supply chain exam 3 test bank

The resource and operations planning done by operations managers is intended to balance capacity and output.
T
MRP is the production planning system intended to develop long-range plans (more than a year away) concerning product families manufactured by the organization.
F

APP

The three basic production strategies for addressing the aggregate planning problem are the capacity production strategy, the level production strategy, and the chase production strategy.
F

mixed production strategy

The three basic production strategies for addressing the aggregate planning problem are the chase production strategy, the level production strategy, and the mixed production strategy.

System nervousness is when even small changes to upper-level production plans cause major changes in lower-level production plans.
T

has nothing to do with ERP systems

An MRP system has a subassembly with a lot size of 100 units. In terms of filling future requirements, this would mean that planned order releases for the subassembly would always have to be exactly 100 units.
F

can be 200, 300, 400, etc.

The process of converting a parent item’s planned order releases into component gross requirements is referred to as the MRP explosion.
T

not ERP implosion

A typical ERP system attempts to tie together a variety of systems related to production and inventory planning, purchasing, logistics, human resources, finance, accounting, customer relationship management, and supplier relationship management by means of a single centralized database.
T

coordinates all the functional areas and operations of an organization through a common software infrastructure or centralized database

ERP IS CENTRALIZED

Key requirements to a successful ERP implementation include adequate computer support, accurate system inputs, and flexible business processes that can conform to the approaches used in the ERP software logic.
T
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.
RRP
b.
MPS
c.
RCCP
d.
MRP
MRP
Which of the following basic production strategies used for addressing the aggregate planning problem would work best with make-to-order manufacturing firms?
a.
Capacity Production Strategy
b.
Chase Production Strategy
c.
Level Production Strategy
d.
Backlog Production Strategy
Chase production strategy
Which of the following is NOT one of the three basic methods used to calculate the available-to-promise quantities?
a.
Discrete available-to-promise
b.
Cumulative available-to-promise without looking ahead
c.
Indiscrete available-to-promise
d.
Cumulative available-to-promise with looking ahead
indiscrete available to promise
Which of the following could be considered a master production schedule for a service firm?
a.
The reservation book utilized by a restaurant
b.
The employee shift schedule utilized by an auto shop
c.
A hospital patient’s personal information fill
d.
The recipe book utilized by a chef at a restaurant
The reservation book utilized by a restaurant

MPS- INTERMEDIATE RANGE PRODUCTION SCHEDULE/ CORE OPERATING PLAN FOR A BIZ

Which of the following is an engineering document that shows an inclusive listing of all the component parts and assemblies making up the final product?
a.
Master Production Schedule
b.
Bill of Materials
c.
Distribution Requirement Plan
d.
Resource Requirement Plan
Bill of Materials

-MPS= intermediate range production schedule
-DRP= Establishes requirements for the distribution network/ balances warehouse capacity and production plan
-RRP- long range capacity plan

According to the textbook, which of the following is considered a reason that ERP implementations fail?
a.
The organization may lack the necessary workforce and expertise to properly implement the system
b.
Top management becomes overcommitted to the point where they constantly encourage the employees during implementation
c.
Organizations tend to spend too much time and money training their employees on the new system
d.
All of these
A
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 year 2000 millennium bug
b.
The trend for companies to eliminate their supply chain partners
c.
The increased use of email during the 1990’s
d.
All of these
A. Y2K
Which of the following is considered an advantage/benefit of utilizing in ERP system?
a.
Utilizes multiple databases in order to provide up-to-date information
b.
Increases the privacy level within an organization, thus functional departments can more easily protect their data from supporting or dependent functional departments
c.
Allows organizations to more easily communicate information about operational changes to supply chain members
d.
Increases the bullwhip effect
C
Organizations that choose to implement one single system with all of the desired applications from a single vendor versus choosing to implement the best applications or modules for each of the different functional departments associated with the supply chain is said to have chosen a(n):
a.
Best-of-breed solution
b.
Elite integrator solution
c.
Single integrator solution
d.
Premier application solution
C. Single integrator solution
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 entry.
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
B

ERP SYSTEM= CENTRALIZED DATABASE

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.
Customer Relationship Management and human resource management
b.
Human resource management and accounting and finance
c.
Supplier relationship management and customer relationship management
d.
All of these
D

