OPS 301 CH. 14 & 16

Wheeled Coach obtains competitive advantage through MRP in part because of their excellent
record integrity and insistence on record accuracy.
True (Global company profile)
MRP is generally practiced on items with dependent demand.
True (Dependent demand)
Reduced inventory levels and faster response to market changes are both benefits of MRP.
True (Introduction)
A dependent demand item is so called because its demand is dependent on customer preferences.
False (Dependent demand)
The quantity required of a dependent demand item is computed from the demand for the final
products in which the item is used.
True (Dependent demand)
Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed
aggregate planning.
False (Dependent inventory model requirements)
The master production schedule is a forecast of demand for families of products.
False (Dependent inventory model requirements)
Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.
True (Dependent inventory model requirements)
A bill of material lists all components, ingredients, and materials needed to produce one unit of an
end item.
True (Dependent inventory model requirements)
“Phantom bills” are bills of material for subassemblies that do not exist in reality.
False (Dependent inventory model requirements)
Planning bills of material are bills of material for “kits” of inexpensive items such as washers, nuts,
and bolts.
True (Dependent inventory model requirements)
The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how
much of which products is to be made at what times.
False (Dependent inventory model requirements)
The time phased product structure, unlike the bill of material, adds the concept of lead times.
True (Dependent inventory model requirements)
If X consists of one A and one B, and each A consists of one F and two Gs, then A is the “parent”
component of G.
True (Dependent inventory model requirements)
If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the
net requirement is 90.
True (MRP structure)
Gross material requirements do not take into account the amount of inventory on hand.
True (MRP structure)
In MRP, a “bucket” refers to a fixed order quantity, such as an EOQ.
False (MRP structure)
Time fences divide that segment of the MPS that can be revised from that section that is “frozen.”
True (MRP management)
MRP is an excellent tool for scheduling products with variable lead times.
False (MRP management)
Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and
machines when building schedules.
True (MRP management)
If parts and subassemblies common to a variety of products are managed through the supermarket
concept, formal order releases for such parts are not necessary.
True (MRP management)
The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and
set up cost is small compared to holding cost.
True (Lot-sizing techniques)
In general, the lot-for-lot approach should be used whenever economical.
True (Lot-sizing techniques)
The economic part period is a fraction of a time bucket.
False (Lot-sizing techniques)
The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.
False (Lot-sizing techniques)
MRP can be effective only if very accurate lot sizes are calculated in advance.
False (Lot-sizing techniques)
Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.
True (Extensions of MRP)
Closed-loop MRP systems allow production planners to move work between time periods to
smooth the load or to at least bring it within capacity.
True (Extensions of MRP)
Operations splitting sends pieces to the next operation before the entire lot is completed on the
previous operation.
False (Extensions of MRP)
When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected
on-hand inventory of the MRP logic.
True (MRP structure)
By convention, the top level in a bill of material is designated level 1.
False (MRP structure)
DRP is a time-phased stock-replenishment plan for all levels of a distribution network.
True (MRP in services)
While ERP may provide a strategic advantage over competitors, it is so complex that many
companies cannot adjust to it.
True (Enterprise resource planning (ERP)
Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt
the way they do business to accommodate the ERP software.
True (Enterprise resource planning (ERP)
The supply chain systems that result from using ERP in the grocery industry are called efficient
consumer response (ECR) systems.
True (Enterprise resource planning (ERP)
Which of the following statements regarding Wheeled Coach is false?
a. Wheeled Coach has found competitive advantage through MRP.
b. Wheeled Coach builds ambulances in a repetitive process.
c. Wheeled Coach’s MRP system allowed the company to meet tight schedules, but caused
inventory to rise.
d. Wheeled Coach’s MRP system maintains excellent record integrity.
e. Low inventory and high quality are two positive outcomes of Wheeled Coach’s use of MRP.
c. Wheeled Coach’s MRP system allowed the company to meet tight schedules, but caused
inventory to rise.
Demand for a given item is said to be dependent if
a. it originates from the external customer
b. there is a deep bill of material
c. the finished products are mostly services (rather than goods)
d. there is a clearly identifiable parent
e. the item has several children
d. there is a clearly identifiable parent
The phrase “demand related to the demand for other products” describes
a. a dependent variable
b. dependent demand
c. recursive demand
d. regression analysis
e. independent demand
d. regression analysis
Dependent demand and independent demand items differ in that
a. for any product, all components are dependent-demand items
b. the need for independent-demand items is forecast
c. the need for dependent-demand items is calculated
d. All of the above are true.
e. None of the above is true.
d. All of the above are true.
