Final exam scma

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A manufacturer embarking on a Six Sigma program sets the goal of having true Six Sigma capability for all processes by the end of the month. If their current process capability index on a key metric is less than 2.0 and the process capability ratio is 1.0, what must happen with the process standard deviation? A) The process standard deviation must be doubled. B) The process standard deviation must be reduced by a factor of six. C) The process standard deviation must be cut in half. D) The process tolerances should be doubled.

A benchmarking team develops improvement plans and team assignments. Once the plans are implemented it monitors progress and recalibrates benchmarks as improvements are made. This phase of the benchmarking process is called: A) implementation. B) analysis. C) integration. D) action.

A bottleneck is an operation that has the lowest effective capacity of any operation in the process.

A computer-generated memo used by inventory planners to make decisions about releasing new orders and adjusting due dates of scheduled receipts is a(n): A) enterprise report. B) infinite capacity. C) action notice. D) input-output report.

A continuous review system is sometimes called a fixed interval reorder system.

A continuous review system is sometimes called a reorder point system.

A cost that is incurred if some aspect of a service must be performed again is called a(n): A) yield loss. B) prevention cost. C) appraisal cost. D) rework cost.

A manufacturing firm's sales and operations plan generates both production plan and a staffing plan.

A predetermined data approach to time standards can be completed before actual production begins.

A firm that chooses to compete based on delivery speed and variety would most likely have: A) a make-to-order production and inventory strategy. B) an assemble-to-order production and inventory strategy. C) a make-to-stock production and inventory strategy. D) an engineer-to-order production and inventory strategy.

A firm's actual throughput and profit depend more on the contribution margin generated at the bottleneck than by the contribution margin of each individual product produced.

A firm's internal program in employee involvement includes which of the following considerations? A) defining who is the customer B) supplier management C) product availability D) psychological impressions

A fishbone diagram identifies which category is most frequently observed out of all the categories for which you have data.

A front-office module for an ERP system includes: A) manufacturing. B) accounting and finance. C) sales and marketing. D) human resources.

product family

A group of customers, services, or products that have similar demand requirements and common process, labor, and materials requirements is called a(n) ___

A group of people, who are knowledgeable about the process and its disconnects, meets to propose ideas for change in a rapid-fire manner. Such a session is called a brainstorming session.

A linear regression model results in the equation Y = 15 - 23X. If the coefficient of determination is a perfect 1.0, the correlation coefficient must be -1.

A manager is interested in setting a time standard for a machining operation. Which one of the following is LEAST likely to be of use? A) time-study method B) elemental standard data approach C) predetermined data approach D) work sampling method

A manager of a fiberglass molding operation suspects that the number of process failures is related to the number of total units produced of a particular product. A tool most useful in this analysis would be a: A) checklist. B) cause-and-effect diagram. C) Pareto chart. D) scatter diagram.

A professor, dissatisfied with a product he's purchased, bad mouths the product to his class, resulting in decreased market share (since the students believe everything he tells them). The manufacturer suffers: A) an internal failure cost. B) an external failure cost. C) a prevention cost. D) an appraisal cost.

A quantitative method used to evaluate multiple locations based on total cost of production or service operations is called A) break-even analysis. B) the transportation method. C) a preference matrix. D) the load-distance method.

A quantitative method used to evaluate single locations based primarily on proximity is: A) break-even analysis. B) the transportation method. C) a preference matrix. D) the load-distance method

A responsive supply chain typically has: A) a low capacity cushion. B) high inventory turns. C) supply chain partners that emphasize low prices. D) supply chain partners that emphasize volume flexibility.

Which one of the following statements about break-even analysis for evaluating products or services is true?

A restaurant's opening of downsized facilities with only drive-through service is an example of lowering fixed costs and the break-even quantity.

A rotating schedule calls for each employee to work the same days and hours each week.

A sampling plan is best for evaluating quality when: (1) Inspection costs are high (2) Inspection costs are low (3) Non-destructive testing is available (4) Destructive testing is required A) 1 and 3 B) 1 and 4 C) 2 and 3 D) 2 and 4

A scatter diagram is a graphical technique that shows whether two variables may be related.

A service blueprint is a flowchart of a service process that shows which of its steps has high customer contact.

A set of activities that delivers value to external customers is a: A) supply chain. B) core process. C) support process. D) system.

A simple moving average of one period will yield identical results to a naive forecast.

A somewhat successful computer manufacturer makes a generic computer in five exciting colors. Once orders are received, the computer guts are encased in the customer's choice of colored case at the factory. This approach to production is known as: A) channel assembly. B) postponement. C) strategic sourcing. D) strategic production.

A stock-keeping unit (SKU) is a specially designed container for holding a specific amount of an inventory item somewhere along the supply chain.

A stock-keeping unit (SKU) is an individual item or product that has an identifying code and is held in inventory somewhere along the supply chain.

Better forecasting processes yield better forecasts.

Channel assembly is the process of using members of the distribution channel as if they were assembly stations in the factory.

Combination forecasting is a method of forecasting that selects the best from a group of forecasts generated by simple techniques.

Combination forecasting is most effective when the techniques being combined contribute different kinds of information to the forecasting process

quality at the source

Defects are caught and corrected where they were created under a(n) ________ philosophy.

Dependent demand for an item occurs because the quantity required for it varies with the production plans of one or more parents

Dependent demand items are those items for which demand is influenced by market conditions and is not related to inventory decisions for any other item held in stock.

Examples of radio frequency identification (RFID) could include all of the following EXCEPT: A) tracking the status of engineering changes during development of a new product line. B) tracking cases and pallets of products into and out of warehouse inventories. C) air travel use for baggage tracking. D) tracking the flow of parts through a manufacturing process.

Field service representatives are classified as a: A) back office. B) hybrid office. C) front office. D) mid office.

Financial and market results are one consideration of the Baldrige Performance Excellence Program.

Firms that are most likely to use backlogs tend to have a make-to-order strategy.

Geographical Information System (GIS) tools are useful in solving single-facility location problems, but because of software limitations, cannot be used for determining multiple-facility locations.

ISO 14000:2004 is a documentation standard that requires participating companies to keep track of their raw-materials use.

ISO 9001:2008 standards provide strict guidelines for how products are to be produced.

If a planned receipt for an item is due in week 6 and the item's lead time is two weeks, in which week will the corresponding planned order release occur? A) week 2 B) week 4 C) week 6 D) week 8

If a process under analysis is extensive and cuts across several departmental lines, it may benefit from forming a(n): A) brainstorming team. B) benchmarking team. C) steering team. D) implementation team.

If a product initially fails to live up to the customer's expectations, which dimension of quality might salvage the sale and the company's reputation? A) psychological impressions B) fitness for use C) support D) value

b, 30

In an ABC analysis, class ________ SKUs, which typically make up about ________ % of the SKUs, account for only about 15% of the dollar usage.

increases

In an EOQ model, as the annual demand for an item increases, the EOQ for the item ________.

decreases

In an EOQ model, as the annual holding cost for an item increases, the EOQ for the item ________.

decreases

In an EOQ model, as the ordering cost for an item decreases, the EOQ for the item ________.

holding

Inventory ________ cost is the variable cost of keeping items on hand, such as storage and handling, taxes, insurance, and shrinkage.

Inventory management is the planning and controlling of inventories in order to meet the competitive priorities of the organization.

cycle counting

Inventory manager George Costanza knows too well that shrinkage occurs so he goes to the stock room every day to do a spot check of a few pre-selected items, physically counting them to verify that his count agrees with the number indicated by their computerized inventory system. This method of inventory control is known as ________.

Investment return that is unrealized by stocking raw materials and finished goods can be classified as holding cost.

It is desirable for a firm in a responsive supply chain to have: A) low-capacity cushions. B) delivery by railroad. C) high-capacity utilization consistent with high-volume delivery. D) inventory investments as needed to enable fast delivery times.

Items sold to a firm's customers are called: A) quarantined materials. B) work-in-process. C) raw materials. D) finished goods.

The decision rule _______ chooses the alternative that is the "best of the best."

Maximax

One source of disruption caused by the internal supply chain is: A) forecast error. B) underfilled shipments. C) volume changes. D) late deliveries

a linkage to the financial system

One thing that an MRP II system has that an MRP system does not is ________.

One type of cost considered when preparing a sales and operations plan is inventory holding cost.

backward integration

One way to gain control over suppliers in a chain is to buy a controlling interest in them, known as ________.

One way to mitigate the bullwhip effect is to refuse to offer discounts and sales

Operations planning and scheduling is the process of making sure demand and supply plans are in balance.

available to promise inventory

Operations produces a number of items in one production period. Those items that are not produced for a specific customer order are ________.

scope

Process ________ is the boundary of the process to be analyzed.

Process analysis focuses on: A) how work is actually done. B) who is responsible for the customer. C) the customer's needs. D) the number of steps in between supplier and customer.

Process capability can be addressed when: A) assignable causes are present. B) a process is in statistical control. C) a process is in statistical control but assignable causes are present. D) the nominal value equals the tolerance regardless of assignable causes.

Process centering is shown by an chart.

Process improvement teams that focus on processes that cut across departmental boundaries have the silo mentality

Process improvement teams that focus on processes that cut across departmental boundaries have the silo mentality.

The Baldrige Performance Excellence Program: A) focuses on large manufacturing companies because of the impact they have on the economy. B) involves seven major criteria that are built on the base of customer satisfaction. C) is a set of standards governing the requirements for documentation of a quality program. D) was devised by the International Organization for Standardization for companies doing business in Europe.

functional benchmarking

The bursar's office at your university decides to benchmark the collections department of a credit agency to improve their own collection rate. This is an example of ________.

The employees of Global Bike Incorporated specialized in either their mountain bike or touring bike line, but there were a few workers that were equally adept at assembling either product. For sales and operations planning purposes, the latter group could be: A) aggregated. B) reassigned. C) subcontracted. D) overtimed.

The finished goods of one firm may actually be the raw materials for another firm.

The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule, but less inventory on hand than the fixed order quantity rule.

The planning horizon for a sales and operations plan is typically: A) 0 - 3 months. B) 3 - 18 months. C) 18 - 36 months. D) 36 months - 60 months.

The plans for the components, purchased materials, and workstations are developed in the: A) master production scheduling process. B) material requirements planning process. C) scheduling process. D) constraint management process.

The portion of the master production schedule farthest into the future is often frozen to reduce forecasting requirements.

The practice of selecting suppliers and giving them significant responsibility for the design of certain components or systems of the product is called: A) value analysis. B) locus of control. C) presourcing. D) vendor-managed inventories.

The practice whereby a manufacturer has inventories of materials on consignment from its suppliers falls under the scope of: A) inventory pooling control. B) virtual distribution. C) electronic inventory control. D) vendor-managed inventories.

Technological forecasting is an application of executive opinion in light of the difficulties in keeping abreast of the latest advances in technology.

The 15-year-old car didn't dazzle students or members of the opposite sex, but it started every morning and evening and got the professor to his destination on time, thereby scoring high on the: A) psychological impressions scale of quality. B) fitness for use scale of quality. C) support scale of quality. D) bells and whistles scale of quality.

The Baldrige Performance Excellence Program considers a company's business results but ISO 9001:2008 registration does not.

The Baldrige Performance Excellence Program is administered by: A) NASA. B) NIST. C) NORAD. D) NOOB.

shrinkage

__ occurs when inventory is stolen by employees and customers or when the inventory cannot be sold at full value owing to model changes or low demand.

fitness for use

__ refers to how well the product or service performs its intended purpose.

independent variables

___ are assumed to "cause" the results that a forecaster wishes to predict.

raw materials

___ are inventories needed for the production of goods and services; they are considered to be the inputs to the transformation process.

Problem-solving teams or quality circles

___ are small groups of supervisors and employees who meet to identify, analyze, and solve production and quality problems

levers

___ are the basic tactics for reducing inventories in supply chains.

external failure

___ costs arise when a defect is discovered after the customer has received the product or service

Internal benchmarking

___ data is probably the easiest to obtain compared to other types of benchmarking data.

forward placement

___ involves locating the stock closer to customers at a warehouse, distribution center, or retailer

six sigma

___ is a comprehensive and flexible system for achieving, sustaining, and maximizing business success through intensive data analysis and process management, improvement and reengineering.

inventory pricing

___ is a reduction in inventory and safety stock because of the merging of variable demands from customers.

balance delay

___ is the amount by which efficiency falls short of 100 percent.

casual

____ methods use historical data on independent variables to predict demand.

overtime

_____ is the situation that occurs when employees work longer than the regular workday or workweek.

Cycle time

is the maximum time allowed for work on a unit at each station.

Throughput time

is the total time taken from the start to the finish of a process.

t/f A nested process refers to a process within a process.

t/f Manufacturing processes tend to be capital intensive, while service processes tend to be more labor intensive

t/f One distinction between core processes and support processes is that core process can cut across the organization while support processes do not.

t/f Operations management refers to the direction and control of inputs that transform processes into products and services.

t/f Support functions in an organization include Accounting, Human Resources and Engineering.

t/f The supplier relationship process selects the suppliers of services, materials and information, while the order fulfillment process facilitates the timely and efficient flow of these items into the firm

t/f The three main line functions of any business include Operations, Finance and Marketing.

tf A continuous flow process is characterized by a high degree of job customization.

tf A front office structure features high levels of customer contact where the service provider interacts directly with the internal or external customer.

tf A job process has the highest level of customization of the process choices.

tf A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts.

tf A moment of truth or service encounter is face-to-face interaction between the customer and a service provider.

tf A toaster is an example of flexible automation.

tf An off-diagonal position in the product-process matrix is typically more profitable than a position on the diagonal.

tf Assemble-to-order strategy produces a wide variety of products from relatively few assemblies and components after orders are received.

tf Back office work is typically routine, with many steps having considerable divergence.

tf Capital intensive automation is appropriate for high and low volume operations.

tf Customer involvement reflects the ways in which customers become part of the process and the extent of their participation.

tf Fixed automation is appropriate for line and continuous flow operations.

tf The product-process matrix brings together the elements of volume, process, and quality.

The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series.

The transportation method provides optimal solutions for minimization of shipping costs in multiple facility location problems.

The trend projection with regression model can forecast demand well into the future.

The two-bin inventory system is a type of visual system.

The university housekeeping and maintenance staff was cut by 50% during late December and early January when students were home breaking things and trashing their parents' houses instead of university property. This type of schedule for housekeeping and maintenance workers is a: A) vacation schedule. B) part time schedule. C) undertime schedule. D) seasonal schedule.

operational expense

The wages paid to workers on the line are categorized as ________ in the Theory of Constraints.

Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: supply options and demand options. If an organization that faces seasonal demand uses a supply option approach, which one of the following actions is it most likely to implement? A) introduction of complementary products B) creating a stock of anticipation inventory C) advertising to generate demand during off-peak periods D) discounting products in off-peak periods

Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high impact on the company's ability to meet its goals and the factors themselves must be affected by the location decision.

Under which one of the following circumstances can an MRP system be used to its best advantage? A) when the item's demand depends only on customer demand B) when the item's demand is uniform C) when the item's demand is constant D) when the item's demand depends on the production plans of its parent(s)

Undertime is the situation that occurs when employees do not have enough productive work for the regular-time workday or workweek.

Value analysis is a systematic effort to reduce the cost or improve the performance of a service or product.

floating bottlenecks

Variability of a firm's workload may create ________.

random

Variations in demand that cannot be predicted are said to be a(n) ________ pattern.

Vendor-managed inventories are an example of the forward-placement tactic.

lead time

Waiting time and process time are two components of ________.

Weeks of inventory and inventory turns are reflected in: A) working capital. B) operating expenses. C) cost of goods sold. D) cash flow

What is generally TRUE about class A SKUs in ABC analysis? They represent about: A) 20 percent of all SKUs. B) 30 percent of all SKUs. C) 20 percent of the dollar usage. D) 50 percent of the dollar usage.

What is generally TRUE about class A SKUs in ABC analysis? They represent about: A) 50 percent of all SKUs. B) 80 percent of all SKUs. C) 20 percent of the dollar usage. D) 80 percent of the dollar usage.

What is generally TRUE about class B SKUs in ABC analysis? They represent about: A) 20 percent of all SKUs and about 80 percent of the dollar usage. B) 80 percent of all SKUs and about 20 percent of the dollar usage. C) 30 percent of all SKUs and about 15 percent of the dollar usage. D) 50 percent of all SKUs and about 95 percent of the dollar usage.

What services are typically offered by a 3PL? A) transportation B) product design C) catalog hub D) auction

When considering the plan-do-study-act cycle for problem solving, instructing other employees in the use of the new process occurs in the ________ step. A) plan B) do C) study D) act

When looking at inventory management, the term "lot size" refers to the physical dimensions of the area where the inventory is stored.

When looking at inventory management, the term "lot size" refers to the quantity of an inventory item management either buys from a supplier or manufactures using internal processes.

When managing processes, it is vital that: A) attention is paid to competitive priorities and strategic fit. B) design teams are allowed to function creatively and set their own charter. C) design teams are not held accountable since their involvement ends once the new process rolls out. D) the organization is not satisfied unless fundamental reengineering changes are made.

When managing processes, it is vital that: A) design teams are allowed to function creatively and set their own charter. B) the organization is not satisfied unless fundamental reengineering changes are made. C) sound project management practices are used to implement the redesigned process. D) people are redesigned at the same time the process is redesigned.

When outbound transportation costs are a dominant factor, manufacturing facilities should be located close to suppliers and resources needed for production.

When performing sales and operations planning, companies can aggregate products or services but not members of their workforce.

When should complete inspection be used? A) when inspection tests are destructive B) when inspection tasks are monotonous C) when the cost of product failure is high relative to the inspection costs D) when quality is a competitive priority

When using ABC analysis, class C SKUs should be reviewed frequently.