ERP coordinates all the functional areas and operations of an organization through a centralized software infastructure and database

Organizations that choose to implement the best applications or modules for each of the different functional departments associated with the supply chain versus choosing to implement one single system with all of the desired applications from a single vendor is said to have chosen a(n):
a.
Best-of-breed solution
b.
Elite integrator solution
c.
Multi-modular solution
d.
Premier application solution
Best of Breed
Briefly define any FOUR of the following six terms as they apply to MRP.
1.
Parent
2.
Gross Requirement
3.
Scheduled Receipt
4.
Planned Order Release
5.
Lot-size
6.
Projected on Hand Inventory
gross requirement- amount of resources needed for production. satisfied by on hand inventory and scheduled receipts

Scheduled receipt- received order release

planned order release- a placed order to be made to satisfy future demand

Lot-size- amount of materials that must be bought when placing an order

Projected on inventory- amount of materials left after completing production (Gross-(SR+BI))

What does that mean if your organization has chosen to adopt a best-of-breed solution?
Your organization has chosen to implement ERP systems and implements the application or model that best fit the each individual functional area.

The single integrator approach, on the other hand, would utilize all the desired applications from a single vendor.

What is ERP? Why is it developed?
ERP stands for Enterprise Resource Planning systems. ERP systems are manufacturing information systems that are intended to connect all functional areas and operations of an organization, as well as its suppliers and customers, in some cases, via a common software infrastructure and database. The systems utilize a centralized and shared database that allows the organization and easily share information and communicate quickly with all of its internal functional members as well as any participating supply-chain partners.
This chapter discussed both materials planning and capacity planning. Consider those concepts in answering the following questions:
1.
Which is more appropriate for a conventional service organization? Why?
2.
Which is more appropriate for a conventional manufacturing organization? Why?
3.
What are the three hierarchical components of materials planning? Provide a brief description of each.
4.
What are the three hierarchical components of capacity planning? Provide a brief description of each.
1.) Capacity planning, services cannot be inventoried

2.)production planning, goods can be inventoried

3.)APP- long term production plan
MPS- Intermediate production plan, core operating plan of a biz
MRP- short range production plan

4.)RRP- long term capacity plan, checks feasibility of the APP
RCCP- intermediate capacity plan, checks feasibility of the MPS
CRP- short range capacity plan, checks feasibility of the MRP

What is ERP?
Why should the organization get an ERP system?
Why might the organization not want to get ERP?
If we did get an ERP system what would be required for successful implementation?
ERP is a manufacturing information system that coordinates all the functional areas and operations of an organization via common software infrastructure and database.

It will allow for the organization to easily share information and communicate internally and with supply chain partners.

high costs, implementation and training. drop in productivity due to learning curve

commitment, adequate funds and training

Lean production and Six Sigma quality are essentially two terms that mean the same thing.
F

LEAN= eliminating waste and inefficiencies
Six Sigma= quality improvement through reduction in defect and variability

Channel integration is a supply chain term which refers to how a manufacturing firm within a supply chain attempts to create strategic alliances not only with their immediate suppliers but also with the suppliers’ suppliers and in the other direction not only reaching out to its immediate customers but also the customer’s customers.
T
Manufacturing layouts for an organization practicing lean manufacturing principles seek to maximize operator visibility, maintain an effective and efficient flow of people and materials, and minimize the distance that work in process must travel from one processing center to another processing center.
T
Organizations practicing lean production often increase their inventory levels in the long-run in order to create a cushion against variability so that they can investigate and eliminate the weaknesses of their system.
F

excess inventory is waste and hides/covers up problems and inefficiencies

W. Edwards Deming and Shigeo Shingo were two of the notables who helped Toyota develop the Toyota Production System.
T
Pareto chart, demming prize
false
Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes from variations due to common causes.
T
The five S’s refer to various safety activities practiced by Toyota
F

refers to waste reduction LEAN

Sort
Straighten
Shine
Standardize
Sustain

(safety)

The primary design objective with lean layouts is to reduce wasted movements of workers, customers, and/or work-in-process
T
Six Sigma is a quality improvement concept developed by Motorola.
T

