tendency in one direction is defined as bias.

Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom made parts.

TRUE After the Industrial Revolution, more standardized approaches became common.

Annual ordering cost is inversely related to order size.

TRUE Annual ordering cost decreases as order size increases.

Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered.

TRUE As carrying costs increase, the optimal order quantity decreases.

The calculation of safety stock requires knowledge of demand and lead time variability.

TRUE Both of these play a role in the calculation of safety stock.

Forecasts help managers both to plan the system itself and to provide valuable information for using the system.

TRUE Both planning and use are shaped by forecasts.

Forecasts of future demand are used by operations people to plan capacity.

TRUE Capacity decisions are made for the future and therefore depend on forecasts.

One of the primary output reports of MRP concerns changes to planned orders.

TRUE Changes to planned orders can be outputs from MRP systems.

DVD recorders would be an example of independent-demand items.

TRUE Components of the DVD recorders would be dependent-demand items.

One important use of inventories in manufacturing is to decouple operations through the use of work-in-process inventories.

TRUE Decoupling operations is an important use of inventories.

Removing the seasonal component from a data series (deseasonalizing) can be accomplished by dividing each data point by its appropriate seasonal relative.

TRUE Deseasonalized data points have been adjusted for seasonal influences.

Project Management approaches can help in a conversion to an ERP system.

TRUE ERP conversions can be complex projects.

ERP automates the tasks involved in performing a business process, such as order fulfillment and financial reporting.

TRUE ERP extends beyond purchasing and materials management.

ERP implementation requires support and a direct mandate from the CEO because it impacts so many different functional areas.

TRUE ERP implementation is an organization-wide initiative.

The fixed-order-interval model requires a larger amount of safety stock than the ROP model for the same risk of a stockout.

TRUE Fixed order intervals typically carry more safety stock.

Among Ford's many contributions was the introduction of mass production, using the concept of interchangeable parts and division of labor.

TRUE Ford made mass production a practical success.

Forecasting techniques generally assume an existing causal system that will continue to exist in the future.

TRUE Forecasts depend on the rules of the game remaining reasonably constant.

When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill.

TRUE Greater loss of goodwill would equate with a higher shortage cost.

Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.

TRUE If an organization can react more quickly, its forecasts need not be so long term.

In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.

TRUE If demand exceeds the stocking level, a stockout has occurred.

The inventory records contain information on the status of each item by time period.

TRUE Inventory records also contain information on lead times and current inventory position.

A tracking signal focuses on the ratio of cumulative forecast error to the corresponding value of MAD.

TRUE Large absolute values of the tracking signal suggest a fundamental change in the forecast model's performance.

Carrying cost is a function of order size; the larger the order, the higher the inventory carrying cost.

TRUE Larger order quantities lead to higher inventory carrying cost.

Lean production systems use a highly skilled work force and flexible equipment.

TRUE Lean depends on a skilled workforce.

Lean production systems incorporate the advantages of both mass production and craft production.

TRUE Lean production blends the best of both worlds.

Load reports show capacity requirements for departments or work centers which may be more or less than the capacity available in that work center.

TRUE Load reports facilitate the formulation of feasible production schedules.

The shorter the forecast period, the more accurately the forecasts tend to track what actually happens.

TRUE Long-term forecasting is much more difficult to do accurately.

Lot-for-lot ordering in MRP eliminates the holding costs for parts that are carried over to other periods.

TRUE Lot-for-lot ordering minimizes holding costs.

MRP is used within most MRP II and ERP systems.

TRUE MRP II and ERP systems incorporate MRP.

Reducing consumer choices makes service more efficient.

TRUE Efficiency comes from the standardization that results from reduced consumer choices.

Initially, a master production schedule - the output from MRP - may not represent a feasible schedule.

TRUE Management must make more detailed capacity requirements planning to determine whether these more specific capacity requirements can be met and some adjustments in the master production schedule may be required.

Many operations management decisions can be described as tradeoffs.

TRUE Managing tradeoffs is the essence of operations management.

As an abstraction of reality, a model is a simplified version of a real phenomenon.

TRUE Models are valuable abstractions and simplifications of real, complex phenomena.

The best forecast is not necessarily the most accurate.