Which of the following changes would increase the likelihood of a supply chain experiencing the bullwhip effect? A) engineering changes to the design of a product B) instituting a more accurate materials management information system C) closely coordinating promotions with the internal marketing department and suppliers D) using a more reliable delivery company

Which of the following does NOT generate pressure to decrease inventories? A) taxes and insurance B) inventory holding costs C) storage and handling costs D) ordering costs

Which of the following does NOT generate pressure to increase inventories? A) transportation costs B) backorders and stockouts C) inventory shrinkage costs D) quantity discounts

Which of the following does not increase repeatability? A) parts standardization B) customization C) group technology D) flexible automation

Which of the following generates pressure to decrease inventories? A) inventory shrinkage costs B) backorders and stockouts C) transportation costs D) quantity discounts

Which of the following is NOT a lever in an integrated supply chain? A) collaborative activities by supply chain partners B) reduced replenishment lead times C) reduced order lot sizes D) elimination of product shortages and backorders

Which of the following is NOT a stage in the New Service / Product Development Process? A) development B) design C) maintenance D) analysis

Which of the following is NOT an example of dependent demand items? A) shoelaces, shoes B) wheels, car C) carafes, coffeemakers D) ice skates, roller skates

Which of the following is NOT identified in the text as a competitive advantage of a mass customization strategy? A) improvement of the quality of parts produced B) management of customer relationships C) elimination of finished goods inventory D) an increase in perceived value of services or products

With flexible automation, the ability to reprogram instructions can be useful in: A) line flow, but not flexible flow, operations. B) flexible flow, but not line flow, operations. C) either line flow or flexible flow operations. D) situations in which top efficiency is mandatory, but only if volumes are high.

With regards to globalized operations and cost advantages, what China is to manufacturing, India is to: A) services. B) human resources. C) finance. D) supply chain.

With the multiplicative seasonal method of forecasting: A) the times series cannot exhibit a trend. B) seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast. C) the seasonal amplitude is a constant, regardless of the magnitude of average demand. D) there can be only four seasons in the time-series data

Work sampling can be used to estimate the proportion of time spent by people or machines on activities.

Xerox benchmarked its distribution system against that of L. L. Bean's. This is an example of: A) competitive benchmarking. B) internal benchmarking. C) functional benchmarking. D) disaggregate benchmarking.

You are interested in buying a laptop computer. Your list of considerations include the computer's speed in processing data, its weight, screen size and price. You consider a number of different models, and narrow your list based on its speed and monitor screen size, then finally select a model to buy based on its weight and price. In this decision, speed and monitor screen size are examples of: A) order winners. B) a mission statement. C) a needs assessment. D) order qualifiers.

You are interested in buying a laptop computer. Your list of considerations include the computer's speed in processing data, its weight, screen size, and price. You consider a number of different models, and narrow your list based on speed and monitor screen size, then finally select a model to buy based on its weight and price. In this decision, weight and price are examples of: A) order qualifiers. B) a needs assessment. C) order winners. D) a mission statement.

You have taken a job in industry and are facing your first ordering decision. As you prepare to place the order, you remember your instructor teaching you that you wouldn't use the EOQ formula if: A) you followed a make-to-stock strategy for an item with stable demand. B) your carrying costs and ordering costs are known and relatively stable. C) the order size is constrained by capacity limitations such as the number or size of the delivery trucks. D) your setup costs and holding costs remain constant and can be determined.

concurrent engineering

_ brings product engineers, process engineers, marketers, buyers, information specialists, quality specialists and suppliers together to work jointly to design a product and all its processes.

Lot-for-lot, L4L

_ is a lot-sizing rule under which the lot size ordered covers the gross requirements of a single week.

rework

_ is an internal cost of quality incurred when a process step must be performed again or fixed before an item can be shipped.

volume flexibility

_ is the ability to accelerate or decelerate the rate of production quickly to handle large fluctuations in demand.

capacity

_ is the maximum rate of output of a process or a system.

Cost of capital

_ is the opportunity cost of investing in an asset relative to the expected return on assets of similar risk.

on time delivery

_ measures the frequency with which delivery-time promises are met.

cycle

__ inventory is the portion of total inventory that varies directly with lot size.

Safety stock

__ inventory is the surplus inventory that a company holds to protect against uncertainties in demand, lead-time, and supply.

Internal benchmarking

__ involves using an organizational unit with superior performance as the ideal for other departments.

benchmarking

__ is a continuous, systematic procedure that measures a firm's products, services, and processes against those of industry leaders

Drum-buffer-rope (DBR)

__ is a planning and control system that regulates the flow of work-in-process materials at the bottleneck or the capacity constrained resource in a productive system.

cooperative orientation

__ is a supplier relation in which the buyer and seller are partners, each helping the other as much as possible.

value analysis

__ is a systematic effort to reduce the cost or improve the performance of products and services, either purchased or produced

backlog

__ is the accumulation of customer orders that have been promised for delivery at some future date.

acceptance sampling

__ is the application of statistical techniques to determine if the quality of incoming materials should be accepted or rejected, based on the testing of a sample of parts.

economic dependency

__ is the condition where the buyer has purchasing power when the purchasing volume represents a significant share of the supplier's sales

primary

A ________ lever is one that must be activated if inventory is to be reduced.

An example of an internal failure cost would be warranty cost.

Forecasts almost always contain errors

The Delphi method is a process of gaining consensus from a group of experts by debate and voting throughout several rounds of group discussion led by a moderator.

There are three consecutive steps in a customer service process. The first two steps are each capable of serving 25 customers per hour while the third step can process only 20 customers per hour. Which of the following statements regarding this system is TRUE? A) The entire system is capable of processing 25 customers per hour. B) There are floating bottlenecks in the system. C) If the first two steps are run at full capacity, then the third step has a waiting line. D) The first and second steps are bottlenecks for the system

offshore

There was no reason to build a new call center and hire hundreds of customer service representatives when there were perfectly viable options thousands of miles away. Hence, the company decided to ________ this process.

Time-series analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand.

To generate the maximum output, the cycle time should be set as the longest elemental task time.

Traffic flows are one dominant factor in locating manufacturing location

Commodore is debating whether to produce the printed circuit boards for a new line of video cameras or outsource their production to a company that specializes in this operation. Strictly from a cost standpoint, production of the circuit boards would definitely be outsourced if:

the production volumes are less than Commodore's break-even quantity.

The process and R-charts are developed using a sample size of 5, but the technician mistakenly looks up A2, D3, and D4 values for a sample size of 7. If these charts are put into daily use, the manufacturer will mistakenly ship more bad product than had the charts been constructed correctly.

The process batch at the constraint in a drum-buffer-rope system should be: A) the same size as that at any non-constraint. B) the same size as the transfer batch. C) of such a size as to maximize the number of setups for the constraint. D) of such a size as to improve utilization of the constraint.

The process structure that best describes a waiter's position at a restaurant would be classified as: A) front office. B) back office. C) hybrid office. D) inner office.

The process that facilitates the placement of orders and identifies, attracts, and builds relationships with external customers is called the: A) customer relationship process. B) new service development process. C) order fulfillment process. D) supplier relationship process.

The process that includes the activities required to produce and deliver the service or product to the external customer is called the: A) customer relationship process. B) new service development process. C) order fulfillment process. D) supplier relationship process.

The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned receipts.

Which condition would result in invalidating an application of break-even analysis?

The purchasing department both offers quantity discounts to customers and receives quantity discounts from suppliers.

The purpose of supply chain design is to shape a firm's supply chain to meet the competitive priorities of its operations strategies.

Which of the following is NOT an external cause of supply chain disruptions? A) late deliveries B) new service or product introductions C) customer service or product mix changes D) underfilled shipments

weeks of supply

______ is an inventory measure obtained by dividing the average aggregate inventory value by sales per week at cost.

modular design

______ is essentially standardization in chunks.

linear regression

________ is a causal method of forecasting in which one variable is related to one or more variables by a linear equation.

Jerry watched in awe as Warren went to 2 sigma limits from the company-mandated 3 sigma limits, thereby increasing the likelihood of a type ________ error.

t/f At the process level, it is much easier to distinguish whether the process is providing a service or manufacturing a product.

t/f Competitive priorities are the means by which operations implements the firm's corporate strategies.

t/f Every process has a customer.

tf Service providers with a line process tend to move customers, materials, or information in a fixed sequence from one operation to the next.

tf Supply chain processes are simply business processes that have either external customers or external suppliers

tf The ability to reprogram machines is useful for both low-customization and high-customization processes.

"Quality at the source" implies: A) less expensive raw materials. B) lower scrap. C) higher rework costs. D) more final-test inspectors.

"Well if you're out of Duff I'll just take my business elsewhere!" the customer shouted as he stomped out of the Quickie Mart. This unfortunate incident could be described as: A) a stockout. B) a backorder. C) a backlog. D) yield management.

Active customer contact and personalized attention can lower cost to the customer by: A) increasing the capital intensity. B) trading fixed costs for an equivalent variable cost. C) substituting customer efforts for those of the service provider. D) lowering the level of technology involved.

Job flow time is defined as the: A) time of completion of a job plus the time it was available in a work station. B) processing time to complete a particular job. C) time of completion of the last job of a group minus the starting time of the first job. D) amount of time by which a group of jobs missed their due dates.

Jobs processed using the first-come-first-served priority rule still permits them to be expedited.

order quantity

The number of setups (or orders) per year is determined by the annual demand and ________.

The objective of a firm in a responsive supply chain is likely to be realized if it has a: A) standardized product. B) short lead time. C) low-capacity cushion. D) line-flow process.

The order-fulfillment process involves the activities to deliver a product or service to the customer

p-chart or c-chater

The poultry farmer was aghast when the grocery store revealed their new weapon in the war on poor quality. They planned to use a(n) ________ to monitor the rotten eggs found in the cartons of farm fresh free range eggs that he supplied. The poultry farmer was well-versed in quality and knew their choice to be the right one; nevertheless he was upset about this level of scrutiny and what he perceived as a lack of trust.

The predetermined data approach eliminates the need for time studies.

The primary lever to reduce anticipation inventory is to place orders closer to the time when they must be received.

The primary reason for keeping inventories low is that inventory represents a temporary monetary investment.

The principle of postponement is employed by a producer using a(n): A) make-to-stock strategy. B) make-to-order strategy. C) assemble-to-order strategy. D) engineer-to-order strategy.

The process with the least capacity is called a bottleneck if its output is less than market demand.

The product development team ensures compatibility of the proposed product with corporate strategy and regulatory standards in the: A) design stage. B) analysis stage. C) development stage. D) full launch stage.

The product-process matrix used to analyze manufacturing operations brings together the elements of: A) volume, process, and intensity. B) process, intensity, and product design. C) intensity, volume, and process. D) customization, volume, and process.

The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the MPS quantities.

Reducing setup costs will increase the pressure to keep large inventories.

When a process fails to satisfy a customer: A) it is quite often the customer's fault. B) it is considered a defect C) it is time to reengineer the process. D) it is usually half the customer's fault and half the company's fault.

Responsive supply chains should be preferred when: A) product variety is low. B) demand is predictable. C) contribution margins are low. D) product variety is high.

Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high

Responsive supply chains work best when frequent product introduction exists

The electricity bill at Padco was driven solely by the lights throughout the office; everything else was driven by alternative energy sources. The office was open roughly 8 hours a day, five days a week and the cleaning crew spent about the same amount of time in the offices each week night. The kilowatt hour usage for the office was best described as a: A) horizontal demand pattern. B) random demand pattern. C) seasonal demand pattern. D) cyclical demand pattern.

The TQM wheel features ________ at its center. A) incremental improvement B) customer satisfaction C) employee teams D) leadership

The Theory of Constraints method is also referred to as the drum-buffer-rope method.

The fifth step in Theory of Constraints application, "do not let inertia set in," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. B) repeat the analysis to identify and manage new set of constraints. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck.

The first step in applying the Theory of Constraints is to identify the constraint

The causal method of forecasting uses historical data on independent variables (such as promotional campaigns and economic conditions) to predict the demand of dependent variables (such as sales volume).

The center of gravity method considers a greater number of location factors than the break-even analysis.

The center of gravity technique does not take into consideration the: A) total volume of product any given site receives. B) location of any given site. C) number of locations that must be served. D) balance of supply and demand.

cash-to-cash

The clever wine shop owner held a tasting, accepted customer orders and payments, and then placed an order with the vineyard. Since he paid the vineyard after he received the shipment (and well after he charged his customers), his ________ time was negative

The closer the value of the sample correlation coefficient is to -1.00, the worse the predictive ability of the independent variable for the dependent variable.

The companies SAP AG and Microsoft have the largest installed base of customers for ERP packages.

The competitive orientation to supplier relations is that the buyer and supplier are partners.

value

The customer's assessment of quality with reference to the price paid for the good or service is known as

MSE, MAD

The dispersion of forecast errors is measured by both MAD and MSE, which behave differently in the way they emphasize errors. ________ gives larger weight to errors and ________ gives smaller weight to errors.

identify opportunities

The first step of the systematic approach to process analysis is _

identify opportunities

The first step of the systematic approach to process analysis is ________.

The local building supply store experienced what they considered to be irregular demands for lumber after the devastating hurricane season. These unusual data points were considered: A) nonbase data. B) outliers. C) residuals. D) erroneous.

orders, orders placed

The lot-for-lot (L4L) rule minimizes inventory investment but it also maximizes the number of ________.

The lowest planning level in a sales and operations plan is: A) resource planning. B) forecasting. C) scheduling. D) sales and operations planning.

The manager at Crystal Mountain Ski Resort lowers the price of lift tickets to $2 during July and August, a traditionally slow period for skiing. This secondary lever impacts: A) safety stock inventory. B) cycle inventory. C) pipeline inventory. D) anticipation inventory.

The manufacturer developed and tested a questionnaire, designed to assist them in gauging the level of acceptance for their new product, and identified a representative sample as part of their: A) salesforce estimate. B) market research. C) executive opinion. D) Delphi method.

The master production schedule (MPS) is the part of the material requirements planning that specifies when components must be ordered or assembled.

The meaning of undertime is: A) employees work as usual, but they are paid at a lower rate. B) employees don't have enough productive work for the number of hours that they normally work. C) employees work more than normal hours, but they are not compensated. D) the workweek of some employees is permanently reduced

The most controversial aspect of line-flow layout is: A) the heuristic decision rules in assigning the next work element. B) the number of models produced. C) the cycle time. D) behavioral response.

The naive forecast may be adapted to take into account a demand trend.

The notion of internal customers applies to all parts of a firm

The number of #2 pencils the bookstore sells appears to be highly correlated with the number of student credit hours each semester. The bookstore manager wants to create a linear regression model to assist her in placing an appropriate order. In this scenario: A) the dependent variable is student credit hours. B) there are two independent variables. C) there are two dependent variables. D) the independent variable is student credit hours.

Which of the following is NOT an advantage the Internet provides for a firm's order placement process? A) greater variety and better quality of products available B) cost reduction C) increase in revenue flow D) pricing flexibility E) global access

Which of the following is NOT an internal cause of supply chain disruptions? A) engineering changes B) batching of orders C) service or product promotions D) underfilled shipments

A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example of: A) offshoring. B) forward integration. C) backward integration. D) postponement.

quantity discount

A ________ is an incentive to order larger quantities, where the price per unit decreases when the order is sufficiently large.

A back office operation most closely resembles a: A) continuous flow process. B) batch process. C) job process. D) line process

A backorder occurs when a customer order cannot be filled when it is placed, but is instead filled later.

A benchmarking team establishes goals and obtains support from the management team that agrees to provide resources for accomplishing the goals. This phase of the benchmarking process is called: A) goal setting. B) analysis. C) integration. D) action.

A benchmarking team meets for the first time and decides to try to improve its order delivery time and selects another firm as a benchmarking partner. This phase of the benchmarking process is called: A) planning. B) selection. C) integration. D) action.

A bias error results from unpredictable factors that cause the forecast to deviate from actual demand.

A bill of materials (BOM) shows all of the components of an item, the parent-component relationships, usage quantities, and lot size derived from engineering and process designs.

A bill of materials is a record of all the components of an item, the parent-component relationships, and the usage quantities derived from engineering and process designs.

A bottleneck process has the lowest capacity and the longest total time from the start to the finish.

A business focusing on increasing the efficiency of its operations is more directly addressing: A) volume flexibility. B) variety. C) consistent quality. D) low-cost.

A catalog hub is a central distribution point where buyers may purchase items directly from manufacturers before the items are shipped to retailers.

A common disruption of the external supply chain is engineering changes

A common disruption of the external supply chain is product and service mix changes

A common disruption of the supply chain resulting from internal causes is demand volume changes

A common disruption of the supply chain resulting from internal causes is order batching.

A company adopts the supply chain strategy of contracting with a number of geographically dispersed suppliers just in case prices rise in one part of the world. This approach is known as: A) price hopping. B) hedging. C) outsourcing. D) futures.

subcontractors

A company can meet short-term capacity shortages by arranging with ________ outside of their normal workforce to provide necessary services.

A company is attempting to cope with seasonal demand patterns by managing its demand. Which one of the following will NOT help achieve this aim? A) complementary products or services B) adjusting workforce levels C) promotional campaigns D) creative pricing

A company is interested in monitoring the average time it takes to serve its customers. An appropriate control chart would be: A) an B) a p-chart. C) a c-chart. D) an R-chart.

A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be: A) an B) a p-chart. C) a c-chart. D) an R-chart.

