Supply Chain Exam 3 HW

If the EOQ assumptions hold, and if a firm orders the EOQ, the average inventory level over time should be a. Half the EOQ. b. Twice the EOQ. c. The square root of the EOQ. d. Equal to the lead time quantity.

A

Calculate the number of inventory containers (round up) required given the following: Demand rate = 12 parts per hour, Safety stock required = 10% Size of containers = 8 parts, Time to cycle through entire system = 4 hours a. 4 containers b. 6 containers c. 7 containers d. 5 containers

C # of containers= [demand rate x time to cycle x (1 + safety stock)]/ size of containers

Calculate the number of inventory containers (round up) required given the following: Demand rate = 12 parts per hour, Safety stock required = 10% Size of containers = 8 parts, Time to cycle through entire system = 4 hours a. 4 containers b. 6 containers c. 7 containers d. 5 containers

C [12*4*(1+ 0.1)]/ 8

When General Motors purchases tires for their automobiles, this can be classified as: a. Dependent demand b. Independent demand c. Customer demand d. Continuous demand

A

When purchase order quantities are cut in half, which of the following will be true? a. Average inventory levels will also be cut in half. b. Average inventory levels will be zero. c. Average inventory levels will not be impacted. d. Average inventory levels will double.

A

Which of the following is not an assumption of the basic economic order quantity model? a. Replenishments take place at the proper time b. Order lead time is known and constant c. Demand is known and constant d. Price is constant

A

How do lean systems impact the environment? a. It means fewer kanbans, which is better for the environment. b. It reduces waste, which improves the environment. c. It's use of enterprise resource planning means closer ties to the environment. d. New products are moved to the market more quickly, which is better for the environment.

B

The Economic Manufacturing Quantity (EMQ) model relaxes which assumption of the classical EOQ model? a. Zero safety stock b. Instantaneous replenishment c. Constant price d. Constant demand

B

Too much inventory creates: a. Excess stockout cost. b. Excess carrying cost. c. Excess ordering cost. d. Excess setup cost.

B

When using the ABC Inventory Classification, A items typically account for about: a. 15% of the overstocked items. b. 80% of the annual dollar usage. c. 80% of the items. d. 20% of the annual dollar usage.

B

Which of the following is one of the MOST important elements of the lean production philosophy? a. Labor reduction and increased lot sizes b. Inventory reduction and continuous improvement c. Fully automated assembly lines and a large supplier base d. Quality inspections and a standardized product line

B

If the cost of an item is $500, the carrying cost rate is 20%, the order cost is $75, annual demand is for 1,000 units, calculate the economic order quantity. Round off to the next highest unit. a. 26 b. 39 c. 15 d. 52

B (2 x annual demand x order cost)/ (average price * holding cost/100) than take square root

Completed items ready for shipment are classified as: a. Work-in-completion inventories b. MRO inventories c. Finished goods inventories d. Product demand inventories

C

Each unit produced contains $1.25 in materials. This is an example of: a. Carrying cost b. Processing cost c. Direct cost d. Setup cost

C

Which of the following is not a dependent demand item? a. Service parts at an auto repair shop b. Raw materials at a manufacturer c. Retail goods at a department store d. Hamburger buns at McDonalds

C

According to the Six Sigma philosophy, the Six Sigma goal is to have ____ defects per million measurement opportunities. a. 9.9 b. 1.0 c. 0 d. 3.4

D

Bill owns Speedy Deliveries and keeps track of customer complaints. For each delivery, there are two possible complaints: a late delivery and a wrong delivery. Bill tracks the delivery "defects" and then uses this information to determine his company's Six Sigma quality level. During the past week, his company made 322 deliveries. His drivers received 8 late delivery complaints and 4 incorrect delivery complaints. What is Bill's defects per million opportunities (DPMO)? a. 644 b. 4295 c. 9377 d. 18634

D

C charts are useful when: a. The sample means are known but the sample ranges are not. b. You wish to determine the average percent defective for a number of samples. c. The samples are not randomly drawn from the population. d. A number of mistakes or errors can occur per unit of output, but they occur infrequently.

D

Moving small production batches through a lean production facility is often accomplished using: a. Lean suppliers b. Automation c. Keiretsus d. Kanbans

D

Use of Six Sigma helps supply chains become lean, due to: a. The cross-training of employees to increase processing flexibility b. The improved use of Kanbans in production facilities c. The increased batch sizes to take advantage of economies of scale d. The impact that improved quality has on reducing safety stocks

D

Variations in process measurements can be classified as either natural or: a. Unnatural b. Measureable c. Specific d. Assignable

D