TRUE More accuracy often comes at too high a cost to be worthwhile.

The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.

TRUE Often the naive forecast performs reasonably well when compared to more complex techniques.

Trend-adjusted exponential smoothing requires selection of two smoothing constants.

TRUE One is for the trend and one is for the random error.

The basic EOQ model ignores the purchasing cost.

TRUE Only if quantity discounts are offered does purchasing cost enter into EOQ analysis.

ERP began in manufacturing organizations but has spread into service organizations.

TRUE Over time ERP has spread into a wide variety of organizations.

The use of a control chart assumes that errors are normally distributed about a mean of zero.

TRUE Over time, a forecast model's tracking signal should fluctuate randomly about a mean of zero.

If a pattern appears when a dependent variable is plotted against time, one should use time series analysis instead of regression analysis.

TRUE Patterns reflect influences such as trends or seasonality that go against regression analysis assumptions.

The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework.

TRUE Quantitative techniques have limitations that must be considered.

The two basic issues in inventory are how much to order and when to order.

TRUE Quantity and timing are the two basic issues in inventory management.

When to order can be calculated by the ROP and expressed as a quantity.

TRUE ROP models indicate when, with regard to on-hand inventory, orders should be placed.

Back flushing takes place after the production has been completed.

TRUE Records are updated based on end-item production.

Curvilinear and multiple regression procedures permit us to extend associative models to relationships that are nonlinear or involve more than one predictor variable.

TRUE Regression analysis can be used in a variety of settings.

Variability in demand and/or lead time can be compensated for by safety stock.

TRUE Safety stock can be used to accommodate these.

A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.

TRUE Seasonal relatives are used when the seasonal effect is multiplicative rather than additive.

One reason that accurate bills of material are important is that errors at one level become magnified at lower levels because of the multiplication process used by MRP.

TRUE Small higher-level errors can be magnified into larger lower-level errors.

An example of a tactical operations management decision is determining employment levels.

TRUE Staffing is an ongoing, tactical decision.

A modern firm has two supply chain considerations - external links with suppliers and customers, and an internal network of flows to and between the operations function itself.

TRUE Supply chain considerations are at play both in and beyond the modern firm.

Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations Movement, which emphasized the importance of the human element in job design.

TRUE The Hawthorne Experiments were the beginning of the Human Relations Movement.

The sample standard deviation of forecast error is equal to the square root of MSE.

TRUE The MSE is equal to the sample variance of the forecast error.

Correlation measures the strength and direction of a relationship between variables.

TRUE The association between two variations is summarized in the correlation coefficient.

A bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item.

TRUE The bill of materials indicates how much material will be needed to produce one unit of the item in question.

The rate of demand is an important factor in determining the ROP.

TRUE The demand rate multiplied by the lead time is a major part of the ROP.

The minimum number of workstations for a production line is determined in part by the desired output rate.

TRUE The desired output rate is used to find the required cycle time.

Exponential smoothing is a form of weighted averaging.

TRUE The most recent period is given the most weight, but prior periods also factor in.

In order to update a moving average forecast, the values of each data point in the average must be known.

TRUE The moving average cannot be updated until the most recent value is known.

The single-period model can be very helpful in determining how much to order.

TRUE The single-period model helps determine how many to order.

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

TRUE The total cost function is relatively flat, so rounding costs little.

A single-phase queuing system is one which has a single:

operation

The inventory value of the supply chain exceeds the inventory value of the organization's work-in-process inventory.

TRUE There can be raw materials and finished goods inventory at the organization. Other organizations in the supply chain will have inventories, too.

The master production schedule states which end items are to be produced, in addition to when and how many.

TRUE These are critical inputs into MRP.

Interest, insurance, and opportunity costs are all associated with holding costs.

TRUE These are holding costs

The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

TRUE These are inversely related.

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

TRUE These are the essential facets of inventory control.

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: the timing and the size of orders.

TRUE These are the fundamental decisions regarding inventory control.

The master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items.

TRUE This ensures that materials plans can be adequately formulated.

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

TRUE This is the overall objective of inventory management.

The total cost curve is relatively flat near the EOQ.