A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be: A) an B) a p-chart. C) a c-chart. D) an R-chart

A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be: A) an B) a p-chart. C) a c-chart. D) an R-chart.

advanced planning system, APS

A(n) ________ seeks to optimize resources across the supply chain and align daily operations with strategic goals.

swim lane flowchart

A(n) ________ shows processing steps grouped according to which company department is responsible for performing them.

sampling plan

A(n) ________ specifies the sample size, the time between successive samples, and decision rules that determine when action should be taken

chase

A(n) ________ strategy involves hiring and laying off employees to match the demand forecast over the planning horizon.

level

A(n) ________ strategy involves keeping the workforce constant and varying utilization.

continuous review, reorder-point

A(n) ________ system is a system designed to track the remaining inventory of an item each time a withdrawal is made to determine whether to replenish the item.

two-bin

A(n) ________ system is a visual system in which an item's inventory is stored at two different locations.

scatter diagram

A(n) ________ would be a useful tool to determine the effect that the number of practice problems solved correctly has on the midterm score.

Consumers consider five aspects when defining quality. Which one of the following is least likely to be one of these aspects? A) value B) fitness for use C) psychological impressions D) individual development

Continuous improvement is a philosophy that: A) uses problem-solving techniques within work teams. B) ensures there are plenty of quality inspectors to find areas for improvement. C) waits until a big problem occurs, then systematically solves it. D) encourages the hiring of statistical process control specialists to reduce the need for current employees to learn statistical methods

Convicting an innocent defendant is an example of a type II error.

Core competencies are: A) product or service attributes that represent the needs of a particular market segment. B) another name for competitive priorities. C) various flow strategies. D) the unique resources and strengths that management considers when formulating strategy.

centralized placement

Cornelius Controlfreak insisted that his manufacturing plant also be the sole location for all finished goods inventory. If any customer placed an order, they knew it would come from the only place on Earth that had a ready supply, Cornelius' plant warehouse. ________ was alive and well thanks to this approach.

per unit or a single unit shipped form a factory to a warehouse

Costs that are represented in each cell of a transportation tableau are based on

Which of these benchmarking metrics is NOT suitable for a support process? A) average employee turnover rate B) total cost of payroll processes per $1,000 revenue C) the impression that applicants have as they submit applications D) number of accepted jobs as a percent of job offers

Which of these business processes typically lies within the realm of operations? A) complaint handling B) customer relationship C) help desks D) waste management

Which of these distance calculation methods provides the most accurate input to a load-distance calculation? A) GIS B) rectilinear distance C) Euclidean distance D) center of gravity

Which of these elements is not part of the Deming Wheel? A) plan B) design C) study D) act

Which of these is NOT a common functionality of a GIS? A) data storage B) communication C) map display D) modeling

Which of these is NOT identified as a component of a geographical information system? A) hardware B) data C) software D) network

Which of these is most likely to be classified as a "load" when using the load-distance model? A) a process B) a supplier C) a shipment D) a customer

Which of these questions is not one of the initial round questions typically used to uncover opportunities during a process redesign? A) What is being done? B) When is it being done? C) Who is doing it? D) Why are we doing it?

Which of these statements about pipeline inventory is BEST? A) Shorter lead times create more pipeline inventory. B) Changing an item's lot size does not directly affect the average level of the pipeline inventory. C) Pipeline inventory exists to avoid customer service problems. D) Pipeline inventory is used to even out volatile fluctuations in supply or demand.

Which of these statements about processes is NOT true? A) A process can have its own set of objectives. B) A process can involve work flow that cuts across departmental boundaries. C) A process can require resources from several departments. D) A process can exist without customers.

Which of these tools is considered a primary enabler of process reengineering? A) supply chain partners B) information technology C) logistics D) infrastructure

Which one of the following actions applies to a level strategy? A) Hire workers to increase production output to match increases in demand requirements. B) Build anticipation inventory to meet the variability in demand. C) Decrease production output to match any decreases in demand requirements. D) Use promotional campaigns to boost demand.

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline? A) horizontal B) seasonal C) random D) cyclical

Which one of the following conditions favors a level strategy for manufacturing firms? A) high availability of workers B) short shelf life of inventory C) highly automated equipment and a make-to-stock strategy D) high inventory-holding cost

Which one of the following correctly describes a production system? A) airline: pilots→planes→transportation B) bank: tellers→computer equipment→deposits C) furniture manufacturer: wood→sanding→chair D) telephone company: satellites→cables→communication

divergence

___ is represented in a process flow chart when an outgoing arrow from one step splits into two or more arrows that lead to different boxes.

Past due, Tardiness

___ is the amount of time by which a job missed its due date.

sole sourcing

___ is the awarding of a contract for an item or service to only one supplier.

Process analysis

___ is the documentation and detailed understanding of how work is performed and how it can be redesigned.

lead time

___ is the elapsed time between receiving a customer's order and filling it.

purchasing

___ is the management of the acquisition process, which includes deciding which suppliers to use, negotiating contracts, and deciding whether to buy locally.

channel assembly

___ is the process of using members of the distribution channel as if they were assembly stations in the factory.

undertime

___ is the situation that occurs when employees do not have enough work for the regular workday or workweek.

assignable causes

___ of variation include any variation-causing factors that can be identified and eliminated.

support processes

___ provide vital resources and inputs to core processes

metrics

____ are performance measures that are established for a process and the steps within it.

Gross requirements

____ are the total demand derived from all parent production plans.

Work-in-process (WIP)

____ consists of items such as components or assemblies needed for a final product in manufacturing.

pipeline

____ inventory is the inventory moving from point to point in the materials flow system.

postponement

____ is a concept whereby some of the final activities in the provision of a service or product are delayed until the orders are received.

market research

____ is a systematic approach to determine consumer interest in a product or service by creating and testing hypotheses through data-gathering surveys

Capacity requirements planning, CRP

____ is a technique used for projecting time-phased capacity requirements for workstations.

simple moving average

____ is a time-series method used to estimate the average of a demand time series by averaging the demand for the n most recent time periods.

employee empowerment

____ is an approach to teamwork that moves responsibility for decisions farther down the organizational chart-to the level of the employee actually doing the job.

flow time

____ is the amount of time a job spends in the service or manufacturing system.

Ordering cost

____ is the cost of preparing a purchase order for a supplier or a production order for manufacturing.

Work measurement

____ is the process of creating labor standards based on the judgment of skilled observers.

judgement

____ methods of forecasting translate the opinions of management, experts, consumers, or salesforce into quantitative estimates.

supply chain design

____ seeks to develop a firm's supply chain to meet the competitive priorities of the firm's operations strategy.

Anticipation inventory

____ takes advantage of the tangible nature of manufactured goods to absorb uneven rates of supply and demand.

Manufacturing resource planning, MRP II

____ ties the basic MRP system to the company's financial system.

Scheduled receipts

_____ are orders that have been placed but not yet completed.

Scheduled receipts, SR

_____ are orders that have been placed but not yet received.

combination forecasts

_____ are produced by averaging independent forecasts based on different methods or different data, or both.

_____ uses a firm's flexible processes to generate a wide variety of personalized services or products at reasonably low costs. A) Mass customization B) Channel assembly C) Postponement D) Forward integration

Projected on-hand inventory

_______ is an estimate of the amount of inventory available each week after gross requirements have been satisfied.

time-series

________ analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand, and it recognizes trends and seasonal patterns.

A chance event that has an impact on the outcome of the choice but is not under the manager's control is called a ____________.

state of nature

t/f Firm A wants to enter a foreign market and has a skill that is difficult to duplicate. Firm B desires this skill, so Firm A works with Firm B in an arrangement known as a joint venture.

t/f Flexibility is a possible competitive priority

t/f Quality is more easily measured in a service process than in a manufacturing process.

t/f Strategic plans are developed farther into the future than tactical plans.

tf Divergence is the extent to which the process is customized with considerable latitude on how the tasks are performed

tf High customer involvement increases service provider productivity and makes quality measurement easier

tf In a line process, there is little variability in the products manufactured, and production and material handling equipment are often specialized.

tf In a service process, capital intensity varies with volume in both front office and back office operations.

tf Job processes generally have higher volumes than batch processes.

tf Most products today are composites of global materials and services from throughout the world.

tf No process can exist without at least one product or service

tf Operations managers are involved at both the strategic and tactical levels of corporate strategy.

tf Petroleum refineries typically use continuous flow processes.

tf Process decisions are strategic in nature

tf Processes, by their nature, are found only in the operations function of an organization.

tf The common denominator for decisions on service processes is primarily customer contact.

tf The degree of process divergence is what keeps a large batch process from being economically produced using a line process.

tf The increased global presence of many firms has lessened the burden to behave ethically.

tf The principle of postponement is modeled by the worker that has known his assignment for several weeks, but waits until the day before the product is to be delivered to begin production.

dependent

the ________ variable is the variable that one wants to forecast.

stockout

A(n) ________ is an order that cannot be satisfied, resulting in the loss of a sale.

backorder

A(n) ________ occurs when a customer order cannot be filled as promised or demanded but is filled later.

People often evaluate the quality of a service on the basis of psychological impressions.

People processing services require: A) a high degree of process structure. B) high capital intensity. C) physical presence. D) hybrid low volume—capital intensive operations.

The best data analysis tool for recording which gas pump most customers use would be a checklist.

The bill of resources (BOR) is a record of parent-component relationships and all the required materials, equipment time, staff, and other resources needed, including the usage quantities.

The bullwhip effect is characterized by: A) ordering patterns that experience increasing variance as you proceed downstream in the chain. B) ordering patterns that experience increasing variance as you proceed upstream in the chain. C) purchasing patterns that experience increasing variance downstream in the chain. D) purchasing patterns that experience decreasing variance as you proceed upstream in the chain.

factory of upstream, customer or downstream

The bullwhip effect results in greater demand variability at the ________ end of the supply chain and lesser demand variability at the ________ end of the supply chain.

The bullwhip effect says that in any supply chain, the ordering patterns experience increasing variance as you move closer to the end customer.

The bursar's office at a large state school sends a team to the bookstore on campus to see how they handle customers and process payments. This is an example of functional benchmarking.

While it is important to manufacturing firms, little can be done to improve supply chain strategy in most service organizations.

sales and operations plan

The sums of the quantities in the master production schedule must equal those in the ________.

design

When a customer orders an item that is a completely new and different product, the company's supply chain must be able to deliver an item that is ________-to-order.

A sales and operations plan for a service firm is: A) a staffing plan. B) a process plan. C) an operations plan. D) a production plan.

aggregate plan

A sales and operations plan is sometimes called a(n) ________.

staffing plan

A service firm's sales and operations plan, called a(n) ________, centers on staffing and other labor-related factors.

A services firm's sales and operations plan generates both production plan and a staffing plan.

The weeks of supply measure will improve if the weekly sales decrease.

The workforce schedule: A) determines when employees work. B) determines how many workers are needed over an extended horizon. C) determines the daily worker requirements. D) specifies the specific task each worker is to do and when.

There are historically three 32-month periods of generally rising prices in the stock market for every one 9-month period of falling prices. This observation leads you to conclude that the stock market exhibits a: A) random pattern. B) trend pattern C) seasonal pattern. D) cyclical pattern.

Quality of life issues include: A) proximity to markets. B) prevailing wage rates. C) local and state taxes. D) recreational facilities.

Some discount stores are able to sell items before they have to pay their suppliers, resulting in a negative: A) net profit. B) return on assets. C) number of inventory turns. D) cash-to-cash measure.

Some ways to manage demand include building anticipation inventories of goods and hiring or laying off employees.

purchased

A(n ) ________ item has one or more parents but no components.

The decision rule ____________ is also referred to as the pessimist's criterion.

Maximin

Production shifting is a form of low-cost hopping.

The SCOR model focuses on the supply chain processes of planning, making, sourcing, delivering, and returning.

POQ rule

The L4L rule is a special case of the _

supply chain

The cumulative work of the processes of a firm is a(n) __

The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials

The most used form of e-purchasing today is electronic data interchange.

"Quality at the source" implies: A) less expensive raw materials. B) lower scrap. C) higher rework costs. D) more final-test inspectors.

sample correlation coefficient, r

A(n) ________ measures the direction and strength between the independent variable and the dependent variable.

inventory turnover

, the annual sales at cost divided by the average aggregate inventory value, is the number of times a year that a firm completely replenishes its inventory.

.Increasing the quality level by better products and processes may: A) allow a company to raise the price of the product. B) move a company closer to a competitive priority of price. C) reduce prevention costs. D) ensure that the trade-off between prevention costs and other costs of poor quality is worthwhile.

process

A(n) ________ is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides one or more outputs for its customers.

remnant

A(n) ________ is inventory carried into a week but too small to prevent a shortage.

mixed model

A(n) ________ line is a product line that produces several items belonging to the same family.

silo mentality

A(n) ________ means that a department focuses on its own tasks without understanding the role and processes of departments outside its own organizational boundaries.

A technique used for projecting time-phased capacity requirements for workstations is called: A) capacity requirements planning. B) time-adjusted output control. C) input-output control. D) work center planning.

A company operating under an EOQ policy enjoys rising annual demand for their products for three consecutive years. During this time their holding cost and ordering cost remain constant. Which statement is BEST? A) Their order quantity will fall and so will the time between orders. B) Their order quantity will fall but the time between orders will rise. C) Their order quantity will rise but the time between orders will fall. D) Their order quantity will rise and so will the time between orders.

A company realizes that recent layoffs at its primary customers reflect potential falling demands for its customers' products, and hence for its own products. The company has engaged in: A) flow strategy. B) market segmentation. C) mission statement redefinition. D) environmental scanning.

A company's ability to quickly introduce a new service or product would be best described as: A) volume flexibility. B) variety. C) consistent quality. D) development speed.

A company's ability to support varying rates of production is BEST described as: A) volume flexibility. B) variety. C) consistent quality. D) development speed.

enterprise process

A companywide process that cuts across functional areas, business units, geographic regions, and product lines is a(n) ____

A companywide process that cuts across traditional functional areas, business units, geographic regions, and product lines is a(n): A) enterprise process. B) master production scheduling process. C) kinetic process. D) full-business process.

A competent operations manager should first eliminate all of the bottlenecks from the process.

A component is an item that may go through one or more operations to be transformed into or become part of one or more parents.

A cost that is incurred if some aspect of a service must be performed again is called a(n): A) yield loss. B) prevention cost. C) appraisal cost. D) rework cost.

A cross-docking warehouse holds inventory from manufacturers until retailers are prepared to sell the items.

A customer is given a due date for their product order with: A) backlog. B) reservation. C) service on demand. D) appointment.

A decision maker using break-even analysis must assume that suppliers do not provide discounts for large orders.

A dummy plant is useful for problems where the sum of the plant capacities equals the sum of the demands.

A farmer that has been well-trained in the scientific method divides his acreage into several plots and plants the same variety of hay in each. He varies the amount of fertilizer applied to each plot and carefully records the yield, in bales per acre, for each of the plots. Which of these tools would be the best to help him analyze the effect of fertilizer application on hay yield? A) cause and effect diagram B) scatter diagram C) Pareto chart D) flow chart

A favorable labor climate might include all of the following EXCEPT: A) a good work ethic. B) no union presence. C) high average wages. D) an educated work force.

A financial assessment of a for-profit organization's near future (for one or two years ahead) is a(n): A) business plan. B) annual plan. C) resource plan. D) financial budget.

A financial assessment of a not-for-profit organization's near future (for one or two years ahead) is a(n): A) business plan. B) annual plan. C) resource plan. D) financial budget.

A firm may choose to use members of the distribution channel as if they were assembly stations in the factory. Such an approach is known as: A) backward integration. B) postponement. C) channel assembly. D) deferred delay.

A firm targeting Six Sigma quality will use a process capability ratio of ________ as their goal

A fixed schedule gives each employee the next employee's schedule the following week.

A flowchart created at the strategic level of an organization should show: A) core processes and their linkages. B) details of a process as bracketed by its scope. C) individual steps that may have been aggregated at a higher level of analysis. D) areas that are seen and unseen by the customer.

A flowchart traces the flow of all EXCEPT the following: A) information through a process. B) customers through a process. C) equipment through a process. D) safety regulations through a process.

stockout

A(n) ________ is an order that cannot be satisfied when demanded and causes the customer to go elsewhere.

A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses: A) the entire data set available to develop the forecast. B) the older observations in the data set to develop the forecast and more recent to check accuracy. C) the newer observations in the data set to develop the forecast and older observations to check accuracy. D) every other observation to develop the forecast and the remaining observations to check the accuracy.

A forecasting system that brings the manufacturer and its customers together to provide input for forecasting is a(n): A) nested system. B) harmonically balanced supply chain. C) iterative Delphi method system for the supply chain. D) collaborative planning, forecasting, and replenishment system.

A geographic information system contains demographic information

nonbase (data)

A history file of past demand will often be separated into two parts; the ________ part will reflect irregular demands.

rotating schedule

A hospital must have a skeleton crew on hand during the undesirable work period from midnight to 8 o'clock. One way to make sure that all employees have the opportunity to work this shift is by adopting a(n) ________.

A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. The next four months have 33, 27, 29, and 43 complaints. What should management do? A) Look for assignable causes because the process is in control. B) Look for assignable causes because the process is out of control. C) Look for common causes because the process is out of control. D) Do nothing; the process is in control.

A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the lower control limit? A) less than or equal to 15 B) more than 15 but less than or equal to 20 C) more than 20 but less than or equal to 25 D) more than 25

A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the upper control limit? A) less than or equal to 35 B) more than 35 but less than or equal to 45 C) more than 45 but less than or equal to 55 D) more than 55

A job process should be preferred when: A) workforce and equipment are specialized. B) products are made to stock type. C) customization is high and volume is low. D) customization is low and volume is high.

A learning curve is a line showing the relationship between processing time and the cumulative quantity of a product or service produced.

A level strategy matches demand during the planning horizon by varying either the workforce level or the output rate.

