Supply Demand Integration

Manufacturing planning and control (MPC) includes which of the following activities?
I. Material management
II. product marketing
III. coordinating suppliers
I and III
In the MPC process, capacity decisions (equipment, facilities, suppliers, etc.) are most likely to occur in which time horizon?
long
In the MPC process, detailed scheduling decision are most likely to occur in which time horizon?
short
Shop-floor systems are a part of which MPC phase?
execution
Sales and operations planning (SOP) & demand management are a part of which MPC phase?
direction setting
Master production scheduling (MPS) and resource planning are a part of which MPC phase?
detailed planning
Measurement and control are a part of which MPC phase?
direction setting, detailed planning & execution
Products that are part of a continuous production process (e.g., petroleum products) would most likely use which form of MPC?
flow
Products that are part of a one-time production process (e.g. bridges, aircraft carriers) would most likely use which form of MPC?
project
Updating and old MPC systems can include which of the following?
I. Adding new modules or functionality
II. Consideration of new decision criteria
III. Removing unneeded/obsolete modules or functionality
I, II, III
Demand management (DM) includes which of the following activities?
I. Forecasting
II. Product shipping
III. Entering customer orders
I and III
Demand management is the firm’s connection to which of the following entities?
marketplace
Sources of demand that are part of demand management include all of the following except.
scrap products
Which of the following are examples of independent demand?
I. Customer orders
II. Shipping samples to the sales team
III. Use of raw materials in production
I and II
Which of the following are examples of dependent demand?
I. Customer orders
II. Using finished goods stock to build preloaded store displays
III. Raw materials usage
II and III
The customer order decoupling point is best defined as.
the point in the supply chain where demand changes from dependent to independent
In an engineer-to-order environment, the most likely point where customer order decoupling would take place is.
suppliers
In an assemble-to-order environment, the most likely point where customer order decoupling would take place is.
work-in-process parts and components
In a make-to-stock environment, the most likely point where customer order decoupling would take place is.
finished goods
In which environment is defining the customer order in terms of components and options the key focus of demand management?
assemble-to-order
Which of the following lists properly ranks the different environments from lowest to highest need to communicate with the customer?
assemble-to-order, make-to-order, engineer-to-order
In an assemble-to-order environment, how many different product combinations are possible if the product is make from 12 components, each of which has three different options?
531, 441
In a make-to-stock environment, what is the key problem?
balancing inventory levels with customer service requirements
In an engineer-to-order environment, the forecasting process is not necessary
false
Sales and operations planning can be completed at which of the following levels?
I. product family
II. region
III. organizational unit
I, II & III
The lifetime of a customer order (time from receiving the order until order is fulfilled) is longest in which environment.
engineer-to-order
The lifetime of a customer order (time from receiving the order until order is fulfilled) is shortest in which environment?
make-to-stock
In which environment is the demand management function least likely to provide customers with promise dates?
make-to-stock
Which types of data are captured and monitored by the demand management function?
I. detailed product mix
II. product pricing
III. overall market trends
I, II & III
Collaborative planning, forecasting, and replenishment (CPFR) has been defined by the Voluntary Interindustry Commerce Standards Association as a process involving how many steps?
9
The first step in the collaborative, forecasting, and replenishment (CPFR) process is to.
establish a collaborative relationship
The main goal of a collaborative planning, forecasting, and replenishment (CPFR) process is to.
reduce the variance between supply and demand
A manufacturer of printer paper would most likely be what type of firm?
make-to-stock
A manufacturer of jet airplanes would most likely be what type of firm?
make-to-order
A local coffee house restaurant would most likely be what type of firm?
assemble-to-order
Which of the following decisions would be most likely to be made using highly aggregated estimate of general business trends?
I. individual product plans
II. product line development
III. constructing a new plant
III only
Which of the following lists the planning decisions in order from highest to lowest aggregation level?
strategic business unit – sales and operations planning (SOP)- master production scheduling (MPS)
Which of the following lists the planning decisions in order from lowest to highest data processing costs?
master production scheduling (MPS) – sales and operations planning (SOP) – strategic business unit
Which of the following is an example of a casual model?
I. product sales increasing over time
II. lawn mower sales decreasing in the winter
III. increasing appliance sales when housing construction increases
III only
A forecast used for sales and operations planning is likely to cover a period of
several months to a year
A forecast used for master production scheduling and control is likely to cover a period of
several days to a few weeks
Regression analysis where the relationship between variable is a straight line is called
linear regression
In regression analysis, the dependent variable could be time.
false
In a time series analysis, time is the
independent variable
The least squares method of linear regression minimizes
I. the error of the slope
II. the squared distance between each point and the line
III. the error of the intercept
II only
In a least squares regression analysis, if the value of a has been calculated as 10 and b has been found to be 100, what is the equation of the line?
y=10+100x
Which of the following are possible components of time series demand?
