SCM 3650 Exam 3: Chapters 11, 12, S5
Which of the following is true regarding corporate social responsibility?
A. The operations function plays a profound role in meeting corporate social responsibility. B. Corporate social responsibility means "doing what's right" and doing it properly, which can be beneficial to all stakeholders. C. Companies that practice corporate social responsibility introduce policies that consider environmental, societal, and financial impacts in their decision making.
Which of the following is an example of a fixed-period inventory system?
An administrative assistant orders more legal pads on the first day of each month.
Which of the following statements is true? A. "Reverse logistics" is the opposite of "closed-loop supply chain." B. A closed-loop supply chain prepares for returns prior to product introduction. This is the correct answer. C. A closed-loop suppy chain is designed to optimize only reverse flows. Your answer is not correct. D. Reverse logistics refers to the supplier selection process.
A closed-loop supply chain prepares for returns prior to product introduction.
Boreki Enterprise has the following 10 items in inventory. Theodore Boreki asks you, a recent OM graduate, to divide these items into ABC classifications. Fill in the blanks and then answer the following questions. (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.)
Based on the percentages of dollar volume, item A2 should be classified as A. Part 4 Item F3 should be classified as C.
Which of the following statements is NOT true regarding channel assembly?
Channel assembly sends individual components, modules, and finished products, to the distributor.
L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.)
For the following three questions, consider only items 1289, 2349, and 8210 from the above table for relative classification (these are some of the items for which you computed the metrics). Based on the percentages of dollar volume, item number 1289 should be classified as A. Part 4 Item number 2349 should be classified as B. Part 5 Item number 8210 should be classified as C.
Using the crossover mileage between the hybrid vehicle and the alternative vehicle from a competing auto manufacturer below, what is the crossover point in years?
Given that the crossover mileage is 28,235 miles, the crossover point in years is 1.821.82 years (round your response to two decimal places).
Which of the following is NOT one of the assumptions of fixed-period systems?
Lead times are variable.
Which of the following is NOT a type of inventory?
MRP
With regard to the cost-based price model negotiation strategy, which of the following is true?
Prices are based upon supplier costs.
The Brew House needs to decide which of two coffee maker designs is better environmentally. Using the following tables, determine which model is the better design alternative.
Revenue retrieval for Brew Master=$5.535.53 (round your response to two decimal places). Part 3 Revenue retrieval for Brew Mini=$7.657.65 (round your response to two decimal places). Part 4 The best design alternative is Brew Mini.
Prior to embarking on supply chain design, why do operations managers first consider "make-or-buy" and outsourcing decisions?
Some products or services may be better or less expensive if obtained externally.
Why might an organization strive to form long-term relationships with a few dedicated suppliers?
Suppliers are encouraged to provide design innovations and technological expertise.
Which of the following statements is true about sustainability? A. Green manufacturing requires the use of green labeling on products. B. Sustainability is often associated with corporate social responsibility. Your answer is correct. C. Exponential decay refers to climate change impacts on future generations and the ability to meet their needs. D. None of the above.
Sustainability is often associated with corporate social responsibility.
What is the crossover point in miles between the hybrid vehicle and the alternative vehicle from a competing auto manufacturer?
The crossover point, M, is 3710637106 miles (round your response to the nearest whole number).
Which of the following statements is NOT one of the differentiation strategy decisions? A. Minimize inventory to avoid product obsolescence. B. Gather and communicate market research data. C. Modular design to aid product differentiation. D. Use buffer stocks to ensure speedy supply.
Use buffer stocks to ensure speedy supply.
Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 800 valves; order cost is $12 per order; and annual inventory holding costs are $2.15 per unit.
Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order 400400 units at a time from Vendor B (enter your response as a whole number).
A system that keeps track of each withdrawal or addition to inventory continuously is
a perpetual inventory system.
William Beville's computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D 19,600 units/year Ordering cost S $23/order Holding cost H $5/unit/year
a) The EOQ for the workbooks is 425425 (round your response to the nearest whole number). Part 3 b) What are the annual holding costs for the workbooks? $10621062 (round your response to the nearest whole number). Part 4 c) What are the annual ordering costs? $10621062 (round your response to the nearest whole number).