A line balance that is 100% efficient must: A) be using the minimum cycle time. B) be using the theoretical minimum number of work stations. C) also achieve 100% balance delay. D) be producing the theoretical maximum output.

A line that produces several items belonging to the same family is called a: A) mixed-model line. B) part family line. C) group technology line. D) cellular line.

A linear regression model is developed that has a slope of -2.5 and an intercept of 10. The sample coefficient of determination is 0.50. Which of the following statements is TRUE? A) The sample correlation coefficient must be 0.250. B) The sample correlation coefficient must be -0.707. C) The sample correlation coefficient must be -0.250. D) The sample correlation coefficient must be 1.00.

A manufacturer that produces standard products in large volumes is likely to be using a(n): A) make-to-stock strategy. B) make-to-order strategy. C) assemble-to-order strategy. D) engineer-to-order strategy.

A master production schedule is a schedule that specifies the timing, size, and sequence of production for aggregated product families.

A materials requirements planning (MRP) explosion occurs when the system is bombarded with too many orders to schedule at one time.

A mixed-model line produces several items belonging to the same family.

A mom and pop gas station near a remote lake popular with anglers is more likely to use a periodic review system than a chain of department stores.

A naive forecast is a time-series method whereby the forecast for the next period equals the demand for the current period.

A neighborhood sportswear store sells a pair of Victoria sneakers for $40. Due to the recent fitness craze, these shoes are in high demand: 50 pairs of shoes are sold per week. The ordering cost is $20 per order, and the annual holding cost is 20% of the selling price. If the store operates 52 weeks a year, what can you say about the current lot size of 235? A) too large B) too small C) just right D) cannot tell from the information given

A new product development team that is composed of product and process engineers, marketers, quality specialists, and buyers that work together to make sure the new product can actually be built is engaging in: A) concurrent engineering. B) joint application development. C) reverse logistics. D) core process design.

A parent is any item manufactured from one or more components.

A periodic review system is a system in which an item's inventory position is reviewed periodically rather than continuously.

A politician conducting a town hall meeting is an example of: A) back office. B) passive contact. C) active contact. D) hybrid office.

A popular haberdashery could take a customer's measurements in the afternoon and produce a dandy suit ready for customer pickup by next morning. Their competitive priority was: A) variety. B) top quality. C) delivery speed. D) on-time delivery.

A prime example of an internal failure cost is the: A) labor cost associated with inspecting every item produced. B) labor cost associated with repairing an item returned under warranty. C) material cost of a piece of stock metal that has had too large a hole drilled in it. D) material cost of the paint applied to the case of a finished unit.

A process chart activity that changes, creates, or adds something is a(n): A) operation. B) transportation. C) inspection. D) delay.

A process chart activity that checks or verifies something but does not change it is a(n): A) operation. B) transportation. C) inspection. D) delay.

A process chart activity that occurs when something is put away until a later time is a(n): A) storage. B) transportation. C) inspection. D) delay.

A process is monitored with a control chart. The process is correctly judged to be in-control once the results from the most recent sample are plotted. Therefore, all of the output produced at that time is good.

A process selected for reengineering should be a: A) core process. B) front-office process. C) hybrid office. D) back office process.

A process that is primarily back office is: A) a taxi driver. B) loan officer at a bank. C) the payroll clerk that calculates your paycheck. D) the hostess at a restaurant.

A process troubleshooter has to decide which problem to address first with his or her cause-and-effect diagram. The data analysis tool that will help him decide which problem to tackle first is a: A) scatter diagram. B) check sheet. C) flowchart. D) Pareto chart.

A producer of medical devices makes a single model that can be customized to talk in and display any of 47 different languages. This customization is performed in one of their five regional distribution centers as firm orders are received, providing an elegant example of: A) backward integration. B) forward integration C) channel assembly. D) offshoring.

A product family is a group of customers, services, or products that have similar demand requirements and common processes, labor, and materials requirements.

A professor can grade a quiz in 30 seconds. Over the course of an academic year he has 6 sections of a course with an average of 30 students with 10 quizzes in each section. If he is paid $40 an hour, how much is his annual quiz-grading labor cost to the university? A) $60 B) $100 C) $600 D) $36,000

A quantity discount is attractive because there is a drop in the price per unit when the order is sufficiently large.

A regression equation with a coefficient of determination near one would be most likely to occur when the data demonstrated a: A) seasonal demand pattern. B) trend demand pattern. C) cyclical demand pattern. D) random demand pattern.

A sales and operations plan for a manufacturing firm that centers on manufacturing rates and inventory holdings is: A) a staffing plan. B) a production plan. C) an operations plan. D) a process plan.

A stockout occurs when an item that is typically stocked is not available to satisfy a demand the moment it occurs.

A strain is placed on the supply chain during the ramp-up stage of the development process due to changing volumes, quality issues and last minute design changes

A supply chain can be thought of as a river that flows from raw material suppliers to consumers.

A swim lane flowchart is an appropriate tool to use when: A) the process features only intangible outputs. B) the process involves more than one department. C) the process scope is difficult to define. D) the process has a person or group of people at a workstation or with a customer.

A systematic approach to process analysis includes the step: A) reengineering. B) integration. C) order fulfillment. D) define scope.

A systematic effort to reduce the cost or improve the performance of services or products is known as: A) presourcing. B) cooperative orientation. C) supplier certification. D) value analysis.

trend

A systematic increase or decrease in the mean of the series over time is a(n) ________.

A team consisting of members from each functional area affected by the process change is referred to as a(n): A) reengineering team. B) cross-functional team. C) process team. D) improvement team.

A time study analyst is attempting to determine the standard time for a work element. She observes a worker performing the work element at a higher-than-average pace. How will this fact be reflected in the time standard that is eventually created? A) The frequency of the work element per cycle will be increased. B) The proportion of allowance time will be increased above 1.0. C) The performance rating factor will be set greater than 1.0. D) The normal time for the work element will be increased

A tracking signal greater than zero and a mean absolute deviation greater than zero imply that the forecast has: A) no bias and no variability of forecast error. B) a nonzero amount of bias and a nonzero amount of forecast error variability. C) no bias and a nonzero amount of forecast error variability. D) a nonzero amount of bias and no variability of forecast error.

A typical manufacturer spends: A) about 25% of its total income from sales on purchased services and materials. B) about 45% of its total income from sales on purchased services and materials. C) more than 60% of its total income from sales on purchased services and materials. D) almost 80% of its total income from sales on purchased services and materials.

A water ski manufacturer believes they can double their sales by producing snow skis during the other half of the year. This approach to demand management is an example of complementary products.

A weary traveler shows up at a hotel desk at midnight without a reservation. The desk clerk informs him that there is a room available, but sadly it is marked up 80% higher than the usual price. This is an example of promotional pricing.

A yacht maker produces customized yachts for a clientele that wants a one-of-a-kind watercraft. This process can be described as: A) divergent. B) complex. C) specialized. D) hybrid.

naive

A(n) ________ forecast is a time-series method whereby the forecast for the next period equals the demand for the current period.

Gantt workstation chart

A(n) ________ graphically displays the load on a productive resource of interest, i.e., when it is busy and when it is idle.

pareto chart

A(n) ________ is a bar chart on which the factors are plotted in decreasing order of frequency along the horizontal axis.

cause-and-effect diagram

A(n) ________ is a diagram that relates a key quality problem to its potential causes.

checklist

A(n) ________ is a form used to record the frequency of occurrence of certain product or service characteristics related to quality.

brainstorming session

A(n) ________ is a method where a group of people, knowledgeable about the process and its disconnects, propose ideas for change in a rapid-fire manner.

holdout set

A(n) ________ is a portion of data from more recent time periods that is used to test different models developed from earlier time period data.

bill of resources

A(n) ________ is a record of a service firm's parent-component relationships all of the materials, equipment, time, staff, and other productive assets associated with them, including usage quantities.

inventory record

A(n) ________ is a record that divides the future into time periods called time buckets.

tableau

A(n) ________ is a standard matrix that is used to solve location problems using the transportation method.

mixed strategy

A(n) ________ is a strategy that considers and implements a fuller range of supply options than a pure chase or level strategy.

visual system, single-bin system

A(n) ________ is a system that allows employees to place orders when inventory visibly reaches a certain marker.

subassembly

A(n) ________ is an intermediate item that is assembled from one or more components.

bottleneck

A(n) ________ is an operation that has the lowest effective capacity of any operation in the process, and thus limits the system's output.

At which of the following steps will the cost of detecting product defects be the highest? A) customer B) process C) final testing D) raw material

Facilitating goods in a hotel's bill of resources would include a: A) housekeeper. B) fax machine. C) towel. D) front-desk clerk.

Acme expected demand for rocket-powered roller skates to pick up during Roadrunner Season, so they built hundreds of extra pairs and stored them out of season. The excess production is: A) buffer stock. B) throughput. C) lagniappe. D) anticipation inventory.

An experienced operations manager can tell at a glance whether an item should be classified as safety stock, anticipation inventory, or cycle stock.

An exponential smoothing model with an alpha equal to 1.00 is the same as a naive forecasting model.

ABC analysis is a process for categorizing SKUs according to dollar usage so that managers can focus on items with the highest dollar value

ABC analysis is closely related to: A) three-bin analysis. B) EOQ analysis. C) repeatability analysis. D) Pareto analysis.

Acceptance sampling is the application of statistics to determine if the quality of incoming materials should be accepted or rejected.

inventory

According to the Theory of Constraints, all the money invested in a system in purchasing things that it intends to sell is ________.

Admission to the prestigious school had become so competitive that a high GPA is no longer enough to separate one fresh-faced high school student from another. Today's outstanding candidate must also demonstrate their involvement in a myriad of extracurricular activities in order to be admitted. It seems that good grades are now: A) a needs assessment. B) order qualifiers. C) order winners. D) a mission statement.

Advanced planning and scheduling systems (APS) seek to optimize resources across the supply chain and align daily operations with strategic goals.

Aggregating products or services together generally decreases the forecast accuracy.

Aggregation is the act of clustering several similar products or services

All forms of benchmarking are best applied in situations where long-term continuous improvement is desired.

MRP system

Among the four core processes of an organization that link activities within and across firms in a supply chain, the ________ interacts with all of them either through its inputs or outputs.

Among the seven criteria in the Baldrige Performance Excellence Program, which has the greatest weight in scoring? A) Leadership B) Customer Focus C) Operations Focus D) Results

An acceptable quality level is measured as the proportion of defective items a buyer is willing to tolerate.

An accounting firm realizes it is woefully inadequate at cultivating new clients. It is allowed to observe a law firm perform the new-client cultivation process in hopes of gleaning improved methods it can adopt. This is an example of: A) competitive benchmarking. B) functional benchmarking. C) internal benchmarking. D) generic benchmarking

An accounting firm realizes it is woefully inadequate at cultivating new clients. It is allowed to observe a rival firm perform the new-client cultivation process in hopes of gleaning improved methods it can adopt. This is an example of: A) competitive benchmarking. B) functional benchmarking. C) internal benchmarking. D) generic benchmarking.

An accounting professor realizes she is woefully inadequate at performing research. She discusses the art of research with a colleague and gains important insights that permit her to establish a research agenda. This is an example of: A) competitive benchmarking. B) functional benchmarking. C) internal benchmarking. D) generic benchmarking.

An aggressive advertising campaign was credited with K-Tel's inability to keep K-Fed's latest CD on the shelves. K-Tel continued to accept orders and promised to ship as soon as they could burn new discs. Customers weren't happy, but were willing to wait. This unfortunate situation can be described as a: A) stockout. B) backlog. C) backorder. D) lost sale.

An effective tool for showing steps of a service process with a high level of customer contact is a: A) Pareto chart. B) flowchart. C) service blueprint. D) check sheet.

An efficient supply chain should be preferred when: A) product variety is high. B) competitive priority is customization. C) demand is highly predictable. D) demand is unpredictable.

An efficient supply chain typically has: A) a high capacity cushion. B) high inventory turns. C) supply chain partners that emphasize fast delivery time. D) supply chain partners that emphasize volume flexibility.

twenty

An eighty percent learning curve means that for each doubling of output, the time required to complete the last task is ________ percent less than before.

An electronic market that brings together textbook sellers, office supply companies, apparel vendors, and students is an example of an exchange.

An examination of strategic issues such as possible gaps between a process's competitive priorities and current competitive capabilities falls in the: A) document process phase of process analysis. B) evaluate performance phase of process analysis. C) redesign process phase of process analysis. D) identify opportunities phase of process analysis.

An example of a dependent demand item for services is a(n): A) menu in a restaurant. B) jukebox in a club. C) operating suite at a hospital. D) a pilot's checklist for an airline.

An example of a type I error would be: A) throwing away a perfectly good banana. B) counting a student's multiple choice response correct when it is actually incorrect. C) releasing a guilty defendant. D) counting a student's multiple choice response correct when it is actually correct.

An example of a type II error would be: A) counting a student's True/False response incorrect when it is actually correct. B) convicting an innocent defendant. C) eating food that you were unaware was spoiled. D) counting a student's True/False response incorrect when it is actually incorrect.

An important factor for locating new manufacturing plants is: A) proximity to customers. B) location of competitors. C) proximity to markets. D) favorable labor climate.

An intermediate item must have at least one parent and at least one component.

An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review system) or a P system (periodic review system) answers these questions? A) Under a Q system, a fixed quantity is ordered every P time period. B) Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R. C) Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R. D) Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods.

An operator of a filling machine plotted the weights of each bag she filled for three weeks. At the same time, a quality inspector randomly took groups of five bags of the same output and plotted the average weights of the samples. The inspector's sampling distribution will: A) have greater variability than the operator's distribution. B) have less variability than the operator's distribution. C) show if the output has been produced to the operator's specifications. D) have a mean five times greater than the operator's distribution.

Andy took what he liked to call "the sheriff without a gun" approach to forecasting. Every period he tried a number of different forecasting approaches and simply averaged the predictions for all of the techniques. This overall average was the official forecast for the period. The more formal name for this technique is: A) grand averaging. B) focus forecasting. C) simple average. D) combination forecasting.

Anticipation inventory is used to absorb uneven rates of demand or supply.

constant

Any factor that limits the performance of a system and restricts its output is a(n)

Any item manufactured from one or more components is a(n): A) parent. B) component. C) intermediate item. D) purchased item.

Any system composed of resources that are operating at maximum output will, by definition, have maximum output for the entire system

Applying Six Sigma to service processes is more challenging than for manufacturing processes.

Appraisal costs are associated with preventing defects before they happen

Approaches to e-purchasing include all of the following EXCEPT: A) catalog hubs. B) radio frequency identification (RFID). C) exchanges. D) electronic data interchange (EDI).

As October came to a close, Geoff updated the sales and operations plan with figures for actual sales, production, inventory, costs, and constraints before turning the production staff's attention to November, a process known as: A) planning. B) rolling. C) closing out. D) pencil whipping.

As an operations manager, which definition of quality do you have the most control over? A) conformance to specifications B) support C) psychological impressions D) value

As he entered his broker's office for the first time, the young associate professor was dazzled by its tasteful accoutrements and the offer of a double tall split shot skinny hazelnut latte. He knew his lottery winnings would be safe here, thanks to his: A) broker's conformance to specifications. B) broker's fitness for use. C) broker's support. D) own psychological impressions.

increases

As safety stock increases, the holding cost of that inventory item ________.

As the annual demand increases, the EOQ also increases.

As the service level increases, the probability of not running out of stock during a cycle decreases.

Assignable causes of variation include any variable-causing factors that can be identified and eliminated.

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand. Specifically, the forecast errors were found to be: Mean absolute percent error = 10% Cumulative sum of forecast errors = 0 Which one of the statements concerning this forecast is TRUE? A) The forecast has no bias but has a positive standard deviation of errors. B) The forecast has a positive bias and a standard deviation of errors equal to zero. C) The forecast has no bias and has a standard deviation of errors equal to zero. D) The forecast has a positive bias and a positive standard deviation of errors.

Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand inventory is greater than zero in the first period), and subsequently in periods when the MPS quantity is greater than 0.

Available-to-promise inventory is the amount of end items that marketing can promise to customers by a certain date.

dummy

If the total supply does not equal the total number of units demanded, then the modeler should use a(n) ________ warehouse as part of the transportation method.

Increasing the percentage of on-time deliveries to customers actually reduces the total revenue of a firm

Budgeting, recruiting, and scheduling are examples of a(n): A) development. B) core process. C) support process. D) system.

Back offices typically emphasize: A) low cost operations and on-time delivery. B) top quality and customization. C) on-time delivery and customization. D) top quality and low cost operations.

Backorders and stockouts are most likely to cause expenses for: A) advertising costs. B) lost productivity. C) cost of capital. D) lost sales.

Balance delay could be described as the: A) amount by which efficiency falls short of 100 percent. B) efficiency that could be obtained by a solution that achieves the theoretical minimum number of stations. C) maximum time allowed for work on a unit at each station. D) desired output rate.

Barney took what he liked to call "the shotgun approach" to forecasting. Every period he tried a number of different forecasting approaches and at the end of the period he reviewed all of the forecasts to see which was the most accurate. The winner would be used for next period's forecast (but he still made forecasts all possible ways so he could use the system again for the following period). The more formal name for this technique is: A) combination forecasting. B) post-hoc forecasting. C) focus forecasting. D) shotgun forecasting. He is using the correct terminology.

Because Geographical Information System (GIS) tools are primarily quantitative in nature, a firm's managerial criteria, such as proximity to major metropolitan areas, are not able to be included in the GIS analysis.

Because Six Sigma involves the elimination of defects, it can only be applied in manufacturing processes.

Benchmarking involves four basic steps, which are: A) plan, do, check, and act. B) planning, analysis, integration, and action. C) search, check, systematize, and act. D) find, do, change, and calibrate.

