DCSI 3210 Exam 3 (CH 11, 12, 14-16)
A container of ball-bearings valued at $25,000, currently located in Houston, TX, needs to be delivered to the Morton, IL, plant. The standard shipment method takes two days. However, for an additional charge of $500, the container can be sent overnight. The annual holding cost rate for this type of item has been estimated at 28%. What option is more economical?
$19.18
Six Sourcing Strategies
- Many suppliers - Few suppliers - Vertical integration - Joint ventures - Keiretsu networks - Virtual companies
3) A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $20, and trees sell for $50 what is the service level?
A) .60
A work center had actual input of 280 hours and actual output of 270 hours. What is the change in backlog? A) 10 B) -10 C) 0 D) 1.037 E) Unable to determine with the given information
A) 10
An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C? A) 115 B) 175 C) 240 D) 690 E) 700
A) 115
4) A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level?
A) 41
The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the shortest processing time rule, what is the average completion time? Job Processing Time (days) Job due date (days) A 20 180 B 30 200 C 10 175 D 16 230 E 18 210 A) 47.6 days B) 60.2 days C) 94.0 days D) 2.5 days E) 238.0 days
A) 47.6 days
1) Which of the following items is mostly likely managed using a single-period order model?
A) Christmas trees
18) Which of the following statements about the basic EOQ model is TRUE?
A) If the ordering cost were to double, the EOQ would rise. B) If annual demand were to double, the EOQ would increase. C) If the carrying cost were to increase, the EOQ would fall. D) If annual demand were to double, the number of orders per year would increase. E) All of the above statements are true. Answer: E
25) Which of the following statements regarding the reorder point is TRUE?
A) The reorder point is that quantity that triggers an action to restock an item. B) There is a reorder point even if lead time and demand during lead time are constant. C) The reorder point is larger than d × L if safety stock is present. D) A shorter lead time implies a smaller reorder point. E) All of the above are true.
Which of the following best describes a gross material requirements plan? A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started B) an intermediate range plan for the scheduling of families of products C) a chart illustrating whether capacity has been exceeded D) a table that corrects scheduled quantities for inventory on hand E) a schedule showing which products are to be manufactured and in what quantities
A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started
2) The fixed-period inventory system requires more safety stock than a fixed-quantity system because:
A) a stockout can occur during the review period as well as during the lead time.
Which of the following is NOT tracked by scheduling optimization systems used in retail stores? A) cars parked in the parking lot B) individual store sales C) transactions D) units sold E) customer traffic
A) cars parked in the parking lot
What is the priority rule that sequences jobs using the smallest ratio of due date from today to processing time? A) critical ratio B) earliest due date C) first come, first served D) longest processing time E) shortest processing time
A) critical ratio
EDD stands for what? A) earliest due date B) earliest design date C) earliest detrimental date D) earliest decision date E) economic date determination
A) earliest due date
6) Q is to ________ systems as P is to ________ systems.
A) fixed quantity, fixed period
3) Which of the following is an element of inventory holding costs?
A) housing costs B) material handling costs C) investment costs D) pilferage, scrap, and obsolescence E) All of the above are elements of inventory holding costs. Answer: E
16) In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will:
A) increase by about 41%.
2) The main trait of a single-period model is that:
A) inventory has limited value after a certain period of time.
By convention, what is the top level in a product structure? A) level 0 B) level 1 C) level T D) level 10 E) level 100
A) level 0
What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A) lot-for-lot B) EOQ C) POQ D) the Wagner-Whitin algorithm E) All of the above are appropriate for the situation.
A) lot-for-lot
Which of the following lot-sizing techniques results in the lowest holding costs? A) lot-for-lot B) EOQ C) POQ D) Wagner-Whitin algorithm E) the quantity discount model
A) lot-for-lot
In MRP, system nervousness is caused by: A) management's attempt to continually respond to minor changes in production requirements. B) the use of the lot-for-lot approach. C) management's marking part of the master production schedule as "not to be rescheduled". D) the use of phantom bills of material. E) management's attempt to evaluate alternative plans before making a decision.
A) management's attempt to continually respond to minor changes in production requirements.
If an assignment problem consists of 5 workers and 4 projects: A) one worker will not get a project assignment. B) one project will be assigned two workers. C) the fifth worker will split time among the four projects. D) one project will not get a worker assigned. E) The problem cannot be solved by assignment method.
A) one worker will not get a project assignment.
4) What is the difference between P and Q inventory systems?
A) order size B) order spacing E) A and B
5) Which of the following is a requirement of Q systems?
A) perpetual inventory system
Which of the following dispatching rules ordinarily gives the best results when the criterion is lowest time for completion of the full sequence of jobs? A) shortest processing time (SPT) B) critical ratio (CR) C) first in, first out (FIFO) D) first come, first served (FCFS) E) longest processing time (LPT)
A) shortest processing time (SPT)
What is a scheduling technique used to achieve an optimum, one-to-one matching of tasks and resources? A) the assignment method B) Johnson's rule C) the CDS algorithm D) the appointment method E) the reservation method
A) the assignment method
31) A firm wants to develop a level material use schedule based on the following data. What should be the setup cost? Desired lot size: 60 Annual demand: 40,000 Holding cost: $20 per unit per year Daily production rate: 320 Work days per year: 250 A) $0.45 B) $4.50 C) $45 D) $450 E) $500
Answer: A) $0.45
6) With cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)? A) 1 B) 2 C) 3 D) equal to the total number of components E) equal to the number of countries to which the final product is sold
Answer: A) 1
2) Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover? A) 12.50 B) 10.00 C) 42.00 D) 4.16 E) 20.00
Answer: A) 12.50
34) If a factory wants to cut its current lot size in half, by what proportion must setup cost change? A) Setup cost must be cut to one fourth its current value. B) Setup cost must also be cut in half from its current value. C) Setup cost must double from its current value. D) Cannot be determined. E) Setup cost must quadruple from its current value.
Answer: A) Setup cost must be cut to one fourth its current value.
16) Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A) close relationships with trust B) close relationships with skepticism C) distant relationships with trust D) distant relationships with skepticism E) none of the above
Answer: A) close relationships with trust
4) What term describes a supply chain that is designed to optimize both forward and reverse flows? A) closed-loop supply chain B) full-journey supply chain C) circular supply chain D) network supply chain E) recycled supply chain
Answer: A) closed-loop supply chain
4) What type of negotiating strategy requires the supplier to open its books to the purchasers? A) cost-based price model B) market-based price model C) competitive bidding D) price-based model E) transparent negotiations
Answer: A) cost-based price model
22) The list of 5Ss, although it looks like a housekeeping directive, supports lean production by: A) identifying non-value items and removing them, in the "sort/segregate" category. B) reducing inventory, in the "standardize" category. C) increasing variability through standardized procedures, in the "standardize" category. D) eliminating wasted motion through ergonomic studies, in the "support" category. E) building good safety practices, in the "shine/sweep" category.
Answer: A) identifying non-value items and removing them, in the "sort/segregate" category.
6) Local optimization is a supply-chain complication best described as: A) optimizing one's local area without full knowledge of supply chain needs. B) obtaining very high production efficiency in a decentralized supply chain. C) the prerequisite of global optimization. D) the result of supply chains built on suppliers with compatible corporate cultures. E) the opposite of the bullwhip effect.
Answer: A) optimizing one's local area without full knowledge of supply chain needs.
