ISDS 3115 Final Questions

What is an information system for identifying and planning the​ enterprise-wide resources needed to​ take, make,​ ship, and account for customer​ orders?

ERP

Which choice best describes level scheduling?

Inventory goes up or down to buffer the difference between demand and production.

JIT makes quality cheaper becuase

JIT prevents long runs of defects

Which of the following statements is NOT true about MRP?

MRP is an independent demand technique used in production environment

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 5 minutes. Station 5 can produce a unit in 8 minutes. Which station is the bottleneck station?

Station 2

Which of the following is true regarding the leverage of supply chain savings?

Supply chain savings exert more leverage as the firm's net profit margin decreases

Which one of the following statements is TRUE about the kanban system?

The customer workstation signals to the supplier workstation when production is needed.

Which of the following statements about quantity discounts is FALSE?

The larger the annual demand, the less attractive a discount schedule will be

A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans?

The meat department stocking up on turkeys before Thanksgiving

Low-level coding means that:

a component item is coded at the lowest level at which it appears in the BOM structure

What directly results from disaggregation of an aggregate plan?

a master production schedule

The fixed-period inventory system requires more safety stock than a fix-quantity system because:

a stockout can occur during the review period as well as during the lead time

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 minimizes the total production costs c. It minimizes inventory d. It applies only to items produced in the firm's own production departments. e. It relaxes the assumption that the demand rate is constant.

a. It relaxes the assumption that all the order quantity is received at one time.

Which type of layout features departments or other functional groupings in which similar activities are performed? a. process-oriented b. product-oriented c. fixed-position d. mass production e. unit production

a. process-oriented

Revenue management is MOST likely to be used in which one of the following situations?

an airline attempting to fill "perishable" seats at maximum revenue

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

annual dollar volume

Product focused processes:

are processes that are specialized for relatively few products or customer groups

Enterprise Resource Planning (ERP):

automates and integrates the majority of business processes

Which of the following products is likely to be assembled on a repetitive process line?

automobiles

Which of the following statements about aggregate planning is true? a. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. b. A pure chase strategy allows lower inventories when compared to a pure level strategy. c. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise. d. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. e. An advantage of the counter-seasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs.

b. A pure chase strategy allows lower inventories when compared to a pure level strategy.

Dependance on an external source of supply is found in which of the following aggregate planning strategies?

subcontracting

In aggregate planning, which one of the following is not a basic option for altering demand?

subcontracting

Which of the following aggregate planning options in NOT associated with manipulation of product or service demand?

subcontracting

How can a reduction of in-transit inventory be encouraged?

supplier location near plants

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?

the bullwhip effect

Adding a complementary product to what is currently being produced is a demand management strategy used when:

the existing product has seasonal or cyclical demand

A disadvantage of the "few suppliers" sourcing strategy is:

the high cost of changing partners

One of the similarities between process focus and mass-customization is:

the variety of outputs

ABC analysis is based upon the principle that

there are usually a few critical items, and many items that are less critical

An advantage of the fixed-period inventory system is that:

there is no physical count of inventory when an item is withdrawn

What term is used to describe the outsourcing of logistics?

third-party logistics (3PL)

What is one of the tools that is particularly useful in reducing system nervousness in an MRP system?

time fences

Manufacturing cycle time is best defined as:

time from raw materials receipt to finished product exit

The two most basic inventory questions answered by the typical inventory model are:

timing of orders and order quantity

Which of the following would NOT generally be a motive for a firm to hold inventories?

to minimize holding costs

What is the primary purpose of the basic economic order quantity model shown below? Q*= square root of (2DS/H)

to minimize the sum of setup costs and holding costs

The crossover point is that production quantity where:

total costs for one process equal total costs for another process

Aggregate planning would entail which of the following production aspects at BMW for a 12-month period?

total number of cars to produce

A fast-food retailer that acquired a spice manufacturer would be practicing backward integration

true

Changes in capacity may lead, lag, or straddle the demand.

true

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

true

Intermittent processes are organized around processes

true

One of the ways that just-in-time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

true

Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

true

Price changes are useful for matching the level of demand to the capacity of a facility.

true

Saving in the supply chain exert more leverage as the firm's net profit margin decreases

true

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain

true

The cost of waiting decreases as the service level increases.

true

Which of the following actions is consistent with the use of scheduling?

use inventory to meet demand requirements

Harley Davidson:

uses work cells to feed its assembly line

Which of these aggregate planning strategies is a capacity option?

using part-time workers

Which one of the following is not a benefit of JIT implementation?

variability increase

In the basic EOQ model, if D = 6000 per year, S = $100, and holding costs = $5 per unit per month, what is the economic order quantity?