Benchmarking is a continuous, systematic procedure that measures a firm's products, services, and processes against those of industry leaders

Benchmarking studies must have: A) a direct competitor for comparison. B) a team composed of at least one member from each department in the organization. C) a team composed of at least one member from each department in the organization plus one customer of each process output. D) quantitative goals.

Bias is the worst kind of forecasting error.

Brainstorming sessions can be effectively conducted on the Internet using software that allows one person to see another's ideas and build on them.

Brainstorming sessions must have: A) all participants together in the same room. B) a mechanism for evaluation of the ideas as they are surfaced. C) a means of implementing ideas as they are surfaced. D) a way for all participants to communicate.

The _____ is the volume at which total revenues equal total costs.

Break even quantity

Which one of the following statements about break-even analysis, as we applied it to evaluating products or services, is best?

Break-even analysis assumes that the cost function is linear and consists of fixed costs plus variable costs times volume.

Break-even analysis can help a manager compare location alternatives on the basis of quantitative factors that can be expressed in terms of total cost.

Items, such as components or assemblies, needed to manufacture a final product are called: A) quarantined materials. B) work-in-process. C) raw materials. D) finished goods.

Market research is a systematic approach to determine consumer interest by gaining consensus from a group of experts while maintaining their anonymity.

Repeatability is an undesirable feature of some orders because they must be repeated until the order is filled correctly.

Repeated onsite expansion ultimately leads to diseconomies of scale

Quality measured with reference to price is captured by the notion of: A) conformance to specifications. B) value. C) fitness for use. D) psychological impressions.

Common causes of variation are the purely random, unidentifiable sources of variation that are unavoidable with the current process.

Companies perform aggregation along the three dimensions of: A) products, labor, customers. B) time, suppliers, services. C) products / services, labor, time. D) time, products, customers.

Companies that do not have operations in China find it difficult to compete based on the basis of low prices with companies that do. Instead those companies tend to compete based on: A) quality and social responsibility. B) speed and small production runs. C) luxury. D) quality and small production runs.

Competitive priorities: A) may change over time. B) are the cost, quality, time and flexibility dimensions that a process or supply chain actually possesses and is able to deliver. C) are used to distinguish between a service that is considered and one that is actually purchased. D) are developed by a review of internal operations capabilities.

Concurrent engineering helps firms avoid the costly mismatch between the design of a new offering and the capability of the processes required to produce it.

Concurrent engineering is the term used to describe a firm's development of a new product after it has been discovered that a competitor is engineering a similar product for launch

Consider consecutive processes A-B-C, where process A has a capacity of 20 units per hour, process B has a capacity of 25 units per hour, and process C has a capacity of 30 units per hour. Where would an operations manager want any inventory? A) in front of process A B) in front of process B C) in front of process C D) Inventory should not exist anywhere.

Considering the EOQ model, a reduction in ordering costs justifies reducing the lot size ordered.

Considering the EOQ model, smaller lots are justified when holding costs are decreased.

Constraints at any step causes imbalance in the capacity of a process. As a result, the overall performance of a system is affected which in turn leads to low customer satisfaction and loss of money even with high sales level.

Critical mass is a situation whereby several competing firms cluster near one location, and thus attract more customers than the total number who would shop at the same stores in scattered locations.

Cross-functional coordination is at particular risk where: A) there is low process divergence. B) there are handoffs in the process. C) functional silos exist. D) it is not possible to create a flowchart.

make-to-order

Customer clothing and the Boeing 787 Dreamliner aircraft are based on standard designs but component production and manufacture of the final product is

active contact

Customer, materials, or information move in diverse ways in processes that have ______

Cycle counting is an inventory-control method whereby storeroom personnel physically count a small percent of the total number of items each day.

exchanges

___ are electronic marketplaces where buying and selling firms meet to do business, without protracted contract negotiations.

work sampling

___ involves estimating the proportion of time spent by people and machines on activities, based on a large number of observations.

vendor managed inventories

___ is an extreme application of the forward placement tactic.

Competitive benchmarking

___ is based on comparison of processes with a direct adversary in industry.

If possibilities for events can be estimated, then the situation faced by the decision maker is called _____

Decision making under risk

_____ is a general approach to decision making when the outcomes associated with alternatives are often in doubt.

Decision theory

A ______ is a schematic model of alternatives available to the decision maker.

Decision tree

EOQ should be used if you follow a make-to-stock strategy and the item has relatively stable demand.

EOQ should be used if you use a make-to-order strategy and the customer specifies that the entire order be delivered in one shipment.

single database

ERP revolves around a(n) ________.

possible shipping route

Each cell in the interior of a transportation tableau not in the requirements row or capacity column is a(n) ________.

Earliest due date (EDD) is a priority-sequencing rule that states the job requiring the shortest processing time is the next job to be processed.

Early supplier involvement is a program that allows suppliers to fill orders prior to the customer placing them.

Efficient supply chains use low capacity cushions.

Efficient supply chains work best when contribution margins are high.

Electronic Data Interchange enables the transmission of routine, standardized business documents from computer to computer over telephone or direct leased lines.

Elemental standard time data can help managers develop time standards for new work before production begins.

Entering new information in the database of an ERP system is a(n): A) data packet. B) transaction. C) record. D) file.

production batch, transfer batch

Every time a manufacturer uses one resource, they make a lot size of 300. Once a group of 30 units are completed, they are taken to the next step in the process. The lot of 300 is the ________ and the group of 30 is the ________.

Increasing the quality level by better products and processes may: A) allow a company to raise the price of the product. B) move a company closer to a competitive priority of price. C) reduce prevention costs. D) ensure that the trade-off between prevention costs and other costs of poor quality is worthwhile.

Five samples of size 4 were taken from a process. A range chart was developed that had LCLR = 0 and UCLR = 2.50. Similarly, an average chart was developed with the average range from the five samples, with = 15.0 and = 24.0. The ranges for each of the five samples were 1.75, 2.42, 2.75, 2.04, and 2.80, respectively. The values of the sample average for each sample were 19.5, 22.3, 17.4, 20.1, and 18.9, respectively. What can you tell management from this analysis? A) The process variability is out of control, and we cannot make a statement about the process average. B) The process variability is out of control, but the process average is in control. C) The process variability and the process average are out of control. D) We cannot tell if the process variability or the process average is out of control.

_____ is the portion of total cost that remains constant regardless of changes in levels of output.

Fixed cost

Flow time is only the time a job spends being processed, and excludes any time waiting to be processed, equipment set up time and time spent moving between operations.

Flowcharts, service blueprints, and process charts are effective for documenting and evaluating processes

Flowcharts, service blueprints, and process charts are effective for documenting and evaluating processes.

Focus forecasting selects the best forecast from a group of forecasts generated by individual techniques.

For items manufactured in-house, one component of the planned lead time is waiting time.

For students not wanting a traditional major in marketing or accounting, for example, the college decided to create a general business major, which allowed any combination of the easiest business courses to comprise the program. The competitive priority achieved in this example is: A) customization. B) delivery speed. C) consistent quality. D) low-cost.

For the student advisement service at a university, business majors and education majors would constitute two different product families.

Forecast error is found by subtracting the forecast from the actual demand for a given period.

Formal work measurement techniques estimate average times for each step in a process by relying on the judgment of skilled observers.

Forward placement is a reduction in inventory and safety stock because of the merging of variable demands from customers

From an ethical standpoint, it is acceptable for a hospital's cardiac surgery unit that is striving for zero complications to turn down high-risk patients.

Front offices generally emphasize top quality and customization.

Front offices typically emphasize: A) low cost operations and on-time delivery. B) top quality and customization. C) on-time delivery and standardization. D) top quality and low cost operations.

black belts

Full-time teachers and leaders of teams involved in six sigma projects are referred to as __

Gantt charts can be used to: A) monitor the progress of jobs but cannot be used to sequence work on each machine. B) sequence work on each machine but cannot be used to monitor the progress of each job. C) monitor the progress of jobs and sequence work on each machine. D) monitor the average number of defective parts generated by a machine on each job.

disconnects

Gaps between actual and desired performance are called ________.

quality engineering

Genichi Taguchi first combined engineering and statistical methods to reduce costs and improve quality in an approach called ___

Good process management should include: A) a mechanism for identifying what goes wrong and who is responsible. B) a method for creating self-directed work teams. C) at least half time dedicated to each employee's self-actualization. D) an infrastructure for continuous improvement.

Green purchasing involves identifying, assessing, and managing the flow of environmental waste and finding ways to reduce it and minimize its impact on the environment.

Gross requirements are the total demand derived from all parent production plans.

Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is: A) less than 2.0. B) greater than 2.0 but less than 2.5. C) greater than 2.5 but less than 3.0. D) greater than 3.0.

Higher volume in a process is generally associated with: A) more resource flexibility. B) more capital intensity. C) greater customer involvement. D) fewer opportunities for standardization.

Higher volume processes are more likely to be encountered in the back office.

Highly customized job processes and processes that are highly divergent require the use of: A) the time study method. B) the elemental standard data approach. C) the predetermined data approach. D) the work sampling method.

Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an chart with a sample size of 10- and 3- sigma limits. Suppose the next sample of 10 yielded the following result: 3.2, 2.1, 3.6, 2.8, 3.9, 3.5, 2.7, 4.1, 2.6, and 3.3. What conclusion can be drawn? A) Assuming the process variability is in control, the process average is also in statistical control. B) Assuming the process average is in control, the process average is out of statistical control. C) The sample size should be increased. D) No conclusion can be drawn because there is insufficient data.

Independent-demand items are those items for which demand is influenced by market conditions and is not related to inventory decisions for any other items held in stock.

Jake reports to the courier department Monday through Friday and stays from 9 am to 5 pm but many times does not have enough work to keep him busy. Regardless, he is paid for a full eight hours even on those days when he spends more time on social media than delivering supplies. This is an example of undertime.

decreases

If an item is ordered using an EOQ policy, as the annual demand for an item decreases, the EOQ for the item ____

If the customer must be physically present at the process, location is an important issue.

If the demand for an independent demand item is continuous and uniform, so will the planned order releases of its components.

Improving quality seems to be a strategic weapon in gaining market share. However, improving quality entails allocation of resources and effort. As greater effort is expended to stop defects before they occur, which one of the following costs increases? A) prevention costs B) appraisal costs C) internal failure costs D) external failure costs

class A

In ABC analysis, ________ SKUs represent the smallest number of SKUs but the greatest dollar usage.

component

In MRP, a(n) ________ is an item that may go through one or more operations to be transformed into or become part of one or more parents.

parent

In MRP, a(n) ________ is any item manufactured from one or more components.

In SPC, the distribution of sample means: A) can be approximated by the normal distribution. B) will have greater variability than the process distribution. C) will always have a mean greater than the process distribution because of the sample size. D) cannot be used for control charts because the variability is understated.

In Statistical Process Control, ________ are used to detect defects and determine if the process has deviated from design specifications. A) flowcharts B) cause-and-effect diagrams C) process capability charts D) control charts

assemble-to-order

In ________, the product is built to customer specifications from a stock of existing components.

In a competitive orientation to negotiations between buyer and supplier, the buyer does not always possess the power in the relationship—the supplier sometimes holds the power and can exercise this power during negotiations with the buyer.

In a drum-buffer-rope system, the lot size that moves from one work center to another for additional processing is a(n): A) process batch. B) operations batch. C) transfer batch. D) rope batch.

In a swim lane flowchart, the line of visibility is used to separate the process steps in view of the customer from those hidden from view of the customer.

acceptable quality level (AQL)

In acceptance sampling, the ________ is the proportion defective that the buyer will allow in an incoming shipment.

In acceptance sampling, the proportion defective that the buyer will allow in an incoming shipment is: A) the acceptable random sample (ARS). B) the upper control limit (UCL). C) the lower control limit (LCL). D) the acceptable quality level (AQL).

In acceptance sampling, when the random sample passes the buyer's incoming test (low number of defects found), the next action taken is to: A) accept the entire lot of incoming materials. B) do additional testing to reduce the risk of accepting a bad-quality lot. C) place the lot on hold and wait for additional lots from this seller to be tested to assure consistent good quality. D) 100% inspect the lot because some defects were found.

c, 50

In an ABC analysis, class ________ SKUs, which typically make up ________ % of the SKUs, account for only about 5% of the dollar usage.

a, 20

In an ABC analysis, class ________ SKUs, which typically make up about ________ % of the SKUs, account for about 80% of the dollar usage.

In an assembly operation at a furniture factory, six employees assembled an average of 450 custom chairs per 5-day week. What is the labor productivity of this operation? A) 90 chairs per worker per day B) 20 chairs per worker per day C) 15 chairs per worker per day D) 75 chairs per worker per day

larger

In an exponential smoothing model a ________ value for alpha results in greater emphasis being placed on more recent periods.

In presourcing, suppliers are selected early in the concept-development stage.

In response to social and political moves to discourage cigarette smoking, major cigarette manufacturers have had to diversify into other products. Identifying the pressures against smoking is an example of: A) environmental scanning. B) market segmentation. C) flow strategy. D) mission statement development.

In the winter, Handyman Negri repaired snowblowers and in the summer he earned extra money by repairing lawnmowers, a classic example of: A) promotional pricing. B) complementary products. C) mixed model service. D) yield management.

Increasing inventory levels can sometimes help a firm reduce both its inbound and outbound transportation costs.

Instead of dividing the total standard time required to assemble each unit by nc to determine the efficiency of a line balance, you could divide by: A) the number of workers times the number of stations. B) the number of tasks plus the number of stations. C) the sum of the task times plus the sum of the idle times. D) (1-balance delay).

profit (margin), bottleneck

Instead of producing products with the highest profit margins, operations managers should focus on the ________ generated at the ________.

Internal customers are those that have some familial relation working at the business providing the good or service.

Inventories needed for the production of services and goods (inputs to a firm's transformation processes) are called: A) quarantined materials. B) work-in-process. C) raw materials. D) finished goods.

It would be most appropriate to combine a judgment approach to forecasting with a quantitative approach by: A) having a group of experts examine each historical data point to determine whether it should be included in the model. B) combining opinions about the quantitative models to form one forecasting approach. C) adjusting a forecast up or down to compensate for specific events not included in the quantitative technique. D) developing a trend model to predict the outcomes of judgmental techniques in order to avoid the cost of employing the experts.

Judgment methods of forecasting are quantitative methods that use historical data on independent variables to predict demand.

Judgment methods of forecasting should never be used with quantitative forecasting methods.

presourcing

Knoxville Industries had their supplier design the improved body armor for their new apparel. This level of supplier involvement, known as ________ was sure to result in a pain free season.

Lanny discovers that the bottleneck is the riveting machine so he schedules all production around when that machine is available. This is an example of elevating the constraint in the five-step constraint management process.

Choosing the alternative that is the best weighted payoff using decision making under uncertainty would be:

Laplace

The decision rule _____ chooses the alternative with the best weighted payoff.

Laplace

The decision rule most appropriate for the realistic manager using decision making under uncertainty would be:

Laplace

Line balancing applies only to line processes that do assembly work, or to work that can be bundled in many ways to create the jobs for each workstation in the line.

Line balancing is the assignment of work to stations in a line to achieve the desired output rate with the smallest number of workstations

Line balancing strives to create workstations so that the capacity utilization for the bottleneck is much higher than for the other workstations in the line.

Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued.

MRP II ties MRP to the company's financial system.

explosion

MRP ________ is a process that converts the requirements of various final products into a material requirements plan that specifies the replenishment schedule of all the subassemblies, components, and raw materials needed by the final products

Managers should produce products with the highest contribution margins or unit sales, provided they have market demand for them.

Manufacturing processes usually have: A) physical, durable output. B) high levels of customer contact. C) output that cannot be inventoried. D) low levels of capital intensity.

Many firms are concluding that large, centralized manufacturing facilities in low-cost countries with poorly trained workers are not sustainable

Material requirements planning (MRP) is a computerized information system developed specifically to aid in managing dependent demand inventory and scheduling replenishment orders.

The decision rule in decision making under uncertainty that would be best for the manager who has high expectations would be

Maximax

Choosing the alternative that is the "best of the worst" using decision making under uncertainty would be:

Maximin

The decision rule in decision making under uncertainty most appropriate for the pessimistic manager would be:

Maximin

McKenna Restaurant wishes to open a new store. Based on the following subjective criteria, where 10 is excellent and 0 is poor, where should the new store be located? A) A B) B C) C D) D

Choosing the alternative that minimizes loss opportunity costs using decision making under uncertainty would be:

Minimax Regret

More fixed automation typically means: A) decreased labor productivity. B) longer cycle time. C) higher demand volumes. D) lower sales.

More often than not, process improvement takes place whether or not a process is reengineered.

More than 80 percent of all relocations are within 10 miles of the first location, so usually the existing workforce is displaced.

demand management

Nathan managed to level the customer requests for his valuable services by offering reservations, deploying some promotional pricing, and engaging in yield management, all forms of _

On a control chart, a type I error occurs when the employee concludes that the process is in control when it is actually out of statistical control.

On average, it is less expensive to relocate a service-oriented business than a manufacturing business

Once a demand forecast has been entered into a sales and operations plan, it cannot be updated since it would skew the process results.

Once certified, a supplier can be used by the purchasing department without the purchaser having to make background checks.

analysis

Once the benchmarking team has collected the data, the ________ phase of the benchmarking study can begin

analysis

Once the benchmarking team has collected the data, the ________ phase of the benchmarking study can begin.

One aspect of demand that makes every forecast inaccurate is: A) trend variation. B) random variation. C) cyclical variation. D) seasonal variation.

One chart commonly used for quality measures based on product or service attributes is the chart.

One component of the holding cost of inventory is interest.

One component of the ordering cost of inventory is shrinkage.

One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer.