TRUE Thus approximating the EOQ can be a very good solution.

In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naive forecast would yield.

TRUE With alpha equal to 1 we are using a naive forecasting method.

Services often don't fit simple yield measurements.

TRUE Comparing one service output to another is difficult to do accurately.

The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisions.

TRUE Mission is at the highest level of the hierarchy, while operational decisions are at the lowest.

A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly.

TRUE Service quality is a powerful tool for improving profitability.

A mission statement should provide a guide for the formulation of strategies for the organization.

TRUE Strategy-making is constrained by the mission statement.

Intermittent processing can take the form of batch processing or a job shop.

TRUE A job shop is a batch processor with a standard batch size of one.

Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations.

TRUE A nation is often only as competitive as its companies.

A service blueprint is quite similar to an architectural drawing.

TRUE A service blueprint shows the basic customer and service actions involved in a service operation.

Reliability can be improved by the use of backup components.

TRUE Adding a backup component is often cheaper than increasing the reliability of a given component.

One approach to extending a product's life cycle is to promote alternate uses of the product.

TRUE Alternate uses extend product life cycles.

Applied research has the objective of achieving commercial applications for new ideas.

TRUE Applied research is aimed at commercializing basic research.

Poor layouts are found in both manufacturing and service organizations.

TRUE Both manufacturers and service firms benefit from improved layouts.

Group technology is closely connected to cellular manufacturing.

TRUE Both require a systematic analysis of parts to identify the part families.

A major benefit of Computer Aided Design (CAD) is the increased productivity of designers.

TRUE CAD tends to greatly increase designers' productivity.

"Concurrent engineering" brings people concerned with manufacturing into the design phase earlier than in the "over-the-wall" approach.

TRUE Concurrent engineering people concerned with manufacturing are actively engaged in the design phase.

As a general rule, continuous processing systems produce products for inventory rather than for customer order.

TRUE Continuous processing systems tend to be used in make-to-stock scenarios.

Continuous production has been a significant factor underpinning the U.S. standard of living over the last century.

TRUE Continuous production has led to substantial productivity gains.

Service involves a much higher degree of customer contact than manufacturing.

TRUE Customer contact tends to be much higher in services.

The value of outputs is measured by the prices customers are willing to pay for goods or services.

TRUE Customers' willingness to pay for goods or services sets the value of these outputs.

Cycle time is the maximum time allowed for each workstation to complete its work on each unit.

TRUE Cycle time paces the production line.

Process layouts feature departments or other functional groupings of personnel or equipment.

TRUE Departmental or functional grouping is an example of process layout.

"Design for production" takes into account the capabilities of the organization to produce or deliver a given product or service.

TRUE Design for production is important to ensure that product or service design decisions are feasible.

E-commerce refers to the use of electronic technology to facilitate business transactions.

true

The goal of life-cycle assessment is to incorporate the environmental impact of products or services into product-design or service-design decision-making.

TRUE Life-cycle assessment involves assessing the environmental impact of a product or service as it goes through its useful life.

Product failures can be easier to remedy with modular design.

TRUE Modular designs make it easy to change only portions of the design.

Applied research is the major R & D effort of business organizations because of the desire for commercial applications.

TRUE Most business organizations focus on applied rather than basic research.

Numerically controlled (N/C) machine and some robots are applications of programmable automation.

TRUE N/C machines and robots can be used in flexible manufacturing systems (FMS).

People who work in the field of operations should have skills that include both knowledge and people skills.

TRUE Operations management requires a blend of knowledge and people skills.

None of the approaches to line balancing, manual or computerized, guarantees an optimal solution.

TRUE Optimal solutions cannot be guaranteed through the use of heuristics.

A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts.

TRUE Optimizing the performance of individual subsystems does not guarantee optimal performance from the overall system.

Process layouts allow greater flexibility in processing than product layouts.

TRUE Process layouts are more flexible.

A possible disadvantage of a product layout is an inflexible system.

TRUE Product layouts are inherently inflexible.

Product liability means that a manufacturer is liable for any injuries and damages caused by a faulty product because of poor workmanship or design.

TRUE Product liability is a serious issue for manufacturers.