A master production schedule specifies
a. the raw materials required to complete the product
b. what component is to be made, and when
c. what product is to be made, and when
d. the labor hours required for production
e. the financial resources required for production
c. what product is to be made, and when
The ______ is (are) the MRP input detailing which end items are to be produced, when they are
needed, and in what quantities.
a. master production schedule
b. gross requirements
c. inventory records
d. assembly time chart
e. bill of material
a. master production schedule
A master production schedule contains information about
a. quantities and required delivery dates of all subassemblies
b. quantities and required delivery dates of final products
c. inventory on hand for each subassembly
d. inventory on hand for each final product
e. scheduled receipts for each final product
b. quantities and required delivery dates of final products
The aggregate plan gets input or feedback from which of the following areas?
a. engineering
b. finance, marketing, and human resources
c. the master production schedule
d. procurement, production, and general management
e. all of the above
e. all of the above
In continuous (make-to-stock) operations, the master production schedule is usually expressed in
terms of
a. end items
b. modules
c. kits
d. customer orders
e. warehouse orders
a. end items
In job shop (make-to-order) operations, the master production schedule is usually expressed in
a. end items
b. modules
c. kits
d. customer orders
e. warehouse orders
d. customer orders
The following table is an example of a(n)
Week 1 Week 2 Week 3 Week 4 Week 5
Clothes Washer 200 100
Clothes Dryer 300 100 100 100
Upright Freezer 200 500

a. aggregate plan
b. load report
c. master production schedule
d. capacity plan
e. inventory record

c. master production schedule
A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors
and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and
100 riding mowers in week 4. This document is most likely a(n)
a. net requirements document
b. resource requirements profile
c. aggregate plan
d. master production schedule
e. Wagner-Whitin finite capacity document
d. master production schedule
The ______ is the input to material requirements planning which lists the assemblies,
subassemblies, parts, and raw materials needed to produce one unit of finished product.
a. bill of material
b. master production schedule
c. inventory records
d. assembly time chart
e. net requirements chart
a. bill of material
A bill of material lists the
a. times needed to perform all phases of production
b. production schedules for all products
c. components, ingredients, and materials required to produce an item
d. operations required to produce an item
e. components, ingredients, materials, and assembly operations required to produce an item
c. components, ingredients, and materials required to produce an item
Firms making many different final products use __________ to facilitate production scheduling.
a. planning bills
b. modular bills
c. phantom bills
d. overdue bills
e. none of the above
b. modular bills
A bill of material must be updated with the corrected dimensions of a part. The document that
details this change is a(n)
a. modular bill
b. engineering change notice
c. resource requirements profile
d. lead time-offset product structure document
e. planning bill
b. engineering change notice
The bill of material contains information necessary to
a. place an order to replenish the item
b. calculate quantities on hand and on order
c. convert net requirements into higher level gross requirements
d. convert gross requirements into net requirements
e. convert (explode) net requirements at one level into gross requirements at the next level
e. convert (explode) net requirements at one level into gross requirements at the next level
Which of the following statements best compares modular bills and phantom bills?
a. Both pertain to assemblies that are not inventoried.
b. There is no difference between the two.
c. Both pertain to assemblies that are inventoried.
d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills.
e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom
bills represent subassemblies that exist only temporarily and are not inventoried.
e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom
bills represent subassemblies that exist only temporarily and are not inventoried.
The minimum record accuracy required for successful MRP is approximately
a. lower than 90%
b. 90%
c. 95%
d. 97%
e. 99%
e. 99%
Given the following bill of material
If the demand for product A is 50 units, what will be the gross requirement for component E?
A
B(2) C(3) D(1)
C(1) D(1) D(1) E(2) F(1) G(2)
a. 4
b. 100
c. 200
d. 250
e. 300
e. 300
Given the following bill of material
If the demand for product A is 50 units, what will be the gross requirement for component E?
A
B(1) | C(1)
D(2) E(1) F(2) D(1) F(1)

a. 50
b. 100
c. 150
d. 200
e. 300

a. 50
When safety stock is deemed absolutely necessary, the usual policy is to build it into which
category of the MRP logic?
a. Gross Requirements
b. Scheduled Receipts
c. Projected On Hand
d. Net Requirements
e. Planned Order Receipts
c (MRP structure, moderate)
c. Projected On Hand
Given the following bill of material
If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how
many units of part D will be needed?
