ISDS 3115 PRACTICE QUIZ – Flashcards

T/F: With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.

Which sourcing strategy is particularly common when the products being sourced are commodities? a) vertical integration b) many suppliers c) virtual companies d) kereitsu e) few suppliers

Drop shipping: a) is a good reason to find a new firm to ship your products. b) is the same thing as keiretsu c) is equivalent to cross-docking d) is the opposite of a blanket order e) means the supplier will ship directly to the end consumer, rather than to the seller.

What term is used to describe the outsourcing of logistics? a) e-logistics b) third-party logistics (3PL) c) sub-logistics d) hollow logistics e) shipper-managed inventory (SMI)

T/F: The reorder point is the inventory level at which action is taken to replenish the stocked item.

Which of the following statements regarding control of service inventories is TRUE? a) Effective control of all goods leaving the facility is one applicable technique. b) Service inventory is a fictional concept, because services are intangible. c) Good personnel selection, training, and discipline are easy. d) Service inventory needs no safety stock, because there's no such thing as a service stockout. e) Service inventory has carrying costs but no setup costs.

Which of the following statements regarding the reorder point is TRUE? a) The reorder point is that quantity that triggers an action to restock an item. b) The reorder point is larger than d x L if safety stock is present. c) A shorter lead time implies a smaller reorder point. d) There is a reorder point even if lead time and demand during lead time are constant. e) All of the above are true.

The purpose of safety stock is to: a) replace failed units with good ones b) eliminate the possibility of a stockout c) control the likelihood of a stockout due to variable demand and/or lead time. d) protect the firm from a sudden increase in demand e) eliminate the likelihood of a stockout due to erroneous inventory tally.

Which of the following is a requirement of Q systems? a) constant demand b) constant order spacing c) perpetual inventory system d) variable lead time e) all of the above

T/F: In aggregate planning, the amount of overtime and the size of the work force are both adjustable elements of capacity.

T/F: Techniques for controlling the cost of labor in services include accurate scheduling of labor hours to assure quick response to customer demand, on-call labor for unexpected demand, flexibility of labor skills for reallocation of available labor, and flexibility in rate of output or hours of work to meet changing demand.

Which of the following would most likely fall under the scope of only an operations manager? a) new product plans b) research and development c) setting inventory levels d) facility location/capacity e) capital investments

Which choice best describes level scheduling? a) Subcontracting, hiring, and layoffs to manipulate supply. b) Daily production is variable from period to period. c) Overtime is used to handle seasonal demand fluctuations. d) Inventory goes up or down to buffer the difference between and production. e) Price points are calculated to match demand to capacity.

To use revenue management strategies, a business should have which combination of costs? a) high variable and high fixed b) high variable and low fixed c) low variable and high fixed d) low variable and low fixed e) either A and b

In level scheduling, what is kept uniform from month to month? a) product mix b) production/workforce levels c) inventory levels d) demand levels e) sub-contracting levels

Revenue (or yield) management is best described: a) a situation where the labor union yields to management demands. b) a situation where management yields to labor demands c) allocation of scarce resources to customers at prices that will maximize revenue d) a process designed to increase the rate of output e) management's selection of a product mix yielding maximum profits.

Which of the following statements regarding the production order quantity is TRUE? a) It minimizes the total production costs. b) It minimizes inventory. c) It relaxes the assumption that the demand rate is constant. d) It relaxes the assumption that all the order quantity is received at the same time. e) It applies only to items produced in the firm's own production departments.

The two most basic inventory questions answered by the typical inventory model are: a) order quantity and service level b) timing of orders and order quantity c) order quantity and cost of orders d) timing of orders and cost of orders e) ordering cost and carrying cost

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? a) flexibility in rate of output or hours of work to meet changing demand b) little flexibility in worker hours to decrease the burden on management c) accurate scheduling of labor-hours to assure quick response to customer demand d) flexibility of individual worker skills that permits reallocation of available labor e) an on-call labor resource that can be added or deleted to meet unexpected demand

Effective use of MRP and other dependent demand models does not require which of the following? a) lead times b) cost of individual components c) bill of materials d) inventory availability e) master production schedule

Low-level coding means that: a) a component item is coded at the lowest level at which it appears in the BOM structure. b) the code being used is the code for the lowest level in the BOM structure. c) a final item has only a few levels 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) the lowest-paid staff member in the production department performs the coding.

Which of the following is NOT a source of variability? a) Customer demand is unknown b) Employees, machines, and suppliers produce units that conform to standards. c) Engineering drawings are inaccurate d) Employees, machines, and suppliers produce units late e) Drawings or specifications are incomplete

If the goals of JIT partnerships are met, which of the following is a result? a) Suppliers maintain a variety of customers to reduce risk. b) In-transit inventory falls as suppliers are located closer to facilities. c) For incoming goods, receiving activity and inspection are outsourced. d) In-plant inventory replaces in-transit inventory. e) All of the above are consequences of meeting the JIT partnership goals.

Which one of the following is a characteristic of a JIT partnership? a) maximal product specifications imposed on supplier b) removal of incoming inspection c) active pursuit of vertical integration d) frequent deliveries in large lot quantities e) third-party logistics never used

JIT makes quality cheaper because: a) the cost of low quality can be hidden as inventory cost b) JIT prevents long runs of defects c) JIT adds more buffers to the system d) B and C e) A, B, and C

Which of the following statements regarding MRP in services is TRUE? a) MRP only works in services for demand that is independent. b) MRP is for manufacturing only, and it is not applicable to services. c) MRP can be used in services, but only in those that offer very limited customization. d) Services such as restaurants meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling. e) None of the above is true

Which of the following is generally found in most lean environments? a) a push system for high margin items and a pull system for low margin items b) a push system for purchased parts and a pull system for manufactured parts c) a push or a pull system, depending on the rate of demand d) pull systems e) push systems

Characteristics of just-in-time partnerships do NOT include: a) produce with zero defects b) large lot sizes to save on setup costs and to gain quantity discounts. c) long-term contracts. d) removal of in-transit inventory e) focus on core competencies

If a factory wants to cut its current lot size in half, buy what proportion must setup cost change? a) Setup cost must quadruple from its current value. b) Cannot be determined c) Setup cost must double from its current value d) Setup cost must also be cut in half from its current value e) Setup cost must be cut to one fourth its current value

Which of the following is FALSE regarding the links between JIT and quality? a) If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. b) Invenotry hires bad quality; JIT immediately exposes it. c) JIT increases the cost of obtaining good quality. d) As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. e) JIT reduces the number of potential sources of error by shrinking queues and lead times.

Which choice below best describes the counterseasonal product demand option? a) developing a mix of products that smoothes out their demands b) using subcontractors only when demand is excessive c) the breaking of the aggregate plan into finer levels of detail d) lower prices when demand is slack e) producing such products as lawnmowers and sunglasses during the winter

If safety stock is desired, it should be built into which portion of MRP? a) any b) none c) raw materials d) finished goods e) either C or D

Which of the following regarding a pull system is TRUE? a) Work is pulled to the downstream stations before it is actually needed b) Manufacturing cycle time is increased c) Large lots are pulled from upstream stations d) Problems become more obvious e) None of the above is true of a pull system