Research and development (R&D) refers to organized efforts that are directed toward increasing scientific knowledge and product (or process) innovation.

TRUE Product or process innovations often result from deliberate R&D programs.

Re-manufacturing refers to removing some of the components of old products and reusing them in new products.

TRUE Re-manufacturing is a way of increasing sustainability.

Reliability can be defined in terms of a particular point in time or in terms of length of service.

TRUE Reliable designs can be counted on to work over time.

The process of dismantling and inspecting a competitor's product to discover improvement is called reverse engineering.

TRUE Reverse engineering is a legitimate means of evaluating the competitive landscape.

Service often requires greater labor content, whereas manufacturing is more capital intensive.

TRUE Service operations tend to be more labor-intensive than manufacturing.

Standardization refers to the extent to which there is absence of variety in a product, service, or process.

TRUE Standardization reduces variety and leads to greater efficiency.

For a production line, daily capacity can be determined by dividing the daily operating time by the line's cycle time.

TRUE The line's cycle time represents the time between units. Thus, dividing the time available by the cycle time gives the daily capacity.

Service layouts must be visually pleasing as well as functional.

TRUE The service layout is often perceived by the customer.

One motivation for an organization to redesign its product or service is to avoid the alternative of downsizing the organization.

TRUE The threat of downsizing often spurs product or service redesign.

Delayed differentiation and modular design are tactics for mass customization.

TRUE These allow variety without giving up too much in the way of standardization.

An advantage of a U-shaped production line is that it facilitates teamwork and flexibility in work assignments.

TRUE These are key factors in favor of U-shaped layouts.

Among the benefits claimed for cellular manufacturing are less material handling and reduced setup time.

TRUE These are lower in cellular manufacturing.

Mismatches between operational capabilities and market demand can have a negative impact on an organization

TRUE These can lead to changes in processes.

Product layouts involve high utilization of labor and equipment.

TRUE They're used in high volume, standardized operations.

The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements.

TRUE This is why it is called line balancing.

Which is true of a net-change system?

The basic production plan is modified to reflect changes as they occur

A company has decided to outsource the production of key components for its main product to suppliers. What affect will this have on the product's bill of materials?

The bill of materials will be flatter.

Use logic similar to the logic found in MRP. Consolidate all business planning systems and data throughout an organization. Integrate materials and capacity planning into one system. A and C All of these.

Use logic similar to the logic found in MRP. Integrate materials and capacity planning into one system. (A and C) APS does not consolidate all planning (ERP does that). APS does use logic similar to MRP and integrates materials and capacity planning.

Distribution requirements planning:

Uses logic similar to MRP, beginning at the point closes to the customer.

Distribution requirements planning:

Uses logic similar to MRP, beginning at the point closes to the customer. DRP uses logic similar to MRP to create gross requirements beginning at retailers or the point closest to consumers.

A primary reason for using global suppliers is to:

Work with the same suppliers in many different regions of the world. When expanding globally, many companies want their suppliers to be able to expand with them.

Which of these items would be most likely to have dependent demand?

Xbox batteries; Xbox batteries would only be needed if Xbox consoles were being produced.

Every year around mid May, the Grand Hotel on Mackinac Island runs a special to coincide with the Lilac Festival. This special offers visitors a three day stay (3 days/2 nights) combined with all meals and a guided tour of the various Lilac displays. Which of the following terms best captures this program?

Yield Management

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true? Multiple Choice Zanda will have higher investment in plant and equipment. Zanda will have higher hiring and firing costs. Zanda will have higher inventory carrying costs. Zanda will have higher overtime costs.

Zanda will have higher inventory carrying costs.

The ultimate goal of JIT is:

a balanced rapid flow

Integrating the information streams produced by a firm into a single, coherent enterprise-wide set of data, and then using modeling, statistical analysis tools, and data mining tools to make sense out of all these data so that managers can make better decisions and better plans describes the functions of __________.

business intellingence (BI) and business analytics (BA)

Tacit knowledge refers to _________.

knowledge that encompasses the insights, judgment, creative processes, and wisdom that come from learning and long experience in a field, and from many trials and errors

Which of the following is not usually necessary in order to have an effective MRP system?

lot-for-lot ordering;; MRP does not depend on lot-for-lot ordering.