M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 700 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost is $45, and annual holding cost per unit is $7.
a) What is the economic order quantity if price is not a consideration? 329329 units (round your response to the nearest whole number). Part 3 b) Which supplier, based on all options with regard to discounts, should be used? Allen Mfg. Part 4 c) What is the optimal order quantity and total annual cost of ordering, purchasing, and holding the component? The optimal order quantity is 10001000 with a total cost of $129878129878 (round your responses to the nearest whole number).
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,000 units per year. The cost of each unit is $99, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (This is a corporate operation, and there are 250 working days per year).
a) What is the EOQ? 183.90183.90 units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? 91.9591.95 units (round your response to two decimal places). Part 4 c) What is the optimal number of orders per year? 32.6332.63 orders (round your response to two decimal places). Part 5 d) What is the optimal number of days in between any two orders? 7.667.66 days (round your response to two decimal places). Part 6 e) What is the annual cost of ordering and holding inventory? $2022.982022.98 per year (round your response to two decimal places). Part 7 f) What is the total annual inventory cost, including the cost of the 6,000 units? $596022.98596022.98 per year (round your response to two decimal places).
Jenna Baker, CEO of Baker Mfg Inc., wishes to compare her company's inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory.
a) What is Baker's inventory turnover? 15.6715.67 times per year (round your response to two decimal places). Part 3 b) What is Baker's percentage of assets committed to inventory? 7.377.37% (enter your response as a percentage rounded to two decimal places). Part 4 c) How does Baker's performance compare to the industry leaders? Better
Kamal Fatehl production manager of Kennesaw Manufacturing, finds his profit at $19,600 (as shown in the statement below) inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to $29,600 so he can obtain the bank's approval for the loan.
a) What percentage improvement is needed in a supply chain strategy for profit to improve to $29,600? What is the cost of material with a $29,600 profit? A decrease of 4.94.9% in supply-chain costs is required to yield a profit of $29,600, for a new cost of supply chain purchases of $191600191600. (Enter your response for the percentage decrease to one decimal place and enter your response for the new supply chain cost as a whole number.) Part 3 b) What percentage improvement is needed in a sales strategy for profit to improve to $29,600? What must sales be for profit to improve to $29,600? An increase of 21.021.0% in sales is required to yield a profit of $29,600, for a new new level of sales of $338,824338,824. (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
Hau Lee Furniture, Inc., spends 55% of its sales dollars in the supply chain and finds its current profit of $20,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $25,000 so he can obtain the bank's approval for the loan.
a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A decrease of 9.099.09% in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $50,00050,000. (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) Part 3 b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? An increase of 16.716.7% in sales is required to yield a profit of $25,000, for a new new level of sales of $116667116667. (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
The grocery industry has an annual inventory turnover of about 16 times. Organic Grocers, Inc., had a cost of goods sold last year of $10,670,000; its average inventory was $989,770. What was Organic Grocers' inventory turnover, and how does that performance compare with that of the industry?
a) What was Organic Grocers' inventory turnover? 10.7810.78 times per year (round your response to two decimal places). Part 3 b) How does Organic Grocers' performance compare with that of the industry? It is worse than the industry.
What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship?
blanket order
What is one of the key compounds society is expecting to reduce as part of industrial greenhouse gas emission programs in the European Union and United States?
carbon dioxide
The cost to produce the goods or services sold for a given period is referred to as
cost of goods sold.
In the single-period inventory model, the overage cost is
cost per unit − salvage value per unit.
Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities?
decreased total logistics cost
Supply chain managers outsource logistics to meet three goals:
drive down inventory investment, lower delivery costs, and improve delivery reliability and speed.
Which of the following tactics may reduce risks in supplier delivery, logistics, and distribution?
effective contracts with penalties
Inventory control models assume that demand for an item is
either independent of or dependent on the demand for other items.
The five core elements of ISO 14001 are
environmental management, auditing, performance evaluation, labeling, and life cycle assessment.
Which of the following is an advantage of shipping manufactured goods by truck?
flexibility
Which of the following inventory items warrants the use of a single-period inventory model?
fresh bread in a baker's case
A single-period inventory model is NOT applicable for
furniture.
Which of the following statements is NOT one of the response strategy decisions?
gather and communicate market research data
When an inventory manager uses ABC analysis, which of the following will they consider to be the most critical A item?
highest dollar-volume each year
Inventory record accuracy would be decreased by
increasing stockroom accessibility.
Which of the following should a company include as part of an item's holding cost?
investment costs, including taxes and insurance
Airfreight
is a fast-growing mode of shipping.
