ISDS 3115 Final
C. The meat department stocking up on turkeys before Thanksgiving.
A grocery store is attempting to implement a kanban system. Which of the following would NOT be an application of kanbans? A. A red light on top of the cashier's lane signals that the cashier needs additional change replenished. B. An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. C. The meat department stocking up on turkeys before Thanksgiving. D. A line of 5 people in the Chinese department signaling the department to heat 5 orders of crab rangoon. E. All of the above are kanban applications.
C. vendor-managed inventory.
A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. e-procurement. B. postponement. C. vendor-managed inventory. D. single stage control of replenishment.
A. a production facility organized around specific activities.
A process focused facility is A. a production facility organized around specific activities. B. a rapid, low-cost production facility that caters to constantly changing unique customer desires. C. a production facility organized around products. D. based on the classical assembly line
B. 26
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides an 85% service level? A. 165 B. 26 C. 133 D. 41 E. 126
A. 14
A work system has five stations that have process times of 5, 9, 14, 9, and 8. What is the bottleneck time? A. 14 B. 18 C. 45 D. 35 E. 9
D. 32
A work system has five stations that have process times of 5, 9, 4, 6, and 8. What is the throughput time of the system? A. 18 B. 35 C. 9 D. 32 E. 7
C. there are usually a few critical items, and many items that are less critical.
ABC analysis is based upon the principle that: A. more time should be spent on class "C" items because there are many more of them. B. an item is critical if its usage is high. C. there are usually a few critical items, and many items that are less critical. D. all items in inventory must be monitored very closely. E. as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items.
B. the existing product has seasonal or cyclical demand.
Adding a complementary product to what is currently being produced is a demand management strategy used when: A. efficiency exceeds 100 percent. B. the existing product has seasonal or cyclical demand. C. price increases have failed to bring about demand management. D. capacity exceeds demand for a product that has stable demand. E. demand exceeds capacity.
A. is a fast-growing mode of shipping.
Airfreight A. is a fast-growing mode of shipping. B. represents about 10% of the tonnage shipped in the United States. C. is the oldest means of freight transportation. D. is the best way to transport natural gas.
C. has a facility that is above optimum operating level and should reduce facility size.
An organization whose capacity is on the portion of the average unit cost curve that increases as output rises: A. has a facility that is at optimum operating level. B. has utilization higher than efficiency. C. has a facility that is above optimum operating level and should reduce facility size. D. is enjoying economies of scale. E. has a facility that is below optimum operating level and should build a larger facility.
A. 98%
A firm's probability of a stockout for a popular item is 2%. Given this information, what is its service level for this popular item? A. 98% B. 96% C. 2% D. 4%
A. high-volume, low-variety products.
A product-focused process is commonly used to produce: A. high-volume, low-variety products. B. low-variety products at either high- or low-volume. C. low-volume, high-variety products. D. high-volume, high-variety products. E. high-volume products of either high- or low-variety.
B. furniture.
A single-period inventory model is NOT applicable for A. seasonal goods. B. furniture. C. newspapers. D. milk.
e. more than 40
Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be? A. about 24 B. about 38 C. about 18 D. about 32 E. more than 40
false
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage. True False
A. level 0
By convention, what is the top level in a product structure? A. level 0 B. level 1 C. level T D. level 100 E. level 10
C. product, mass customization
Frito-Lay is to ________ focus as Dell Computer is to ________ focus. A. process, repetitive B. repetitive, product C. product, mass customization D. product, repetitive E. process, product
B. supplier location near plants
How can a reduction of in-transit inventory be encouraged? A. low carrying costs B. supplier location near plants C. high setup costs D. low-cost, global suppliers E. use of trains, not trucks
B. 100
In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $10 per unit per month, what is the economic order quantity? A. 600 B. 100 C. 24 D. 141 E. 346
False
Capacity decisions are based on technological concerns, not demand forecasts. True/False
E. large lot sizes to save on setup costs and to gain quantity discounts.
Characteristics of just-in-time partnerships do NOT include: A. produce with zero defects. B. removal of in-transit inventory. C. long-term contracts. D. focus on core competencies. E. large lot sizes to save on setup costs and to gain quantity discounts.
