ISDS 3115 Final (Quiz and DSM Concepts)

__________________ is the technique where a manufacturer sends individual components (rather than assembled units) to a distributor.

Channel Assembly

What type of negotiation strategy requires the supplier to open its books to the purchasers?

Cost-based price model

What is a process by which inventory records are verified for accuracy?

Cycle counting

Using the raw data for Thompson ​Industries' Suppliers provided below​, analytics manager Vicky Luo wishes to set up Conditional Formatting in Excel to ensure that there are no blank entries for Supplier category in Column C. Which Conditional Formatting​ 'Rule Type' should she​ select?

"Format only cells that contain"

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?

100 (math isn't real)

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true?

14 is the reorder point, and 100 is the order quantity.

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 20 and the daily production rate is 100. What is the production order quantity for this​ problem?

195

A company wishes to determine the EOQ for an item that has an annual demand of 2,000 units, a cost per order of $75, and annual carrying cost of 7.50 per unit. What is the EOQ?

200

Consider a firm with a 2018 net income of $20 million, revenue of $60 million, and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant, and equipment, how many weeks of supply does the firm hold?

4.16 weeks

A production facility is trying to determine the best batch size for an item that is produced intermittently. This item has an annual demand of 1,000 units, an annual carrying cost of $10 per unit, and a setup cost of $400. They operate 50 weeks per year, and can produce 40 units per week. What is the best batch size for this item?

400

A specific product has expected 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?

41

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacturer of Y is 1 week. The lead time for procurement of Z is 6 weeks. The cumulative lead time for X is __________ weeks.

8

A store wants to ensure a shelf full of marshmallow peeps as the holiday season approaches. Daily demand for peeps is normally distributed with a mean of 25 and a standard deviation of 5. Lead time is 3 days and the store intends a 98% service level. What is the appropriate reorder point?

93

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?

98%

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

ERP

A system that triggers ordering on a uniform time basis is called a _______.

a fixed-period system

To reduce the risks from vertical​ integration, firms may choose to develop some form of formal collaboration known as

a joint venture

A system that keeps track of each withdrawal or addition to inventory continuously is __________.

a perpetual inventory system

The fixed−period inventory system requires more safety stock than a​ fixed-quantity system​ because

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

A disadvantage of the fixed-period inventory system is that

a stockout is possible

If demand is not uniform and constant, the stockout risks can be controlled by __________.

adding safety stock

ABC analysis generally divides on-hand inventory into three classes based upon ______.

annual dollar volume

Which of the following is NOT one of the Seven​ Wastes? a. motion b. over production c. assignment d. defective product e. transportation

assignment

What visualization graph plots data that is readily divided into​ categories?

bar graph

The appropriate level of safety stock is typically determined by _________.

choosing the level of safety stock that assures a given service level

Concerning relationships with​ suppliers, what combination is critical to the success of​ JIT?

close relationships with trust

The three classic types of negotiation strategies are __________.

cost-based price model, market-based price model, and competitive bidding

Supply chain managers outsource logistics to meet three​ goals:

drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed.

A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________.

drop shipping

Which of the following statements is NOT one of the response strategy​ decisions? a. fast transportation b. use buffer stocks to ensure speedy supply c. gather and communicate market research data d. low setup time

gather and communicate market research data

In a​ ________, the highest and lowest values are highlighted

heat map

The trucking industry is establishing technologies, which let shippers and truckers find each other in order to ________.

improve logistics efficiency

In the probabilistic model, increasing the service level will __________.

increase the cost of the inventory policy

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

increased material handling

Inventory record accuracy would be decreased by __________.

increasing stockroom accessibility

The production order quantity model _______.

is appropriate when units are produced and sold simultaneously

Trucking

is increasingly using computers to manage its operations

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

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

Maximizing local profit or minimizing cost in a supply chain is best described as __________.

local optimization

What​ lot-sizing techniques results in the lowest holding​ costs?

lot-for-lot

What is characteristic of lean operations?

