Supply Demand Integration – Flashcards
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Sales and operations planning (SOP) & demand management are a part of which MPC phase?
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direction setting
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Master production scheduling (MPS) and resource planning are a part of which MPC phase?
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detailed planning
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Measurement and control are a part of which MPC phase?
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direction setting, detailed planning & execution
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Products that are part of a continuous production process (e.g., petroleum products) would most likely use which form of MPC?
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flow
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Products that are part of a one-time production process (e.g. bridges, aircraft carriers) would most likely use which form of MPC?
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project
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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
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I, II, III
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Demand management (DM) includes which of the following activities? I. Forecasting II. Product shipping III. Entering customer orders
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I and III
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Demand management is the firm's connection to which of the following entities?
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marketplace
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Sources of demand that are part of demand management include all of the following except.
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scrap products
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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
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I and II
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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
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II and III
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The customer order decoupling point is best defined as.
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the point in the supply chain where demand changes from dependent to independent
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In an engineer-to-order environment, the most likely point where customer order decoupling would take place is.
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suppliers
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In an assemble-to-order environment, the most likely point where customer order decoupling would take place is.
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work-in-process parts and components
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In a make-to-stock environment, the most likely point where customer order decoupling would take place is.
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finished goods
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In which environment is defining the customer order in terms of components and options the key focus of demand management?
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assemble-to-order
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Which of the following lists properly ranks the different environments from lowest to highest need to communicate with the customer?
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assemble-to-order, make-to-order, engineer-to-order
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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?
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531, 441
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In a make-to-stock environment, what is the key problem?
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balancing inventory levels with customer service requirements
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In an engineer-to-order environment, the forecasting process is not necessary
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false
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Sales and operations planning can be completed at which of the following levels? I. product family II. region III. organizational unit
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I, II & III
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The lifetime of a customer order (time from receiving the order until order is fulfilled) is longest in which environment.
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engineer-to-order
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The lifetime of a customer order (time from receiving the order until order is fulfilled) is shortest in which environment?
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make-to-stock
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In which environment is the demand management function least likely to provide customers with promise dates?
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make-to-stock
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Which types of data are captured and monitored by the demand management function? I. detailed product mix II. product pricing III. overall market trends
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I, II & III
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Collaborative planning, forecasting, and replenishment (CPFR) has been defined by the Voluntary Interindustry Commerce Standards Association as a process involving how many steps?
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9
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The first step in the collaborative, forecasting, and replenishment (CPFR) process is to.
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establish a collaborative relationship
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The main goal of a collaborative planning, forecasting, and replenishment (CPFR) process is to.
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reduce the variance between supply and demand
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A manufacturer of printer paper would most likely be what type of firm?
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make-to-stock
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A manufacturer of jet airplanes would most likely be what type of firm?
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make-to-order
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A local coffee house restaurant would most likely be what type of firm?
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assemble-to-order
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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
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III only
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Which of the following lists the planning decisions in order from highest to lowest aggregation level?
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strategic business unit - sales and operations planning (SOP)- master production scheduling (MPS)
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Which of the following lists the planning decisions in order from lowest to highest data processing costs?
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master production scheduling (MPS) - sales and operations planning (SOP) - strategic business unit
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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
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III only
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A forecast used for sales and operations planning is likely to cover a period of
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several months to a year
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A forecast used for master production scheduling and control is likely to cover a period of
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several days to a few weeks
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Regression analysis where the relationship between variable is a straight line is called
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linear regression
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In regression analysis, the dependent variable could be time.
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false
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In a time series analysis, time is the
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independent variable
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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
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II only
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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?
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y=10+100x
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Which of the following are possible components of time series demand? I. seasonal variation II. cyclical variation III. trend
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I, II & III
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With additive seasonal variation, the seasonal change is constant regardless of trends.
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true
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Seasonal variations are generally associated with the seasons of the year, while cyclical variations refer to other annual patterns
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true
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As forecasts are extended further into the future, the prediction internal is most likely to
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increase
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A moving-average forecast is often superior to a simple average because it considers only recent data
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true
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An exponential smoothing forecast considers all past data
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true
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In an exponential smoothing forecast, a higher level alpha will place more emphasis on recent history
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true
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Compared to a moving-average forecast, an exponential smoothing forecast places more emphasis on recent history
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can't determine without more information
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To make an exponential smoothing forecast more reactive to trends, a lower value of alpha should be used
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false
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Mean error of a forecast provides information concerning the forecast's
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bias
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Which value indicates the better forecast?
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cannot be determined
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Mean absolute deviation (MAD) measures
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magnitude of forecast errors
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Evaluating forecast accuracy requires an understanding of I. mean absolute deviation (MAD) II. Mean error (bias) III. Forecast costs
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I & II
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Assuming that forecast errors are normally distributed, what is the relationship between mean absolute deviation (MAD) and standard deviation (SD)?