A
B(1) | C(1)
D(2) E(1) F(2) D(1) F(1)
a. 3
b. 40
c. 70
d. 90
e. 110
c. 70
Low level coding means that
a. a final item has only a few levels in the BOM structure
b. it is the code for the lowest level in the BOM structure
c. a component item is coded at the lowest level at which it appears in the BOM structure
d. the top level of the BOM is below level zero and that BOMs are not organized around the
finished product
e. none of the above
c. a component item is coded at the lowest level at which it appears in the BOM structure
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 manufacture of Y is 1 week. The lead time for the procurement of Z
is 6 weeks. The cumulative lead time for X is _____ weeks.
a. 6
b. 7
c. 8
d. 10
e. cannot be determined
c. 8
A material requirements plan contains information with regard to all of the following except
a. quantities and required delivery dates of all subassemblies
b. quantities and required delivery dates of final products
c. the capacity needed to provide the projected output rate
d. inventory on hand for each final product
e. inventory on hand for each subassembly
c. the capacity needed to provide the projected output rate
Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The
lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The
cumulative lead time for R is _____ days.
a. 6
b. 9
c. 13
d. 17
e. cannot be determined
c. 13
Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1
week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is
6 weeks. The cumulative lead time for R is ______ weeks.
a. 6
b. 9
c. 12
d. 18
e. 28
b. 9
Which of the following best describes a gross material requirements plan?
a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or
when production must be started
b. an intermediate range plan for the scheduling of families of products
c. a chart illustrating whether capacity has been exceeded
d. a table that corrects scheduled quantities for inventory on hand
e. a schedule showing which products are to be manufactured and in what quantities
a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or
when production must be started
Which of the following statements regarding the gross material requirements plan is true?
a. It shows total demand for an item.
b. It shows when an item must be ordered from a supplier or when production must be started.
c. It combines a master production schedule with the time-phased schedule.
d. It requires several inputs, including an accurate bill of material.
e. All of the above are true.
e. All of the above are true.
The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M
requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are
a. 150
b. 170
c. 300
d. 320
e. 440
e. 440
The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand.
Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net
requirements for C are
a. 115
b. 175
c. 240
d. 690
e. 700
a. 115
The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A
requires 4 of Part B. There are 20 units of B available. The net requirements for B are
a. 20
b. 120
c. 180
d. 240
e. 440
c. 180
In MRP record calculations, the appearance of a negative value for the gross requirements of an
end item in a specific time bucket
a. signals the need to purchase that end item in that period
b. implies that value was scheduled by the MPS
c. signals the need for a negative planned order receipt in that period
d. is impossible
e. All of the above are true.
d. is impossible
The number of units projected to be available at the end of each time period refers to
a. net requirements
b. scheduled receipts
c. the projected usage of the item
d. the amount projected to be on hand
e. the amount necessary to cover a shortage
d. the amount projected to be on hand
Linking a part requirement with the parent component that caused the requirement is referred to as
a. net requirements planning
b. a time fence
c. pegging
d. kanban
e. leveling
c. pegging
In MRP, system nervousness is caused by
a. management’s attempt to continually respond to minor changes in production requirements
b. the use of the lot-for-lot approach
c. management’s marking part of the master production schedule as “not to be rescheduled”
d. the use of phantom bills of material
e. management’s attempt to evaluate alternative plans before making a decision
a. management’s attempt to continually respond to minor changes in production requirements
One of the tools that is particularly useful in reducing the system nervousness in the MRP system is
(are)
a. modular bills
b. time phasing
c. time fences
d. lot sizing
e. closed loop system
c. time fences
Distortion in MRP systems can be minimized when safety stock is held at the
a. purchased component or raw material level
b. work-in-process level
c. finished goods level
d. a and b
e. a and c
e. a and c
Material requirements plans specify
a. the quantities of the product families that need to be produced
b. the quantity and timing of planned order releases
c. the capacity needed to provide the projected output rate
d. the costs associated with alternative plans
e. whether one should use phantom bills of material or not
b. the quantity and timing of planned order releases
Which of the following best differentiates material requirements planning (MRP) from finite
capacity scheduling (FCS)?
a. FCS recognizes the finite nature of capacity while MRP does not.
b. FCS works in services while MRP does not.
c. MRP requires time buckets while FCS does not.
d. FCS is an input into traditional MRP systems.
e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.
a. FCS recognizes the finite nature of capacity while MRP does not.