5) What is the practice of keeping a product generic as long as possible before customizing? A) postponement B) keiretsu C) vendor-managed inventory D) forward integration E) backward integration
Answer: A) postponement
8) Warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions? A) purchasing B) postponement C) break-bulk activities D) consolidation point E) cross-docking
Answer: A) purchasing
6) By which distribution system is more than 90 percent of U.S. coal shipped? A) railroads B) trucks C) waterways D) pipelines E) none of the above
Answer: A) railroads
7) What are the four stages of supplier selection? A) supplier evaluation, supplier development, negotiations, and contracting B) supplier evaluation, negotiations, supplier acquisition, and supplier development C) introduction, growth, maturity, and decline D) supplier evaluation, supplier development, negotiations, and centralized purchasing E) negotiations, contracting, centralized purchasing, and E-procurement
Answer: A) supplier evaluation, supplier development, negotiations, and contracting
24) How can a reduction of in-transit inventory be encouraged? A) supplier location near plants B) high setup costs C) low carrying costs D) use of trains, not trucks E) low-cost, global suppliers
Answer: A) supplier location near plants
4) Distribution management focuses on which of the following? A) the outbound flow of products B) incoming materials C) allocation of demand among suppliers D) setting dividend rates E) balancing an assembly line
Answer: A) the outbound flow of products
5) Designing distribution networks to meet customer expectations suggests what three criteria? A) rapid response, service, and cost B) rapid response, product choice, and service C) product choice, cost, and service D) cost, process choice, and service E) rapid response, cost, and process choice
Answer: B
32) A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d = 400 per day (250 days per year), p = 4000 units per day, H = $40 per unit per year, and Q = 200 (demand for four hours, half a day). A) $2.00 B) $7.20 C) $18.00 D) $64.00 E) $1,036.80
Answer: B) $7.20
18) If the goals of JIT partnerships are met, which of the following is a result? A) For incoming goods, receiving activity and inspection are outsourced. B) In-transit inventory falls as suppliers are located closer to facilities. C) Suppliers maintain a variety of customers to reduce risk. D) In-plant inventory replaces in-transit inventory. E) All of the above are consequences of meeting the JIT partnership goals.
Answer: B) In-transit inventory falls as suppliers are located closer to facilities.
30) Which one of the following statements is TRUE regarding JIT inventory? A) It exists just in case something goes wrong. B) It is the minimum inventory necessary to keep a perfect system running. C) It hides variability. D) It is minimized with large lot production. E) It increases if setup costs decrease.
Answer: B) It is the minimum inventory necessary to keep a perfect system running.
4) Which of the following is NOT one of the five parts of the Supply Chain Operations Reference (SCOR) model? A) Make B) Sell C) Plan D) Source E) Return
Answer: B) Sell
12) Vertical integration appears particularly advantageous when the organization has: A) a very specialized product. B) a large market share. C) a very common, undifferentiated product. D) little experience operating an acquired vendor. E) purchases that are a relatively small percent of sales.
Answer: B) a large market share.
15) A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing which of the following? A) postponement B) drop shipping C) channel assembly D) passing the buck E) float reduction
Answer: B) drop shipping
28) Which one of the following is NOT a layout tactic in a JIT environment? A) work cells for families of products B) fixed equipment C) minimizing distance D) little space for inventory E) poka-yoke devices
Answer: B) fixed equipment
13) 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? A) horizontal integration B) forward integration C) backward integration D) current transformation E) keiretsu
Answer: B) forward integration
5) E-procurement: A) works best in long-term contract situations but is not suited for auctions. B) is the same thing as Internet purchasing. C) has many benefits but requires a lot of paperwork. D) is illegal in all states except Nevada and New Jersey. E) All of the above are true of e-procurement.
Answer: B) is the same thing as Internet purchasing.
41) The cook in a fast-food restaurant knows that 2 hamburger patties and an order of fries should be started for each car that is waiting in line. This is best an example of: A) keiretsu. B) kanban. C) push production. D) kaizen. E) EOQ.
Answer: B) kanban.
14) Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A) kanban B) keiretsu C) samurai D) poka-yoke E) kaizen
Answer: B) keiretsu
20) Characteristics of just-in-time partnerships do NOT include: A) removal of in-transit inventory. B) large lot sizes to save on setup costs and to gain quantity discounts. C) long-term contracts. D) produce with zero defects. E) focus on core competencies.
Answer: B) large lot sizes to save on setup costs and to gain quantity discounts.
7) Which sourcing strategy is particularly common when the products being sourced are commodities? A) few suppliers B) many suppliers C) keiretsu D) vertical integration E) virtual companies
Answer: B) many suppliers
47) Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is NOT part of JIT? They: A) communicate their schedules to suppliers. B) produce in long production runs to reduce the impact of setup costs. C) use a pull system to move inventory. D) continuously work on reducing setup time. E) produce in small lots.
Answer: B) produce in long production runs to reduce the impact of setup costs.
4) Which of the following is not characteristic of a TPS employee? A) knowledgeable B) strict job classifications C) know more about their job than anyone else D) empowered E) All of the above characterize a TPS employee.
Answer: B) strict job classifications
8) 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? A) double marginalization B) the bullwhip effect C) CPFR D) postponement E) vendor-managed inventory
Answer: B) the bullwhip effect
39) The number of kanbans should be equal to which of the following? A) one B) the ratio of (demand during lead time + safety stock) to container size C) one-half of the EOQ D) one full day's production divided by the EOQ E) the ratio of demand during lead time to (container size + safety stock)
Answer: B) the ratio of (demand during lead time + safety stock) to container size
16) Which of the following is NOT an advantage of a virtual company? A) speed B) total control over every aspect of the organization C) specialized management expertise D) low capital investment E) flexibility
Answer: B) total control over every aspect of the organization
17) Which one of the following is not a benefit of JIT implementation? A) cost reduction B) variability increase C) rapid throughput D) quality improvement E) rework reduction
Answer: B) variability increase
3) Which of the following is an illustration of employee empowerment? A) UPS drivers are trained to perform several motions smoothly and efficiently. B) Unionization of the work place brings better morale and therefore better quality. C) "No one knows the job better than those who do it." D) all of the above E) none of the above
Answer: C) "No one knows the job better than those who do it."
42) Lead time for computers is 7 days with daily demand of 5 computers and a safety stock of 1 day. Each kanban holds 8 computers. What is the correct number of kanbans? A) 4.5 B) 1 C) 5 D) 7 E) 8
Answer: C) 5
10) In what type of auction does a buyer initiate the process by submitting a description of the desired product or service? A) traditional B) buyer C) Dutch D) French E) Mexican
Answer: C) Dutch
46) JIT makes quality cheaper because: A) the cost of low quality can be hidden as inventory cost. B) JIT adds more buffers to the system. C) JIT prevents long runs of defects. D) B and C E) A, B and C
Answer: C) JIT prevents long runs of defects.
5) Which one of the following distribution systems offers speed and reliability when emergency supplies are needed overseas? A) trucking B) railroads C) airfreight D) waterways E) pipelines
Answer: C) airfreight
11) A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? A) horizontal integration B) forward integration C) backward integration D) current transformation E) job expansion
Answer: C) backward integration
37) What does the Japanese word "kanban" mean? A) low inventory B) employee empowerment C) card D) continuous improvement E) lot size of one
Answer: C) card
5) 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? A) outsourcing B) dual-sourcing C) cross-sourcing D) backup-sourcing E) parallel-sourcing
Answer: C) cross-sourcing
23) Which one of the following is a concern expressed by suppliers in JIT partnerships? A) having too many customers B) delivery to the point of use C) having limited ability to respond to changes in product and quality D) large lot sizes E) customers' infrequent engineering changes
Answer: C) having limited ability to respond to changes in product and quality
6) What three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network? A) inventory costs, production costs, and transportation costs B) inventory costs, production costs, and facility costs C) inventory costs, transportation costs, and facility costs D) facility costs, production costs, and transportation costs E) facility costs, inventory costs, and marketing costs
Answer: C) inventory costs, transportation costs, and facility costs
17) When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following? A) keiretsu B) virtual companies C) joint venture D) vertical integration E) few suppliers
Answer: C) joint venture
15) The Japanese concept of a company coalition of suppliers is: A) poka-yoke. B) kaizen. C) keiretsu. D) dim sum. E) illegal.
Answer: C) keiretsu.
8) Which of the following is NOT an advantage of the "few suppliers" sourcing strategy? A) suppliers have a learning curve that yields lower transaction and production costs B) suppliers are more likely to understand the broad objectives of the end customer C) less vulnerable trade secrets D) creation of value by allowing suppliers to have economies of scale E) suppliers' willingness to provide technological expertise
Answer: C) less vulnerable trade secrets
10) Drop shipping: A) is equivalent to cross-docking. B) is the opposite of a blanket order. C) means the supplier will ship directly to the end consumer, rather than to the seller. D) is the same thing as keiretsu. E) is a good reason to find a new firm to ship your products.
Answer: C) means the supplier will ship directly to the end consumer, rather than to the seller.
10) Which of the following best describes vertical integration? A) sell products to a supplier or a distributor B) develop the ability to produce products that complement the original product C) produce goods or services previously purchased D) develop the ability to produce the specified good more efficiently than before E) build long-term partnerships with a few suppliers Answer: C
Answer: C) produce goods or services previously purchased
2) The Institute for Supply Management: A) establishes laws and regulations for supply management. B) is an agency of the United Nations charged with promoting ethical conduct globally. C) publishes the principles and standards for ethical supply management conduct. D) prohibits backward integration into developing economies. E) grants Ph.D. degrees in purchasing.
