Business Quizzes Final Review
One classic type of negotiation strategy is the market-based price model. True False
True
One function of inventory is to take advantage of quantity discounts. True False
True
True or False: Location decisions are based on many things, including costs, revenues, incentives, attitudes, intangibles, and ethical considerations.
True
True or False: The assembly line is a classic example of a repetitive process
True
True or False:One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.
True
Harley Davidson: utilizes job shops to make each of its modules. uses a large number of modules to build a small number of different bikes. uses work cells to feed its assembly line. uses product focused manufacturing. All of these are true.
Uses work cells to feed its assembly line
Arnold Palmer Hospital uses which focus? product process repetitive mass customization A and D
process
Which of the following is NOT among the eight determinants of revenue and volume for a service firm? shipment cost of finished goods competition in the area quality of management purchasing power of the customer-drawing area uniqueness of the firm's and the competitors' locations
shipment cost of finished goods
In the consumer packaged goods industry, the benchmark firms tend to have ________. long order fulfillment lead time low order fill rate short cash-to-cash cycle time low service levels high inventory days of supply
short cash-to-cash cycle time
Product-focused processes: are processes that accommodate a variety of products or customer groups. apply only to service firms, not to manufacturers. are profitable because customers demand flexibility, not specialization. tend to have long, continuous production runs. allow more customization, but are not very efficient.
tend to have long, continuous product runs
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following? CPFR postponement vendor-managed inventory double marginalization the bullwhip effect
the bullwhip effect
Which of the following is NOT one of the predictive variables chosen by the profitability regression model used by La Quinta Inns? the price of the inn the state population per inn the number of inns in a region median income levels the location of nearby colleges
the number of inns in a region
Distribution management focuses on which of the following? allocation of demand among suppliers setting dividend rates incoming materials balancing an assembly line the outbound flow of products
the outbound flow of products
ABC analysis is based upon the principle that: as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items. an item is critical if its usage is high. all items in inventory must be monitored very closely. there are usually a few critical items, and many items that are less critical. more time should be spent on class "C" items because there are many more of them.
there are usually a few critical items, and many items that are less critical.
At the economic order quantity, holding costs are equal to product costs. True False
False
Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation. True False
False
In ABC analysis, "A" items are the least tightly controlled. True False
False
In the production order quantity model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a smaller production/order quantity than in an otherwise identical EOQ problem. True False
False
In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately. True False
False
Research suggests that shoppers are more likely to make a purchase from displays with many products than the ones with a more limited selection. True False
False
The EOQ model is best suited for items whose demand is dependent on other products. True False
False
True or False: Additive manufacturing is often referred to as computer numerical control.
False
True or False: An example of an intangible cost, as it relates to location decisions, is depreciation.
False
True or False: Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.
False
True or False: Professional services typically require low levels of labor intensity.
False
True or False: Recent events suggest that additive manufacturing is just a fad.
False
True or False: Service firms choose locations based mostly on the cost of a site.
False
True or False: The transportation model calculates an optimal shipping system between several points of supply and several outlying customers.
False
True or False: The typical full-service restaurant uses a process-focused process.
False
True or False:An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.
False
True or False:In the production order quantity model, the cost of acquiring goods (product cost) is a factor in determining lot size.
False
True or false: Activity times should not be included in a service blueprint.
False
Vertical integration, whether forward or backward, requires the firm to become more specialized. True False
False
When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply. True False
False
With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality. True False
False
Work-in-process inventory describes components that have been purchased but not processed. True False
False
Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor? Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. Few people will travel out of state for a routine haircut. Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source. Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances.
Few people will travel out of state for a routine hair cut
What describes a system that stores and displays information that can be linked to a geographic location? GIS GLOC LOC LIS AIS
GIS
Which of the following phrases best describes product focus? low volume, high variety high inventory Processes are designed to perform a wide variety of activities. Finished goods are usually made to order. high fixed costs, low variable costs
High fixed costs, low variable costs
Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $15 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold? 6.93 0.13 6.00 4.16 7.50
6.93
A certain type of computer costs $10 per unit, and the annual holding cost is 25% of the value of the item. Annual demand is 1,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? 866 346 1095 120,000 110
346
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $400. What is the inventory carrying cost per unit per year for this item? $3.00 $150.00 $2.00 $1.00 not enough data to determine
$2
Which of the following workers is the most productive? $50 wages, 10 parts produced $100 wages, 21 parts produced $30 wages, 5 parts produced $10 wages, 1 part produced $500 wages, 110 parts produced
$500 wages, 110 parts produced
An employee produces 10 parts during a shift in which he made $90. What is the labor content of the product? $5 $900 $9 $6 $0.111
$9
Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $20 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover? 12.50 10.00 30.00 8.00 40.00
10.00
Which of the following companies use a mass customization approach? Dell Align Technology Frito-Lay Arnold Palmer hospital A and B
A and B
Which of the following statements regarding work-in-process (WIP) inventory is FALSE? WIP exists because of flow time. During most of the time a product is "being made," it is in fact sitting idle. Actual "run" time is usually a significant portion of the material flow time. Reducing flow time reduces WIP inventory. WIP inventory describes products or components that are no longer raw materials but have yet to become finished products.