Which of the following lot-sizing techniques results in the lowest holding costs?
a. lot-for-lot
b. EOQ
c. part-period balancing
d. Wagner-Whitin algorithm
e. the quantity discount model
a. lot-for-lot
Which of the following statements is true about the MRP plan when using lot-for-lot ordering?
a. The quantity of gross requirements for a child item is always equal to the quantity of planned
order releases for its parent.
b. 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.
c. The quantity of gross requirements for a child item is always equal to the quantity of gross
requirements for its parent.
d. The quantity and gross requirements for a child item is always equal to the quantity of net
requirements for its parent.
e. All of the above are true.
b. 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 lot-sizing technique is generally preferred when inventory holding costs are extremely high?
a. lot-for-lot
b. EOQ
c. part-period balancing
d. the Wagner-Whitin algorithm
e. All of the above are appropriate for the situation.
a. lot-for-lot
For the lot-sizing technique known as lot-for-lot to be appropriate
a. future demand should be known for several weeks
b. setup cost should be relatively small
c. annual volume should be rather low
d. item unit cost should be relatively small
e. the independent demand rate should be very stable
b. setup cost should be relatively small
An item’s holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 weeks. EPP is
a. .005
b. 60
c. 72
d. 100
e. 200
e. 200
Which of the following statements regarding lot-sizing is true?
a. EOQ principles should be followed whenever economical.
b. Too much concern with lot-sizing results in false accuracy.
c. Lot-for-lot cannot be modified for scrap allowance or process constraints.
d. The Wagner-Whitin algorithm simplifies lot size calculations.
e. All of the above are true.
b. Too much concern with lot-sizing results in false accuracy.
3. A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles.
Some assemblies and parts are common to many end items. To relieve the MPS of performing
order releases on these common parts, the firm might choose to use the __________ technique.
a. Wagner-Whitin
b. economic part period
c. supermarket
d. gross material requirements
e. resource requirements profile
c. supermarket
Capacity planning in closed-loop MRP
a. utilizes feedback about workload from each work center
b. may make use of resource requirements profiles (load reports)
c. may smooth work center loads with such tactics as overlapping and lot splitting
d. does not add capacity, but rather seeks effective use of existing capacity
e. All of the above are true.
e. All of the above are true.
If a load report (resource requirements profile) shows a work center scheduled beyond capacity
a. the company must add capacity by enlarging the facility
b. the company must add capacity by such tactics as overtime and subcontracting
c. the work center’s load may be smoothed by such tactics as operations splitting or lot splitting
d. the aggregate plan must be revised
e. the Wagner-Whitin algorithm should be used to rebalance the load
c. the work center’s load may be smoothed by such tactics as operations splitting or lot splitting
MRP II is accurately described as
a. MRP software designed for services
b. MRP with a new set of computer programs that execute on microcomputers
c. MRP augmented by other resource variables
d. an enhancement of MRP that plans for all levels of the supply chain
e. a new generation of MRP software that extends MRP to planning and scheduling functions
c. MRP augmented by other resource variables
The extension of MRP which extends to resources such as labor hours and machine hours, as well
as to order entry, purchasing, and direct interface with customers and suppliers is
a. MRP II
b. enterprise resource planning
c. the master production schedule
d. closed-loop MRP
e. not yet technically possible
b. enterprise resource planning
Which of the following statements regarding MRP in services is true?
a. MRP is for manufacturing only, and is not applicable to services.
b. MRP can be used in services, but only those that offer very limited customization.
c. MRP does not work in services because there is no dependent demand.
d. Services such as restaurant meals illustrate dependent demand, and require product structure
trees, bills-of-material, and scheduling.
e. None of the above is true.
d. Services such as restaurant meals illustrate dependent demand, and require product structure
trees, bills-of-material, and scheduling.
Distribution resource planning (DRP) is
a. a transportation plan to ship materials to warehouses
b. a time-phased stock replenishment plan for all levels of a distribution network
c. a shipping plan from a central warehouse to retail warehouses
d. material requirements planning with feedback loop from distribution centers
e. a material requirements planning package used exclusively by warehouses
b. a time-phased stock replenishment plan for all levels of a distribution network
By convention, the top level in a bill of material is
a. level 0
b. level 1
c. level T
d. level 10
e. level 100
a. level 0
Enterprise resource planning (ERP)
a. seldom requires software upgrade or enhancement
b. does not integrate well with functional areas other than operations
c. is inexpensive to implement
d. automates and integrates the majority of business processes
e. all of the above
d. automates and integrates the majority of business processes
Enterprise resource planning (ERP)
a. has been made possible because of advances in hardware and software
b. uses client/server networks
c. creates commonality of databases
d. uses business application-programming interfaces (BAPI) to access their database
e. All of the above are true of ERP.
e. All of the above are true of ERP.
Which of the following is false concerning enterprise resource planning (ERP)?
a. It attempts to automate and integrate the majority of business processes.
b. It shares common data and practices across the enterprise.
c. It is inexpensive to implement.
d. It provides and accesses information in a real-time environment.
e. All of the above are true.
c. It is inexpensive to implement.