Answer: C) publishes the principles and standards for ethical supply management conduct.
1) Which of the following is NOT an attribute of lean operations? A) eliminating almost all inventory through just-in-time techniques B) minimizing space requirements by reducing the distance a part travels C) pushing responsibility to the highest level possible through centralized decision making D) educating suppliers to accept responsibility for helping meet customer needs E) building worker flexibility through cross-training and reducing job classifications
Answer: C) pushing responsibility to the highest level possible through centralized decision making
11) Among which of the following industries are purchasing costs the LOWEST percentage of sales? A) automobiles B) petroleum C) restaurants D) lumber E) chemicals
Answer: C) restaurants
38) Which one of the following scenarios represents the use of a kanban to reduce inventories? A) A supervisor tells the operators to stay busy and start producing parts for next month. B) A "supplier" work center signals the downstream workstation that a batch has been completed. C) A supervisor signals to several work centers that the production rate should be changed. D) A "customer" work center signals to the "supplier" workstation that more parts are needed. E) An operator asks the next station's operator to help him fix his machine.
Answer: D) A "customer" work center signals to the "supplier" workstation that more parts are needed.
48) A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action? A) It used a pull system to move inventory. B) It produced in ever smaller lots. C) It required deliveries directly to the point of use. D) It picked the supplier that offered the lowest price based on quantity discounts. E) It worked to reduce the company's in-transit inventory.
Answer: D) It picked the supplier that offered the lowest price based on quantity discounts.
17) Which of the following statements regarding a pull system is TRUE? A) Large lots are pulled from upstream stations. B) Work is pulled to the downstream stations before it is actually needed. C) Manufacturing cycle time is increased. D) Problems become more obvious. E) None of the above is true of a pull system.
Answer: D) Problems become more obvious.
29) Who is credited with coining the phrase, "Inventory is evil"? A) Poka Yoke B) Pat "Keiretsu" Morita C) Kanban Polka D) Shigeo Shingo E) Taiichi Ohno
Answer: D) Shigeo Shingo
5) Which of the following is NOT true about reverse logistics as compared to forward logistics? A) Inventory management is not consistent. B) Distribution costs are less directly visible. C) Pricing is dependent upon many factors. D) Speed is often very important. E) Forecasting is more uncertain.
Answer: D) Speed is often very important.
44) A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans? A) An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. B) A line of 5 people in the Chinese department signaling the department to heat 5 Crab Rangoon. C) A red light on top of the cashier's lane signals that the cashier needs additional change replenished. D) The meat department stocking up on turkeys before Thanksgiving. E) All of the above are kanban applications.
Answer: D) The meat department stocking up on turkeys before Thanksgiving.
7) As the number of facilities increases, total logistics costs tend to follow a curve that first declines, then rises. Why? A) Transportation and inventory costs first decline steeply, then rise, while facility costs always rise. B) Transportation costs always decline, but eventually the rise in facility and inventory costs outweigh the declining transportation costs. C) Facility costs first decline steeply, then rise, while transportation and inventory costs always rise. D) Transportation costs first decline steeply, then rise, while facility and inventory costs always rise. E) Inventory costs first decline steeply, then rise, while transportation and facility costs always rise.
Answer: D) Transportation costs first decline steeply, then rise, while facility and inventory costs always rise.
6) What are the three classic types of negotiation strategies? A) supplier evaluation, supplier development, and supplier selection B) Theory X, Theory Y, and Theory Z C) many suppliers, few suppliers, and keiretsu D) cost-based price model, market-based price model, and competitive bidding E) traditional auctions, reverse auctions, and online exchanges
Answer: D) cost-based price model, market-based price model, and competitive bidding
11) A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing which of the following? A) postponement B) cross-docking C) channel assembly D) drop shipping E) float reduction
Answer: D) drop shipping
36) Kanban is associated with all EXCEPT which of the following? A) small lot sizes B) signals, such as cards, lights, or flags C) moving inventory only as needed D) increased material handling E) reductions in inventory
Answer: D) increased material handling
21) Which of the following is not a goal of JIT partnerships? A) removal of unnecessary activities B) removal of in-plant inventory C) removal of in-transit inventory D) inspect all incoming shipments to ensure zero defects E) All of the above are goals of JIT partnerships.
Answer: D) inspect all incoming shipments to ensure zero defects
2) Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes? A) overproduction B) queues C) transportation D) inventory E) defective product
Answer: D) inventory
9) Which of the following is NOT an opportunity for effective management in the supply chain? A) accurate "pull" data B) vendor-managed inventory C) postponement D) local optimization E) CPFR
Answer: D) local optimization
3) Which of the following is characteristic of lean operations? A) inventory buffers between each workstation to minimize system downtime B) easy, mindless jobs C) specialty workers with no cross-training D) low space requirements E) no supplier partnerships
Answer: D) low space requirements
12) Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of which of the following? A) vendor-managed inventory B) standardization C) backward integration D) postponement E) timely customization
Answer: D) postponement
9) Which of the following is NOT a typical benefit of centralized purchasing? A) leverage purchase volume for better pricing B) develop specialized staff expertise C) reduce the duplication of tasks D) reduce lead times E) promote standardization
Answer: D) reduce lead times
8) Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels? A) supplier qualification B) product tracking C) independent audits D) refrigeration E) just-in-time delivery
Answer: D) refrigeration
19) Which one of the following is a characteristic of a JIT partnership? A) third-party logistics never used B) maximal product specifications imposed on supplier C) active pursuit of vertical integration D) removal of incoming inspection E) frequent deliveries in large lot quantities
Answer: D) removal of incoming inspection
7) Which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver? A) use multiple suppliers B) effective contracts with penalties C) subcontractors on retainer D) require overnight delivery E) pre-planning
Answer: D) require overnight delivery
5) Which one of the following is NOT one of the six sourcing strategies? A) negotiation with many suppliers B) vertical integration C) keiretsu D) short-term relationships with few suppliers E) virtual companies
Answer: D) short-term relationships with few suppliers
9) Which of the following is NOT a condition that favors the success of vertical integration? A) availability of capital B) availability of managerial talent C) sufficiently high demand D) small market share E) All of the above favor the success of vertical integration.
Answer: D) small market share
7) While freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes? A) damage record B) on-time delivery C) door-to-door service D) speed of shipment E) consolidation capabilities
Answer: D) speed of shipment
6) A disadvantage of the "few suppliers" sourcing strategy is: A) the risk of not being ready for technological change. B) the lack of cost savings for customers and suppliers. C) possible violations of the Sherman Antitrust Act. D) the high cost of changing partners. E) the suppliers are less likely to understand the broad objectives of the procuring firm and the end customer.
Answer: D) the high cost of changing partners.
43) Lead time for computers is 5 days with daily demand of 25 and safety stock of 5 computers. If management wants to use 10 kanbans how many computers should each one hold? A) 25 B) 1 C) 5 D) 10 E) 13
Answer: E) 13
40) Lead time for cakes is 2 days with daily demand of 10 cakes and a safety stock of ½ a day. Each container (kanban) holds 1 cake. What is the correct number of kanbans? A) 4 B) 1 C) 5 D) 10 E) 25
Answer: E) 25
3) Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 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? A) 12.50 B) 5.20 C) 2.60 D) 0.08 E) 4.16
Answer: E) 4.16
2) Lean operations are known for their: A) employee development. B) supplier education. C) supplier partnerships. D) challenging jobs. E) All of the above are attributes of lean operations.
Answer: E) All of the above are attributes of lean operations.
22) Which of the following is NOT a goal of JIT partnerships? A) removal of unnecessary activities B) removal of in-plant inventory C) removal of in-transit inventory D) obtain improved quality and reliability E) All of the above are goals of JIT partnerships.
Answer: E) All of the above are goals of JIT partnerships.
3) In supply chain management, ethical issues: A) are particularly important because of the enormous opportunities for abuse. B) may be guided by company rules and codes of conduct. C) become more complex the more global is the supply chain. D) may be guided by the principles and standards of the Institute for Supply Management. E) All of the above are true.
Answer: E) All of the above are true.