Actual "run" time is usually a significant portion of the material flow time.
A quasi-custom product: gets its apparent customization from the combinations available from a small number of modules. is a valid description of a fast-food sandwich. is often the output of repetitive focus facilities. only applies in services. All but D are true.
All but A and D are true
Which of the following is among the eight determinants of revenue and volume for a service firm? quality of the competition quality of management purchasing power of the customer-drawing area uniqueness of the firm's and the competitors' locations all of these
All of these
Which of the following is a function of inventory? to hedge against inflation to decouple various parts of the production process to take advantage of quantity discounts to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand All of these are functions of inventory.
All of these are functions of inventory
The bullwhip effect: occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. occurs because of distortions in information in the supply chain. results in increasing fluctuations at each step of the sequence. increases the costs associated with inventory in the supply chain. All of these are true.
All of these are true
Which of the following is TRUE regarding vision systems? They do not become bored. They are modest in cost. They are consistently accurate. All of these are true. None of these is true.
All of these are true
Which of the following statements regarding the reorder point is TRUE? There is a reorder point even if lead time and demand during lead time are constant. The reorder point is larger than d × L if safety stock is present. The reorder point is that quantity that triggers an action to restock an item. A shorter lead time implies a smaller reorder point. All of these are true.
All of these are true
In what type of auction does a buyer initiate the process by submitting a description of the desired product or service? Dutch traditional Mexican French buyer
Dutch
Which of the following statements about the basic EOQ model is FALSE? If the setup cost were to decrease, the EOQ would fall. If annual demand were to double, the EOQ would rise. If annual demand were to double, the number of orders per year would increase by 73%. If the holding cost were to increase, the EOQ would decrease. None. All of these statements are true.
If annual demand were to double, the number of orders per year would increase by 73%.
Which of the following statements regarding the production order quantity model is TRUE? It minimizes the total production costs. It minimizes inventory. It relaxes the assumption that all the order quantity is received at one time. It relaxes the assumption that the demand rate is constant. It applies only to items produced in the firm's own production departments.
It relaxes the assumption that all the order quantity is received at one time.
Which of the following technologies could enable a cashier to scan the entire contents of a shopping cart in seconds? AGV CAD/CAM FMS RFID ASRS
RFID
Which of the following statements regarding "proximity" in the location decision is FALSE? Clustering among fast-food chains occurs because they need to be near high traffic flows. Reduction in bulk during production is a good reason for a manufacturer to locate near the supplier. Service organizations find that proximity to suppliers is the most critical primary location factor. Manufacturers want to be near customers when their product is bulky, heavy, or fragile. Perishability of raw materials is a good reason for manufacturers to locate near the supplier, not the customer.
Service organizations find that proximity to suppliers is the most critical primary location factor.
Which of the following statements about quantity discounts is FALSE? In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. The smaller the ordering cost, the less attractive a discount schedule will be. The larger the annual demand, the less attractive a discount schedule will be. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs.
The larger the annual demand, the less attractive a discount schedule will be.
Which of the following is FALSE regarding repetitive processes? They are the classic assembly lines. They use modules. They include the assembly of basically all automobiles. They allow easy switching from one product to the other. They have more structure and less flexibility than a job shop layout.
They allow easy switching from one product to another
A major challenge in inventory management is to maintain a balance between inventory investment and customer service. True False
True
Vertical integration appears particularly advantageous when the organization has: a large market share. a very common, undifferentiated product. little experience operating an acquired vendor. purchases that are a relatively small percent of sales. a very specialized product.
a large market share
Intangible costs include which of the following? availability of public transportation quality of education quality of prospective employees all of these none of these
all of these
ABC analysis divides on-hand inventory into three classes, generally based upon which of the following? item quality the number of units on hand annual dollar volume unit price annual demand
annual dollar volume
A jewelry store is more likely than a jewelry manufacturer to consider ________ in making a location decision. quality of life transportation costs taxes cost of raw materials appearance/image of the location
appearance/ image of the location
Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking? based on average duration between presidential/prime minister elections based on corruption based on competitiveness based on cost of doing business based on magnitude of government social programs
based on corruption
Computer-integrated manufacturing (CIM) includes manufacturing systems that have: transaction processing, management information systems, and decision support systems integrated. all of their computers integrated with the marketing department. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated. automated guided vehicles, robots, and process control integrated. robots, automated guided vehicles, and transfer equipment integrated.
computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated.
