MKT 411 - Exam 2 Mindtap Questions
Which one of the following is NOT a type of qualitative forecasting? a. Sales force composite b. Consumer survey c. Simple moving average d. Jury of executive opinion
C. Simple Moving Average
The College Bookstore sells a unique calculator to college students. The demand for this calculator has a normal distribution with an average daily demand of 20 units and a standard deviation of 4 units per day. The lead time for this calculator is 9 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 200 units b. 20 units c. 80 units d. 420 units e. 180 units
a. 200 units
The cost of a product is $5, and the carrying cost rate is 20%; the cost of processing an order is $45 and the annual demand is 1000. What is the economic order quantity (EOQ)? a. 300 b. 20 c. 25 d. 5 e. 200
a. 300
Quantitative forecasts use mathematical techniques that are based on: a. Historical data b. Expert opinions c. Surveys d. Sales force knowledge of the market
a. Historical data
According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Lack of communication within an organization b. Organizations tend to spend too much time and money training their employees on the new system c. Top management becomes overcommitted to the point where they constantly encourage the employees during implementation d. All of these choices are correct.
a. Lack of communication within an organization
The ___________ planning horizon is shorter than the aggregate production plan's, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? a. Master production schedule b. Material requirements plan c. Capacity Requirements Plan d. Demand time fence
a. Master production schedule
Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or subassemblies over time period of few days to a few weeks? a. Material requirements plan b. Master production schedule c. Rough-cut capacity plan d. Resource requirements plan
a. Material requirements plan
Which strategy uses overtime and subcontracting to cope with the high demand periods? a. Mixed Production Strategy b. The Chase Production Strategy c. The Level Production Strategy d. The Aggregate Production Strategy
a. Mixed Production Strategy
If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the: a. Most recent positive ATP b. Bill of materials c. Beginning inventory d. Master Production Schedule
a. Most recent positive ATP
The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue. a. True b. False
a. True
Which of the following is true under the Periodic Review System? a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system b. a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system c. there are no discrepancies between physical inventory and the stock record d. it is more expensive to administer compared to the Continuous Review System e. the only uncertainty is the magnitude of demand during the delivery lead time
a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system
If an item is ordered using its economic order quantity, the annual carrying cost should be: a. equal to the annual ordering cost. b. the square root of the annual ordering cost. c. slightly less than the annual ordering cost. d. twice the annual purchase price. e. None of these choices are correct.
a. equal to the annual ordering cost
Using the data set below, what would be the forecast for period 4 using a three period moving average: (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 15,750 5 20,500 6 18,500 a. 14,008 b. 11,883 c. 12,244 d. 11,500
b. 11,883
Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,220 6 18,500 a. 15,220 b. 14,030 c. 13,190 d. 12,660
b. 14,030
The College Bookstore sells a unique calculator to college students. The demand for this calculator is constant at 20 units per day. The lead time for this calculator is variable at an average of 9 days with a standard deviation of 2 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 226 units b. 246 units c. 182 units d. 26 units e. 46 units
b. 246 units
Complete the following MRP record and provide the planned order releases for Week 1. Lead time is 2 weeks. Safety stock is 3. Use LFL lot sizes.
b. 29
Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? a. 20 percent of the items account for 80 percent of the tasks. b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items. c. 80 percent of the items account for 20 percent of the groups. d. 80 percent of the unit cost accounts for 20 percent of the items. e. None of these choices are correct.
b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items.
The __________ specifies which end product is to be made, how many are required, and when they need to be completed. a. Bill of material b. Aggregate production plan c. Master production schedule d. Super bill of materials
b. Aggregate production plan
Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. Elite integrator solution b. Best-of-breed solution c. Multi-modular solution d. Premier application solution
b. Best-of-breed solution
Why are firms migrating to ERP systems? a. ERP systems are successful with two-dimensional processes b. ERP systems tie together a variety of specialized systems c. ERP systems are easy to implement, particularly in large organizations d. ERP systems are inexpensive to implement
b. ERP systems tie together a variety of specialized systems
Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Fairly inexpensive to purchase and implement b. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries c. Flexible enough that it allows different companies with different business models to mold the new ERP system to fit the company's business model d. All of these choices are correct.
b. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entires
All of the following may influence demand and should be considered when developing a forecast EXCEPT a. Emerging markets b. Ergonomic conditions c. Supplier quality d. New competition
b. Ergonomic conditions
The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from: a. Sophisticated forecasting algorithms b. Exchange of forecasting information c. Both "Sophisticated forecasting algorithms" and "Exchange of forecasting information" d. None of these choices are correct.
b. Exchange of forecasting information
The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock. a. True b. False
b. False
The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods. a. True b. False
b. False
Cyclical variations are longer than a year and can be influenced by: a. Events such as natural disasters b. Political factors c. Population growth d. Imbalances in supply and demand
b. Political factors
The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. Best-of-breed b. Single integrator c. Premier application d. Elite integrator
b. Single integrator
According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT: a. Cost b. Supplier lead times c. Trust between supply chain partners d. Making organizational and procedural changes
b. Supplier lead times
Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. The Aggregate Production Strategy b. The Level Production Strategy c. Mixed Production Strategy d. The Chase Production Strategy
b. The Level Production Strategy
When linear trend forecasts are developed, demand would typically be: a. The independent variable b. The dependent variable c. The lead variable d. The passive variable
b. The dependent variable
A positive error implies that a forecast was? a. Too high b. Too low c. Neither too high or too low d. The sign of an error gives no information as to the direction of the error.
b. Too low
Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series? a. Cyclical Variations b. Trend Variations c. Random Variations d. Seasonal Variations
b. Trend variations
If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that: a. Your order size was lower than the EOQ b. Your order lot size was higher than the EOQ c. Your order lot size was equal to the EOQ d. Nothing because there is insufficient information to discern where the EOQ would be.
b. Your order lot size was higher than the EOQ
If at the end of the year, the cost of revenue = $2,500, total revenue = $12,000 and inventory value = $2,000, the inventory turnover ratio would be: a. 0.208 b. 0.375 c. 1.250 d. 2.667 e. 0.800
c. 1.250
Using the data set below, what would be the forecast for period 5 using a four period weighted moving average? The weights for each period are 0.05, 0.15, 0.30, and 0.50 from the oldest period to the most recent period, respectively. (Choose the closest answer.) Period Actual Demand 1 10,000 2 12,400 3 13,250 4 14,750 5 15,220 6 18,500 a. 12,820 b. 13,105 c. 13,710 d. 14,610
c. 13,710
When demand and delivery lead time are known and constant, daily demand = 8, purchase lead time = 5 days, and the purchase price = $20/unit, then the reorder point is: a. 13. b. 56. c. 2. d. 40. e. 32.
d. 40
Use the information below to calculate the number of orders per year when using the EOQ: Annual demand for an item is 43,000 units. The cost to place an order is $200The per unit cost of the item is $50.00. The annual holding rate is 35%. Choose the closest answer. a. 202 b. 123 c. 49 d. 81
c. 49
Based on the information in the data set below, what is the mean squared error (accurate to 1 decimal)? Month Actual Forecast 1 12 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 10.0 b. 1.00 c. 8.0 d. 0.8
c. 8.0
An advantage/benefit of utilizing an ERP system includes which of the following? a. ERP systems enable the firm to automate some of the steps of a manufacturing process b. ERP systems are designed to take advantage of Internet technology c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process" d. None of these choices are correct.
c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process"
Which of the following basic production strategies works best with make-to-order manufacturing firms? a. Capacity Production Strategy b. Mixed production Strategy c. Chase Production Strategy d. Level Production Strategy
c. Chase Production Strategy
Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: a. Operating systems and Internet browsing b. Computer assisted drawing and Photo enhancing c. Customer relationship management and Human resource management d. All of these choices are correct.
c. Customer relationship management and Human resource management
Which of the following is NOT a common module of ERP systems? a. Human Resources Management b. Customer Relationship Management c. Marketing Resources Management d. Supply Chain Management
c. Marketing Resources Management
Which of the following is NOT an assumption of the economic order quantity (EOQ) model? a. Quantity discounts are not possible. b. Lead time is known and constant. c. Production and use occur simultaneously. d. The only variable costs are setup cost and holding cost. e. Demand is known, constant, and independent.
c. Production and use occur simultaneously
Which of the following is TRUE regarding the EOQ figure below? a. Curve J represents the annual ordering cost, and curve L represents the annual holding cost. b. A lot size of G has an annual total cost of about C. c. The EOQ is at lot size G, and curve K is the annual holding cost curve. d. At lot size H both holding costs and ordering costs exceed the annual total cost.
c. The EOQ is at lot size G, and curve K is the annual holding cost curve.
