ISDS 3115 Final
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. back ordering during high demand periods B. subcontracting C. hiring and laying off D. varying production rates through overtime or idle time E. using part-time workers
b
Enterprise resource planning (ERP): A. does not integrate well with functional areas other than operations. B. automates and integrates the majority of business processes. C. seldom requires software upgrade or enhancement. D. is inexpensive to implement. E. all of the above
b
If a factory wants to cut its current lot size in half, by what proportion must setup cost change? A. Setup cost must double from its current value. B. Setup cost must be cut to one fourth its current value. C. Setup cost must also be cut in half from its current value. D. Cannot be determined. E. Setup cost must quadruple from its current value.
b
In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5 per unit per month, what is the economic order quantity? A.100 B.141 C.24 D.600 E.490
b
The objective of aggregate planning is to meet forecast demand while ________ over the planning period. A. minimizing stock out B. minimizing cost C. minimizing fixed cost D. maximizing service level E. all of the above
b
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. Lean operations C. kanban D. Just-in-time (JIT) E. Material requirements planning (MRP)
d
Disaggregation: A. breaks the aggregate plan into greater detail. B. is an assumption required for the use of the transportation model in aggregate planning. C. transforms the master production schedule into an aggregate plan. D. calculates the optimal price points for yield management. E. converts product schedules and labor assignments to a facility-wide plan.
a
Vertical integration appears particularly advantageous when the organization has: A. a large market share. B. little experience operating an acquired vendor. C. a very common, undifferentiated product. D. a very specialized product. E. purchases that are a relatively small percent of sales.
a
Which of the following statements regarding the production order quantity model is TRUE? A. It relaxes the assumption that all the order quantity is received at one time. B. It applies only to items produced in the firm's own production departments. C. It relaxes the assumption that the demand rate is constant. D. It minimizes inventory. E. It minimizes the total production costs.
a
Which of these is among the demand options of aggregate planning? A. back-ordering during high-demand periods B. varying production rates through overtime or idle time C. subcontracting D. changing inventory levels E. varying workforce size
a
Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? A. an on-call labor resource that can be added or deleted to meet unexpected demand B. little flexibility in worker hours to decrease the burden on management C. flexibility in rate of output or hours of work to meet changing demand D. flexibility of individual worker skills that permits reallocation of available labor E. accurate scheduling of labor-hours to assure quick response to customer demand
b
A firm uses the chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy? A. add 200 units to inventory in the next period B. implement a lower price point to increase demand C. lay off workers to match the 200-unit difference D. hire workers to match the 100-unit difference E. add 100 units to inventory in the next period
c
A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? A.horizontal integration B.current transformation C.backward integration D.forward integration E.job expansion
c
ABC analysis divides on-hand inventory into three classes, generally based upon which of the following? A. item quality B. unit price C. annual dollar volume D. the number of units on hand E. annual demand
c
JIT makes quality cheaper because: A. JIT adds more buffers to the system. B. the cost of low quality can be hidden in inventory. C. JIT prevents long runs of defects. D. B and C E. A, B and C
c
Manufacturing cycle time is best defined as the: A. time between the start of one unit and the start of the next unit. B. time it takes a unit to move from one workstation to the next. C. time from raw materials receipt to finished product exit. D. sum of all the task times to make one unit of a product. E. length of the work shift, expressed in minutes per day.
c
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem? A. 365 B. 139 C. 184 D. 174 E. 548
c
The proper quantity of safety stock is typically determined by: A. multiplying the EOQ by the desired service level. B. carrying sufficient safety stock so as to eliminate all stockouts. C. setting the level of safety stock so that a given stockout risk is not exceeded. D. using a single-period model. E. minimizing total costs.
c
What is the practice of keeping a product generic as long as possible before customizing? A.keiretsu B.backward integration C.postponement D.forward integration E.vendor-managed inventory
c
Which of the following statements about aggregate planning is TRUE? A. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. B. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise. C. A pure chase strategy allows lower inventories when compared to a pure level scheduling. D. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. E. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand.
c
Which of the following statements regarding aggregate planning is TRUE? A. Because service firms have no inventory, the chase strategy does not apply. B. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. C. Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon. D. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. E. A disadvantage of the option of changing inventory levels is that it forces abrupt production changes.
c
Which of these is among the demand options of aggregate planning? A. changing inventory levels B. varying workforce size C. back-ordering during high-demand periods D. varying production rates through overtime or idle time E. subcontracting
c
A disadvantage of the fixed-period inventory system is that: A. the average inventory level is decreased. B. orders usually are for larger quantities. C. additional inventory records are required. D. since there is no count of inventory during the review period, a stockout is possible. E. it involves higher ordering costs than the fixed quantity inventory system.
d
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. A line of 5 people in the Chinese department signaling the department to heat 5 Crab Rangoon. C. An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. D. The meat department stocking up on turkeys before Thanksgiving. E. All of the above are kanban applications.