33) Which of the following is TRUE regarding the steps to reducing setup times? A) The first step involves performing as much setup preparation as possible while the process/machine is operating. B) The cycle of steps is repeated until setup time is reduced to under a minute. C) The standardization of both tooling and work procedures is advantageous to setup time reduction. D) Move material closer and improve material handling are done before operator training. E) All of the above are true.
Answer: E) All of the above are true.
7) The bullwhip effect: A) occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. B) results in increasing fluctuations at each step of the sequence. C) increases the costs associated with inventory in the supply chain. D) occurs because of distortions in information in the supply chain. E) All of the above are true.
Answer: E) All of the above are true.
8) Which of the following would NOT be subject to negotiation between a buyer and supplier? A) price B) credit and delivery terms C) quality standards D) cooperative advertising agreements E) All of the above could be negotiated.
Answer: E) All of the above could be negotiated.
26) Which of the following is NOT a concern of suppliers as they prepare to enter into JIT partnerships? A) Suppliers feel that they would be less at risk if they contracted with more than one customer. B) Suppliers are concerned that customers will present frequent engineering changes with inadequate lead time to deal with them. C) Suppliers feel that their processes are suited for larger lot sizes than the customer wants. D) Suppliers are concerned that frequent delivery of small quantities is economically prohibitive. E) All of the above represent JIT supplier concerns.
Answer: E) All of the above represent JIT supplier concerns.
21) The 5Ss: A) have the "flavor" of a housekeeping list. B) are a checklist for lean operations. C) have become a list of seven items in American practice. D) can be used to assist with necessary changes in organizational culture. E) All of these are true.
Answer: E) All of these are true.
45) Which of the following is FALSE regarding the links between JIT and quality? A) Inventory hides bad quality; JIT immediately exposes it. B) JIT reduces the number of potential sources of error by shrinking queues and lead times. C) As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. D) If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. E) JIT increases the cost of obtaining good quality.
Answer: E) JIT increases the cost of obtaining good quality.
35) Which one of the following statements is TRUE about the kanban system? A) The quantities in the containers are usually large to reduce setup costs. B) It is associated with a push system. C) It is useful to smooth operations when numerous quality problems occur. D) The supplier workstation signals the customer workstation as soon as a batch is completed. E) The customer workstation signals to the supplier workstation when production is needed.
Answer: E) The customer workstation signals to the supplier workstation when production is needed.
27) Just-in-time systems make demands on layouts, including the need for: A) distance reduction. B) increased flexibility. C) reduced space and inventory. D) cross-trained, flexible employees. E) all of the above
Answer: E) all of the above
8) Which of the following devices represents an opportunity for technology to improve security of container shipments? A) devices that identify truck and container location B) devices that sense motion C) devices that measure radiation or temperature D) devices that can communicate the breaking of a container lock or seal E) all of the above
Answer: E) all of the above
25) In JIT partnerships, suppliers have several concerns. Which of the following is NOT such a concern? A) desire for diversification B) poor customer scheduling C) small lot sizes D) producing high enough quality levels E) customers' infrequent engineering changes
Answer: E) customers' infrequent engineering changes
9) Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain? A) suppliers B) distributors C) wholesalers D) retailers E) landscaping contractors
Answer: E) landscaping contractors
13) All EXCEPT which of the following are "opportunities" in managing the integrated supply chain? A) postponement B) drop shipping C) blanket orders D) standardization E) line balancing
Answer: E) line balancing
14) Which of the following is an advantage of the postponement technique? A) reduction in automation B) early customization of the product C) better quality of the product D) reduction in training costs E) reduction in inventory investment
Answer: E) reduction in inventory investment
8) Which of the following statements does NOT accurately explain what occurs when the number of facilities in a distribution network increases? A) response time decreases B) profit first increases, then decreases C) total logistics costs first decrease, then increase D) inventory costs increase E) response time first decreases, then increases
Answer: E) response time first decreases, then increases
16) TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney in an example of which of the following? A) blanket orders B) standardization C) postponement D) lot size reduction E) single-stage control of replenishment
Answer: E) single-stage control of replenishment
4) What term is used to describe the outsourcing of logistics? A) e-logistics B) shipper-managed inventory (SMI) C) hollow logistics D) sub-logistics E) third-party logistics (3PL)
Answer: E) third-party logistics (3PL)
18) Which of the following best describes Vizio's sourcing strategy? A) few suppliers B) keiretsu C) joint venture D) vertical integration E) virtual company
Answer: E) virtual company
1) According to the global company profile, Amazon.com's advantage in inventory management comes from its almost fanatical use of economic order quantity and safety stock calculations.
Answer: FALSE
1) As the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines.
Answer: FALSE
1) Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
Answer: FALSE
1) Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.
Answer: FALSE
1) Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making.
Answer: FALSE
1) JIT brings about competitive advantage by faster response to the customer regardless of cost.
Answer: FALSE
11) Level scheduling means producing at a constant rate, regardless of customer demands.
Answer: FALSE
12) With level schedules, a few large batches, rather than frequent small batches, are processed.
Answer: FALSE
13) The number of kanbans decreases as safety stock is increased.
Answer: FALSE
15) The quality management tool called poka-yoke is not relevant to JIT systems.
Answer: FALSE
2) Designing distribution networks to meet customer expectations suggests three criteria: (1) rapid response, (2) cost, and (3) service.
Answer: FALSE
2) Insurance and taxes on inventory are part of the costs known as setup or ordering costs.
Answer: FALSE
2) Safety stock in inventory systems depends only on the average demand during the lead time.
Answer: FALSE
2) The EOQ model is best suited for items whose demand is dependent on other products.
Answer: FALSE
2) The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk.
Answer: FALSE
2) Vertical integration, whether forward or backward, requires the firm to become more specialized.
Answer: FALSE
2) Waterways are an attractive distribution system when speed is more important than shipping cost.
Answer: FALSE
3) Cross-sourcing describes the practice of having two suppliers provide every component.
Answer: FALSE
3) In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.
Answer: FALSE
3) Once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only.
Answer: FALSE
3) The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
Answer: FALSE
3) When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply.
Answer: FALSE
3) Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management.
Answer: FALSE
4) At the economic order quantity, holding costs are equal to product costs.
Answer: FALSE
4) Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.
Answer: FALSE
4) Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration.
Answer: FALSE
5) In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.
Answer: FALSE
7) JIT systems carry inventory just in case something goes wrong.
Answer: FALSE
9) In the quantity discount model, the cost of acquiring goods (product cost) is not a factor in determining lot size.
Answer: FALSE
1) Benchmark firms have driven down costs of supply-chain performance.
Answer: TRUE
1) Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.
Answer: TRUE
1) If setup costs are reduced by substantial reductions in setup time, the production order quantity is also reduced.
Answer: TRUE
1) Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.
Answer: TRUE
1) Service level is the complement of the probability of a stockout.
Answer: TRUE
1) The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
Answer: TRUE
1) The demand for automobiles would be considered as independent demand.
Answer: TRUE
1) The fixed-period inventory model can have a stockout during the review period as well as during the lead time, which is why fixed-period systems require more safety stock than fixed-quantity systems.
Answer: TRUE
1) Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories.
Answer: TRUE
10) The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating.
Answer: TRUE
14) A kanban system requires that the process has little variability in lead time because shortages impact the entire production system.
Answer: TRUE
2) Drop shipping results in time and shipping cost savings.
Answer: TRUE
2) In ABC analysis, "A" items are the most tightly controlled.
Answer: TRUE
2) One classic type of negotiation strategy is the market-based price model.
Answer: TRUE
2) One goal of JIT partnerships is the removal of in-plant inventory by delivery in small lots directly to the using department as needed.
Answer: TRUE
2) The Toyota Production System requires that activities have built-in, automatic tests to signal problems.
Answer: TRUE
3) A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
Answer: TRUE
3) Logistics management can provide a competitive advantage through improved customer service.
Answer: TRUE
3) Many suppliers feel that having a variety of customers is better than being tied to long-term contracts with one customer.
Answer: TRUE
3) While the prices that consumers pay are often inflexible, a significant number of final prices paid in business-to-business transactions are negotiated.
Answer: TRUE
4) A blanket order is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.
Answer: TRUE
4) JIT suppliers have concerns that the JIT firm's demands for small lot sizes are simply a way of transferring holding cost from the JIT firm to the suppliers.
Answer: TRUE
5) A common JIT layout tactic is to minimize distance.