low space requirements

What is the characteristic of lean​ operations?

low space requirements

The approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________.

many suppliers

A paint company mixes ten different base colors into 3,000 different color options. If the MPS is organized around the ten different base colors, their bills of material are classified as:

modular

Inventory management policies based on ABC analysis might include investing _______.

more in supplier development for A items

What business analytics tool take(s) large volumes of data and potential variables to form groupings of variables to identify complex paths and​ associations?

neural networks

The advantage of having many potential suppliers is their willingness to

offer lower prices in the short term

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________.

outsourcing

Which industry has the highest supply chain cost as a percentage of​ sales?

petroleum

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?

planning bill

Keeping a product generic as long as possible before customizing is known as __________.

postponement

What is generally found in most Lean​ environments?

pull systems

Which of the following mitigation tactics could reduce economic​ risk? a. purchasing contracts that address price fluctuations b. subcontractors on retainer c. multiple transportation modes and warehouses d. franchising and licensing

purchasing contracts that address price fluctuations

What is the characteristic of a JIT​ partnership?

removal of incoming inspection

Extra units that are held in inventory to reduce stockouts are called __________.

safety stock

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

The four stages of supplier selection, in order, are __________.

supplier evaluation, supplier development, negotiations, and contracting

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 distributer, therefore, places an even larger order with the lobsterman. This is the result of __________.

the bullwhip effect

A disadvantage of the "few suppliers" strategy is __________.

the high cost of changing partners

The difference between the basic Economic Order Quantity (EOQ) model and the production order quantity model is that _______.

the production order quantity model does not require the assumption of instantaneous delivery

What allows a segment of the master schedule to be designated as​ "not to be​ rescheduled?"

time fence

Which of the following would NOT generally be a motive for a firm to hold​ inventories? a. to decouple various parts of the production process b. to hedge against inflation c. to minimize holding costs d. to take advantage of quantity discounts e. to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand

to minimize holding costs

The primary purpose of the basic economic order quantity model is ________.

to minimize the sum of setup cost and holding cost

One use of inventory is __________.

to provide a hedge against inflation

Most inventory models attempt to minimize __________.

total inventory based costs

The three major variations of online catalogs are grouped by __________.

vendors, intermediaries, and buyer exchange systems

The two most important inventory-based questions answered by the typical inventory model are ______.

when to place an order and how many of an item to order

In​ MRP, system nervousness is caused​ by:

​management's attempt to continually respond to minor changes in production requirements

Which of the following best represents the relationship between the master production schedule​ (MPS) and the aggregate​ plan? a. The MPS is the same as the aggregate plan. b. The MPS disaggregates the aggregate plan. c. The MPS precedes the aggregate plan in the planning process. d. There is no relationship between the MPS and the aggregate plan.

The MPS disaggregates the aggregate plan.

Which of the following statements is NOT true regarding the bullwhip​ effect? a. 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. b. Bullwhip fluctuations in the supply chain decrease customer service and profitability. c. Bullwhip fluctuations in the supply chain increase the costs associated with​ inventory, transportation, shipping and receiving. d. Inaccurate information results in distortions and​ fluctuations, causing what is known as the bullwhip effect.

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 these conditions is not necessary for the economic order quantity model to be valid? a. The item has a constant purchase price. b. The item has a constant lead time. c. The item has a constant order cost.

The item has a constant purchase price.

A grocery store is attempting to implement a kanban system. Which of the following would NOT be an application of​ kanbans? a. A line of 5 people in the Chinese department signaling the department to heat 5 orders of crab rangoon. b. The meat department stocking up on turkeys before Thanksgiving. c. A red light on top of the​ cashier's lane signals that the cashier needs additional change replenished. d. An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. e. All of the above are kanban applications.

The meat department stocking up on turkeys before Thanksgiving.

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 is 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 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 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.

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.

What term is used to describe the outsourcing of logistics?