D. close relationships with trust
Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A. distant relationships with skepticism B. distant relationships with trust C. close relationships with skepticism D. close relationships with trust E. none of the above
C. Station 4
Consider a production line with five stations. Station 1 can produce a unit in 9 minutes. Station 2 can produce a unit in 10 minutes. Station 3 has two identical machines, each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines). Station 4 can produce a unit in 11 minutes. Station 5 can produce a unit in 8 minutes. Which station is the bottleneck station? A. Station 3 B. Station 2 C. Station 4 D. Station 5 E. Station 1
C. management's attempt to continually respond to minor changes in production requirements.
In MRP, system nervousness is caused by: A. management's marking part of the master production schedule as "not to be rescheduled". B. the use of the lot-for-lot approach. C. management's attempt to continually respond to minor changes in production requirements. D. management's attempt to evaluate alternative plans before making a decision. E. the use of phantom bills of material.
A. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed.
Supply chain managers outsource logistics to meet three goals: A. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed. B. drive down inventory investment, improve delivery reliability and speed, and provide better market response. C. lower delivery costs, improve delivery reliability and speed, and provide better market response. D. drive down inventory investment, lower delivery costs, and provide better market response.
A. 78.9%
The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the design capacity of the system is 1900 students per semester and that effective capacity equals 90% of design capacity. If the number of students who actually got their orientation session is 1500, what is the utilization of the system? A. 78.9% B. 87.7% C. 1710 students D. 90% E. 1350 students
E. 78.9%
The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the design capacity of the system is 1900 students per semester and that effective capacity equals 90% of design capacity. If the number of students who actually got their orientation session is 1500, what is the utilization of the system? A. 90% B. 87.7% C. 1350 students D. 1710 students E. 78.9%
E. a stockout can occur during the review period as well as during the lead time.
The fixed−period inventory system requires more safety stock than a fixed-quantity system because: A. this model is used for products that require very high service levels. B. setup costs and holding costs are large. C. this model is used for products that have large standard deviations of demand. D. replenishment is not instantaneous. E. a stockout can occur during the review period as well as during the lead time.
A. inventory has limited value after a certain period of time.
The main trait of a single-period model is that: A. inventory has limited value after a certain period of time. B. the order quantity should usually equal the expected value of demand. C. the cost of a shortage cannot be determined accurately. D. supply is limited. E. it has the largest EOQ sizes.
B. 99%
The minimum record accuracy required for successful MRP is approximately which of the following? A. lower than 90% B. 99% C. 90% D. 95% E. 97%
B. 89.5 percent; 70.8 percent
The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put into use, the program has become more complex, so that 950 now represents the most employees that can be trained per year. In the past year, 850 employees were trained. The efficiency of this system is approximately ________ and its utilization is approximately ________. A. 950 employees; 850 employees B. 89.5 percent; 70.8 percent C. 90.5 percent; 79.2 percent D. 87.5 percent; 950 employees E. 79.2 percent; 90.5 percent
E. timing of orders and order quantity.
The two most basic inventory questions answered by the typical inventory model are: A. order quantity and service level. B. timing of orders and cost of orders. C. order quantity and cost of orders. D. ordering cost and carrying cost. E. timing of orders and order quantity.