While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? a. The trend for companies to eliminate their supply chain partners b. The increased use of email during the 1990's c. The year 2000 millennium bug d. All of these choices are correct.
c. The year 2000 millenium bug
Random variations in a Time Series component are due to: a. Population growth b. Using a large value for the exponential smoothing constant c. Unpredictable events d. Inaccurate responses of the expert participants
c. Unpredictable events
Which of the following is a disadvantage of carrying too much inventory? a. it increases the need to purchase items. b. it leads to lower average finished goods inventories. c. it creates an unnecessary waste of scarce resources. d. it leads to higher annual inventory ordering costs. e. it reduces the need to conduct cycle counts.
c. it creates an unnecessary waste of scarce resources
A forecasting method has produced the following data over the past 5 months shown in the data set. What is the mean absolute deviation (accurate to 1 decimals)? Month Actual Forecast 1 12 11 2 13 10 3 10 8 4 11 6 5 9 8 a. 2.0 b. 10.0 c. -1.2 d. 2.4
d. 2.4
Which of the following is a benefit of CPFR? a. Uses joint planning and promotions management b. Integrates planning, forecasting and logistics activities c. Provides an analysis of key performance metrics d. All of these choices are correct.
d. All of these choices are correct
Legacy MRP systems had which of the following limitations? a. The systems were designed to perform a very specific operational function b. The systems needed continuous modifications c. The systems were not user-friendly d. All of these choices are correct.
d. All of these choices are correct.
Which of the following would be considered a dependent demand item? a. Televisions b. Retail customers c. Furniture d. Bicycle tires used to assemble a bicycle
d. Bicycle tires used to assemble a bicycle
The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. Delphi method b. CPFR effect c. Mean deviation d. Bullwhip effect
d. Bullwhip effect
Inaccurate forecasts can result in negative outcomes like: a. High inventory costs and increased profits b. Low inventory costs and stockouts c. Material shortages and decreased costs of obsolescence d. Imbalances in supply and demand
d. Imbalances in supply and demand
When there is not a lot of currently relevant data available it is generally best to use: a. Time series forecasting b. Simple moving average forecasting c. Naive forecasting d. Qualitative forecasting
d. Qualitative forecasting
Legacy MRP systems typically utilized multiple software packages and databases which caused: a. Data integrity b. The system to crash often c. Planned order releases d. The same information to be stored in multiple locations
d. The same information to be stored in multiple locations
Which one of the following is NOT a reason for firms to carry inventory? a. To maintain independence of operations b. To meet variations in product demand c. To take advantage of quantity discounts d. To increase production change/setup costs e. To allow for production scheduling flexibility
d. To increase production change/setup costs
Classify the following inventory items as either A, B, or C items using the ABC inventory control system: a. item 1 (B), item 2 (A), item 3 (A), item 4 (C), item 5 (C) b. item 1 (A), item 2 (B), item 3 (C), item 4 (A), item 5 (B) c. item 1 (C), item 2 (B), item 3 (C), item 4 (A), item 5 (C) d. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C) e. item 1 (B), item 2 (C), item 3 (B), item 4 (C), item 5 (A)
d. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C)
In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. a. The bullwhip effect b. Price reductions c. Excess stock d. Stockouts
d. stockouts
The primary purpose of the basic economic order quantity (EOQ) model is to: a. Maximize the customer service level b. Calculate the reorder point, so that replenishments take place at the proper time c. Calculate the optimum safety stock level d. Minimize the sum of purchase cost and holding cost e. None of these choices are correct.
e. None of these choices are correct