One distinction between manufacturing and services that affects sales and operations plans is that services have difficulty creating inventories in anticipation of uneven demand.

One dominant factor in locating manufacturing facilities is a favorable labor climate

One electronics manufacturer manages risk by making agreements with factories well in advance to guarantee productive capacity at an agreed price. If their product is popular, then they can use that productive capacity during an otherwise busy season at a lower cost. Such an agreement could best be described as: A) a futures contract. B) low-cost hopping. C) theory of constraints management. D) the bullwhip effect.

joint alliance

One form of strategic alliance is the ________, in which two firms agree to cooperate to produce a product or service together

One method for a factory to gain operational focus is to: A) build large enough factories to produce all products and services the company offers. B) hire more specialists and supervisors to control the operations. C) reorganize existing facilities to the plant-within-plant approach. D) remodel stores to create the effect of many small boutiques under one roof.

One of the basic time series patterns is random.

One of the benefits of a cooperative orientation in supplier relationships is: A) the buyer sometimes suggests ways to improve the supplier's operations. B) the supplier implements its own quality standards. C) the buyer does not have to share much information with the supplier. D) the supplier has complete freedom in choosing the delivery time.

One of the main challenges in developing the proper culture for TQM is to: A) define customer for each employee. B) suspend reward systems based on quantity. C) institute an equitable employee recognition program. D) get buy-in from the customer.

One of the principles that total quality management (TQM) stresses is customer satisfaction

One of the secondary levers for reducing pipeline inventory is to: A) offer seasonal pricing plans. B) increase capacity cushions. C) accept only large orders. D) select more responsive suppliers.

One source of disruption caused by the external supply chain is: A) product or sales promotions. B) new product or service introduction. C) late deliveries. D) engineering changes.

Paced lines require that inventory storage areas be placed between stations.

Part commonality tends to increase inventory costs.

81. A ___________ shows the amount of revenue for each alternative if each possible event occurs.

Payoff table

Performance measures such as average response times, repair times, and percent defective are referred to as: A) benchmarks. B) metrics. C) targets. D) tactics.

Pilferage, obsolescence, and insurance costs are all elements of this cost category. A) staffing B) backorder and stockout C) production D) inventory holding

Planned receipts are estimates of the amount of inventory available each week after gross requirements have been satisfied.

Polly Prognosticator was the greatest quantitative forecaster in recorded history. A skillful user of all techniques in your chapter on forecasting, she knew better than to try and develop a forecast for data that exhibited a: A) random pattern. B) horizontal pattern. C) seasonal pattern. D) cyclical pattern.

Possible causes of disruption due to internal supply chain problems are: A) late deliveries. B) machine breakdowns or inexperienced workers. C) product and service mix changes. D) underfilled shipments.

Price, quality, and the degree of customization are all examples of: A) volume needs. B) other needs. C) product needs. D) delivery system needs.

When using decision tree analysis:

Probabilities for all branches leaving a chance node must sum to 1.

scope

Process ________ is the boundary of the process to be analyzed

Process analysis is the documentation and detailed understanding of how work is performed and how it can be redesigned.

Process capability determines whether a process is capable of producing the product or services that customers demand

Professor Willis noted that the popularity of his office hours mysteriously rose in the middle and the end of each semester, falling off to virtually no visitors throughout the rest of the year. The demand pattern at work is: A) cyclical. B) random. C) seasonal. D) trend.

Quality measured with reference to price is captured by the notion of: A) conformance to specifications. B) value. C) fitness for use. D) psychological impressions.

Quality at the source refers to the effort to catch and correct any mistakes as they are being made by those that are making them.

Reengineering is the fundamental rethinking and radical redesign of processes to improve performance dramatically.

Refer to Figure 10-1. The movement from point A to point B indicates the: A) increase in time it takes for your firm to deliver goods and services. B) decrease in time it takes for your firm to deliver goods and services. C) increase in cost. D) decrease in cost.

Refer to Figure 10-1. Which is the best statement if a company simultaneously moves from point A to point B and from point D to point C? A) The new supply chain efficiency curve is superior to the old one. B) The new costs are higher, but the performance is better. C) The new supply chain is still inferior to the supply chain efficiency curve. D) The new performance is worse, but the costs are lower.

Regarding control charts, a type I error refers to concluding that the process is: A) in control when it is not in control. B) incapable when it is capable. C) out of control when it is in control. D) capable when it is not capable.

Regarding control charts, changing from three-sigma limits to two-sigma limits: A) increases the probability of concluding nothing has changed, when in fact it has. B) increases the probability of searching for a cause when none exists. C) decreases the probability that the process average will change. D) decreases the probability that defects will be generated by the process.

Regarding control charts, changing from two-sigma limits to three-sigma limits: A) increases the probability of concluding nothing has changed, when in fact it has. B) increases the probability of searching for a cause when none exists. C) decreases the probability that the process average will change. D) decreases the probability that defects will be generated by the process.

Regardless of how departments like Accounting, Engineering, Finance, and Marketing function in an organization, they are all linked together through: A) management. B) processes. C) customers. D) stakeholders.

one

Regardless of the number of tasks or their lengths, a line balance efficiency of 100% is possible if the number of stations is ________.

A _______ is the difference between a given payoff and the best payoff for a given state of nature.

Regret

In order for a decision tree to be a valuable decision tool, the decision maker should be in a condition of:

Risk

Salesforce estimates are extremely useful for technological forecasting.

Scheduling involves generating a work schedule for employees or sequences of jobs or customers at workstations.

Selling expenses, fixed expenses and depreciation are all considered operating expenses.

_____ is a technique for systematically changing parameters in a model to determine the effects of such changes.

Sensitivity Analysis

Sensitivity analysis on the economic order quantity (EOQ) formula can help the operations manager answer several questions on how to manage inventories. Which one of the following questions is NOT answered by EOQ sensitivity analysis? A) How critical are errors in estimating demand (D), inventory holding cost (H), and setup cost (S)? B) What should happen to lot sizes if interest rates drop? C) What should happen to cycle inventory if the demand rate increases? D) What should happen to lot sizes if supply and lead-time uncertainty increase?

Service location decisions are driven primarily by the operating costs at the locations under consideration.

Service processes usually have: A) physical, durable output. B) low levels of customer contact. C) output that can be inventoried. D) low levels of capital intensity.

Setup cost is independent of order size.

Short term capacity planning should be driven by identification and management of bottlenecks.

Since an employee's responsibility is to move production along, it is ethical to knowingly pass defective services or products to internal or external customers when capacity is tight.

quality circles

Small groups of employees and supervisors that meet to identify, analyze, and solve process and quality problems are known as _

supply chain management

__ is the synchronization of a firm's process with those of its suppliers and customers to match flow of materials, services and information with demand

Statistical process control (SPC) is the application of statistical techniques to determine whether a quantity of material should be accepted or rejected.

green purchasing

Steve-O engaged in ________ by using only suppliers that recycled and managed their flow of environmental waste.

Strategic planning is given the most weight among the Baldrige Performance Excellence Program.

The SCOR model focuses on the basic supply chain processes of: A) source, control, operate, return. B) plan source, make deliver, return. C) purchase, operate, control, logistics. D) operations, marketing, finance.

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a buyer can threaten to cancel future business unless the supplier adheres to the buyer's demands, this is called a ________ source of power. A) legal B) reward C) referent D) coercive

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a buyer has access to knowledge, information and skills desired by the supplier, this is called a(n) ________ source of power. A) expert B) reward C) referent D) coercive

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a supplier values identification with a buyer, this is called a(n) ________ source of power. A) expert B) reward C) referent D) legal

Supply chain design for a service provider is driven primarily by the need to control the materials it consumes as it delivers its various services.

The SCOR model provides guidelines for how materials are to be delivered along a supply chain.

The SCOR model requires a(n): A) three-tier supply chain. B) point of reference. C) make-to-order or assemble-to-order product. D) process view.

Supply chain integration is the effective coordination of supply chain processes through the seamless flow of information to suppliers, but does not include customers, such as distributors and retailers.

Supply chain integration is the effective coordination of supply chain processes through the seamless flow of information to suppliers, up and down the supply chain

Supply chain management tries to match the flow of materials, services and information with demand.

Suppose that competitive priorities call for offering a wide variety of customized services. Which of the following process decisions would be more likely? A) more capital intensity B) more resource flexibility C) more process automation D) less customer involvement

nominal value

Taguchi's quality loss function should be centered on the ________.

The Six Sigma five-step approach contains the elements define, measure, analyze, improve, and control.

The Six Sigma improvement model can be applied both to projects involving incremental improvements to processes and to projects requiring major changes.

The Baldrige Performance Excellence Program: A) involves a rigorous review process that often helps the companies define what quality means to them, regardless of the outcome. B) focuses on large manufacturing companies because of the impact they have on the economy. C) is a set of standards governing the requirements for documentation of a quality program. D) was devised by the International Organization for Standardization for companies doing business in Europe.

The Delphi method of forecasting is useful when: A) judgment and opinion are the only bases for making informed projections. B) a systematic approach to creating and testing hypotheses is needed and the data are usually gathered by sending a questionnaire to consumers. C) historical data are available and the relationship between the factor to be forecast and other external or internal factors can be identified. D) historical data is available and the best basis for making projections is to use past demand patterns.

The EOQ is the smallest lot size that a supplier will allow a customer to order.

The Gantt chart can be used as a tool for sequencing work on machines and monitoring its progress

The Gap, Inc. has targeted teenagers and young adults in need of casual clothes, and through its GapKids stores, the parents or guardians of infants through 12-year-olds. This is an example of: A) market segmentation. B) a collaborative effort between the company and its customers. C) a needs assessment. D) a mission statement.

The ISO 14000 standards explicitly mentions: A) composition of the company safety committee. B) fair labor practices. C) life-cycle assessment D) fair operating practices.

The ISO 9001:2008 standard: A) emphasizes corporate leadership as a means of determining who receives the award. B) has the greatest number of points awarded for business results. C) is awarded by the U.S. government each year. D) addresses quality system documentation.

The Lemma Company manufactures and sells 10 products. Ways have been found to cut both the setup and inventory holding costs in half. What effect will this have on the economic order quantities of the 10 products? A) They will be reduced by a factor of 1.41. B) They will not change. C) They will be reduced by a factor of 2.00. D) They will be increased by a factor of 1.41.

The Lemming Company implements an aggressive marketing campaign and effectively doubles the annual demand for Model 13s. Their total annual holding cost should: A) decrease by 50%. B) increase by 100%. C) stay the same. D) increase by 40%.

The best data analysis tool for recording which gas pump most customers use would be a checklist

The UCL and LCL for an chart are 25 and 15 respectively. The central line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 24, and 16. What should you do? A) Nothing; the process is in control. B) Explore the assignable causes because the second, fourth, and fifth samples are above the mean. C) Explore the assignable causes because there is a run. D) Explore the assignable causes because there is a trend.

learning effect

The ________ can be represented by a line called a learning curve.

lot size

The ________ determines the frequency and quantity to order.

line of visibility

The ________ in a service blueprint separates which steps are in view of the customer from those that aren't.

delphi method

The ________ is a process of gaining consensus from a group of experts while maintaining their anonymity.

bill of materials, BOM

The ________ is a record of all components of an item, the parent-component relationships, and usage quantities derived from engineering and process design.

master production schedule

The ________ is a schedule that specifies the timing and size of production quantities for each product in the product family.

TBO (time between orders)

The ________ is the average elapsed time between receiving replenishment orders of Q units for a particular lot size.

planning horizon

The ________ is the length of time covered by a sales and operations plan.

inventory position, IP

The ________ is the measurement of an item's ability to satisfy future demand.

reorder point, ROP

The ________ is the predetermined minimum level that an inventory position must reach before a fixed quantity (Q) is ordered.

same coefficient of determination, r-squared

The ________ measures the amount of variation in the dependent variable about its mean that is explained by the regression line

SCOR

The ________ model focuses on the supply chain processes plan, source, make, deliver, and return

order fulfillment

The ________ process involves the activities required to deliver a product or service to a customer.

order placement

The ________ process involves the activities required to register the need for a product or service and to confirm the acceptance of the order

business results

The ________ section of the Baldrige Performance Excellence Program has the greatest emphasis.

material requirements plan

The ________ takes the master production schedule and derives plans for components, purchased materials and workstations.

The advantage of variable measurements is that they can be quickly counted compared to attribute measurements.

The balance delay is the amount by which efficiency falls short of 100 percent.

The first three cars I bought all fell apart around 50,000 miles. It was called planned obsolescence and no one seemed to care until companies entered the market that promised 70,000, then 80,000, and finally 100,000 warranties. What sets a great car apart from a good one now is not the quality, which is assumed, but performance, safety and fuel economy. A car that can achieve all three is highly sought after. In the automotive market, performance, safety and fuel economy are sterling examples of: A) order winners. B) a needs assessment. C) order qualifiers. D) a mission statement.

The five categories of activities (operation, transportation, inspection, delay, and storage) are used in which of the following methods of process analysis? A) multiple-activity chart B) process chart C) capital budgeting D) flow diagram

The focus for a process improvement exercise should be on balancing: A) flow. B) capacity. C) workload. D) time.

The foundations of modern manufacturing and technological breakthroughs were inspired by the creation of the mechanical computer by: A) Charles Babbage. B) James Watt. C) Eli Whitney. D) Frederick Taylor

The fourth step in Theory of Constraints application, "elevate the bottleneck(s)," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. B) repeat the analysis process to look for other bottlenecks. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck.

The framework for carrying out all of an organization's functions is: A) the competitive priority. B) the corporate strategy. C) the market analysis. D) the organizational design.

The general principle that 80% of a company's revenue is generated by 20% of its customers is known as the Pareto concept.

The intermediate link between the business plan and the MPS is the: A) annual plan. B) production plan. C) financial plan. D) workforce schedule.

scrap

The internal failure known as ________ occurs when an item is unfit for further processing.

The international standard that is applied to determine a company's "environmental friendliness" is: A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 19000:2008. D) ISO 26000:2010.

The investment a company makes in training employees to perform their duties and redesigning products and processes to improve them would be categorized as prevention costs.

The judgment methods of forecasting are to be used for purposes of: A) making adjustments to quantitative forecasts due to unusual circumstances. B) generating data for use in time-series approaches. C) providing the calculations necessary for quantitative forecasts. D) calculating the forecast error for quantitative methods.

The key to preserving bottleneck capacity is to watch them carefully and keep them as busy as practical

The learning curve for a process depends on the rate of learning and the actual or estimated time for the first unit processed.

workforce, output

The level strategy maintains a constant ________ level or ________ level during the planning horizon.

access control

When I signed on at Seagate, they gave me an ID card that was dutifully checked each morning as I stumbled in to the office at 7:30. This process could best be described as ________.

The purpose of a rotating schedule is to: A) assign each employee to work the same days and hours each week. B) assign senior employees more opportunity to have weekends off. C) deal with certain undesirable aspects of several individual workforce schedules. D) make sure the legal constraints imposed on workforce schedules are satisfied.

The purpose of supply chain management is to synchronize a firm's processes with those of its suppliers and customers.

The ramp-up stage of the development process precedes the full launch stage.

The sales and operations plan typically has a one-year planning horizon.

The sales and operations planning strategy to be used should be consistent with the business environment. Which one of the following pairs of business environment and strategy is consistent? A) skilled labor in short supply; adjust workforce levels B) low inventory holding cost; build anticipation inventory C) ample labor supply; increase backlog for short-term demand surges D) seasonal requirements and ample, unskilled labor supply; subcontracting

The scheduled receipts are orders that have been placed but not yet received.

The second step in Theory of Constraints application, "exploit the bottleneck(s)," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. B) repeat the analysis process to look for other bottlenecks. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck.

The service analogy to the bill of materials in a manufacturing company is the bill of: A) resources. B) services. C) sub-services. D) tender

The spreadsheet approach to sales and operations planning for a services provider includes inventory costs as one factor to be considered.

The stage of new product or service development that links the creation of new services or products to the corporate strategy of the firm is called: A) design. B) analysis. C) development. D) full launch

The stage of new service or product development at which personnel are trained and some pilot runs can be conducted to look for possible problems in production is called: A) design. B) analysis. C) development. D) full launch.

iso 28000:2007

The standard for supply chain security management is

The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for weeks, ultimately deciding to make, rather than buy. This decision resulted in increased: A) outsourcing. B) offshoring. C) postponement. D) backward integration.

lot size, lot size

The term ________ refers to the quantity of an item that is purchased from a supplier; the term ________ is used to refer to the size of the batch that is produced using internal processes.

The term lot size signifies: A) the total production of a single SKU for a one-year period. B) the physical dimensions of the raw materials used to make a batch of one SKU. C) the dimensions of the container used to ship an order to any location outside of company property. D) the number of units of a single item that a company buys from a supplier.

The terms "aggregate plan" and "sales and operations plan" are synonymous.

The third step in Theory of Constraints application, "subordinate all other decisions to Step 2," means that the analyst should: A) wait for authorization before proceeding with any system-wide changes. B) schedule non-bottleneck resources to support the bottleneck schedule. C) seek to increase capacity of only the bottleneck resources. D) seek to increase capacity of both the bottleneck and non-bottleneck resources.

The three sigma limits for a process whose distribution conforms to the normal distribution include approximately: A) 50% of the observed values, in the long run. B) 68% of the observed values, in the long run. C) 95% of the observed values in the long run. D) 99% of the observed values in the long run.

allowance, allowance time

The time added to adjust for factors such as fatigue or equipment malfunction is called ________.

The time that employees work that is longer than the regular workday or workweek for which they receive additional pay is: A) slack time. B) premium. C) overtime. D) the workweek.

The timing and size of production quantities for each product in the product family is specified by the: A) master production schedule. B) material requirements plan. C) resource plan. D) scheduling plan.

fixed

The traditional method of determining contribution margin does not consider ________ costs.