D. All of the above
The use of effective contracts with penalties could reduce which form of supply chain risk? A. Supplier failure to deliver B. Logistic delays or damages C. Distribution D. All of the above
E. low space requirements
Which of the following is characteristic of lean operations? A. no supplier partnerships B. easy, mindless jobs C. specialty workers with no cross-training D. inventory buffers between each workstation to minimize system downtime E. low space requirements
D. pull systems
Which of the following is generally found in most Lean environments? A. a push system for high margin items and a pull system for low margin items B. a push or pull system, depending upon the rate of demand C. push systems D. pull systems E. a push system for purchased parts and a pull system for manufactured parts
D. inspect all incoming shipments to ensure zero defects
Which of the following is not a goal of JIT partnerships? A. removal of in-plant inventory B. removal of unnecessary activities C. removal of in-transit inventory D. inspect all incoming shipments to ensure zero defects E. All of the above are goals of JIT partnerships.
C. mass customization
Which of the following is not one of the strategies for improving service productivity? A. separation B. automation C. mass customization D. self-service E. scheduling
E. Release work orders to the system at the bottleneck's capacity pace.
Which of the following is one of the four principles of bottleneck management? A. Lost time at a non-bottleneck is lost system capacity. B. Increased non-bottleneck capacity is increased system capacity. C. Bottlenecks should be moved to the end of the system process. D. Increasing capacity at bottleneck stations is a mirage. E. Release work orders to the system at the bottleneck's capacity pace.
B. Toyota Production System (TPS)
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. Just-in-time (JIT) B. Toyota Production System (TPS) C. Lean operations D. Material requirements planning (MRP) E. kanban
C. Just-in-time (JIT)
Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? A. Toyota Production System (TPS) B. kanban C. Just-in-time (JIT) D. Material requirements planning (MRP) E. Lean operations
B. Lean operations
Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? A. Material requirements planning (MRP) B. Lean operations C. Just-in-time (JIT) D. Toyota Production System (TPS) E. kanban
D. low volume, high variety
Which of the following phrases best describes process focus? A. Operators are less broadly skilled. B. high fixed costs, low variable costs C. Finished goods are usually made to a forecast and stored. D. low volume, high variety E. low inventory
b. safety stock
Which of the following should be higher in P systems than Q systems? A. lead time B. safety stock C. order size D. demand E. order spacing
B. Having certain demand raises the possibility of a stockout.
Which of the following statement is NOT true? A. The service level is the complement of the probability of a stockout. B. Having certain demand raises the possibility of a stockout. C. Probabilistic models relax the assumption that demand for a product is constant and certain. D. Probabilistic models are a real-world adjustment because demand and lead time will not always be known and constant.
A. lot-for-lot
Which of the following lot-sizing techniques results in the lowest holding costs? A. lot-for-lot B. POQ C. Wagner-Whitin algorithm D. the quantity discount model E. EOQ
E. removal of incoming inspection
Which one of the following is a characteristic of a JIT partnership? A. third-party logistics never used B. maximal product specifications imposed on supplier C. active pursuit of vertical integration D. frequent deliveries in large lot quantities E. removal of incoming inspection
B. It is the minimum inventory necessary to keep a perfect system running.
Which one of the following statements is TRUE regarding JIT inventory? A. It increases if setup costs decrease. B. It is the minimum inventory necessary to keep a perfect system running. C. It hides variability. D. It is minimized with large lot production. E. It exists just in case something goes wrong.
B. product focus
High-volume, low-variety production is best suited for which of the following process strategies? A. repetitive focus B. product focus C. mass customization D. process focus
A. process focus
Low-volume, high-variety production is best suited for which of the following process strategies? A. process focus B. repetitive focus C. mass customization D. product focus
A. tend to have long, continuous production runs.
Product-focused processes: A. tend to have long, continuous production runs. B. apply only to service firms, not to manufacturers. C. are processes that accommodate a variety of products or customer groups. D. allow more customization, but are not very efficient. E. are profitable because customers demand flexibility, not specialization.