141

An assembly line has 10 stations with times of 1,2,3,4, ...., 10, respectively. What is the bottleneck time?

18.18% of the throughput time

A work system has five stations that have process times of 5,9,4,9, and 8. What is the throughput time of the system?

35

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 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 efficiency of the system?

87.7%

Which of these statements about the production order quantity model is FALSE?

All else equal, the smaller the ratio of demand rate to production rate, the larger the production order quantity

The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.

false

A rice mill in south Louisiana phases the trucking firm that transports packaged rice to distributors. This is an example of which of the following?

forward integration

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises:

has a facility that is below optimum operating level and should build a larger facility

A product-focused process is commonly used to produce:

high-volume, low-variety products

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will:

increase by about 41%

Which of the following is NOT one of the benefits in MRP?

increased inventory levels

A job shop is an example of a(n):

intermittent process

The main trait of a single period model is that:

inventory has limited value after a certain period of time

Which of the following is FALSE concerning enterprise resource planning (ERP)?

it is inexpensive to implement

Which one of the following statements is TRUE regarding JIT inventory?

it is the minimum inventory necessary to keep a perfect system running

Characteristics of just-in-time partnerships do NOT include:

large lot sizes to save on setup costs and to gain quantity discounts

By​ convention, what is the top level in a product​ structure?

level 0

Which of the following is NOT an opportunity for effective management in the supply chain?

local optimization

Which of the following is a characteristic of lean operations?

low space requirements

Which of the following phases best describes process focus?

low volume, high variety

Which of the following is not one of the strategies for improving service productivity?

mass customization

When quantity discounts are allowed, the cost-minimizing order quantity:

minimizes the sum of holding, ordering, and production costs

The objective of aggregate planning is to meet forecast demand while ___________ over the planning period.

minimizing cost

Local optimization is a supply-chain complication best described as:

optimizing one's local area without full knowledge of supply chain needs

What is transferring a​ firm's activities that have traditionally been internal to external​ suppliers?

outsourcing

Aggregate planning for service firms that provide intangible output deals mainly with:

planning for human resource requirements and managing demand

Hewlett-Packard delays customization of its laser printer as long as possible. This is an example of which of the following?

postponement

What is the practice of keeping a product generic as long as possible before customizing?

postponement

Which of the following statements regarding a pull system is TRUE?

problems become more obvious

What layout strategy deals with low-volume, high-variety production?

process-oriented layout

Frito-Lay is to​ ________ focus as Dell Computer is to​ ________ focus.

product, mass customization

Frito-Lay is to ________ focus as Harley Davidson is to ________ focus.

product, repetitve

In level scheduling, what is kept uniform from month to month?

production/workforce levels

In MRP, the number of units projected to be available at the beginning of each time period refers to:

projected on hand

Which of the following is generally found in most Lean environments?

pull systems

Which of the following is an advantage of the postponement technique?

reduction in inventory investment

Which one of the following is a characteristic of a JIT partnership?

removal of incoming inspection

Which of the following industries is most likely to have low equipment utilization?

resturants

The proper quantity of safety stock is typically determined by:

setting the level of safety stock so that a given stockout risk is not exceeded

A disadvantage of the fixed-period inventory system is that

since there is no count of inventory during the review period, a stockout is possible

Outsourcing: a. Utilizes efficiency that comes with specialization b. Transfers traditional internal activities to outside vendors c. Allows the outsourcing firm to focus on its key success factors d. All of the above are true of outsourcing e. None of the above is true of outsourcing

d. All of the above are true of outsourcing

Which of the following statements about aggregate planning is true? a. In a pure level strategy, production rates or workforce levels are adjusted to match demand requirements over the planning horizon. b. Mixed strategies in aggregate planning may utilize inventory, workforce, and production rate changes over the planning horizon. c. Because service firms have no inventory, the pure chase strategy does not apply. d. A disadvantage of the option of changing inventory levels is that it forces abrupt production changes. e. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies.

b. Mixed strategies in aggregate planning may utilize inventory, workforce, and production rate changes over the planning horizon.