The transportation method of production planning is a special case of: A) linear programming. B) integer programming. C) queuing theory. D) goal programming

The type of goods for which a responsive supply chain is appropriate are: A) fashion goods. B) products with a long shelf life. C) expensive products. D) those with infrequent design changes.

The underlying statistical distribution for the p-chart is: A) Poisson. B) binomial C) percentage. D) normal.

Using an airline example for competitive priorities, the process capability of handling service needs of all market segments and promotional programs would be best described by: A) top quality. B) variety. C) consistent quality. D) delivery speed.

Using rail to move large quantities of goods is relatively cheap, but transit times are long and often variable.

Using salesforce estimates for forecasting has the advantage that: A) no biases exist in the forecasts. B) statistical estimates of seasonal factors are more precise than any other approach. C) forecasts of individual sales force members can be easily combined to get regional or national sales totals. D) confusion between customer "wants" (wish list) and customer "needs" (necessary purchases) is eliminated.

backward integration

When a company uses ________, it is moving upstream in the supply chain toward the source of raw materials.

What is generally TRUE about class C SKUs in ABC analysis? They represent about: A) 20 percent of all SKUs. B) 30 percent of all SKUs. C) 5 percent of the dollar usage. D) 50 percent of the dollar usage.

What is generally TRUE about class C SKUs in ABC analysis? They represent about: A) 20 percent of all SKUs. B) 50 percent of all SKUs. C) 15 percent of the dollar usage. D) 50 percent of the dollar usage.

What is one reason that Six Sigma is more difficult to apply to service processes? A) There is no manual that suggests how Six Sigma can be applied to services. B) The work product is more difficult to see. C) There is no way to measure process capability of a service product. D) The National Six Sigma Society cautions against using it for services.

What is the definition of "theoretical maximum efficiency"? A) It is the amount by which efficiency falls short of 100 percent. B) It is the efficiency that could be obtained by a solution that achieves the theoretical minimum number of stations. C) It is the maximum time allowed for work on a unit at each station. D) It is alternatively called the desired output rate.

What is the difference between a reservation and an appointment? A) There is no difference between the two terms. B) The term reservation implies that the customer has paid in advance. C) The term appointment implies that the customer has paid in advance. D) The term reservation is issued when the customer occupies the facility to receive service

What is the meaning of the acronym 3PL? A) three profit/loss periods B) three purchasing locations C) three partner leverage D) third party logistics provider

When comparing several sites, typically a company will pick specific available site locations, then broaden their choices to communities, and finally to alternate regions.

dependent, independent

When considering dependent / independent demand, in the example of tires and automobiles, the original equipment tires represent ________-demand items, while automobiles represent a(n) ________-demand item.

less than or equal to 200 units

When considering reorder points and inventory position, if an item has an inventory position of 200 units, an order will be placed only if the reorder point is _

When considering the plan-do-study-act cycle for problem solving, evaluating how closely a project's results correspond to the initial goals set for the work is part of the ________ step. A) plan B) do C) study D) act

When considering the plan-do-study-act cycle for problem solving, quantitative goals are set for process improvement in the ________ step. A) plan B) do C) study D) act

When errors have been made while producing a product such that the item must be discarded, the resultant cost is called a(n): A) warranty. B) scrap cost. C) rework cost. D) external failure cost.

When forecasting total demand for all their services or products, few companies err by more than: A) one to four percent. B) five to eight percent. C) nine to twelve percent. D) thirteen to sixteen percent.

Which of the following is NOT an advantage resulting from a firm outsourcing its customer service process? A) Specific detailed questions can be answered by the customer service representative. B) The firm gains more control over the customer interface process. C) Customer service labor costs are low. D) Automated systems are replaced by human contact.

When the underlying mean of a time series is very stable and there are no trend, cyclical, or seasonal influences: A) a simple moving-average forecast with n = 20 should outperform a simple moving-average forecast with n = 3. B) a simple moving-average forecast with n = 3 should outperform a simple moving-average forecast with n = 15. C) a simple moving-average forecast with n = 20 should perform about the same as a simple moving-average forecast with n = 3. D) an exponential smoothing forecast with a = 0.30 should outperform a simple moving-average forecast with α = 0.01.

When using Geographical Information System (GIS) tools to solve multiple-facility location problems, an analyst may also use load-distance scores and center of gravity data to arrive at trial locations

When using the load-distance method to select a new location, the decision maker can represent the number of trips to be made, the number of customers needing a physical presence, or number of tons per week, among other measures, as loads.

When using work sampling, the times of day when the analyst collects the sample data should be selected at random over the length of the study.

Which alternative will increase the probability of detecting a shift in the process average? A) increasing the control limit spread B) taking smaller samples C) taking smaller samples more frequently D) taking larger samples more frequently

Which best defines the gross requirements for a component item? A) the forecasted customer demand for the component B) the amount of safety stock needed to buffer against uncertainties C) the sum of gross requirements for all parents of the component D) the total demand for the component derived from all immediate parents

Which location shift would qualify as forward placement? A) from the manufacturer to a distribution center B) from the retailer to the wholesaler C) from the wholesaler to the manufacturer D) from the retailer to the manufacturer

Which of the following analyses is BEST suited for a scatter diagram? A) A professor plots a student's exam score against the number of homework problems the student completed prior to the exam. B) A professor determines a student's letter grade based on their final course average. C) A professor determines the curve on the most recent exam by categorizing students into groups called A, B, C, etc. D) A professor studies his student evaluations and classifies complaints into broad categories such as Assign More Homework and Make Exams More Challenging.

Which of the following changes would decrease the likelihood of the bullwhip effect? A) changing the mix of items in an order B) sending partial shipments of an order C) instituting a policy of no discounts or promotions D) sending late deliveries of an order

Which of the following generates pressure to increase inventories? A) inventory holding costs B) ordering costs C) storage and handling costs D) taxes and insurance

Which of the following invalidates any analysis using the transportation method? A) unequal supply and demand amounts B) more sources than destinations C) more destinations than sources D) lack of a linear increase in shipping costs

Which of the following is NOT a component of the supply chain? A) order fulfillment B) materials C) customer relationship D) competitors

Which of the following is NOT a lever for reducing cycle inventories? A) place purchased item orders at fixed intervals B) reduce lot sizes for items moving in the supply chain C) streamline methods for placing orders and making machine set ups D) increase repeatability to eliminate the need for changeovers

Which of the following is NOT a step in setting up a transportation tableau? A) Create a row for each plant being considered. B) Remove the lowest and highest cost intersections from consideration. C) Create a column for each warehouse being considered. D) Add a column and a row for plant capacities and total demands.

Which of the following is NOT an advantage of the predetermined data approach to work measurement? A) Standards can be set before production begins. B) New work methods can be compared without conducting a time study. C) Performance ratings are not needed to derive standards. D) The approach is particularly applicable to firms with a flexible flow strategy.

common causes

__ of variation are the purely random, unidentifiable sources of variation that are unavoidable with the current process.

Which of the following is NOT used to derive an item's gross requirements? A) the MPS for immediate parents that are end items B) the planned order releases for immediate parents below the MPS level C) the MPS components that are not purchased items D) any other requirements not originating in the MPS, such as the demand for replacement parts

Which of the following is a back-office module in a typical ERP system? A) customer service B) sales C) marketing D) human resources

Which of the following is an example of a core competency? A) facilities B) top quality C) low-cost operations D) on-time delivery

Which of the following is an example of a nested process? A) At the start of the new semester, a student first pays tuition and then goes to the bookstore. B) A customer service representative verifies a caller's account information. C) A candidate's intent to graduate is checked for financial holds by the Bursar and for degree requirements by Advising before the diploma mill prints their sheepskin. D) A stockbroker calls a client and advises her to sell silver short.

Which of the following is an example of an organization using the Geographical Information System (GIS) method for locating multiple facilities? A) A company that is searching for a location for its combination manufacturing plant and warehouse to better serve several geographical regions of the country. B) Load-distance scores and center of gravity data being used to locate a facility to provide better customer service for multiple customers. C) A company that is searching for a manufacturing plant location that provides enough space for the plant to double in size over the next five years. D) A hospital network that wants to locate several satellite medical facilities in outlying areas to better serve a major metropolitan area.

Which of the following is not a benefit of outsourcing? A) comparative labor costs B) lower logistics costs C) reduction of transaction costs through use of the Internet D) technology transfer to another country or company

Which of the following is sometimes called mass production? A) batch process and make-to-order strategy B) line process and make-to-stock strategy C) continuous flow process and assemble-to-order strategy D) job process and make-to-order strategy

Which of the following is the best example of a physical constraint on the sales and operations plan? A) inventory storage space B) level of backorders C) use of overtime D) safety stock levels

Which of the following location factors was NOT found to dominate location decisions for new U.S. manufacturing plants? A) proximity to the parent company's facilities B) quality of life C) proximity to competitors' facilities D) favorable labor climate

Which of the following statements about ERP systems is BEST? A) Recent studies have shown that the most successful ERP implementations use standardized systems. B) ERP systems written in XML require complete replacements of a company's legacy systems. C) A company must adapt their ERP system to their existing processes in order for all employees to gain a benefit from the new system. D) An ERP system requires a regular synchronization of all of the module databases, which is usually accomplished automatically when the business is not conducting business.

Which of the following statements about MRP II is BEST? A) It is computationally faster than regular MRP. B) It is limited only to aiding order-launching decisions. C) It incorporates informal systems through the use of expert systems technology. D) It provides more extensive information than MRP because it is tied to the company's financial system

Which of the following statements about MRP is TRUE? A) To be classified as a successful MRP user, a company must use either the L4L or POQ rules for lot sizing. B) MRP gross requirements for a parent item are equal to the planned order releases of its components. C) MRP logic is based on the logic of uniform, continuous demand, and item independence. D) MRP gross requirements for a component depend on the planned order releases of its immediate parents.

Which of the following statements about break-even analysis is incorrect? A) No start-up costs exist. B) Economies of scale cannot be achieved. C) Variable costs vary as output changes. D) Fixed costs vary as output changes.

Which of the following statements about cross-docking is NOT correct? A) Cross-docking is packing products on incoming shipments so they can be easily sorted for outgoing shipments based on their final destination. B) Cross-docking reduces inventory and storage space requirements, but handling costs and lead times tend to increase. C) Items are moved from incoming vehicles to outgoing vehicles without being stored in warehouse inventory. D) Inbound and outbound shipments must be tightly coordinated for cross-docking to work.

Which of the following statements about customer involvement is BEST? A) In service industries, customer contact is of minor importance. B) High task divergence and flexible process flows require more flexibility of the process's employees, facilities and equipment. C) A firm that produces standardized products often seeks customer specifications. D) When customer involvement is highly customized, a process is more likely to use a standardized-services process rather than a customized-services process.

Which of the following statements about locating facilities in the service sector is BEST? A) The factors that apply to manufacturing firms often also apply to service facilities, but the impact of the location on sales and customer satisfaction is an important addition. B) Management should avoid locating facilities where competitors are already well established, as illustrated by new car showrooms. C) Creating a critical mass is a strategy that avoids locating near competing firms. D) "Site specific" factors are the main reason for locating warehousing and distribution operations near the customer.

Which of the following statements about process choice is BEST? A) A batch process typically has a standard sequence of operations through the facility. B) Automobiles and appliances are examples of products created using a continuous flow process. C) Continuous flow processes are very capital intensive. D) A custom cake operation is an example of a batch process.

Which work measurement technique breaks down tasks into a series of generic micromotions? A) time study method B) elemental standard data approach C) predetermined data approach D) work-sampling method

Which of the following statements about service resource planning is TRUE? A) The service analogy to the BOM in a manufacturing company is a bill of lading (BOL). B) One resource that every service provider manages is cash. C) There is no such thing as dependent demand in the service sector. D) As services are completed, the accounts receivable decrease.

Which of the following statements concerning MRP is TRUE? A) Dependent-demand items tend to experience relatively constant demand rates. B) MRP systems use independent demands for each component item. C) Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order releases to estimate capacity requirements for critical workstations. D) The most accurate way to forecast dependent demand is to examine past usage rates.

Which of the following statements concerning line balancing is TRUE? A) The theoretical minimum number of stations must always be fewer than the actual number. B) The largest number of followers rule assigns (as quickly as possible) those work elements most difficult to fit into a station. C) Selecting the cycle time can never have an effect on line efficiency. D) Increasing the output rate may increase the theoretical minimum number of stations

Which of the following statements concerning resource flexibility is BEST? A) Flexible equipment is useful to companies with low production volumes and high customization. B) Investment in general-purpose equipment is warranted if the firm expects to sell more than the break-even amount. C) Manufacturing efficiency increases with general-purpose equipment. D) Resource flexibility is crucial for line-flow processing.

Which of the following statements concerning the use of the Geographical Information System (GIS) method for locating multiple facilities is TRUE? A) GIS helps with general facility locations, but is not able to identify specific locations because the transportation structure of roads and interstate highways can't be included in the GIS databases. B) Load-distance scores and center of gravity data can be merged with customer databases to arrive at trial locations for facilities. C) When locating two new facilities, the entire operating area is split into four subregions, two for each new facility, so the best two locations from the four subregions can be selected. D) One weakness of the GIS method is that it is slow and cumbersome, and significant time must be allowed in order to reach a reasonable multiple-facility location decision.

Which of the following statements is more of a general characteristic of a manufacturing organization, as compared to a service organization? A) Short-term demand tends to be highly variable. B) Operations are more capital intensive. C) Outputs are more intangible. D) Quality is more difficult to measure

Which of the following statements regarding resource flexibility is BEST? A) Training is a small part of worker flexibility. B) Specialization of employees is consistent with worker flexibility. C) Worker flexibility is not a priority if the process is subject to hourly or seasonal peaks in demand. D) Resource flexibility requires employees to be able to perform a broad range of duties, and equipment usually must be more general purpose.

Which of the following uses of MRP in promoting a healthy environment is NOT used? A) An MRP system can track waste in a bill of materials as a component of an item. B) When the master production schedule is developed for a product, reports can be generated that project the quantity of waste. C) When the master production schedule is developed for a product, reports can be generated that project the timing of waste. D) The MRP system can be used to communicate directly with the International Organization for Standardization to file ISO 9000 documentation.

Which of the following would be a "common" cause of variation? A) random sources B) a machine in need of repair C) an untrained worker D) a defective raw material

Which of the following would be considered a prevention cost of quality? A) inspecting incoming raw materials B) training workers to perform their jobs C) issuing a recall of defective product before another customer is injured D) performing a 24 hour burn-in on every item produced to make sure it works before it is shipped.

Which of the following would be considered an advantage of global competition? A) ability to safeguard proprietary technology in working with offshore suppliers B) a recent climate of low political risk and lessening nationalization C) high levels of worker skills in foreign countries mean less required training D) strong global competition and increased worldwide demand

Which of the following would be considered an appraisal cost of quality? A) training workers to perform their jobs B) purchasing better tools for workers to perform their jobs C) repairing an item under the warranty D) running a functional test on each item before it is boxed for shipment

Which of the these sales and operations planning levers is associated with interviews, training, and severance pay? A) backorders and stockouts B) hiring and layoffs C) use of overtime D) holding inventory

Which of these Great Moments in Operations and Supply Chain Management did not occur in the 20th century? A) invention of the assembly line B) publication of the Toyota Production Systems book C) establishment of railroads D) strategic planning for achieving product variety

Which of these ISO standards has the greatest number of organizations certified as of 2009? A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 19000:2008. D) ISO 26000:2010.

Which one of the following descriptions best defines the cycle-service level as a measure of customer service? A) the preferred proportion of annual demand instantaneously filled from stock B) the number of stockouts tolerated per year C) the preferred proportion of days in the year when an item is in stock D) the desired probability of not running out of stock in any one inventory cycle

Which one of the following groups of activities is likely to be shown on a process chart? A) operation, inspection, delay B) operation, capital intensity, flow strategy C) transportation, material flow, physical layout D) storage, delay, personnel involved

Which one of the following is NOT an assumption of the EOQ model? A) Decisions for one item can be made independently of decisions made for other items. B) There is no uncertainty in lead-time. C) The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop. D) Quantity discounts can be taken advantage of for large lot sizes.

Which one of the following is TRUE for supply chain management? A) Supply chain applies to both manufacturing and service organizations. B) Supply chain applies only to manufacturing because it deals with flow of materials. C) Supply chain is about suppliers and does not include distributors or customers. D) Supply chain includes any operation that deals with materials.

Which one of the following is a consequence of internal failures? A) increased customer service B) increased inventory costs C) increased productivity D) decreased lead time

Which one of the following is a feature of MRP II, but not available in basic MRP systems? A) financial projections B) action notices C) dispatch lists D) capacity reporting

Which one of the following is a potential consequence of external failures? A) longer lead times B) less rework C) more litigation costs D) lower product costs

Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average inventory? A) periodic order quantity (POQ), with P = 2 B) fixed order quantity (FOQ) C) economic order quantity (EOQ) D) lot for lot (L4L)

Which one of the following is an example of causal forecasting technique? A) weighted moving average B) linear regression C) exponential smoothing D) delphi method

Which one of the following is an input to the MRP system? A) shop-floor schedules B) financial reports C) master production schedule D) purchasing orders

Which one of the following is considered to be an appraisal cost? A) cost of quality audits B) cost of supplier programs C) cost of rework D) cost of process design

Which one of the following is most useful for measuring the bias in a forecast? A) cumulative sum of forecast errors B) standard deviation of forecast errors C) mean absolute deviation of forecast errors D) percentage forecast error in period t

Which one of the following is part of prevention costs? A) the costs of quality audits B) the costs resulting from scrap C) the costs of improving process design and product design D) the costs of lawsuits from injury from use of the product

Which one of the following statements about costs of sales and operations plans is BEST? A) Overtime wages are typically 50% of regular time wages, exclusive of fringe benefits. B) The cost of capital is not generally included in the inventory-holding cost. C) Fringe benefits, which are a part of regular-time costs, do not typically include health insurance and paid vacations. D) Hiring costs include the costs of advertising jobs, interviews, training programs for new employees, and initial paperwork.