Which of the following regarding enterprise resource planning (ERP) is true?
a. It involves an ongoing process for implementation.
b. It can incorporate improved, reengineered “best processes.”
c. It has a software database that is off-the-shelf coding.
d. ERP systems usually include MRP, financial and human resource information.
e. All of the above are true.
e. All of the above are true.
All of the following are advantages of enterprise resource planning (ERP) except it
a. creates commonality of databases
b. increases communications and collaboration worldwide
c. helps integrate multiple sites and business units
d. requires major changes in the company and its processes to implement
e. can provide a strategic advantage over competitors
d. requires major changes in the company and its processes to implement
TPS stands for Toyota Production System.
True
TPS stands for Total Production Streamlining.
False
Product storage is an example of waste, in the sense that no value is added.
True
In a JIT system, product inspection adds value by identifying defective items.
False
Customer demand will always remain an unknown, so it is not considered a source of variation.
False
Variability in manufacturing can occur because engineering drawings or specifications are
incomplete or inaccurate.
True
A push system means providing the next station with exactly what is needed when it is needed.
False
Waste is anything that does not add value, such as storage or inspection of items; waste also
includes any activity that does not add value from the consumer’s perspective.
True
Increasing inventory exposes variability in production processes.
False
JIT brings about competitive advantage by faster response to the customer regardless of cost.
False
One goal of JIT partnerships is the removal of in-plant inventory by delivery in small lots directly
to the using department as needed.
True
Many suppliers feel that having a variety of customers is better than being tied to long-term
contracts with one customer.
True
JIT suppliers have concerns that the JIT firm’s demands for small lot sizes are simply a way of
transferring holding cost from manufacturer firm to the supplier firm.
True
Reducing distance is a common JIT goal.
True
Cross-training is a common JIT tactic to improve flexibility.
True
JIT systems carry inventory just in case something goes wrong.
False
Hidden problems are generally uncovered during the process of reducing inventory.
True
Lower average inventory is feasible only if setup times are short.
True
If setup times and costs can be reduced enough, the JIT ideal of “Lot Size = 1” can be achieved.
True
A scheduler may find that freezing the portion of the schedule closest to the due dates allows the
production system to function and the schedule to be met.
True
The first step in reducing setup times is the separation of setup into preparation activities and actual
setup, so that as much work as possible can be done while the machine or process is operating.
True
Level scheduling means producing at a constant rate, regardless of customer demands.
False
With level schedules, a few large batches, rather than frequent small batches, are processed.
False
The number of kanbans decreases as safety stock is increased.
False
A kanban system requires little variability in lead time because shortages have their impact on the
entire productive system.
True
Inventory has only one positive aspect, which is availability; inventory has several negatives,
including increased material handling, obsolescence, and damage.
True
The quality management tool called poka-yoke is not relevant to JIT systems.
False
Employee empowerment is unnecessary in the Toyota Production System, because automation and
powerful information systems reduce the need for employee creativity and decision making.
False
The Toyota Production System requires that activities have built-in, automatic tests so that gaps
between expectations and actuality are immediately evident.
True
The 5S’s—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self
discipline—are important to lean production because they act as a means to reduce waste.
True
When implemented as a comprehensive manufacturing strategy, JIT, TPS, and lean systems sustain
competitive advantage and result in increased overall returns.
True
Because most services cannot be inventoried, there is little place for JIT to help service
organizations achieve competitive advantage.
False
What does TPS stand for?
a. Total Production Streamlining
b. Toyota Production System
c. Taguchi’s Production S’s
d. Total Process Simplification
e. None of the above
b. Toyota Production System
Which of the following is generally found in most JIT environments?
a. a push or pull system, depending upon the rate of demand
b. a push system for high margin items and a pull system for low margin items
c. a push system for purchased parts and a pull system for manufactured parts
d. push systems
e. pull systems
e. pull systems
Which one of the following is not a benefit of the implementation of JIT?
a. cost reduction
b. variability increase
c. rapid throughput
d. quality improvement
e. rework reduction
b. variability increase
Which of the following is not a reason for variability?
a. Employees, machines, and suppliers produce units late.
b. Customer demand is unknown.
c. Employees, machines, and suppliers produce units that conform to standards.
d. Engineering drawings are inaccurate.
e. Drawings or specifications are incomplete.
c. Employees, machines, and suppliers produce units that conform to standards.