C. planning bill
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A. component bill B. phantom bill C. planning bill D. low-level bill E. modular bill
B. JIT prevents long runs of defects.
JIT makes quality cheaper because: A. the cost of low quality can be hidden in inventory. B. JIT prevents long runs of defects. C. JIT adds more buffers to the system. D. B and C E. A, B and C
A. increased material handling
Kanban is associated with all EXCEPT which of the following? A. increased material handling B. small lot sizes C. signals, such as cards, lights, or flags D. moving inventory only as needed E. reductions in inventory
E. increased material handling
Kanban is associated with all EXCEPT which of the following? A. reductions in inventory B. moving inventory only as needed C. signals, such as cards, lights, or flags D. small lot sizes E. increased material handling
C. a component item is coded at the lowest level at which it appears in the BOM structure.
Low-level coding means that: A. the lowest-paid staff member in the production department performs the coding. B. the code being used is the code for the lowest level in the BOM structure. C. a component item is coded at the lowest level at which it appears in the BOM structure. D. the top level of the BOM is below level zero and that BOMs are not organized around the finished product. E. a final item has only a few levels in the BOM structure.
False
MRP can be effective only if very accurate lot sizes are calculated in advance. True/False
False
MRP can be effective only if very accurate lot sizes are calculated in advance. True/False
B. the volume of outputs.
One of the similarities between product focus and mass-customization is: A. many departments and many routings. B. the volume of outputs. C. the use of modules. D. the variety of outputs. E. All of the above are similarities.
True
Price changes are useful for matching the level of demand to the capacity of a facility. True/False
C. "make-or-buy" and outsourcing decisions.
Prior to embarking on supply chain design, operations managers must first consider A. what kind of distribution network to have. B. how to select suppliers. C. "make-or-buy" and outsourcing decisions. D. how to manage supply chain inventory.
postponement
The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. This scenario is a prime example of A. postponement. B. drop shipping. C. vendor-managed inventory. D. the bullwhip effect.
A. a joint venture.
To reduce the risks from vertical integration, firms may choose to develop some form of formal collaboration known as A. a joint venture. B. cross sourcing. C. channel assembly. D. vendor managed inventory.
B. is increasingly using computers to manage its operations.
Trucking A. is one of the least flexible transportation modes. B. is increasingly using computers to manage its operations. C. is the least used transportation mode for manufacturing goods. D. does not play a role in multimodal shipping.
False
Utilization is the number of units a facility can hold, receive, store, or produce in a period of time. True/False
B. effective capacity is less than design capacity.
Utilization will typically be lower than efficiency because: A. effective capacity equals design capacity. B. effective capacity is less than design capacity. C. expected output is less than actual output. D. effective capacity is greater than design capacity. E. expected output is less than rated capacity.
C. Material requirements planning (MRP)
What is a dependent demand technique that uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements? A. Periodic order planning (POP) B. Economic order method (EOM) C. Material requirements planning (MRP) D. Material requirements method (MRM)
C. bill-of-material
What is a list of quantities of components, ingredients, and materials required to make a product? A. engineering change notice B. master production schedule C. bill-of-material D. purchase order
C. blanket order
What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. postponement B. advanced shipping notice C. blanket order D. drop shipping
C. vertical integration
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. virtual companies B. outsourcing C. vertical integration D. horizontal integration
B. Accurate inventory records
What is required for an MRP system to work? A. A high number of purchase orders outstanding B. Accurate inventory records C. Long lead times D. A small bill of material
B. Drop shipping
What is the term of shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs? A. Vendor-managed inventory B. Drop shipping C. Postponement D. Direct shipping
C. outsourcing
What is transferring a firm's activities that have traditionally been internal to external suppliers? A. keiretsu network B. make-or-buy C. outsourcing D. vertical integration
C. minimizes the sum of holding, ordering, and product costs.
When quantity discounts are allowed, the cost-minimizing order quantity: A. minimizes the sum of holding and ordering costs. B. minimizes the unit purchase price. C. minimizes the sum of holding, ordering, and product costs. D. may be a quantity below that at which one qualifies for that price. E. is always an EOQ quantity.
c. the mps disaggregates the aggregate plan
Which of the following best represents the relationship between the master production schedule (MPS) and the aggregate plan? A. The MPS precedes the aggregate plan in the planning process. B. The MPS is the same as the aggregate plan. C. The MPS disaggregates the aggregate plan. D. There is no relationship between the MPS and the aggregate plan.