I. seasonal variation
II. cyclical variation
III. trend
I, II & III
With additive seasonal variation, the seasonal change is constant regardless of trends.
true
Seasonal variations are generally associated with the seasons of the year, while cyclical variations refer to other annual patterns
true
As forecasts are extended further into the future, the prediction internal is most likely to
increase
A moving-average forecast is often superior to a simple average because it considers only recent data
true
An exponential smoothing forecast considers all past data
true
In an exponential smoothing forecast, a higher level alpha will place more emphasis on recent history
true
Compared to a moving-average forecast, an exponential smoothing forecast places more emphasis on recent history
can’t determine without more information
To make an exponential smoothing forecast more reactive to trends, a lower value of alpha should be used
false
Mean error of a forecast provides information concerning the forecast’s
bias
Which value indicates the better forecast?
cannot be determined
Mean absolute deviation (MAD) measures
magnitude of forecast errors
Evaluating forecast accuracy requires an understanding of
I. mean absolute deviation (MAD)
II. Mean error (bias)
III. Forecast costs
I & II
Assuming that forecast errors are normally distributed, what is the relationship between mean absolute deviation (MAD) and standard deviation (SD)?
SD > MAD
In pyramid forecasting, the “roll-up” process involves
adding together family forecasts to determine the aggregate forecast
In pyramid forecasting, the “fore-down” process involves
allocating aggregate forecast changes to product families
One of the most important ways to reflect special events (promotions, product changes, etc.) is to directly modify the product forecast.
true
Sales and operations planning (SOP) provides which of the following benefits?
I. key communications links for top management
II. a basis to focus production resources
III. detailed production plans
I & II
The four fundamental issues in sales and operations planning are
volume, mix, demand and supply
One role of sales and operations planning is to provide early warning when demand and supply become unbalanced.
true
Sales and operations planning balances supply and demand at the
volume level
Many key sales and operations planning linkages are outside the manufacturing planning and control (MPC) system.
true
Which of the following are true?
I. the sales and operations planning plan is usually stated in aggregate units
II. the master production schedule is usually stated in end product units.
III. the sales and operation planning plan and the master production schedule should be stated in the same units.
I and II only
The recommended number of product groups for sales and operations planning is
6-12
The operations plan is a form of demand forecast.
false
The master production schedule disaggregates the operations plan.
true
The demand management function’s contribution to sales and operations planning is.
ensuring that the operations plan considers all aspect of demand.
Advantages of the sales and operations planning process include.
I. Visibility of the interaction between functional groups
II. Identification of the trade-offs between functional groups
III. The ability to overproduce the plan without the need for additional meetings
I and II
Capacity planning occurs during the supply planning phase of sales and operations planning
true
Decisions concerning the balance of supply and demand are made in the ______ phase of sales and operations planning.
pre-SOP meeting
Mechanisms to ensure support for the sales and operations planning process can include
I. informal adjustments to the plan between SOP meetings
II. contracts between functional groups
III. senior executive involvement
II and III
A strategy that matches monthly supply to forecasted demand is
chase
A strategy that maintains a consistent monthly output is
level
In a chase strategy, if the expected demand in October is 1,000 units, and there are 24 working days in October, how much inventory should be held at the end of September if the goal is 15 days’ supply?
625 units
In a chase strategy, if planned production for the month is 10,000 units and employee productivity is 85 units per month, how many employees should be the firm employ at the beginning of the month?
120
Top management roles in sales and operations planning include
I. commitment to the process
II. forcing resolution of trade-offs
III. designing tools used to conduct sales and operations planning
I and II
The primary obligation for any functional area is to “hit the plan”
true
The sales and operations planning process is led by which team member?
sales and operations planning process owner
Product family groups should represent?
sales’ and marking’s view of the market
For the sales group, overselling the plan is as bad as underselling the plan.
true
Strategic business unit (SBU) planning involves grouping information by
products and markets
To ensure control of the operations plan, which of the following are necessary?
I. accurate forecasts
II. a transparent planning process
III. clear communications of expectations
I, II & III
Which of the following are prerequisites to implementing a master production scheduling system?
I. define master production schedule (MPS) unit
II. install an enterprise resource planning (ERP) system
III. train an employee in MPS concepts and techniques
I & III
The master production schedule (MPS) translates the sales and operations plan (SOP) into
a specific production plan
The master production schedule (MPS) shows when products will physically be available to ship.
false
A master production schedule is.
neither a statement of current production nor current demand
The master production schedule (MPS) differs from forecast by considering.
I. capacity limtis
II. production costs
III. the sales and operations plan (SOP)
I, II & III
The master production schedule (MPS) must be stated in terms that relate to the producible product.
true
The master production schedule (MPS) must be stated in terms of actual products.
false
In which environment is a planning bill-of-material (BOM) most likely to be used?
assemble-to-order
The master production schedule (MPS) considers preferred lot sizes when constructing the plan.
true
Cycle stock is.
inventory carried as a result of lot size requirements
Available-to-Promise (ATP) is likely to be least useful in which environment?
make-to-stock
Which formula is used to calculate the projected available inventory balance?
projected available inventory = previous available inventory + MPS – max (forecast, actual orders)
A planning bill of material is
a bill of material that represents probably usage in an assemble-to-order environment
A super bill represents average usage of components in an assemble-to-order environment.
true
The final assembly schedule (FAS) represents which of the following?