Answer: TRUE
6) Cross-training is a common JIT layout tactic to improve flexibility.
Answer: TRUE
6) In the production order quantity (POQ) model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a larger production/order quantity than in an otherwise identical EOQ problem.
Answer: TRUE
7) The reorder point is the inventory level at which action is taken to replenish the stocked item.
Answer: TRUE
8) Hidden problems are generally uncovered during the process of reducing inventory.
Answer: TRUE
8) In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.
Answer: TRUE
9) A scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met.
Answer: TRUE
23) A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost ________ per year in total annual inventory (holding and setup) costs.
B) $800
24) A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order:
B) 200 units per order.
30) A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?
B) 245
Five welding jobs are waiting to be processed. Their processing times and due dates are given below. Using the critical ratio dispatching rule, in which order should the jobs be processed? All dates are specified as days from today. Job Processing Time (days) Job due date (days) A 4 7 B 2 4 C 8 11 D 3 5 E 5 11 A) B, D, A, E, C B) C, D, A, B, E C) C, E, A, D, B D) E, B, A, D, C E) B, D, A, C, E
B) C, D, A, B, E
A work center is interested in limiting work-in-process by not allowing production to start again until the current batch is finished. The best solution most likely involves: A) MRP. B) ConWIP cards. C) Gantt charts. D) Johnson's rule. E) the assignment method.
B) ConWIP cards.
26) An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is TRUE?
B) Fourteen is the reorder point, and 100 is the order quantity.
27) Which of the following statements regarding the production order quantity model is TRUE?
B) It relaxes the assumption that all the order quantity is received at one time.
Which of the following dispatching rules tends to minimize job flow time? A) FCFS: first come, first served B) SPT: shortest processing time C) EDD: earliest due date D) LPT: longest processing time E) FCLS: first come, last served
B) SPT: shortest processing time
Which of the following is TRUE regarding services scheduling? A) The critical ratio sequencing rule is widely used for fairness to customers. B) The emphasis is on staffing levels, not materials. C) Reservations and appointments are often used to manipulate the supply of services. D) Labor use can be intensive, and labor demand is usually stable. E) All of the above are true.
B) The emphasis is on staffing levels, not materials.
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A) The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. C) The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. D) The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E) All of the above are true.
B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.
Which of the following statements regarding lot-sizing is TRUE? A) EOQ principles should be followed whenever economical. B) Too much concern with lot-sizing results in false accuracy. C) Lot-for-lot cannot be modified for scrap allowance or process constraints. D) The Wagner-Whitin algorithm simplifies lot size calculations. E) All of the above are true.
B) Too much concern with lot-sizing results in false accuracy.
Distribution resource planning (DRP) is: A) a transportation plan to ship materials to warehouses. B) a time-phased stock replenishment plan for all levels of a distribution network. C) a shipping plan from a central warehouse to retail warehouses. D) material requirements planning with a feedback loop from distribution centers. E) a material requirements planning package used exclusively by warehouses.
B) a time-phased stock replenishment plan for all levels of a distribution network.
12) Cycle counting:
B) eliminates annual inventory adjustments.
21) A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:
B) increased by less than 50%.
20) A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is:
B) one-third as large.
Which lot-sizing technique orders the quantity needed during a predetermined time between orders? A) economic order quantity B) periodic order quantity C) lot-for-lot D) time fencing E) part-period balancing
B) periodic order quantity
For the lot-sizing technique known as lot-for-lot to be appropriate: A) future demand should be known for several weeks. B) setup cost should be relatively small. C) annual volume should be rather low. D) item unit cost should be relatively small. E) the independent demand rate should be very stable.
B) setup cost should be relatively small.
5) Service level is:
B) the probability of not stocking out. D) calculated as the cost of a shortage divided by (the cost of shortage + the cost of overage) for single-period models. E) B and D Answer: E
8) An advantage of the fixed-period inventory system is that:
B) there is no physical count of inventory items when an item is withdrawn.
There are two jobs to be assigned to two workers. The profit for worker A on job 1 is $5 and on job 2 is $8. The profit for worker B on job 1 is $10 and on job 2 is $12. How should the work be divided using the assignment method? A) worker A assigned to job 1 and worker B assigned to job 2 B) worker A assigned to job 2 and worker B assigned to job 1 C) worker A gets both jobs 1 and 2 D) worker B gets both jobs 1 and 2 E) unable to determine
B) worker A assigned to job 2 and worker B assigned to job 1
22) 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 $600. What is the inventory carrying cost per unit per year for this item?
C) $3.00
A work center had planned outputs of 10, 15, 13, and 20 hours with actual outputs of 12, 14, 13, and 18 hours. What is the cumulative deviation in output? A) 0 B) 1 C) -1 D) 58 E) Unable to determine with the given information
C) -1
4) Suppose that papers for a newspaper stand cost $0.40 and sell for $0.80. They currently have no salvage value. If the stand owner is able to find an outlet that would provide a salvage value of $0.10, what would be the increase in service level?
C) .07
If job 5 takes 3, 4 or 5 hours to be completed by workers A, B, and C, respectively, what would the row values for job 5 be after performing Step 1A of the assignment method? A) 3, 4, 5 B) 8, 9, 10 C) 0, 1, 2 D) 6, 7, 8 E) 1, 4/3, 5/3
C) 0, 1, 2
Eight jobs have been sequenced at a single work center. Total processing time for the eight jobs is 34 hours, and total flow time for the sequence is 85 hours. For this schedule, utilization is ________ and the average number of jobs in the system is ________. A) 100 percent; 10.625 B) low; .0941 C) 0.400 or 40 percent; 2.5 D) 0.235 or 23.5 percent; 4.25 E) maximized; minimized
C) 0.400 or 40 percent; 2.5
14) A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?
C) 110
9) If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, a 90 percent service level will require how much safety stock?
C) 13 units
17) In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5 per unit per month, what is the economic order quantity?
C) 141
11) In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. What is the standard deviation of demand during lead time?
C) 154 units
An order for 110 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements for B? A) 20 B) 120 C) 180 D) 240 E) 440
C) 180
29) The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem?
C) 184
An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N? A) 150 B) 170 C) 300 D) 320 E) 440
C) 300
10) If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires how much safety stock?
C) 49 units
Five jobs are waiting to be processed. Their processing times and due dates are given below. Using the earliest due date dispatching rule, in which order should the jobs be processed? Job Processing Time (days) Job due date (days) A 4 7 B 2 4 C 8 11 D 3 5 E 5 8 A) C, E, A, D, B B) A, B, C, D, E C) B, D, A, E, C D) C, B, A, E, D E) B, D, A, C, E
C) B, D, A, E, C
13) Which of the following statements regarding control of service inventories is TRUE?
C) Effective control of all goods leaving the facility is one applicable technique.
Which of the following is FALSE concerning enterprise resource planning (ERP)? A) It attempts to automate and integrate the majority of business processes. B) It shares common data and practices across the enterprise. C) It is inexpensive to implement. D) It provides and accesses information in a real-time environment. E) ERP software promises reduced transaction costs.
C) It is inexpensive to implement.
Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Sigma before work center Delta. According to Johnson's rule, what sequence of jobs will minimize the completion time for all jobs? Job Sigma Delta R 40 10 S 25 30 T 50 20 U 35 35 V 55 15 A) R-S-T-U-V B) S-V-T-R-U C) S-U-T-V-R D) V-R-U-S-T E) R-V-T-S-U
C) S-U-T-V-R
Which of the following is an aid used to monitor jobs in progress? A) a Gantt load chart B) the assignment method C) a Gantt schedule chart D) Johnson's rule E) a Gantt progress chart
C) a Gantt schedule chart
Low-level coding means that: A) a final item has only a few levels in the BOM structure. B) the code being used is the code for the lowest level in the BOM structure. C) a component item is coded at the lowest level at which it appears in the BOM structure. D) the top level of the BOM is below level zero and that BOMs are not organized around the finished product. E) the lowest-paid staff member in the production department performs the coding.
C) a component item is coded at the lowest level at which it appears in the BOM structure.
The assignment method is: A) a method to highlight overloads in a given work center. B) a computerized method of determining appropriate tasks for an operation. C) a form of linear programming for optimally assigning tasks or jobs to resources. D) the same thing as the Gantt schedule chart. E) a method for achieving a balance between forward and backward scheduling.
C) a form of linear programming for optimally assigning tasks or jobs to resources.