d
How can a reduction of in-transit inventory be encouraged? A. use of trains, not trucks B. low carrying costs C. high setup costs D. supplier location near plants E. low-cost, global suppliers
d
In level scheduling, what is kept uniform from month to month? A. product mix B. inventory levels C. sub-contracting levels D. production/workforce levels E. demand levels
d
In level scheduling, what is kept uniform from month to month? A. sub-contracting levels B. product mix C. demand levels D. production/workforce levels E. inventory levels
d
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. varying work force size by hiring or layoffs B. changing inventory level C. varying production rates through overtime or idle time D. subcontracting E. using part-time workers
d
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem? A. 174 B. 139 C. 548 D. 184 E. 365
d
What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? A. lot sizing B. modular bills C. closed loop system D. time fences E. time phasing
d
What is the primary purpose of the basic economic order quantity model shown below? Q* = StartRoot StartFraction 2 DS Over Upper H EndFraction EndRoot 2DS H A.to minimize the sum of carrying cost and holding cost B.to calculate the reorder point, so that replenishments take place at the proper time C.to calculate the optimum safety stock D.to minimize the sum of setup cost and holding cost E.to maximize the customer service level
d
Which choice best describes level scheduling? A. Overtime is used to handle seasonal demand fluctuations. B. Daily production is variable from period to period. C. Subcontracting, hiring, and layoffs manipulate supply. D. Inventory goes up or down to buffer the difference between demand and production. E. Price points are calculated to match demand to capacity.
d
Which of the following aggregate planning options attempts to manipulate product or service demand? A. subcontracting B. inventories C. overtime/idle time D. price cuts E. part-time workers
d
Which of the following is FALSE regarding the links between JIT and quality? A. JIT reduces the number of potential sources of error by shrinking queues and lead times. B. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. C. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. D. JIT increases the cost of obtaining good quality. E. Inventory hides bad quality; JIT immediately exposes it.
d
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. Lean operations B. Just-in-time (JIT) C. kanban D. Toyota Production System (TPS) E. Material requirements planning (MRP)
d
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level? A. 55 B. 165 C. 140 D. 133 E. 41
e
An advantage of the fixed-period inventory system is that: A. the average inventory level is reduced. B. no inventory records are required. C. safety stock will be lower than it would be under a fixed-quantity inventory system. D. orders usually are for smaller order quantities. E. there is no physical count of inventory items when an item is withdrawn.
e
By convention, what is the top level in a product structure? A. level 10 B. level 1 C. level T D. level 100 E. level 0
e
Which of the following statements about the basic EOQ model is TRUE? A. If annual demand were to double, the EOQ would increase. B. If annual demand were to double, the number of orders per year would increase. C. If the ordering cost were to double, the EOQ would rise. D. If the carrying cost were to increase, the EOQ would fall. E. All of the above statements are true.
e
Which of the following lot-sizing techniques results in the lowest holding costs? A. the quantity discount model B. EOQ C. POQ D. Wagner-Whitin algorithm E. lot-for-lot
e
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
f
MRP can be effective only if very accurate lot sizes are calculated in advance.
f
The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
f
ABC analysis is based upon the principle that: A. there are usually a few critical items, and many items that are less critical. B. an item is critical if its usage is high. C. all items in inventory must be monitored very closely. D. as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items. E. more time should be spent on class "C" items because there are many more of them.
a
All EXCEPT which of the following statements about ABC analysis are true? A.ABC analysis suggests that all items require the same high degree of control. B.ABC analysis is an application of the Pareto principle. C.ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume. D.ABC analysis suggests that there are the critical few and the trivial many inventory items. E.In ABC analysis, inventory may be categorized by measures other than dollar volume.
a
An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following? A. facility capacity B. overtime work C. labor levels D. inventory levels E. production rates
a
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. more than 40 B. about 32 C. about 18 D. about 24 E. about 38
a
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. subcontracting B. hiring and laying off C. varying production rates through overtime or idle time D. back ordering during high demand periods E. using part-time workers
a
What directly results from disaggregation of an aggregate plan? A. a master production schedule B. a capacity-demand matrix C. a transportation matrix D. detailed work schedules E. priority scheduling
a
Which of the following is an advantage of the postponement technique? A. reduction in inventory investment B. reduction in automation C. early customization of the product D. reduction in training costs E. better quality of the product
a
Which of the following should be higher in P systems than Q systems? A. safety stock B. order size C. demand D. lead time E. order spacing
a
Which of the following statements about ABC analysis is FALSE? A.ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. B.ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. C.In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C" items have. D.Criteria other than annual dollar volume, such as high holding cost or delivery problems, can determine item classification in ABC analysis. E.In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A" items.
a
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 equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. 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 always equal to the quantity of planned order releases for its parent. D. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E. All of the above are true.