Which of the following is specifically characterized by a focus on continuous improvement, respect
for people, and standard work practices?
a. Just-in-time (JIT)
b. Toyota Production System (TPS)
c. Lean operations
d. Material requirements planning (MRP)
e. kanban
b. Toyota Production System (TPS)
Which of the following is specifically characterized by continuous and forced problem solving via
a focus on throughput and reduced inventory?
a. Just-in-time (JIT)
b. Toyota Production System (TPS)
c. Lean operations
d. Material requirements planning (MRP)
e. kanban
a. Just-in-time (JIT)
Which of the following statements regarding a pull system is )#$%?
a. Large lots are pulled from upstream stations.
b. Work is pulled to the downstream stations before it is actually needed.
c. Manufacturing cycle time is increased.
d. Problems become more obvious.
e. None of the above is true of a pull system.
d. Problems become more obvious.
Manufacturing cycle time is best defined as the
a. length of the work shift, expressed in minutes per day
b. time it takes a unit to move from one workstation to the next
c. time between the start of one unit and the start of the next unit
d. sum of all the task times to make one unit of a product
e. time from raw materials receipt to finished product exit
e. time from raw materials receipt to finished product exit
If the goals of JIT partnerships are met, which of the following is a result?
a. For incoming goods, receiving activity and inspection are outsourced.
b. In-transit inventory falls as suppliers are located closer to facilities.
c. The number of suppliers increases.
d. In-plant inventory replaces in-transit inventory.
e. All of the above are consequences of meeting the JIT partnership goals.
b. In-transit inventory falls as suppliers are located closer to facilities.
Which one of the following is a characteristic of a JIT partnership?
a. large number of suppliers
b. maximal product specifications imposed on supplier
c. active pursuit of vertical integration
d. removal of incoming inspection
e. frequent deliveries in large lot quantities
d. removal of incoming inspection
Which of the following is specifically characterized by the elimination of waste through a focus on
exactly what the customer wants?
a. Just-in-time (JIT)
b. Toyota Production System (TPS)
c. Lean operations
d. Material requirements planning (MRP)
e. kanban
c. Lean operations
Characteristics of JIT partnerships with respect to suppliers include
a. competitive bidding encouraged
b. buyer plant pursues vertical integration to reduce the number of suppliers
c. support suppliers so they become or remain price competitive
d. most suppliers at considerable distance from purchasing organization
e. All of the above are characteristics of JIT partnerships.
c. support suppliers so they become or remain price competitive
Characteristics of just-in-time partnerships do ,0) include
a. removal of in-transit inventory
b. large lot sizes to save on setup costs and to gain quantity discounts
c. long-term contracts
d. few suppliers
e. buyer helps supplier to meet the quality requirements
b. large lot sizes to save on setup costs and to gain quantity discounts
What is the time required to move orders through the production process, from receipt to delivery?
a. throughput
b. manufacturing cycle time
c. pull time
d. push time
e. queuing time
a. throughput
Which of the following is ,0) a goal of JIT partnerships?
a. removal of unnecessary activities
b. removal of in-plant inventory
c. removal of in-transit inventory
d. removal of engineering changes
e. All of the above are goals of JIT partnerships.
d. removal of engineering changes
A characteristic of JIT partnerships with respect to quality is to
a. help suppliers meet quality requirement
b. inspect all incoming parts
c. maintain a steady output rate
d. impose maximum product specifications on the supplier
e. draw up strict contracts ensuring that all defectives will be immediately replaced
a. help suppliers meet quality requirement
Which of the following is not a goal of JIT partnerships?
a. removal of unnecessary activities
b. removal of in-plant inventory
c. removal of in-transit inventory
d. obtain improved quality and reliability
e. All of the above are goals of JIT partnerships.
e. All of the above are goals of JIT partnerships.
Which one of the following is a concern expressed by suppliers?
a. elimination of in-plant inventory
b. delivery to the point of use
c. production with zero defects
d. large lot sizes
e. customers’ infrequent engineering changes
c. production with zero defects
Reduction of in-transit inventory can be encouraged through use of
a. supplier location near plants
b. low setup costs
c. low carrying costs
d. use of trains, not trucks
e. low-cost, global suppliers
a. supplier location near plants
In JIT partnerships, suppliers have several concerns. Which of the following is ,0)!such a concern?
a. desire for diversification
b. poor customer scheduling
c. small lot sizes
d. producing high enough quality levels
e. customers’ infrequent engineering changes
e. customers’ infrequent engineering changes
Which of the following is ,0)!a concern of suppliers as they prepare to enter into JIT partnerships?
a. Suppliers feel that they would be less at risk if they contracted with more than one customer.
b. Suppliers are concerned that customers will present frequent engineering changes with
inadequate lead time to deal with them.
c. Suppliers feel that their processes are suited for larger lot sizes than the customer wants.
d. Suppliers are concerned that frequent delivery of small quantities is economically prohibitive.
e. All of the above represent JIT supplier concerns.
e. All of the above represent JIT supplier concerns.