Which one of the following statements about flexible automation is BEST? A) Investment cost is lower when a transfer machine handles many operations. B) Chemical processing plants and oil refineries mainly utilize programmable automation. C) It is an automatic process that can be reprogrammed to handle various products. D) It achieves top efficiency; accommodating new products is difficult and costly.

Which one of the following statements about forecasting is FALSE? A) Causal methods of forecasting use historical data on independent variables (promotional campaigns, competitors' actions, etc.) to predict demand. B) Three general types of forecasting techniques are used for demand forecasting: time-series analysis, causal methods, and judgment methods. C) Time series express the relationship between the factor to be forecast and related factors such as promotional campaigns, economic conditions, and competitor actions. D) A time series is a list of repeated observations of a phenomenon, such as demand, arranged in the order in which they actually occurred.

Which one of the following statements about forecasting is FALSE? A) The method for incorporating a trend into an exponentially smoothed forecast requires the estimation of three smoothing constants: one for the mean, one for the trend, and one for the error. B) The cumulative sum of forecast errors (CFE) is useful in measuring the bias in a forecast. C) The standard deviation and the mean absolute deviation measure the dispersion of forecast errors. D) A tracking signal is a measure that indicates whether a method of forecasting has any built-in biases over a period of time.

independent

__-demand items are items for which demand is influenced by market conditions and is not related to the inventory decisions for any other item held in stock.

Which one of the following statements about forecasting is FALSE? A) You should use the simple moving-average method to estimate the mean demand of a time series that has a pronounced trend and seasonal influences. B) The weighted moving-average method allows forecasters to emphasize recent demand over earlier demand. The forecast will be more responsive to change in the underlying average of the demand series. C) The most frequently used time-series forecasting method is exponential smoothing because of its simplicity and the small amount of data needed to support it. D) In exponential smoothing, higher values of alpha place greater weight on recent demands in computing the average.

Which one of the following statements about forecasting is TRUE? A) The five basic patterns of demand are the horizontal, trend, seasonal, cyclical, and the subjective judgment of forecasters. B) Judgment methods are particularly appropriate for situations in which historical data are lacking. C) Casual methods are used when historical data are available and the relationship between the factor to be forecast and other external and internal factors cannot be identified. D) Focused forecasting is a technique that focuses on one particular component of demand and develops a forecast from it.

Which one of the following statements about inventory control systems is BEST? A) A single-bin system is essentially a P system, with the target inventory and current inventory position established visually. B) A base-stock system minimizes ordering and setup costs by placing orders more infrequently. C) The base-stock system is mostly used for inexpensive items because it maximizes cycle inventory costs. D) Visual systems are intended for use with high-value items, such as jet engines, that don't experience a steady demand.

Which one of the following statements about line balancing is BEST? A) If a precedence relationship exists between A and B, they cannot be assigned to the same station. B) If the desired output rate increases, the cycle time also tends to increase. C) The theoretical minimum number of stations can never be achieved, hence the name "theoretical." D) If a line's balance delay is minimized, its efficiency is maximized.

Which one of the following statements about lot-sizing rules is TRUE? A) The periodic order quantity (POQ) rule seeks to create inventory remnants. B) If the POQ rule is used, an item's lot size can vary each time an order is placed. C) The lot-for-lot (L4L) rule is a special case of the fixed-order quantity (FOQ) rule. D) All lot-sizing rules seek to minimize inventory levels.

Which one of the following statements about managerial inputs to production and staffing plans is BEST? A) Finance provides labor and machine standards. B) Human resources provide the training capacity and labor-market conditions. C) Marketing provides the schedule of sales associates. D) Materials provide the current staffing level.

Which one of the following statements about process management is BEST? A) When customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties. B) The traditional relationship between capital intensity and resource flexibility is that if one is high, so is the other. C) Creating a more capital-intensive process tends to reduce the fixed cost and raise the variable unit cost. D) Economies of scope mean that a process should be devoted to a single product or service to achieve high volumes.

Which one of the following statements about quality control is TRUE? A) Measurement by attributes is a simple yes or no decision. B) Complete inspection is used when inspection cost is high. C) Sampling inspection is used when the cost of passing a defective unit is high relative to the cost of inspection. D) Measurement by variables is often used when the quality specifications are complex.

Which one of the following statements about sales and operations planning is BEST? A) A production plan generally focuses on production rates and inventory holdings, whereas a staffing plan focuses on staffing and other labor-related factors. B) Supply options are actions that adjust demand patterns. C) Operations and marketing are the only two functional areas that supply inputs for developing production and staffing plans. D) A level strategy stabilizes inventory levels by adjusting production rates or staff levels to match demand levels over the planning horizon.

Which one of the following statements about sales and operations planning is BEST? A) When a firm wants to minimize its inventory investment, it should use a level production-planning strategy. B) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy. C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy. D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production-planning strategy.

Which one of the following statements about the patterns of a demand series is FALSE? A) The five basic patterns of most business demand series are the horizontal, trend, seasonal, cyclical, and random patterns. B) Estimating cyclical movement is difficult. Forecasters do not know the duration of the cycle because they cannot predict the events that cause it. C) The trend, over an extended period of time, always increases the average level of the series. D) Every demand series has at least two components: horizontal and random.

Which one of the following statements concerning a continuous review system is BEST? A) The inventory position (IP) of an item measures the item's ability to satisfy future demand, relying only on the on-hand inventory. B) An item's inventory position under a continuous review system increases by Q units as soon as an order is received. C) An item's on-hand inventory increases by Q units as soon as an order is placed. D) Under a continuous review system, an item's inventory position corresponds to the on-hand inventory unless there are backorders or one or more scheduled receipts.

While acceptance sampling does determine if incoming materials should be accepted or rejected, it does not limit the buyer's risk of accepting bad-quality parts or rejecting good-quality parts.

Which one of the following statements concerning production and staffing plans is BEST? A) Aggregation can be performed along three dimensions: product families, labor, and time. B) A staffing plan is the intermediate link between the business plan and the master production schedule. C) Production plans are based primarily on information from the master production plan. D) A master production schedule is a projected statement of income, costs, and profits.

Which one of the following statements concerning sales and operations planning alternatives is BEST? A) Building anticipation inventory during the slack season is a demand management option a firm can follow to satisfy seasonal demand patterns. B) Adjusting workforce levels is an attractive reactive alternative when the cost of training and unemployment compensation is high. C) Creating anticipation inventory has the advantage of increasing customization. D) Using overtime is an undesirable option when the overtime wage premium is high and sustained levels of top worker productivity are important.

Which one of the following statements concerning supply options is BEST? A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers. B) Creating anticipation inventory increases customization and is particularly favored in the service industry. C) Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small. D) Using overtime capacity usually improves worker hourly productivity.

Which one of the following statements concerning the economic order quantity (EOQ) is TRUE? A) The EOQ is the order quantity that minimizes annual inventory holding costs. B) An increase in demand will increase the EOQ. C) The time between orders (TBO) will increase with an increase in holding costs. D) The EOQ formula assumes that there are only three relevant costs: holding, transportation, and setup.

Which one of the following statements concerning the economic order quantity (EOQ) model is TRUE? A) An increase in holding cost will increase the EOQ. B) A decrease in demand will increase the EOQ. C) A decrease in holding cost will increase the EOQ. D) None of the above is true.

Which one of the following statements concerning the role of process reengineering is BEST? A) Reengineering is the fundamental rethinking and radical design of business processes. B) Reengineering efforts should focus on functional departments. C) Information technology should be kept separate from reengineering initiatives. D) Reengineering requires an attitude of incremental improvement.

Which one of the following statements correctly represents a benefit of centralized buying? A) Local managers have more control over their business. B) Purchases and production schedules are meshed more easily. C) Customization to local preferences is simplified. D) Increased buying power can result in significant savings in purchasing costs.

Which one of the following statements is BEST? A) A P system requires more safety stock than a Q B) A P system lends itself more to quantity discounts than does a Q C) A P system requires more administrative control and computer support than does a Q D) In a periodic review system, the value of Q is kept the same from one cycle to another

Which one of the following statements is BEST? A) The level of safety stock maintained decreases when the desired cycle-service level increases. B) The level of safety stock maintained decreases when the standard deviation of demand during lead-time increases. C) When no safety stock is maintained, stockouts will occur during approximately 50% of the cycles. D) The level of safety stock maintained is greater if mean absolute deviation (MAD) is used rather than standard deviation in estimating forecast errors.

Which one of the following statements is TRUE about a cooperative orientation in supplier relationships? A) It cannot be implemented in Western countries because competitive bidding is more effective in that culture. B) It cannot be implemented in the Western countries because it always benefits the supplier. C) It requires all parts and subassemblies to be purchased from the same supplier. D) It requires few suppliers for each item or service.

Which one of the following statements is TRUE about purchasing? A) Purchasing's primary role is to satisfy the firm's long-term supply needs. B) Purchasing's primary role should be placing and tracking orders. C) Purchasing's primary role is to negotiate lower prices. D) Purchasing's primary role is to negotiate prices and delivery dates.

Which one of the following statements is TRUE? A) Appraisal costs decrease as quality level decreases. B) Appraisal costs increase as the variation of output increases. C) Appraisal costs increase as the variation of output decreases. D) Appraisal costs increase as quality level increases.

Which one of the following statements is a key feature of both TQM and Six Sigma? A) Quality is primarily the responsibility of all employees in the organization. B) Quality is primarily the responsibility of the quality control department. C) Quality is primarily the responsibility of the production department. D) Quality is primarily the responsibility of top management.

Which one of the following statements is more of a general characteristic of a service organization, as compared to a manufacturing organization? A) Output can be inventoried. B) The response time is longer. C) There is less customer contact. D) The facilities tend to be smaller.

Which one of the following statements on inventory placement of finished goods is BEST? A) Forward placement might help reduce transportation cost. B) Forward placement is consistent with a competitive priority that calls for customization. C) Inventory pooling should be avoided when demand in various regions fluctuates month to month. D) Backward placement is consistent with a competitive priority that calls for fast delivery times.

Which one of the following statements on the concept of focused factories is BEST? A) emphasizes economies of scale, rather than diseconomies of scale B) prefers larger facilities producing all of the products or services the company offers C) reduces the range of demands placed on an operation so management can concentrate on fewer tasks D) emphasizes flexibility rather than cost

Which one of the following statements on the concept of gaining focus is BEST? A) Focused factories maximize the amount of customization. B) Small sizes of many focused factories make it difficult to compete on the basis of shorter lead times. C) Plants within plants are different operations within a facility that can have individualized competitive priorities and processes. D) Focused factories are large factories producing all the products that the company offers.

Which one of the following statements regarding production and staffing plans is BEST? A) A producer of greeting cards for all occasions can use a level strategy to good advantage because of the complementary nature of the products and the workforce to produce many varieties of cards. B) The production plan outlines time-phased production rates, workforce levels, and inventories without considering capacity limitations. C) A decision to vertically integrate is one of the possible demand options a firm may employ when operating under uneven demand conditions. D) An advantage of employing demand options is that creative pricing and promotional campaigns increase the contribution margin.

Which one of the following statements regarding the economic order quantity (EOQ) is TRUE? A) The EOQ model combines several different item orders to the same supplier. B) If an order quantity is larger than the EOQ, the annual holding cost for cycle inventory exceeds the annual ordering cost. C) The EOQ model assumes a variable demand pattern. D) When the interest rate drops, the inventory holding cost decreases and the EOQ decreases.

Which one of the following statements relating to quality is TRUE? A) Sampling procedures based on measurement by variables should be used when quality specifications are complex. B) A distribution of sample means has more variance than the process distribution itself. C) The distribution of sample means can be approximated by the normal distribution. D) Sampling is a better approach than 100 percent inspection when the cost of accepting a defective item is very high.

Which one of the following statements represents an advantage of a Q system over the P system? A) A perpetual inventory system is not mandatory. B) Orders for multiple items from the same supplier can be combined more easily. C) Fixed replenishment intervals are possible, which can be, administratively, quite convenient. D) The Q system is more suited for quantity discounts and physical limitations.

Which one of the following statements represents an advantage of the P system over the Q system? A) Less safety stock is carried to achieve the same service level. B) The replenishment intervals can be more easily individualized for items. C) Orders can be more easily combined to the same supplier. D) A P system is more suitable for quantity discounts and capacity limitations.

Which one of the following techniques will help management trace customer complaints directly to the process involved? A) cause-and-effect diagram B) quality circles C) quality engineering D) specification management

Which statement about economies of scope is NOT true? A) Economies of scope are often attained through programmable automation. B) Economies of scope bring together two competitive priorities-customization and low price. C) Economies of scope reflect the ability to produce multiple products more cheaply in combination than separately. D) Economies of scope reflect low capital intensity and high resource flexibility.

Which statement about forecast accuracy is TRUE? A) A manager must be careful not to "overfit" past data. B) The ultimate test of forecasting power is how well a model fits past data. C) The ultimate test of forecasting power is how a model fits holdout samples. D) The best technique in explaining past data is the best technique to predict the future.

Which statement about process batches is BEST? A) One or more transfer batches may combine at the constrain buffer to form a process batch. B) A process batch is used to maximize setups at the bottleneck. C) A process batch must be greater than or equal to market demand. D) Process batches are used to increase lead time.

Which statement about transfer batch sizes is BEST? A) Transfer batches are the same size as process batches when arriving at a bottleneck. B) Transfer batches are the same size as process batches when departing from a bottleneck. C) Transfer batches are a convenient way to increase lead time. D) Transfer batches can be as small as one unit.

Which statement on MRP explosion is BEST? A) It calculates the total number of subassemblies, components, and raw materials needed for each parent item. B) It calculates the total number of raw materials to be purchased from all suppliers. C) It calculates the total number of parts to be produced for each parent item. D) It calculates the total number of parts needed to be produced less the number of parts on hand for each parent item.

Which step of the Six Sigma DMAIC procedure involves identifying data sources and preparing a data collection plan? A) Define B) Measure C) Analyze D) Improve E) Control

Which step of the Six Sigma DMAIC procedure monitors the process to make sure high performance levels are maintained? A) Define B) Measure C) Analyze D) Improve E) Control

While other suppliers bidding for the contract brought bids with lower per unit costs, Orchard wanted to take delivery based on the fact that the components they were using were machined to their exacting specifications 99.99999% of the time. Orchard's competitive priority was: A) top quality. B) consistent quality. C) on-time delivery. D) delivery speed.

Wider limits on a control chart result in lower probability of a type I error.

Widespread participation in process analysis is essential not only because of the work involved but also because: A) employees tend to neglect their regular work duties, thus no one falls too far behind. B) it builds commitment. C) no one can analyze a process by himself. D) a silo mentality should prevail and this requires large numbers of workers.

Widgets, Inc. wishes to locate two new manufacturing facilities. Based on the following subjective criteria, where should the new facilities be located? (Excellent = 5, Very good = 4, Good = 3, Fair = 2, Poor = 1) A) B and D B) A and D C) C and D D) D and E

With a dramatic flourish, the team leader tore the employee orientation guidelines into pieces. He then distributed blank pieces of paper to the team and asked them to envision the perfect orientation process without regard to how it has always been done. This team is probably engaging in process reengineering.

Work sampling is most often used in situations in which: A) a time standard is needed for a repetitive job. B) an estimate of the proportion of the time spent on a particular activity is needed. C) it is important to keep the sample size down. D) special training is required for the observer, and stopwatches must be used.

Work should be released into the system when: A) a customer order is received. B) the first step in the process is idle. C) a customer order is completed. D) the bottlenecks need work.

inventory management

_ is the planning and controlling of inventories in order to meet the competitive priorities of the organization.

supplier certification

_ programs verify that potential suppliers have the capability to provide materials or services which the buying firms require.

prevention

__ costs are associated with preventing defects before they happen.

MRP, material requirements planning

__ is a computerized information system developed specifically to aid in managing dependent-demand inventory and scheduling replenishment orders.

Part commonality

__ is the degree to which a component has more than one immediate parent.

process analysis

__ is the documentation and detailed understanding of how work is performed and how it can be redesigned.

ISO 14000:2004

__ is the international standard governing documentation of a quality program.

ISO 9001:2008

__ is the international standard governing documentation of a quality program.

In decision theory, the different courses of action that a decision maker can choose are called ____________.

alternatives

he auto supply stores in the metroplex use a common database to track inventory and actually have very little in each location. Instead, customer requests are typically met with the reply, "We have some in our depot and can get it here by truck after 5 pm." This is an example of: A) forward placement. B) centralized placement. C) backward placement. D) depot placement.

he load-distance model is used to minimize the total: A) number of loads. B) distance traveled. C) cost of doing business. D) profit of competitors.

t/f At the level of the firm, service providers offer just services and manufacturers offer just products.

t/f Contact with the customer is usually higher in a manufacturing process than in a service process.

t.f A firm once made purchasing decisions based on which supplier had the lowest cost. But once cash flow was healthy, purchasing decisions were made based on the fastest delivery of goods and services by firms. In this case, delivery speed is clearly the order qualifier.

t/f A core process is a set of activities that delivers value to external customers.

t/f A firm's core competencies should determine its core processes.

t/f A process involves transforming inputs into outputs

t/f As a functional area of a business, Operations translates materials and services into outputs

t/f At the level of the firm, service providers do no just offer services and manufacturers do not just offer products.

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