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? Part 2 A. horizontal integration B. keiretsu networks Your answer is correct. C. virtual companies D. joint ventures
keiretsu networks
What is an analysis of environmental impacts of products from the design stage through end-of-life?
life cycle assessment
The advantage of having many potential suppliers is their willingness to
offer lower prices in the short term.
Question content area Part 1 Which of the following does NOT belong to holding costs? Part 2 A. storage costs B. order processing Your answer is correct. C. insurance on inventory D. pilferage, scrap, and obsolescence
order processing
What is transferring a firm's activities that have traditionally been internal to external suppliers?
outsourcing
Which of the following is a common measure of supply chain performance?
percentage invested in inventory
The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. Prime example of
postponement.
What is the most critical phase in product life cycle assessment?
product design
Which of the following mitigation tactics could reduce economic risk?
purchasing contracts that address price fluctuations
Which three criteria should be considered when designing distribution networks to meet customer expectations?
rapid response, product choice, service
Which of the following types of inventory describes inventory that has been purchased but not processed?
raw material inventory
Supply chain management describes the coordination of all supply chain activities, starting with _______ and ending with _______.
raw materials; satisfied customers
What is the cost to prepare a machine or process for production?
setup cost
For seasonal products, the service level should be set to equal
shortage cost / (overage cost + shortage cost).
The objective of inventory management is to
strike a balance between inventory investment and customer service.
Why might a company carry inventory?
to decouple steps in a production process
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor?
vertical integration
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing describes suppliers who become part of a company coalition. B. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. C. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. Your answer is correct. D. Cross-sourcing enhances technological skills.
Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other.
Jordin Henry's machine shop uses 2,450 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets:
a) What is the EOQ? 244.17244.17 units (round your response to two decimal places). Part 3 b) What is the average inventory if the EOQ is used? 122.09122.09 units (round your response to two decimal places). What would be the annual inventory holding cost? $183.12183.12 (round your response to two decimal places). Part 4 c) Given the EOQ, how many orders will be made annually? 1010 orders (round your response to two decimal places). What would be the annual order cost? $183.12183.12 (round your response to two decimal places). Part 5 d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? $366.25366.25 (round your response to two decimal places). Part 6 e) What is the time between orders? 2525 days (round your response to two decimal places). Part 7 f) What is the reorder point (ROP)? 19.619.6 units (round your response to two decimal places)
Dara Jones, operations manager of Arrow Distributing Corp., likes to track inventory by using weeks of supply as well as by inventory turnover.
a) What is its weeks of supply? 3.423.42 weeks (round your response to two decimal places). Part 3 b) What percentage of Arrow's assets are committed to inventory? 10.8410.84% (enter your response as a percentage rounded to two decimal places). Part 4 c) What is Arrow's inventory turnover? 15.1815.18 times per year (round your response to two decimal places). Part 5 d) Suppose a manufacturer has an inventory turnover of 13.5 times per year. Arrow's supply chain performance relative to the manufacturer's, as measured by inventory turnover, is better.
If D = 7,800 per month, S = $46 per order, and H = $2.50 per unit per month,
a) What is the economic order quantity? The EOQ is 536536 units (round your response to the nearest whole number). Part 3 b) How does your answer change if the holding cost doubles? The EOQ is 379379 units (round your response to the nearest whole number). Part 4 c) What if the holding cost drops in half? The EOQ is 758758 units (round your response to the nearest whole number).
Mattress Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last year, cost of goods sold was $7.52 million and inventory was $1.46 million. This year, costs of goods sold is $8.64 million and inventory investment is $1.61 million.
a) What was its weeks of supply last year? 10.110.1 weeks (round your response to two decimal places). Part 3 b) What is its weeks of supply this year? 9.699.69 weeks (round your response to two decimal places). Part 4 c) Is Mattress Wholesalers making progress in its inventory reduction effort? Since the number of weeks that cover the supply has decreased, Mattress Wholesalers is making progress in its inventory-reduction effort.
A response strategy requires suppliers be selected based primarily on
capacity, speed, and flexibility.
What is a supply chain designed to optimize both forward and reverse flows?
closed-loop supply chain
Which negotiation strategy bases price on a published, auction, or index price?
market-based price model
What are the three Ps in the triple bottom line of the three Ps?
people, planet, and profit
A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule.
vendor-managed inventory.
