OM331 Final Exam Review
Identify and describe briefly the six sourcing strategies.
1. With the many suppliers strategy, a supplier responds to the demands and specifications of a "request for quotation," with the order usually going to the low bidder. 2. The strategy of few suppliers develops long-term "partnering" relationships with a few dedicated suppliers who will work with the purchaser in satisfying the end customer. 3. Vertical integration is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor. 4. Joint ventures represent a formal collaboration between firms, without implying any change of ownership. 5. Suppliers become part of a company coalition in the keiretsu strategy. 6. With the virtual companies strategy, firms rely on a variety of supplier relationships to provide services on demand.
Identify the advantages and disadvantages of using the "few suppliers" sourcing strategy
Advantages: long-term suppliers are more likely to understand the broad objectives of the procuring firm and the end customer; using few suppliers can create value by allowing suppliers to have economies of scale and a learning curve that yields both lower transaction costs and lower production costs; and the strategy also encourages those suppliers to provide design innovations and technological expertise. Disadvantages: concern about trade secrets and suppliers venturing out on their own; the high cost of changing partners; and risk of poor supplier performance.
A NASCAR pit crew consists of how many members? A) 7 B) 5 C) 9 D) 10 E) 4
Answer: A
A manager who is conducting a time study now needs an accuracy of ±0.1 minutes, rather than ±0.05 minutes as in the past. Because of this change in accuracy, the new required sample size becomes: A) one-fourth as large. B) one-half as large. C) twice as large. D) four times as large. E) one-tenth larger.
Answer: A
In time studies, normal time is: A) average observed time multiplied by a performance rating factor. B) larger than standard time. C) determined by historical experience. D) converted to standard time by the performance rating factor. E) one hour later during the summer months.
Answer: A
Suppose that the allowance factor for a job is 0.5 and the normal time is 4 hours. What is the standard time? A) 8 hours B) 2.5 hours C) 10 hours D) 7.5 hours E) cannot determine with the given information
Answer: A
The smaller the percentage established for allowances: A) the closer is normal time to standard time. B) the closer is average observed time to normal time. C) the larger is the performance rating factor. D) the larger is the required sample size. E) the larger is the number of observations in the work sampling.
Answer: A
Which of the following techniques may NOT provide reliable and accurate labor standards? A) historical experience B) methods time measurement (MTM) C) time studies D) work sampling E) predetermined time standards
Answer: A
) Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A) kanban B) keiretsu C) samurai D) poka-yoke E) kaizen
Answer: B
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? A) horizontal integration B) forward integration C) backward integration D) current transformation E) keiretsu
Answer: B
Most pit crew members have background experience in what area? A) mechanical engineering B) athletics C) car mechanics D) automobile race driving E) No specific area—crew members come from all sorts of backgrounds.
Answer: B
Mutual trust is: A) when employees have gained the trust of management. B) reflected in reasonable, documented employment policies that are honestly and equitably implemented to the satisfaction of both management and employee. C) when management has gained the trust of the employees. D) when management recognizes that the employees are competent, motivated people both able and willing to perform at the level required to produce a quality product. E) when management and the employees both agree on common objectives.
Answer: B
Timing a sample of a worker's performance and using it as a basis for setting a standard time describes which of the following? A) predetermined time standards B) time studies C) work sampling D) methods time measurement E) left-hand, right-hand charting
Answer: B
Vertical integration appears particularly advantageous when the organization has: A) a very specialized product. B) a large market share. C) a very common, undifferentiated product. D) little experience operating an acquired vendor. E) purchases that are a relatively small percent of sales.
Answer: B
Which of the following best describes mutual commitment in an organization? A) an instance in which management is committed to the employees and the employees are committed to management B) both management and the employees are committed to the same objective C) both management and the employees are committed, but to different objectives D) management obtains the commitment of the employees to a stated objective E) both management and the employees can rely on each other
Answer: B
Which of the following is NOT an advantage of a virtual company? A) speed B) total control over every aspect of the organization C) specialized management expertise D) low capital investment E) flexibility
Answer: B
) When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following? A) keiretsu B) virtual companies C) joint venture D) vertical integration E) few suppliers
Answer: C
A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? A) horizontal integration B) forward integration C) backward integration D) current transformation E) job expansion
Answer: C
The Japanese concept of a company coalition of suppliers is: A) poka-yoke. B) kaizen. C) keiretsu. D) dim sum. E) illegal.
Answer: C
Which of the following best describes backward integration? A) sell products to a supplier or a distributor B) develop the ability to produce products that complement the original product C) produce goods or services previously purchased D) develop the ability to produce the specified good more efficiently than before E) build long-term partnerships with a few suppliers
Answer: C
A worker completed a task 10 times during a period in which a typical trained employee completes the task 9 times. What is the worker's performance rating? A) 125% B) 150% C) 100% D) 111% E) cannot be determined with the given information
Answer: D
The objective of a human resource strategy is to: A) produce the demand forecast at the lowest possible labor cost. B) match employment levels with demand. C) achieve a reasonable quality of work life at low cost. D) manage labor and design jobs so people are effectively and efficiently utilized. E) hire the most diversified workforce possible.
Answer: D
Which of the following is NOT a condition that favors the success of vertical integration? A) availability of capital B) availability of managerial talent C) sufficiently high demand D) small market share E) All of these favor the success of vertical integration.
Answer: D
Which of the following is NOT an advantage of virtual companies? A) low capital investment B) flexibility C) respond rapidly to the market D) no overhead expenses E) lean performance
Answer: D
Which of the following best describes Vizio's sourcing strategy? A) few suppliers B) keiretsu C) joint venture D) vertical integration E) virtual company
Answer: E
Which of the following is NOT a use of labor standards? A) labor content of items produced B) cost and time estimates prior to production C) crew size and work balance D) basis of wage-incentive plans E) All of these are uses of labor standards
Answer: E
The objective of a human resource strategy is to manage labor and design jobs so factory space is effectively and efficiently utilized.
Answer: FALSE
________ is a Japanese term that describes suppliers who become part of a company coalition.
Answer: Keiretsu
Equitable pay alone cannot achieve a reasonable quality of work life in an organization.
Answer: TRUE
Mutual commitment means that both management and employee strive to meet common objectives.
Answer: TRUE
Technology, location, and layout decisions are all possible constraints on human resource strategy
Answer: TRUE
________ is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor.
Answer: Vertical integration
) ________ rely on a variety of supplier relationships to provide services on demand.
Answer: Virtual companies
Virtual companies are also known as ________ .
hollow corporations or network companies