Orders are processed in the sequence in which they arrive if (the) ________ rule sequences the jobs. A) earliest due date B) slack time remaining C) first come, first served D) critical ratio E) Johnson's
C) first come, first served
Which critical ratio value implies that a job is already late? A) more than 100 B) 1 C) less than 1 D) 10 E) 3.4
C) less than 1
Which MRP lot-sizing technique should be considered to be the goal (i.e., the technique of choice under ideal conditions)? A) Wagner-Whitin B) EOQ C) lot-for-lot D) POQ E) Silver-Meal
C) lot-for-lot
MRP II is accurately described as: A) MRP software designed for services. B) MRP with a new set of computer programs that execute on microcomputers. C) material resource planning. D) an enhancement of MRP that plans for all levels of the supply chain. E) a new generation of MRP software that extends MRP to planning and scheduling functions.
C) material resource planning.
What is the process of tracing upward in the bill of material from the component to the parent item in order to determine the cause for the component requirement? A) net requirements planning B) time fencing C) pegging D) backtracking E) leveling
C) pegging
Sequencing (or dispatching): A) assigns dates to specific jobs or operations steps. B) assigns jobs to work centers. C) specifies the order in which jobs should be done at each center. D) assigns workers to jobs. E) assigns workers to machines.
C) specifies the order in which jobs should be done at each center.
A material requirements plan contains information with regard to all of the following EXCEPT: A) quantities and required delivery dates of all subassemblies. B) quantities and required delivery dates of final products. C) the capacity needed to provide the projected output rate. D) inventory on hand for each final product. E) inventory on hand for each subassembly.
C) the capacity needed to provide the projected output rate.
If a load report (resource requirements profile) shows a work center scheduled beyond capacity: A) the company must add capacity by enlarging the facility. B) the company must add capacity by such tactics as overtime and subcontracting. C) the work center's load may be smoothed by such tactics as operations splitting or lot splitting. D) the aggregate plan must be revised. E) the Wagner-Whitin algorithm should be used to rebalance the load.
C) the work center's load may be smoothed by such tactics as operations splitting or lot splitting.
What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? A) modular bills B) time phasing C) time fences D) lot sizing E) closed loop system
C) time fences
10) The two most basic inventory questions answered by the typical inventory model are:
C) timing of orders and order quantity.
Average completion time for a schedule sequence at a work center is the ratio of: A) total processing time to the number of jobs. B) total flow time to total processing time. C) total flow time to the number of jobs. D) total processing time plus total late time to the number of jobs. E) total flow time plus total late time to the number of jobs.
C) total flow time to the number of jobs.
15) Most inventory models attempt to minimize:
C) total inventory-based costs.
The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the longest processing time rule, what is the lateness of job A? Job Processing Time (days) Job due date (days) A 20 180 B 30 200 C 10 175 D 16 230 E 18 210 A) 0.0 days B) 24.0 days C) 7.4 days D) 10.0 days E) 11.6 days
D) 10.0 days
6) A bakery wants to determine how many trays of doughnuts it should prepare each day. Demand is normal with a mean of 5 trays and standard deviation of 1 tray. If the owner wants a service level of at least 95%, how many trays should he prepare (rounded to the nearest whole tray)? Assume doughnuts have no salvage value after the day is complete.
D) 7
8) Which of the following statements about ABC analysis is FALSE?
D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
28) Which of these statements about the production order quantity model is FALSE?
D) All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.
What is a method of input-output control that uses a system of cards to limit the amount of work at a work center and also to control lead time and monitor backlog? A) the assignment method B) backward scheduling C) forward scheduling D) ConWIP cards E) level material use
D) ConWIP cards
Five jobs are waiting to be processed. Their processing times and due dates are given below. Using the shortest processing time dispatching rule, in which order should the jobs be processed? Job Processing Time (days) Job due date (days) A 4 7 B 7 4 C 8 11 D 3 5 E 5 8 A) A, B, C, D, E B) C, E, A, D, B C) B, D, A, E, C D) D, A, E, B, C E) C, E, A, B, D
D) D, A, E, B, C
Which of the following is TRUE regarding the POQ lot-sizing method? A) Each POQ interval is recalculated at the time of the order release. B) Each order quantity and POQ interval are recalculated at the time of the order release. C) The POQ interval and all order quantities remain fixed throughout the planning horizon. D) Each order quantity is recalculated at the time of the order release. E) POQ lot sizes are always at least as large as the EOQ lot sizes would be.
D) Each order quantity is recalculated at the time of the order release.
19) Which of the following statements about the basic EOQ model is FALSE?
D) If annual demand were to double, the EOQ would also double.
Which of the following statements regarding MRP in services is TRUE? A) MRP is for manufacturing only, and it is not applicable to services. B) MRP can be used in services, but only in those that offer very limited customization. C) MRP only works in services for demand that is independent. D) Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling. E) None of the above is true.
D) Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling.
32) Which of the following statements about quantity discounts is FALSE?
D) The larger the annual demand, the less attractive a discount schedule will be.
Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Alpha before work center Beta. According to Johnson's rule, which job should be scheduled first in the sequence? Job Alpha Beta R 20 10 S 25 35 T 50 20 U 15 35 V 55 75 A) R B) S C) T D) U E) V
D) U
Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each work center is contained in the table below. Each job requires work center Alpha before work center Beta. According to Johnson's rule, what is the optimum sequence of jobs and the minimum time for completion of all jobs? Job Alpha Beta R 20 10 S 25 35 T 50 20 U 15 35 V 55 75 A) V-T-S-U-R; 225 B) U-R-T-S-V; 175 C) R-S-T-U-V; 240 D) U-S-V-T-R; 200 E) R-U-T-S-V; 175
D) U-S-V-T-R; 200
It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 As? A) Week 1, 300 As B) Week 1, 40 As C) Week 5, 40 As D) Week 4, 40 As E) Week 4, 300 As
D) Week 4, 40 As
8) If demand is not uniform and constant, then stockout risks can be controlled by:
D) adding safety stock.
14) Among the advantages of cycle counting is that it:
D) allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory.
Enterprise resource planning (ERP): A) seldom requires software upgrade or enhancement. B) does not integrate well with functional areas other than operations. C) is inexpensive to implement. D) automates and integrates the majority of business processes. E) all of the above
D) automates and integrates the majority of business processes.
6) The purpose of safety stock is to:
D) control the likelihood of a stockout due to variable demand and/or lead time.
A recent advance in short-term scheduling that makes use of expert systems and simulation in solving dynamic scheduling problems is: A) forward scheduling. B) backward scheduling. C) infinite scheduling. D) finite capacity scheduling. E) progressive scheduling.
D) finite capacity scheduling.
If an assignment problem consists of 6 workers and 7 projects: A) one worker will not get a project assignment. B) one worker will be assigned two projects. C) each worker will contribute work toward the seventh project. D) one project will not get a worker assigned. E) The problem cannot be solved by assignment method.
D) one project will not get a worker assigned.
In MRP, the number of units projected to be available at the beginning of each time period refers to: A) net requirements. B) scheduled receipts. C) planned order releases. D) projected on hand. E) the amount necessary to cover a shortage.
D) projected on hand.
9) Which of the following is NOT one of the four main types of inventory?
D) safety stock inventory
7) The proper quantity of safety stock is typically determined by:
D) setting the level of safety stock so that a given stockout risk is not exceeded.
3) A disadvantage of the fixed-period inventory system is that:
D) since there is no count of inventory during the review period, a stockout is possible.
Flow time represents the time: A) an order spends waiting for processing at a work center. B) an order spends being processed at a work center. C) an order spends moving from one work center to another. D) to complete an order, including time spent in processing and in waiting. E) none of the above
D) to complete an order, including time spent in processing and in waiting.
The minimum record accuracy required for successful MRP is approximately which of the following? A) lower than 90% B) 90% C) 95% D) 97% E) 99%
E) 99%
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A) "pseudo" B) planning C) modular D) low-level E) A and B
E) A and B
Distortion in MRP systems can be minimized when safety stock is held at the: A) purchased component or raw material level. B) work-in-process level. C) finished goods level. D) A and B E) A and C
E) A and C
Which of the following is a limitation of rules-based dispatching systems? A) Rules need to be revised to adjust to changes in orders, product mix, and so forth. B) Rules may not recognize idle resources. C) Rules may not recognize bottleneck resources D) Rules may not be able to prioritize two jobs with identical due dates. E) All of the above are limitations.