I. the assembly plan when a planning BOM is used
II. the exact set of end products to be built in an assemble-to-order environment
III. the plan for moving pre-fabricated components into completed projects
I, II & III
When the master production schedule (MPS) is frozen for some period, changes to the plan within the period are typically prohibited.
true
Inside the demand fence, which of the following are true?
available-to-promise (ATP) calculations ignore forecasts
Inside the planning fence, which of the following are true?
changes to production orders are not allowed
One key to avoiding an overstated master production schedule (MPS) is to
force the MPS to match the production plan (in terms of total units)
Supporting information for material requirements planning (MRP) systems includes which of the following?
I. Bills of material
II. Routing file
III. Inventory status data
I & III
Material requirements planning (MRP) takes place in the front-end systems of manufacturing planning and control system.
false (in the engine)
Material requirements planning (MRP) systems perform which of these functions?
I. translating the overall production plan into detailed steps
II. providing information for capacity planning
III. providing information for staffing plans
I & II
In a material requirements planning (MRP) system, gross requirements (demand) are.
anticipated future usage or demand for the item during each period
In a material requirements planning (MRP) system, scheduled receipts are.
existing replenishment orders for the item due at the beginning of each period
In a material requirements planning (MPS) system, the projected available balance is
current and projected inventory status for the item at the end of the period
In a material requirements planning (MRP) system, gross requirements are time phased which means which of the following?
requirements from all periods are stated on a period-by-period basis
The precedent relationship shows.
the order in which production steps must be accomplished
Front scheduling logic starts each step of the process as late as possible
false (early)
Back scheduling logic starts each step of the process as late as possible.
true
A lot-for-lot order policy generates orders for a fixed quantity, independent of actual requirements.
false
Processing all material requirements planning (MRP) records in a single computer run is called.
regeneration
Safety stock is an inventory buffer of stock over and above requirements.
true
Safety lead time involved inflating lead times to ensure stock availability.
false
In a system where timing of production is uncertain, it would be more appropriate to utilize.
safety lead time
Information concerning the specific source of demand is called
pegging information
A firm planned order (FPO) can be changed by the material requirements planning (MRP) system without human involvement.
false
A commitment to an external supplier (e.g. a purchase order) is represented in the material requirements planning (MRP) system by a
schedule receipt
Which of the following is not an action commonly taken by an MRP planner?
I. release orders
II. confirm inventory counts on incoming shipments
III. reconcile MRP errors
II only
Order launching occurs when a planned order release is in the action bucket.
true
In a well-functioning material requirements planning (MRP) system, what percent of parts would be expected to require planner review (via exception codes) in any given processing cycle?
10-20
Exception codes are usually generated for which of the following reasons?
I. open order timing/amount not satisfactory
II. need for management intervention
III. generation of planned orders
I & II
Which type of inventory occurs as a result of the time needed to physically move goods from one location to another?
transit stock
Which type of inventory occurs as a result of seasonal patterns of demand?
anticipation stock
Which of the following are decisions made when managing independent-demand inventories?
I. how much to order
II. when to order
III. amount of scarp associated with production
I & II
A measurement that relates inventory levels to product sales?
inventory turnover
Which of the following is not a type of cost associated with inventory?
I. ordering preparation costs
II. inventory carrying costs
III. shortage and customer service costs
I, II & III
Which of the following are NOT a part of inventory carrying costs?
I. cost of capital
II. delivery charges
III. product obsolescence
II
If the cost of ordering decreases, what happens to the economic order quantity (EOQ)?
decreases
Assuming that demand is normally distributed, with a standard deviation during lead time of 50 units, what level of safety stock is required to ensure that 95% of order cycles will have no stockouts?
85
Assuming that demand is normally distributed, with a mean of 100 units, standard deviation during the lead time is 50 units, and a lead time of 2 periods, what reorder point will guarantee that no more than 10% of order cycles will have one or more stockouts?
165
Assuming that demand is normally distributed (mean of 250 units, standard deviation of 75 units per period) and a lead time of 3 periods, what reorder point will guarantee that no more than 5% of order cycles will have one or more stockouts?
1200
Assuming that demand is normally distributed (mean of 250 units, standard deviation of 75 units per period) and a lead time of 3 periods (with a standard deviation of 2 periods), what reorder point will guarantee that no more than 5% of order cycles will have one or more stockouts?
1850
In a system with a forecast mean absolute deviation (MAD) of 100 units (over the lead time), what level of safety stock would be required to ensure that 90% of order cycles have no stockouts?
160
In ABC analysis, the A group will likely contain the most items.
false (c)
In ABC analysis, the C group will likely have the highest usage volume (in dollars).
false (a)
Order point inventory control methods are generally used for items with what type of demand?
independent
Which type of inventory occurs as a result of order quantities being larger than needed to satisfy immediate requirements?
cycle stock