LEAN=toyota
Six Sigma=motorola

attributable data= color, satisfaction, beauty
variable data= weight, height

natural variations= expected, random (can’t control)
assignable variations= have specific cause (can control)

Acceptance sampling is a statistical technique that enables a reject or accept decision to be made based on information obtained from a representative sample drawn from the population.
T

Type 1 error= suppliers’ risk
Type 2 error= buyer’s risk

Modern supply chains simultaneously pursue the goals of high-quality, fast response, and low cost because customers nowadays want both high levels of quality and responsiveness. A key manufacturing philosophy that emphasizes waste elimination and minimizing inventories to expose problems is:
a.
Just-in-time
b.
Quick Response
c.
Efficient Consumer Response
d.
Total Quality Management
just-in-time
Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called?
a.
Jidoka Networks
b.
Keiretsu Networks
c.
Kanban Networks
d.
Kaizen Networks
keiretsu networks/ relationships
Which of the following are among the most important elements of the lean production philosophy?
a.
Quality inspections and a standardized product line
b.
Fully automated assembly lines and a large supplier base
c.
Large inventories and quality inspections
d.
Waste reduction and value enhancement
waste reduction and value enhancement
Which company probably played the largest role in the development of the Toyota Production System?
a.
General Motors
b.
Ford
c.
Chrysler
d.
Boeing
Ford
Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a:
a.
Kanban Pull System
b.
Semaphore System
c.
Keiretsu Network
d.
TQM Network
Kanban pull system

kanban=signals

Which of the following is NOT consistent with the lean philosophy?
a.
Cross-training employees to increase processing flexibility
b.
Developing a culture of continuous improvement within the organization
c.
Increasing batch size to take advantage of economies of scale
d.
Positioning WIP inventories near each processing center
C

SMALL BATCH SIZE/uniform plant loading

Which of the following is NOT one of Toyota’s seven wastes?
a.
Excess inventories
b.
Environmental waste
c.
Waiting time
d.
Scrap and rework
Environmental waste
Which of the following best describes the five S’s?
a.
These were originally Japanese words relating to industrial housekeeping
b.
Five ways to reduce inventories on the shop floor
c.
These are five different kinds of manufacturing layouts
d.
Refer to methods for reducing setup times
A.) industrial housekeeping
While the philosophy of Six Sigma means different things to different people and is practiced differently in different companies, according to the textbook, two of the more important and agreed-upon elements of Six Sigma are:
a.
Minimizing inventories and increasing material flow
b.
Focusing on the customer and workforce involvement
c.
Rewarding employees and keeping defect rates below 2%
d.
Minimizing inventories and keeping defect rates below 1%
focusing on customer and workforce involvement
Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves?
phillip crosby
The ISO certification standard for environmental management is:
a.
ISO 9000
b.
ISO 9005
c.
ISO 14000
d.
ISO 19000
ISO 14000-waste reduction

ISO 9000- quality management

A company that produces 8 pound bags of rice gathered 5 samples of 6 bags each. The weights of each bags’ contents are listed below.
only 8.305; find the average
Why is the workforce considered such an important element of lean production?
crossed trained employees add processing efficiency
employees identify problems and are empowered to fix them
Provide a very brief overview of the beliefs of each of the following quality professionals: W. E. Deming, Philip Crosby, and Joseph Juran:
Demming- considered father of TQM, creator of plan do check act cycle

Crosby- “quality is free”, proposed 0 defects as opposed to 3.4 per million (six sigma)

Juran- quality trilogy: q planning, q contol, q improvement

Facility location is a business decision that will ultimately impact issues like the cost of supplies, facilities, and materials, as well as lead times and customer service levels.
T

LOCATION MATTERS

While the development and proliferation of the Internet and web-based commerce has not completely eliminated the relevancy of facilities location, because of the Internet, the speed of delivery and cost in serving the customer are no longer factors in determining the strategic location of an organization’s facilities.
F