E) All of the above are limitations
Capacity planning in closed-loop MRP: A) utilizes feedback about workload from each work center. B) may make use of resource requirements profiles (load reports). C) may smooth work center loads with such tactics as overlapping and lot splitting. D) does not add capacity, but rather seeks effective use of existing capacity. E) All of the above are true.
E) All of the above are true.
Which of the following statements regarding the gross material requirements plan is TRUE? A) It shows total demand for an item. B) It shows when an item must be ordered from a supplier or when production must be started. C) It combines a master production schedule with the time-phased schedule. D) It requires several inputs, including an accurate bill of material. E) All of the above are true.
E) All of the above are true.
What does the use of the shortest processing time sequencing rule generally produce? A) maximum average lateness B) maximum utilization C) maximum effectiveness D) minimum average flow time E) B and D
E) B and D
Using LPT priority would result in what sequence for Jobs A, B, C, and D if their process times are 4, 6, 5, and 2 respectively? A) ABCD B) DCBA C) DACB D) DABC E) BCAD
E) BCAD
3) If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?
E) Cannot be determined without lead time data.
What does the POQ interval equal? A) the number of periods of average demand covered by the safety stock B) the same number of periods that are on the "not to be rescheduled" side of the time fence C) EOQ / maximum gross requirement D) the number of periods until the incoming projected on hand runs out E) EOQ / average demand per period
E) EOQ / average demand per period
Which of the following is an advantage of the FCFS dispatching rule when used in services? A) FCFS maximizes utilization. B) FCFS minimizes the average number of jobs in the system. C) FCFS minimizes the average lateness of all jobs. D) FCFS maximizes the number of jobs completed on time. E) FCFS seems fair to customers.
E) FCFS seems fair to customers.
When a set of jobs must pass through two workstations whose sequence is fixed, ________ is the sequencing rule most commonly applied. A) critical ratio B) earliest due date C) first come, first served D) slack time remaining E) Johnson's rule
E) Johnson's rule
If safety stock is desired, it should be built into which portion of MRP? A) any B) none C) raw materials D) finished goods E) either C or D
E) either C or D
31) When quantity discounts are allowed, the cost-minimizing order quantity:
E) minimizes the sum of holding, ordering, and product costs.
5) Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be?
E) more than 40
4) Which category of inventory holding costs has a much higher percentage than average for rapid-change industries such as PCs and cell phones?
E) pilferage, scrap, and obsolescence
7) Which of the following should be higher in P systems than Q systems?
E) safety stock
Earliest due date is a shop floor dispatching (sequencing) rule that relates the time available to complete a job to the amount of work left to be completed.
False
In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.
False
MRP can be effective only if very accurate lot sizes are calculated in advance.
False
MRP is an excellent tool for scheduling components with variable lead times.
False
Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.
False
Scheduling optimization systems used in retail stores typically track customer traffic in 4-hour time increments.
False
The critical ratio sequencing rule prioritizes the jobs based on the importance or value of the customers who have placed the orders.
False
The seven types of waste in the Lean Philosophy are
OVERPRODUCTION INVENTORY MOTION DEFECTS OVER-PROCESSING WAITING TRANSPORT
A Gantt load chart shows the loading and idle time of several departments, machines, or facilities.
True
Because of the significance of labor in the scheduling of services, behavioral and social issues, wage and hour laws, and union contracts all complicate the scheduling process.
True
Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.
True
DRP is a time-phased stock-replenishment plan for all levels of a distribution network.
True
Dispatching rules are typically judged by four effectiveness criteria: average completion time, utilization, average number of jobs in the system, and average job lateness.
True
Finite capacity scheduling provides the user with graphical interactive computing, which is the technique's primary advantage over rule-based scheduling.
True
Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.
True
Gross material requirements do not take into account the amount of inventory on hand.
True
If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.
True
If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.
True
In general, the lot-for-lot approach should be used whenever economical.
True
In manufacturing scheduling, physical inventories of goods can buffer variations in demand, but service scheduling normally lacks that buffer because services are generally consumed at the same time they are delivered.
True
In services, the scheduling emphasis is usually on staffing levels, not materials.
True
Johnson's rule sequences a set of jobs through two different machines or work centers in the same order.
True
Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of dependent inventory models.
True
MRP is generally practiced on items with dependent demand.
True
One criterion for developing effective schedules is minimizing completion time.
True
Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.
True
Reduced inventory levels and faster response to market changes are both benefits of MRP.
True
Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.
True
The assignment method provides an optimum, one-to-one assignment of jobs to resources.
True
The benefits of effective scheduling include lower cost, faster throughput, and dependable delivery.
True
The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.
True
The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.
True
Time fences divide that segment of the master schedule that can be revised from that section that is "not to be rescheduled."
True
Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.
True
When safety stock is deemed absolutely necessary, the usual policy is to build it into (increase) the inventory requirement of the MRP logic.
True
The correct sequence from longest to smallest duration scheduling is: A) capacity planning, aggregate planning, master schedule, short-term scheduling. B) aggregate planning, capacity planning, master schedule, short-term scheduling. C) master schedule, capacity planning, aggregate planning, short-term scheduling. D) master schedule, aggregate planning, capacity planning, short-term scheduling. E) capacity planning, master schedule, aggregate planning, short-term scheduling.
A) capacity planning, aggregate planning, master schedule, short-term scheduling.
Which of the following is NOT a key benefit of MRP? A) increased quality B) better response to customer orders C) faster response to market changes D) improved utilization of facilities and labor E) reduced inventory levels
A) increased quality
7) Which of the following is a function of inventory?
A) to decouple various parts of the production process B) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand C) to take advantage of quantity discounts D) to hedge against inflation E) All of the above are functions of inventory.
16) Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? A) Just-in-time (JIT) B) Toyota Production System (TPS) C) Lean operations D) Material requirements planning (MRP) E) kanban
Answer: A) Just-in-time (JIT)
12) Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy? A) product development skills B) cost C) capacity D) speed E) flexibility
Answer: A) product development skills
12) What does TPS stand for? A) Total Production Streamlining B) Toyota Production System C) Taguchi's Production S's D) Total Process Simplification E) Transparent Processing System
Answer: B) Toyota Production System
15) Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A) Just-in-time (JIT) B) Toyota Production System (TPS) C) Lean operations D) Material requirements planning (MRP) E) kanban
Answer: B) Toyota Production System (TPS)
10) In most manufacturing industries, which of the following would likely represent the largest cost to the firm? A) transportation B) purchasing C) insurance D) financing E) advertising
Answer: B) purchasing
14) Which of the following is NOT a source of variability? A) Employees, machines, and suppliers produce units late. B) Customer demand is unknown. C) Employees, machines, and suppliers produce units that conform to standards. D) Engineering drawings are inaccurate. E) Drawings or specifications are incomplete.
Answer: C) Employees, machines, and suppliers produce units that conform to standards.
19) Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? A) Just-in-time (JIT) B) Toyota Production System (TPS) C) Lean operations D) Material requirements planning (MRP) E) kanban
Answer: C) Lean operations
14) Which of the following statements is true regarding the leverage of supply chain savings? A) Supply chain leverage is about the same for all industries. B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. C) Supply chain savings exert more leverage as the firm's net profit margin decreases. D) Supply chain leverage depends only upon the percent of sales spent in the supply chain. E) None of the above is true.
Answer: C) Supply chain savings exert more leverage as the firm's net profit margin decreases.
20) Which of the following is NOT one of the Seven Wastes? A) overproduction B) transportation C) assignment D) defective product E) motion
Answer: C) assignment
4) Outsourcing: A) transfers traditional internal activities to outside vendors. B) utilizes the efficiency that comes with specialization. C) allows the outsourcing firm to focus on its key success factors. D) All of the above are true of outsourcing. E) None of the above is true of outsourcing.
Answer: D) All of the above are true of outsourcing.
5) The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is: A) a standard use of the make-or-buy decision. B) not allowed by the ethics code of the Supply Management Institute. C) offshoring. D) outsourcing. E) keiretsu.
Answer: D) outsourcing.