Third-Party logistics

Which of the following best describes vertical integration? a. To produce goods or services previously purchased b. To develop the ability to produce products which complement the original product c. To build long-term partnerships with a few suppliers

To produce goods or services previously purchased

What is specifically characterized by a focus on continuous​ improvement, respect for​ people, and standard work​ practices?

Toyota Production System (TPS)

Which of the following statements about ABC analysis is​ FALSE? a. Criteria other than annual dollar​ volume, such as high holding cost or delivery​ problems, can determine item classification in ABC analysis. b. In ABC​ analysis, forecasting methods for​ "C" items may be less sophisticated than for​ "A" items. c. In ABC​ analysis, "A" items should have tighter physical inventory control than​ "B" or​ "C" items have. d. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. e. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

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

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

Capacity planning in closed-loop MRP does not do which of the following? a. Adds in additional capacity b. Utilize feedback about workload c. Smooth work center loads

Adds in additional capacity

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas? a. Airfreight b. Waterways c. Trucking

Airfreight

The use of effective contracts with penalties could reduce which form of supply chain​ risk? a. Distribution b. Supplier failure to deliver c. Logistic delays or damages d. All of the above

All of the above

Which of the following is an element of inventory holding​ costs? a. housing costs b. material handling costs c. investment costs d. ​pilferage, scrap, and obsolescence e. All of the above are elements of inventory holding costs.

All of the above are elements of inventory holding costs

Which of the following would NOT reduce the bullwhip​ effect? a. Increase​ end-of-quarter sales bonuses b. Reduce lot sizes c. Share​ point-of-sales data with all members of the supply chain d. Implement​ single-stage control of replenishment

Increase​ end-of-quarter sales bonuses

Last year, a vendor cost of goods sold was $8,000 and average inventory investment was $500. This vendor's ________ was 16.

Inventory Turnover

Which of the following statements regarding the gross material requirements plan is false? a. It includes inventory on hand b. It shows when an item must be ordered or when production must be started c. It combines a master production schedule with the time-phased schedule

It includes inventory on hand

Which of the following is false concerning enterprise resource planning? a. It is inexpensive to implement. b. It shares common data and practices across the enterprise. c. It provides and accesses information in a real-time environment.

It is inexpensive to implement.

What is specifically characterized by the elimination of waste through a focus on exactly what the customer​ wants?

Lean operations

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

Level 0

Which one of the following performance measures is not true of a world class firm? a. Long lead time b. Short time placing an order c. High percentage of on-time deliveries

Long lead time

Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? a. Long-term partnering with a few suppliers b. Vertical integration c. Negotiating with many suppliers

Long-term partnering with a few suppliers

Which of the following lot-sizing techniques results in the lowest holding costs? a. Lot-for-lot b. Part period balancing c. Economic order quantity

Lot-for-lot

Which of the following is not a concern of the supply chain? a. Maintenance scheduling b. Warehousing and inventory levels c. Credit and cash transfers

Maintenance scheduling

Which of the following is an aspect of environmental risk in supply-chain management? a. Political Issues b. Secure financial transactions c. Raw material availability

Political Issues

With the growth of the JIT, which of the following distribution systems has been the biggest loser? a. Railroads b. Airfreight c. Trucking

Railroads

Which of the following should be higher in P systems than Q systems?

Safety Stock

Generally, inventory types are divided into four main categories. Which of the following is not one of the four main categories of inventory? a. Safety stock inventory b. Raw material inventory c. Work-in-process inventory

Safety stock inventory

If a factory wants to cut its current lot size in​ half, by what proportion must setup cost​ change?

Setup cost must be cut to one fourth its current value

Which of the following is not an advantage of the "few suppliers" concept? a. Sharing trade secrets between firms b. Suppliers' willingness to provide technological expertise c. Suppliers' willingness to participate in JIT systems

Sharing trade secrets between firms

Which one of the following is not a supply-chain strategy? a. Short-term relationship with few suppliers b. Negotiation with many suppliers c. Vertical integration

Short-term relationship with few suppliers