LOCATION MATTERS

Regional trade agreements and the World Trade Organization provide a framework for managers in terms of investigating important facility location elements like tariffs, costs, and the free flow of goods and services in different regions of the world.
T
A country that imposes high tariffs discourages foreign-based companies from importing goods and they also may encourage multinational corporations to set up local factories to produce items locally in order to avoid those high tariffs
T
Many multinational corporations are moving their facilities and headquarters out of Taiwan and some Southeast Asian countries in order to take advantage of the proximity to customers. The more attractive customer markets are developing in China.
T
While many developing countries are attractive to companies seeking out low labor costs, there are other important factors such as productivity levels, employee skill and education levels, turnover rates, and employment trends that certain industries find just as important, if not more important, in determining facilities’ location.
T
A list of quality-of-life factors would most likely include education system, healthcare system, effectiveness of law enforcement, and travel infrastructure (roads/highways).
T
While business clusters seem logical in well-established areas with developed economies like Silicon Valley and Hollywood, California because companies can easily collaborate, compete, and share knowledge, some high-tech clusters have developed in areas with emerging economies such as Mexico, Singapore, and India.
T
The Americas have two primary regional trade agreements, NAFTA, an agreement between the United States, Canada, and Mexico, and MERCOSUR, an agreement between Argentina, Brazil, Paraguay, and Uruguay to develop a common South American market.
T
When trying to gauge a nation’s competitiveness a manager may want to consult one of two primary world competitiveness rankings, the World Competitiveness Yearbook published by IMD and The Global Competitiveness Report prepared by the World Economic Forum.
T
China’s economy is shifting from labor-intensive industries to arrears like marketing and the production of high technology products that typically provide higher levels of value.
T
Organizations that primarily compete on speed of delivery, such as FedEx and UPS, utilize which of the following approaches for location determination:
a.
Sourcing center
b.
Hub and spoke
c.
Air and ground
d.
LTL consolidation
B hub and spoke
While there are many questions and concerns that must be addressed before a final location is determined, there are basically three levels of location decisions. Which of the following is not one of those three levels of location decisions?
a.
Global market or country selection
b.
Subregion or state selection
c.
Community and site selection
d.
Territory and quadrant selection
D
Which of the following regional trade agreements is paired with the appropriate region of the world?
a.
NAFTA − Southeast Asian Nations
b.
COMESA − United States, Canada, and Mexico
c.
MERCOSUR − Argentina, Brazil, Paraguay, and Uruguay
d.
EU − Middle East nations, not including Israel
MERCOSUR
Some companies import components, use them in the production of their end items, and ultimately export them to other countries. If a company wanted to import the components duty-free, use those components in the production of their end items, and then export them to other countries, they would most likely utilize a(n):
a.
Duty-free Territory
b.
Foreign Trade Zone
c.
International Cross Docking Zone
d.
International Processing Center
foreign (free) trade zone
Which of the following issues is (are) important to consider when trying to determine the location of a firm’s facilities?
a.
The stability in the location considered
b.
Environmental issues regulated by domestic laws or international trade agreements
c.
Access to suppliers from the location considered
d.
All of these
D
Certain states in the United States have laws that secure the rights of employees to decide for themselves whether or not to join or financially support a labor union. These laws are called:
a.
Employee freedom acts
b.
Free trade laws
c.
Right-to-work laws
d.
Sanctioned union acts
right to work laws
Which of the following is a reason that experts have referred to China as being a primary location of business in this century?
a.
China is one of the largest recipients of foreign direct investment
b.
China is the second largest exporter to the US
c.
China’s population accounts for over 20% of the world’s population
d.
All of these
A free trade zone offers a manufacturing firm the ability to import components or subassemblies into a designated area without paying any import related tariffs
If a country is seeking to attract foreign investment in the form of manufacturing related facilities, list 3 things the government might do to increase the chances of this occurring.
-FTZ
-Tariffs- either increase to encourage international manufacturers will relocate to the U.S./ decreasing would increase foreign imports
-Trade agreements-
When an organization is considering future facilities locations, provide 3 human resource related issues that the organization would need to consider.
-cost of labor
-labor skill
-labor education
-quality of life
When a customer takes their automobile to a carwash, the carwash provides state utility to the vehicle.
T
In order to maximize customer satisfaction/visits, service organizations must be able to identify customer needs, create systems that can quickly satisfy these needs in a cost-effective manner, hire, train, and schedule service representatives effectively, utilize technology effectively, and conveniently locate service facilities.
T
A service bundle includes the explicit service, the supporting facility, the facilitating goods, as well as the implicit services.
T
Location strategy is important in that it can provide barriers to entry, and competitive positioning, as well as generating additional demand.
T
Service facilities are normally decentralized.
T
The optimal capacity utilization for an organization would be 100%
F
One problem with services is that they cannot expand globally
F

but it is very difficult to expand services globally

A service bundle describes the explicit service purchased.
F
Cross-training workers is a typical capacity management technique for times when demand exceeds capacity.
T
Reneging occurs when customers decide to leave the queue after some length of waiting time in the queue.
T

