Supply Chain Management Exam 1 Study Guide

The hierarchical planning process that translates the annual business plan, marketing plans, and demand forecasts into a production plan for a product family in a plant or facility is known as?

Aggregate Production Plan (APP)

What is the name of the engineering document that shows all component parts and materials which make up the final product?

Bill of Material (BOM)

Successful modern supply chain management typically includes the practice of?

Collaborating and sharing information between supply chain partners

The inventory control tool that does not require direct line of sight to read the tag on a product(s), is known as

Correct answer: Radio Frequency Identification

When creating a quantitative forecast, if you detect a pattern of demand data that shows a wavelike pattern that last longer than 1 year and can extend over multiple years. This is known as what type of variation?

Cyclical Variation

Material Requirements Planning (MRP) is used to?

Determine what materials you need to make the finished product and when to order them

T or F: Logistics is another name for transportation.

False

Which of the following is NOT one of the basic types of forecasting

Force Field Analysis

Which of the following forecasting methodologies is considered a qualitative forecasting technique?

Historical Analogy

The time it takes to process and prepare material, produce the product, and transport it to the customer, is known as the

Lead Time

The business model that consists of producing finished products on the basis of anticipated demand is?

Make-to-Stock

The detailed plan that shows the exact end items (i.e., finished products) to be produced in a specific time frame is known as what?

Master Production Schedule (MPS)

As the supply chain continues to evolve, it's critical for companies to . . . ?

Outsource their non-core competencies to trading partners that they can trust

Which forecasting technique uses mathematical models and historical data to make forecasts?

Quantitative

If a supply chain is made up of the following companies, who is considered the second-tier supplier of the Manufacturer? Raw Material Supplier ==> Intermediate Supplier ==> Manufacturer ==> Wholesale Customer ==> Retail Customer

Raw Material Supplier

What part of supply chain management deals with the process of moving goods specifically from the point of consumption back to the point of origin for repair, reclamation, remanufacture, recycling, or disposal?

Reverse Logistics

A type of inventory system in which inventory is only ordered for a one-time stocking is known as?

Single Period Inventory Model

Why would a company want to use ABC analysis when managing their inventory?

So they can focus their limited resources on the items that have the highest inventory value

Which of the following inventory types is characterized as "inventory used for a very specific purpose or future event, and for a defined period of time"?

Strategic Stock

Supply chain management was invented by the auto manufacturing industry

Supply chain management was invented by the auto manufacturing industry

Which of the following is NOT an example of an ordering cost for products purchased from a supplier?

The opportunity cost of not ordering from a least cost supplier

Which one of the following is NOT a function of inventory (i.e., NOT a reason to hold inventory)?

To increase cash flow

Which one of the following would be considered an inventory ordering cost?

Transportation costs

T or F: Companies that adjust the production rate and capacity to exactly match demand by increasing or decreasing labor, materials, or necessary resources, is using the Chase Production Strategy

True

T or F: Forecasts generally become less accurate the farther out into the future that you forecast.

True

T or F: It was intense global competition that led manufactures to adopt Supply Chain Management (SCM) and other practices such as Just-in-Time (JIT)

True

T or F: Just-in-Time is a philosophy of manufacturing based on the planned elimination of all waste and continuous productivity improvement.

True

T or F: Sales and Operations Planning (S&OP) is a process that brings all the demand and supply plans for the business (sales, marketing, development, production, sourcing, and finance) together to provide management with the ability to strategically direct the business to achieve a competitive advantage.

True

T or F: The Qualitative forecasting method is based on opinion & intuition

True

T or F: The key disadvantages of the Material Requirements Planning (MRP) system include; loss of visibility, and the fact that MRP ignores capacity and shop floor conditions. Correct answer:

True

T or F: The lowest inventory level at which a new order must be placed to avoid a stockout is known as the Reorder Point

True

T or F: The weighted moving average forecasting model uses a weighting scheme to modify the effects of individual data points. This is its major advantage over the simple moving average model.

True

T or F: To determine the Reorder Point, calculate the demand during lead time.

True

Inventory costs which are dependent on the output quantity are called?

Variable Costs

T or F: Dependent Demand is demand for an item that is unrelated to the demand for other items, such as a finished product, a spare part, or a service part.

False

T or F: If you choose to pick your desired Enterprise Resource Planning (ERP) applications from the top vendor of each individual application, you are using the single integrator approach to selecting your ERP system.

False

T or F: Mean Absolute Deviation (MAD) is a measure of forecast bias. MAD indicates the tendency of a forecast to be consistently higher or lower than actual demand.

False

T or F: The Chase Production Strategy relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern.

False

T or F: The Supply Chain Capability Model designed to minimize cost is known as the Responsive model.

False