Just-in-time systems make demands on layouts, including
a. distance reduction
b. increased flexibility
c. reduced space and inventory
d. cross-trained, flexible employees
e. All of the above are JIT influences on layout.
e. All of the above are JIT influences on layout.
Which one of the following is not a layout tactic in a JIT environment?
a. work cells for families of products
b. fixed equipment
c. minimizing distance
d. little space for inventory
e. poka-yoke devices
b. fixed equipment
Which of the following is the author of the phrase “Inventory is evil”?
a. Poka Yoke
b. Pat “Keiretsu” Morita
c. Kanban Polka
d. Shigeo Shingo
e. none of the above
d. Shigeo Shingo
Which one of the following statements is true regarding JIT inventory?
a. It exists just in case something goes wrong.
b. It is the minimum inventory necessary to keep a perfect system running.
c. It hides variability.
d. It is minimized with large lot production.
e. It increases if setup costs decrease.
b. It is the minimum inventory necessary to keep a perfect system running.
A firm wants to develop a level material use schedule based on the following data. What
should be the setup cost?
Desired lot size: 60
Annual demand: 40,000
Holding cost: $20 per unit per year
Daily production rate: 320
Work days per year: 250
a. $0.45
b. $4.50
c. $45
d. $450
e. $500
a. $0.45
A product has annual demand of 100,000 units. The plant manager wants production to follow a
four-hour cycle. Based on the following data, what setup cost will enable the desired production
cycle? d=400 per day (250 days per year), p=4000 units per day, H=$40 per unit per year, and
Q=200 (demand for four hours, half a day).
a. $2.00
b. $7.20
c. $18.00
d. $64.00
e. $1,036.80
b. $7.20
Throughput measures the time
a. that it takes to process one unit at a station
b. between the arrival of raw materials and the shipping of finished products
c. to produce one whole product through an empty system (i.e., with no waiting)
d. required to move orders through the production process, from receipt to delivery
e. none of the above
d. required to move orders through the production process, from receipt to delivery
Which of the following is true regarding the steps to reducing setup times?
a. The first step involves performing as much setup preparation as possible while the
process/machine is operating.
b. The cycle of steps is repeated until setup time is reduced to under a minute.
c. Standardize tooling and standardize training are included in the same step.
d. Improved material handling and move material closer are done before operator training.
e. All of the above are true.
e. All of the above are true.
Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in
half, by what proportion must setup cost change?
a. Setup cost must be cut to one fourth its current value.
b. Setup cost must also be cut in half from its current value.
c. Setup cost must double from its current value.
d. cannot be determined
e. none of the above
a. Setup cost must be cut to one fourth its current value.
The technique known as level schedules
a. requires that schedules be met without variation
b. processes many small batches rather than one large one
c. is known as “jelly bean” scheduling
d. is based on meeting one day’s demand with that day’s production
e. All of the above are true regarding level scheduling.
e. All of the above are true regarding level scheduling.
Which one of the following statements is true about the kanban system?
a. The quantities in the containers are usually large to reduce setup costs.
b. It is associated with a push system.
c. It is useful to smooth operations when numerous quality problems occur.
d. The supplier workstation signals the customer workstation as soon as a batch is completed.
e. The customer workstation signals to the supplier workstation when production is needed.
e. The customer workstation signals to the supplier workstation when production is needed.
Kanban is associated with all of the following except
a. small lot sizes
b. signals, such as cards, lights, or flags
c. moving inventory only as needed
d. increased material handling
e. reductions in inventory
d. increased material handling
The word “kanban” means
a. low inventory
b. employee empowerment
c. card
d. continuous improvement
e. lot size of one
c. card
Which one of the following scenarios represents the use of a kanban to reduce inventories?
a. A supervisor tells the operators to stay busy and start producing parts for next month.
b. A “supplier” work center signals the downstream workstation that a batch has been completed.
c. A supervisor signals to several work centers that the production rate should be changed.
d. A “customer” work center signals to the “supplier” workstation that more parts are needed.
e. An operator asks the next station’s operator to help him fix his machine.
d. A “customer” work center signals to the “supplier” workstation that more parts are needed.