Balking= immediately refusing to join the queue

A very popular fast food restaurant is presently staffed with three cash register attendants that are taking orders. Upon entering the restaurant, customers must choose from three separate lines, each of which leads to one of the three registers. Immediately upon placing their order with the register attendant, customers are given their food and drinks by the register attendant. To analyze this situation you would use the queuing model for an infinite source, multiple servers, and multiple channels.
T
Long-term customer satisfaction, especially in the face of service failures, requires organizations to empower front-line service personnel to identify problems and then provide solutions quickly and an empathetic way.
T
Since the 1950s, the percentage of service related jobs has increased much more rapidly than the percentage of manufacturing and agriculture related jobs in United States due to the use of technology and mass production techniques developed during that time.
T
Which of the following is an example of a person that would be considered to provide a Pure Service?
a.
Attorney/Lawyer
b.
Management Consultant
c.
Musical Entertainer
d.
All of these
D

NO END PRODUCT

Which of the following organizations would be considered an example of a global service?
a.
FedEx
b.
Deutsche Bank
c.
Wal-Mart International
d.
All of these
D
Which of the following strategies is being followed by a company that is based on creating a service that is considered to offer unique service elements for which customers may consider paying higher prices?
a.
Focus Strategy
b.
Differentiation Strategy
c.
Cost Leadership Strategy
d.
Exclusivity Strategy
B.) differentiated strategy
Which of the following items would be considered a facilitating product?
a.
The automobiles washed by the car wash
b.
The suits being cleaned by the dry cleaner
c.
The tools used to fix your car at an auto shop
d.
All of these
C
wal-mart effect
Information technologies have allowed large retailers to maintain good productivity growth rates
The number of customers per day an organization’s service delivery systems are designed to serve within a certain time frame is referred to as:
a.
Service Capacity
b.
Capacity Utilization
c.
Productivity Potential
d.
Service Throughput
A.) service capacity

amount as well as time

Which of the following would NOT be considered an acceptable option in managing capacity when demand exceeds available service capacity?
a.
Utilizing fewer facilitating products
b.
Utilizing technological tools like computers and automated systems
c.
Cross-training and sharing employees
d.
Using customers to provide services
A
When studying queuing models, a customer who enters the waiting line but leaves the system prior to receiving service is said to have:
a.
Balked
b.
Reneged
c.
Stalled
d.
Disposed
B.) reneged

R-entered and left
B-never entered at all

The three generic competitive strategies are:
a.
profit-based, nonprofits, and free services
b.
cost leadership, differentiation, and focus
c.
manufacturing, service, and retail
d.
mass-production, make-to-order, and services
B
Countries that shift from a manufacturing-oriented economy to a service-oriented economy sometimes see their productivity growth decline over time. This phenomenon is called:
a.
Service Shrink
b.
Deming’s Decline
c.
State Utility
d.
Baumol’s Disease
baumol’s disease
First-come-first-served is an example of a(n):
a.
queue discipline
b.
unfair waiting policy
c.
channel queuing arrangement
d.
single-phase queue design
queue discipline
Which of the following is an example of a person that would be considered to provide a Pure Service?
a.
Photographer
b.
Chef
c.
Musical Entertainer
d.
Pharmacist
C
David Maister’s First Rule of Service is:
a.
It always takes longer than you think to perform the service
b.
You can’t please all the customers all the time
c.
Satisfaction = perception − expectation
d.
Under-promise and over-deliver
RULE 1: satisfaction= perception – expectations

RULE 2: you only have one chance to make a good impression

Which of the following items would be considered a facilitating product?
a.
The computer that is being repaired by a technician
b.
The automobiles washed by the car wash
c.
The hangers provided with your cleaned suit by the dry cleaner
d.
All of these
C