13) For which corporate strategy(ies) should supply chain inventory be minimized? A) low cost B) response C) differentiation D) low cost and response E) low cost and differentiation
Answer: E) low cost and differentiation
13) Which of the following is generally found in most lean environments? A) a push or pull system, depending upon the rate of demand B) a push system for high margin items and a pull system for low margin items C) a push system for purchased parts and a pull system for manufactured parts D) push systems E) pull systems
Answer: E) pull systems
18) Manufacturing cycle time is best defined as the: A) length of the work shift, expressed in minutes per day. B) time it takes a unit to move from one workstation to the next. C) time between the start of one unit and the start of the next unit. D) sum of all the task times to make one unit of a product. E) time from raw materials receipt to finished product exit.
Answer: E) time from raw materials receipt to finished product exit.
1) ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.
Answer: FALSE
1) Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation.
Answer: FALSE
1) With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.
Answer: FALSE
2) TPS stands for Total Production Streamlining.
Answer: FALSE
2) The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.
Answer: FALSE
3) ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.
Answer: FALSE
4) Cycle counting is an inventory control technique exclusively used for cyclical items.
Answer: FALSE
4) In a JIT system, product inspection adds value by identifying defective items.
Answer: FALSE
5) A firm that employs a response strategy should minimize inventory throughout the supply chain.
Answer: FALSE
5) Customer demand will always remain an unknown, so it is not considered a source of variability.
Answer: FALSE
5) Work-in-process inventory is devoted to maintenance, repair, and operating materials.
Answer: FALSE
6) Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.
Answer: FALSE
7) A push system means providing the next station with exactly what is needed when it is needed.
Answer: FALSE
7) Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.
Answer: FALSE
9) Increasing inventory exposes variability in production processes.
Answer: FALSE
1) Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.
Answer: TRUE
1) TPS stands for Toyota Production System.
Answer: TRUE
10) The 5Ss—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self discipline—are important to lean production because they act as a means to reduce waste.
Answer: TRUE
11) When implemented as a comprehensive operations strategy, JIT, TPS, and lean systems sustain competitive advantage and result in increased overall returns.
Answer: TRUE
2) A major challenge in inventory management is to maintain a balance between inventory investment and customer service.
Answer: TRUE
2) Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
Answer: TRUE
3) Product storage is an example of waste in the sense that no value is added.
Answer: TRUE
3) The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.
Answer: TRUE
4) One function of inventory is to take advantage of quantity discounts.
Answer: TRUE
4) Savings in the supply chain exert more leverage as the firm's net profit margin decreases.
Answer: TRUE
5) One advantage of cycle counting is that it maintains accurate inventory records.
Answer: TRUE
6) In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification.
Answer: TRUE
6) Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate.
Answer: TRUE
7) Retail inventory that is unaccounted for between receipt and time of sale is known as shrinkage.
Answer: TRUE
8) Waste is anything that does not add value from the consumer's perspective.
Answer: TRUE
6) Which of the following statements regarding Amazon.com is FALSE?
B) The company was founded as, and still is, a "virtual" retailer with no inventory.
Forward scheduling is the scheduling of: A) the end items or finished products. B) jobs as soon as the requirements are known. C) the start items or component parts. D) the final operation first beginning with the due date. E) jobs according to their profit contributions.
B) jobs as soon as the requirements are known.
Firms making many different final products use ________ to facilitate production scheduling. A) planning bills B) modular bills C) phantom bills D) overdue bills E) gross requirements bills
B) modular bills
10) ABC analysis is based upon the principle that:
B) there are usually a few critical items, and many items that are less critical.
Which of the following is NOT required to be known in order to schedule process-focused facilities? A) the sequence of work B) which workers are assigned to each work center C) the time required for each item D) the capacity of each work center E) the availability of each work center
B) which workers are assigned to each work center
Which of the following statements regarding Wheeled Coach is FALSE? A) Wheeled Coach has found competitive advantage through MRP. B) Wheeled Coach builds ambulances in a repetitive process. C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. D) Wheeled Coach's MRP system maintains excellent record integrity. E) Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.
C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.
The short-term scheduling activity called "loading": A) assigns dates to specific jobs or operations steps. B) specifies the order in which jobs should be done at each center. C) assigns jobs to work centers D) assigns workers to jobs. E) assigns workers to machines.
C) assigns jobs to work centers
A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors , then the bills of material are classified as which of the following? A) phantom B) planning C) modular D) low-level E) A and B
C) modular
9) All EXCEPT which of the following statements about ABC analysis are true?
D) ABC analysis suggests that all items require the same high degree of control.
Dependent demand and independent demand items differ in that: A) for any product, all components are dependent-demand items. B) the need for independent-demand items is forecast. C) the need for dependent-demand items is calculated. D) All of the above are true. E) None of the above is true.
D) All of the above are true.
Short-term schedules are prepared: A) directly from the aggregate plans. B) directly from the capacity plans. C) from inventory records for items that have been used up. D) from master schedules, which are derived from aggregate plans. E) from the purchasing plans.
D) from master schedules, which are derived from aggregate plans.
Which of the following is NOT a key direct benefit from effective internal or external scheduling? A) lower cost B) greater use of assets C) more dependable delivery D) higher quality E) added flexibility
D) higher quality
What is the objective of scheduling? A) maximize quality B) minimize cost C) minimize response time D) prioritize and allocate demand to available facilities E) minimize lead time
D) prioritize and allocate demand to available facilities
Forward scheduling: A) begins with a delivery date, then offsets each operation one at a time, in reverse order. B) has the same meaning as "finite loading." C) is often used in service environments such as catering a banquet or scheduling surgery. D) starts the schedule as soon as the job requirements are known. E) produces a schedule only if it meets the due date.
D) starts the schedule as soon as the job requirements are known.
Demand for a given item is said to be dependent if: A) it originates from the external customer. B) there is a deep bill of material. C) the finished products are mostly services (rather than goods). D) there is a clearly identifiable parent. E) the item has several children.
D) there is a clearly identifiable parent.
8) Which of the following would NOT generally be a motive for a firm to hold inventories?
D) to minimize holding costs
Which of the following statements regarding scheduling at Delta Airlines is FALSE? A) About one flight in twenty is disrupted by weather events. B) Schedule changes at one airport have a ripple effect that may have impacts in many others. C) Delta's high-tech computer and communications system is located in Atlanta. D) Delta's rapid rescheduling uses mathematical scheduling models. E) Delta's rapid rescheduling promotes air safety and limits traveler inconvenience, but has not resulted in money savings for Delta.
E) Delta's rapid rescheduling promotes air safety and limits traveler inconvenience, but has not resulted in money savings for Delta.
Which of the following statements best compares modular bills and phantom bills? A) Both pertain to assemblies that are not inventoried. B) There is no difference between the two. C) Both pertain to assemblies that are inventoried. D) Modular bills are used for assemblies that are not inventoried, unlike phantom bills. E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.
E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.
Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation? A) The material plan must meet both schedule requirements and facility capabilities. B) The plan must be executed as designed. C) Inventory investment must be minimized. D) Excellent record integrity must be maintained. E) The process must adhere to stringent quality control standards.
E) The process must adhere to stringent quality control standards.
11) ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?
E) annual dollar volume
Effective use of MRP and other dependent demand models does not require which of the following? A) master production schedule B) bill of materials C) inventory availability D) lead times E) cost of individual components
E) cost of individual components
Which of the following considers process capacity when scheduling? A) cap loading B) constrained loading C) capacitated loading D) backward loading E) finite loading
E) finite loading
Which of the following is not an effectiveness criterion for scheduling? A) minimizing customer waiting time B) minimizing completion time C) minimizing WIP inventory D) maximizing utilization E) maximizing flow time
E) maximizing flow time
"Phantom bills" are bills of material for subassemblies that do not exist in reality.
False
A dependent demand item is so called because its demand is dependent on customer preferences.
False
By convention, the top level in a product structure is designated level 1.
False
Gantt charts are useful for scheduling jobs, but not for loading them.
False
Process-focused facilities and repetitive facilities generate forward-looking schedules, but process-focused facilities do this with JIT and kanban while repetitive facilities generally use MRP.
False
Short-term scheduling is important to efficiency and to cost reduction, but its impact is not of strategic importance.
False
With forward scheduling, jobs are scheduled as late as possible within the time allowed by the customer due dates.
False
Delta uses mathematical short-term scheduling techniques and a high-tech nerve center to manage the rapid rescheduling necessary to cope with weather delays and similar disruptions.
True
The constant work-in-process (ConWIP) card aids input-output control by limiting the amount of work in a work center.
True
The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.
True
The time-phased product structure, unlike the bill of material, adds the concept of lead times.
True