a
Which one of the following is a characteristic of a JIT partnership? A. removal of incoming inspection B. frequent deliveries in large lot quantities C. third-party logistics never used D. active pursuit of vertical integration E. maximal product specifications imposed on supplier
a
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of green cars to produce B. total number of cars to produce C. number of cars with a hi-fi stereo system to produce D. number of two-door vs. four-door cars to produce E. B, C, and D
b
Which of the following actions is consistent with the use of level scheduling? A. vary production levels to meet demand requirements B. use inventory to meet demand requirements C. use overtime to meet higher-than-average demand requirements D. vary work force to meet demand requirements E. none of the above
b
Which of the following aggregate planning strategies is a capacity option? A. influencing demand by back ordering B. changing inventory levels C. influencing demand by extending lead times D. counterseasonal product mixing E. influencing demand by changing price
b
Which of the following is NOT consistent with level scheduling? A. using built-up inventory to meet demand requirements B. varying production levels and/or work force to meet demand requirements C. finding alternative work for employees during low-demand periods D. varying the use of subcontracting E. All of the above are inconsistent with the pure level strategy.
b
Which of the following is NOT one of the Seven Wastes? A. transportation B. assignment C. motion D. overproduction E. defective product
b
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. pull systems C. a push system for purchased parts and a pull system for manufactured parts D. push systems E. a push or pull system, depending upon the rate of demand
b
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. kanban D. Just-in-time (JIT) E. Toyota Production System (TPS)
b
Which of the following statements is true regarding the leverage of supply chain savings? A. Supply chain leverage depends only upon the percent of sales spent in the supply chain. B. Supply chain savings exert more leverage as the firm's net profit margin decreases. C. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. D. Supply chain leverage is about the same for all industries. E. None of the above is true.
b
Which of these aggregate planning strategies is a capacity option? A. changing price B. using part-time workers C. back ordering D. counterseasonal product mixing E. promotion
b
Which of these aggregate planning strategies is a capacity option? A. changing price B. using part-time workers C. back ordering D. promotion E. counterseasonal product mixing
b
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of two-door vs. four-door cars to produce B. number of green cars to produce C. total number of cars to produce D. number of cars with a hi-fi stereo system to produce E. B, C, and D
c
In level scheduling, what is kept uniform from month to month? A.product mix B.demand levels C.production/workforce levels D.inventory levels E.sub-contracting levels
c
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. varying work force size by hiring or layoffs B. changing inventory level C. subcontracting D. using part-time workers E. varying production rates through overtime or idle time
c
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
d
Which of the following actions is consistent with the use of level scheduling? A.vary work force to meet demand requirements B.use overtime to meet higher-than-average demand requirements C.vary production levels to meet demand requirements D.use inventory to meet demand requirements E.none of the above
d
Which one is NOT an application of lean principle in services? A. inventory sharing among members of the pharmaceutical network B. JIT in food supply management C. improving kitchen layout at McDonald's to drive seconds out of the production process D. securing more inventory to prepare for disruption in production E. scheduling personnel availability at 15 minute increments to meet demand fluctuations
d
Which one of the following statements is TRUE about the kanban system? A. It is associated with a push system. B. The quantities in the containers are usually large to reduce setup costs. C. The supplier workstation signals the customer workstation as soon as a batch is completed. D. The customer workstation signals to the supplier workstation when production is needed. E. It is useful to smooth operations when numerous quality problems occur.
d
Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes? A. overproduction B. defective product C. transportation D. queues E. inventory
e
Revenue management is MOST likely to be used in which one of the following situations? A. a firm with a good counterseasonal product mix B. a fast food restaurant with wide demand fluctuations during the day C. a shipping company that can change its fleet size easily D. a dental clinic that wants to fill its appointment book E. an airline attempting to fill "perishable" seats at maximum revenue
e
The bullwhip effect: A.increases the costs associated with inventory in the supply chain. B.results in increasing fluctuations at each step of the sequence. C.occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. D.occurs because of distortions in information in the supply chain. E.All of the above are true.
e
The minimum record accuracy required for successful MRP is approximately which of the following? A. 97% B. lower than 90% C. 90% D. 95% E. 99%
e
What is the practice of keeping a product generic as long as possible before customizing? A.forward integration B.keiretsu C.vendor-managed inventory D.backward integration E.postponement
e
What term is used to describe the outsourcing of logistics? A.shipper-managed inventory (SMI) B.e-logistics C.hollow logistics D.sub-logistics E.third-party logistics (3PL)
e
Which of the following is NOT a goal of JIT partnerships? A. removal of in-transit inventory B. removal of unnecessary activities C. obtain improved quality and reliability D. removal of in-plant inventory E. All of the above are goals of JIT partnerships.
e
Which of the following is NOT an opportunity for effective management in the supply chain? A.postponement B.vendor-managed inventory C.CPFR D.accurate "pull" data E.local optimization
e
Which of the following is an element of inventory holding costs? A. investment costs B. housing costs C. pilferage, scrap, and obsolescence D. material handling costs E. All of the above are elements of inventory holding costs.
e
Which one of the following statements is TRUE regarding JIT inventory? A. It is minimized with large lot production. B. It hides variability. C. It increases if setup costs decrease. D. It exists just in case something goes wrong. E. It is the minimum inventory necessary to keep a perfect system running.
e
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
t
Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.
t
Savings in the supply chain exert more leverage as the firm's net profit margin decreases.
t
The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
t
The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.
t