In the mass service and service factory quadrants of the service process matrix, the operations manager could focus on all the following except: a. standardization b. customization c. automation d. removing some services e. tight quality control

b. customization

Which of these is among the demand options of aggregate planning?

back-ordering during high-demand periods

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following?

backward integration

Which of the following is not one of the four principles of bottleneck management?

bottlenecks should be moved to the end of the system process

Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 85%. What is the expected weekly output of cranks for this company? a. 5100 a. 5700 c. 4845 d. 969 e. 6783

c. 4845

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. Criteria other than annual dollar volume, such as high holding cost or delivery problems, can determine item classification in ABC analysis. c. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. d. In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A" items. e. In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C" items have.

c. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

All EXCEPT which of the following statements about ABC analysis are true? a. ABC analysis is an application of the Pareto Principle. b. ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume. c. ABC analysis suggests that all items require the same high degree level of control. 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.

c. ABC analysis suggests that all items require the same high degree level of control.

Which of the following represents a common way to manage capacity in the service sector?

changes in staffing levels

Which of the following aggregate planning strategies is a capacity option?

changing inventory levels

Which of the following aggregate planning strategies is a demand option?

changing price

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT?

close relationships with trust

The purpose of safety stock is to:

control the likelihood of a stockout due to variable demand and/or lead time

Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? a. The quantity and gross requirements for a child item are always equal to the quantity of net requirements for its parent. b. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity 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. e. All of the above are true.

d. 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 is NOT one of the Seven Wastes? a. defective product b. transportation c. overproduction d. control charts e. motion

d. control charts

Kanban is associated with all EXCEPT which of the following? a. reductions in inventory b. small lot sizes c. signals, such as cards, lights, or flags d. increased material handling e. moving inventory only as needed

d. increased material handling

Which of the following is NOT an advantage of level scheduling? a. lower absenteeism b. lower turnover c. stable employment d. matching production exactly with sales e. more employee commitment

d. matching production exactly with sales

Which choice best describes the counterseasonal product demand option?

developing a mix of products that smoothes out their demands

Which of the following statements about the basic EOQ model is TRUE?a. If annual demand were to double, the number of orders per year would increase. b. If the carrying cost were to increase, the EOQ would fall. c. If annual demand were to double, the EOQ would increase. d. If the ordering cost were to double, the EOQ would rise. e. ALL of the above statements are true.

e. ALL of the above statements are true.

Lean operations are known for their: a. supplier education b. challenging jobs c. employee development d. supplier partnerships e. All of the above are attributes of lean opperations

e. All of the above are attributes of lean opperations

Which of the following is consistent with a chase strategy? a. Little or no use for inventory to meet demand requirements b. Vary work force to meet demand requirements c. Vary production levels and work force to meet demand requirements d. Vary production levels to meet demand requirements e. All of the above are consistent with a pure chase strategy

e. All of the above are consistent with a pure chase strategy

Which of the following is NOT a goal of JIT partnerships? a. obtain improved quality and reliability b. removal of in-transit inventory c. removal of in-plant inventory d. removal of unnecessary activities e. All of the above are goals of JIT partnerships

e. All of the above are goals of JIT partnerships

The bullwhip effect: a. Increases the costs associated with inventory in the supply chain. b. Occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. c. Results in increasing fluctuations at each step of the sequence. d. Occurs because of distortions in information in the supply chain. e. All of the above are true.

e. All of the above are true.

Which of the following is TRUE regarding the steps to reducing setup times? a. The standardization of both tooling and work procedures is advantageous to setup time reduction. b. The cycle of steps is repeated until setup time is reduced to under a minute. c. Move material closer and improve material handling are done before operator training. d. The first step involves performing as much setup preparation as possible while the process/machine is operating. e. All of the above are true.

e. All of the above are true.

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 the above are elements of inventory holding costs

e. All the above are elements of inventory holding costs

Of the four approaches to capacity expansion, the approach that "straddles" demand: a. uses incremental expansion b. uses one-step expansion c. at some times leads demand, and at other times lags d. works best when demand is not growing but is stable e. Choices A and C are both correct

e. Choices A and C are both correct

Utilization will always be lower than efficiency because:

effective capacity is less than design capacity

An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

false

Capacity decisions are based on technological concerns, not demand forecasts

false

Effective capacity is typically larger than design capacity

false