B. careful selection, monitoring and effective contracts with penalties
Which of the following could reduce distribution risk? A. secure IT systems B. careful selection, monitoring and effective contracts with penalties C. cross-country diversification D. use multiple suppliers
E. They allow easy switching from one product to the other.
Which of the following is FALSE regarding repetitive processes? A. They include the assembly of basically all automobiles. B. They are the classic assembly lines. C. They have more structure and less flexibility than a job shop layout. D. They use modules. E. They allow easy switching from one product to the other.
D. JIT increases the cost of obtaining good quality.
Which of the following is FALSE regarding the links between JIT and quality? A. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. B. Inventory hides bad quality; JIT immediately exposes it. C. JIT reduces the number of potential sources of error by shrinking queues and lead times. D. JIT increases the cost of obtaining good quality. E. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory.
C. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
Which of the following statements about ABC analysis is FALSE? A. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. B. In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A" items. C. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. D. In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C" items have. E. Criteria other than annual dollar volume, such as high holding cost or delivery problems, can determine item classification in ABC analysis.
B. The larger the annual demand, the less attractive a discount schedule will be.
Which of the following statements about quantity discounts is FALSE? A. The smaller the ordering cost, the less attractive a discount schedule will be. B. The larger the annual demand, the less attractive a discount schedule will be. C. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. D. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. E. In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available.
A. Use buffer stocks to ensure speedy supply.
Which of the following statements is NOT one of the differentiation strategy decisions? A. Use buffer stocks to ensure speedy supply. B. Gather and communicate market research data. C. Modular design to aid product differentiation. D. Minimize inventory to avoid product obsolescence.
B. gather and communicate market research data
Which of the following statements is NOT one of the response strategy decisions? A. use buffer stocks to ensure speedy supply B. gather and communicate market research data C. low setup time D. fast transportation
C. The bullwhip effect occurs as order are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence.
Which of the following statements is NOT true regarding the bullwhip effect? A. Bullwhip fluctuations in the supply chain decrease customer service and profitability. B. Inaccurate information results in distortions and fluctuations, causing what is known as the bullwhip effect. C. The bullwhip effect occurs as order are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence. D. Bullwhip fluctuations in the supply chain increase the costs associated with inventory, transportation, shipping and receiving.
B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting.
Which of the following statements is NOT true? Part 2 A. Supply chain management describes the coordination of all supply chain activities, starting with raw materials, and ending with a satisfied customer. B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. C. A supply chain includes suppliers; manufacturers and/or service providers; and distributors, wholesalers, and/or retailers who deliver the product and/or service to the final customer. D. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer.
C. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. B. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. C. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. D. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E. All of the above are true.
C. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other.
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing enhances technological skills. B. Cross-sourcing describes suppliers who become part of a company coalition. C. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. D. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor.
B. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other.
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing enhances technological skills. B. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. C. Cross-sourcing describes suppliers who become part of a company coalition. D. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor.
D. Problems become more obvious.
Which of the following statements regarding a pull system is TRUE? A. Manufacturing cycle time is increased. B. Large lots are pulled from upstream stations. C. Work is pulled to the downstream stations before it is actually needed. D. Problems become more obvious. E. None of the above is true of a pull system.
B. It relaxes the assumption that all the order quantity is received at one time.
Which of the following statements regarding the production order quantity model is TRUE? A. It applies only to items produced in the firm's own production departments. B. It relaxes the assumption that all the order quantity is received at one time. C. It relaxes the assumption that the demand rate is constant. D. It minimizes the total production costs. E. It minimizes inventory.
C. keiretsu networks
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. virtual companies B. joint ventures C. keiretsu networks D. horizontal integration