Which of the following lot sizing methods does not attempt to balance ordering (or setup) and holding costs?

lot-for-lot; Lot-for-lot does not attempt to balance these costs.

The implementation stage of the decision-making process involves __________.

making the chosen alternative work and continuing to monitor how well the solution is working

A recent effort to expand the scope of production resource planning by involving other functional areas in the planning process has been:

manufacturing resources planning;

A computer-based information system designed to handle ordering and scheduling of dependent-demand inventories is:

material requirements planning (MRP); MRP is targeted toward dependent-demand inventories.

There is a very high failure rate among projects involving __________.

mergers and acquisitions

For JIT production it is important to

minimize waiting time

avoidance

minimizing the number or items returned

mms

multiple servers exponential

Single Phase, single channel

m|m|1

Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following?

net requirements; Net requirements would exactly equal planned releases.

An MRP system whose records are updated continuously is referred to as a(n):

net-change system; Net-change systems are updated as transactions occur.

Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, 60 units in week 5, If a fixed-period, 2-period lot-sizing method is used, what will be the qty. of the first planned receipt? A. 60 units B. 120 units C. 180 units D. cannot be determined e. none of the choices

none of the choices

channel

number o channels per system (how many lines)

part 2

In MRP, the gross requirements of a given component part are calculated from:

planned orders of the immediate parent.; Planned orders for parents drive gross requirements for children.

Which one of the following is not an input in an MRP system? A. planned-order schedules B. bill of materials C. master production schedule D. inventory records

planned-order schedules

A(n) __________ is a planned series of related activities for achieving a specific business objective.

project

The level of __________ rises if the project team and the information system staff lack the required technical expertise.

project

External integration tools are a __________.

project management technique that links the work of the implementation team to that of users at all organizational levels

Learning management systems __________.

provide tools for the management, delivery, tracking, and assessment of various types of employee learning and training

61. Which of the following interactions with vendors would potentially lead to inventory reductions?

reduced lead times

Group technology may be used in lean systems to facilitate

reduction of set up and cost time

Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called:

regenerative; Regenerative systems are updated periodically.

If a tangible good or service performs the promised function dependably, we say that it has high: -Durability. -Reliability. -Perceived quality. -Conformance.

reliability

A production kanban authorizes a worker to

replenish an empty bin

Linear regression seeks to minimize the sum of the squared errors between the actual values or demand and the values of demand predicted by the straight line.

true

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time?

safety time; Safety time provides protection against the effects of lead time variation.

A __________ assigns weights to various features of a system and then calculates the weighted totals.

scoring model

gatekeeping

screening out products that cannot be used

Inventory

stock or store of goods

Logistics

the movement of materials or products from one entity to another

Supply Chain

the sequence of events to make a product

System documentation showing each level of design, the relationship among levels, and the overall place in the design structure is called __________.

the structure chart

p = lamda/smu

the utilization factor or the average fraction of time that a server is busy serving customers

last value forecasting method

this forecasting method ignores all data points in a time series except the last one.

average forecasting method

this forecasting method uses the mean of all data points as the forecast

seasonal factor

this measures for any period of a year (a quarter, a month, etc.) measures how that period compares to the overall average for an entire year. = (Average for the period) / (Overall average)

mean absolute deviation

this measures the average forecasting error.

exponential smoothing with trend method

this method adjusts exponential smoothing by also directly considering any current upward or downward trend in sales.

In an MRP master schedule, the planning horizon is often separated into a series of time periods called: A. pegging. B. lead times. C. stacked lead times. D. time buckets. E. firm, fixed, and frozen.

time buckets.

In an MRP master schedule, the planning horizon is often separated into a series of times periods called:

time buckets; Time buckets are discrete time periods.

Inventory Control

to achieve a satisfactory level of customer service while keeping inventory costs within reasonable bounds

A supporting goal of JIT is:

to eliminate disruptions

One of the supporting goals of JIT is:

to eliminate waste

7 resources to save waste

transportation motion waiting over-processing overproduction defect inventory

Decentralized purchasing can usually offer quicker response than centralized purchasing.

true

Demand planning is the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm's operational and financial goals.

true

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