What type of negotiating strategy requires the supplier to open its books to the purchasers? competitive bidding cost-based price model price-based model transparent negotiations market-based price model
cost-based price model
Which of the following describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other? dual-sourcing backup-sourcing parallel-sourcing outsourcing cross-sourcing
cross-sourcing
Which one of the following products is most likely made in a job shop environment? cigarettes custom furniture television sets rolls of newsprint canned vegetables
custom furniture
Cycle counting: is a process by which inventory records are verified once a year. assumes that all inventory records must be verified with the same frequency. provides a measure of inventory turnover. eliminates annual inventory adjustments. assumes that the most frequently used items must be counted more frequently.
eliminates annual inventory adjustments
Which of the following methods best considers intangible costs related to a location decision? locational cost-volume analysis the transportation method crossover methods center-of-gravity method factor-rating method
factor-rating method
________ and currency risks are to key country success factors as land costs and ________ are to key region success factors. Cultural issues; zoning restrictions Labor costs; exchange rates Location of markets; climate Exchange rates; environmental impact Land costs; air and rail systems
location of markets; climate
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? horizontal integration keiretsu current transformation forward integration backward integration
forward integration
Why is Singapore used as a cluster for computer hardware manufacturing? high traffic flows natural resources of land and climate NAFTA venture capitalists located nearby high technological penetration rates and per capita GDP
high technological penetration rates and per capita GDP
A job shop is an example of a(n): line process. intermittent process. specialized process. continuous process. repetitive process.
intermittent process
What three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network? facility costs, production costs, and transportation costs inventory costs, transportation costs, and facility costs inventory costs, production costs, and facility costs inventory costs, production costs, and transportation costs facility costs, inventory costs, and marketing costs
inventory costs, transportation costs, and facility costs
When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following? vertical integration keiretsu few suppliers virtual companies joint venture
joint venture
Which of the following is NOT an advantage of the "few suppliers" sourcing strategy? creation of value by allowing suppliers to have economies of scale suppliers' willingness to provide technological expertise suppliers have a learning curve that yields lower transaction and production costs less vulnerable trade secrets suppliers are more likely to understand the broad objectives of the end customer
less vulnerable
All EXCEPT which of the following are "opportunities" in managing the integrated supply chain? blanket orders drop shipping postponement line balancing standardization
line balancing
Drop shipping: is the opposite of a blanket order. is equivalent to cross-docking. means the supplier will ship directly to the end consumer, rather than to the seller. is the same thing as keiretsu. is a good reason to find a new firm to ship your products.
means the supplier will ship directly to the end consumer, rather than to the seller.
The transportation model, when applied to location analysis: minimizes total transportation costs. maximizes revenues. minimizes total production and transportation costs. minimizes total fixed costs. minimizes the movement of goods.
minimizes total production and transportation costs
What tracks both receipts and subtractions from inventory on a continuing basis? periodic system cycle counting perpetual inventory shrinkage ABC analysis
perpetual inventory
Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. What is the term associated with this phenomenon? bureaucratic risk democratic risk legislative risk political risk judicial risk
political risk
Hewlett-Packard delays customization of its laser printers as long as possible. This is an example of which of the following? timely customization vendor-managed inventory postponement backward integration standardization
postponement
Three of the four types of processes are: modular, continuous, and technological. goods, services, and hybrids. process focus, repetitive focus, and product focus. input, transformation, and output. manual, automated, and service.
process focus, repetitive focus, and product focus
Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy? speed flexibility cost product development skills capacity
product development skills
In most manufacturing industries, which of the following would likely represent the largest cost to the firm? transportation insurance advertising purchasing financing
purchasing
Which of the following is a location analysis technique typically employed by a service organization? linear programming locational cost-volume analysis transportation method queuing theory purchasing power analysis
purchasing power analysis
An assembly line is an example of a: product-focused process. repetitive process. line process. process-focused process. specialized process.
repetitive process
Which of the following statements does NOT accurately explain what occurs when the number of facilities in a distribution network increases? response time first decreases, then increases response time decreases profit first increases, then decreases inventory costs increase total logistics costs first decrease, then increase
response time first decreases, then increases
A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? environmental focus labor focus revenue focus cost focus education focus
revenue focus
Mechanical devices that use electronic impulses to activate motors and switches are called: robots. automated storage and retrieval systems. automated guided vehicles. flexible manufacturing systems. additive manufacturing.
robots
Which of the following is NOT one of the four main types of inventory? work-in-process inventory maintenance/repair/operating supply inventory finished-goods inventory safety stock inventory raw material inventory
safety stock inventory
The crossover point is that production quantity where: variable costs of one process equal the variable costs of another process. the process no longer loses money. fixed costs of a process are equal to its variable costs. total costs for one process equal total costs for another process. total costs equal total revenues for a process.
total costs for one process equal total costs for another process.
Which of the following is most likely to affect the location strategy of a manufacturing firm? utility costs purchasing power of drawing area competition in the area appearance/image of the area parking availability
utility costs