If a casual-dining restaurant is attempting to practice JIT and lean operations, which of the
following would ,0) be present?
a. close relationship with the restaurant’s suppliers of food, utensils, and equipment
b. food preparation in large batches
c. a kitchen set up to minimize wasteful movements
d. lean inventories of food
e. All of the above should be present.
b. food preparation in large batches
The number of kanbans is
a. one
b. the ratio of the reorder point to container size
c. the same as EOQ
d. one full day’s production
e. none of the above
b. the ratio of the reorder point to container size
Which of the following is false regarding the links between JIT and quality?
a. Inventory hides bad quality; JIT immediately exposes it.
b. JIT reduces the number of potential sources of error by shrinking queues and lead times.
c. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better.
d. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory.
e. All of the above are true.
e. All of the above are true.
Which of the following is an illustration of employee empowerment?
a. UPS drivers are trained to perform several motions smoothly and efficiently.
b. Unionization of the work place brings better morale and therefore better quality.
c. “No one knows the job better than those who do it.”
d. all of the above
e. none of the above
c. “No one knows the job better than those who do it.”
Which of the following is ,0) an attribute of lean operators?
a. eliminating almost all inventory through just-in-time techniques
b. minimizing space requirements by reducing the distance a part travels
c. pushing responsibility to the highest level possible through centralized decision making
d. educating suppliers to accept responsibility for helping meet customer needs
e. All of the above are attributes of lean producers.
c. pushing responsibility to the highest level possible through centralized decision making
The 5S’s
a. have the “flavor” of a housekeeping list
b. are a checklist for lean operations
c. have become a list of seven items in American practice
d. can be used to assist with necessary changes in organizational culture
e. All of these are true.
e. All of these are true.
The list of 5S’s, although it looks like a housekeeping directive, supports lean production by
a. identifying non-value items and removing them, in the “sort/segregate” item
b. reducing inventory, in the “standardize” item
c. increasing variability through standardized procedures, in the “standardize” item
d. eliminating wasted motion through ergonomic studies, in the “support” item
e. building good safety practices, in the “shine/sweep” item
a. identifying non-value items and removing them, in the “sort/segregate” item
In the quest for competitive advantage, which of the following is a JIT requirement?
a. small number of job classifications
b. reduced number of vendors
c. reduced space for inventory
d. quality by suppliers
e. All of the above are JIT requirements.
e. All of the above are JIT requirements.
Which one of the following does not exemplify JIT used for competitive advantage?
a. Acme Foods decides to decrease the number of its suppliers to just a few.
b. Ajax, Inc. is proud to announce that incoming goods are delivered directly to the point of use.
c. Ardoyne Builders has a scheduled preventive maintenance program.
d. Cheramie Trucking trains workers to specialize and become very efficient in one job.
e. Cajun Contractors has reduced the amount of space for inventory.
d. Cheramie Trucking trains workers to specialize and become very efficient in one job.
Which one of the following is ,0) a requirement of JIT systems?
a. quality deliveries on time
b. low setup time
c. training support
d. strong job specialization
e. employee empowerment
d. strong job specialization
Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge
pumps. Which of the following activities is ,0) part of JIT? They
a. communicate their schedules to suppliers
b. produce in long production runs to reduce the impact of setup costs
c. use a pull system to move inventory
d. continuously work on reducing setup time
e. produce in small lots
b. produce in long production runs to reduce the impact of setup costs
Which one of the following is an example of JIT being used for competitive advantage?
a. Jones Company has decreased the number of job classifications to just a few.
b. Lafourche Metals increases the number of its suppliers to be less dependent on just a few.
c. Houma Fabricators is proud to announce that incoming goods are inspected.
d. Acme Company tells its maintenance department to intervene only if a machine breaks down.
e. Caro Specialty Metals, Inc. has built a new, huge warehouse to store inventory.
a. Jones Company has decreased the number of job classifications to just a few.
A manufacturer took the following actions to reduce inventory. Which of these is generally not
accepted as a JIT action?
a. It used a pull system to move inventory.
b. It produced in ever smaller lots.
c. It required deliveries directly to the point of use.
d. It picked the supplier that offered the lowest price based on quantity discounts.
e. It worked to reduce the company’s in-transit inventory.
d. It picked the supplier that offered the lowest price based on quantity discounts.
Which of the following is not one of the Seven Wastes?
a. overproduction
b. transportation
c. assignment
d. defective product
e. motion
c. assignment
Concerning relationships with suppliers, which of the following combinations is critical to the
success of JIT?
a. close relationships with trust
b. close relationships with skepticism
c. distant relationships with trust
d. distant relationships with skepticism
e. none of the above
a. close relationships with trust
Which of the following statements regarding JIT in services is true?
a. Restaurants do not use JIT layouts because they interfere with creation of a good servicescape.
b. Excess customer demand in services such as air travel is met by dipping into safety stocks.
c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used
in services.
d. Scheduling is not relevant to effective use of JIT in services.
e. All of the above are false.
c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used
in services.