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SD > MAD
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In pyramid forecasting, the "roll-up" process involves
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adding together family forecasts to determine the aggregate forecast
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In pyramid forecasting, the "fore-down" process involves
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allocating aggregate forecast changes to product families
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One of the most important ways to reflect special events (promotions, product changes, etc.) is to directly modify the product forecast.
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true
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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
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I & II
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The four fundamental issues in sales and operations planning are
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volume, mix, demand and supply
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One role of sales and operations planning is to provide early warning when demand and supply become unbalanced.
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true
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Sales and operations planning balances supply and demand at the
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volume level
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Many key sales and operations planning linkages are outside the manufacturing planning and control (MPC) system.
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true
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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.
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I and II only
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The recommended number of product groups for sales and operations planning is
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6-12
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The operations plan is a form of demand forecast.
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false
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The master production schedule disaggregates the operations plan.
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true
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The demand management function's contribution to sales and operations planning is.
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ensuring that the operations plan considers all aspect of demand.
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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
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I and II
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Capacity planning occurs during the supply planning phase of sales and operations planning
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true
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Decisions concerning the balance of supply and demand are made in the ______ phase of sales and operations planning.
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pre-SOP meeting
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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
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II and III
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A strategy that matches monthly supply to forecasted demand is
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chase
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A strategy that maintains a consistent monthly output is
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level
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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?
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625 units
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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?
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120
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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
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I and II
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The primary obligation for any functional area is to "hit the plan"
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true
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The sales and operations planning process is led by which team member?
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sales and operations planning process owner
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Product family groups should represent?
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sales' and marking's view of the market
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For the sales group, overselling the plan is as bad as underselling the plan.
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true
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Strategic business unit (SBU) planning involves grouping information by
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products and markets
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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
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I, II & III
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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
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I & III
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The master production schedule (MPS) translates the sales and operations plan (SOP) into
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a specific production plan
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The master production schedule (MPS) shows when products will physically be available to ship.
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false
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A master production schedule is.
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neither a statement of current production nor current demand
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The master production schedule (MPS) differs from forecast by considering. I. capacity limtis II. production costs III. the sales and operations plan (SOP)
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I, II & III
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The master production schedule (MPS) must be stated in terms that relate to the producible product.
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true
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The master production schedule (MPS) must be stated in terms of actual products.
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false
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In which environment is a planning bill-of-material (BOM) most likely to be used?
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assemble-to-order
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The master production schedule (MPS) considers preferred lot sizes when constructing the plan.
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true
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Cycle stock is.
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inventory carried as a result of lot size requirements
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Available-to-Promise (ATP) is likely to be least useful in which environment?
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make-to-stock
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Which formula is used to calculate the projected available inventory balance?
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projected available inventory = previous available inventory + MPS - max (forecast, actual orders)
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A planning bill of material is
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a bill of material that represents probably usage in an assemble-to-order environment
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A super bill represents average usage of components in an assemble-to-order environment.
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true
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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
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I, II & III
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When the master production schedule (MPS) is frozen for some period, changes to the plan within the period are typically prohibited.
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true
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Inside the demand fence, which of the following are true?
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available-to-promise (ATP) calculations ignore forecasts
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Inside the planning fence, which of the following are true?
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changes to production orders are not allowed
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One key to avoiding an overstated master production schedule (MPS) is to
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force the MPS to match the production plan (in terms of total units)
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Supporting information for material requirements planning (MRP) systems includes which of the following? I. Bills of material II. Routing file III. Inventory status data
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I & III
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Material requirements planning (MRP) takes place in the front-end systems of manufacturing planning and control system.
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false (in the engine)
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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
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I & II
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In a material requirements planning (MRP) system, gross requirements (demand) are.
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anticipated future usage or demand for the item during each period
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In a material requirements planning (MRP) system, scheduled receipts are.
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existing replenishment orders for the item due at the beginning of each period
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In a material requirements planning (MPS) system, the projected available balance is
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current and projected inventory status for the item at the end of the period
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In a material requirements planning (MRP) system, gross requirements are time phased which means which of the following?
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requirements from all periods are stated on a period-by-period basis
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The precedent relationship shows.
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the order in which production steps must be accomplished
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Front scheduling logic starts each step of the process as late as possible
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false (early)
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Back scheduling logic starts each step of the process as late as possible.
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true
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A lot-for-lot order policy generates orders for a fixed quantity, independent of actual requirements.
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false
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Processing all material requirements planning (MRP) records in a single computer run is called.
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regeneration
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Safety stock is an inventory buffer of stock over and above requirements.
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true
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Safety lead time involved inflating lead times to ensure stock availability.
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false
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In a system where timing of production is uncertain, it would be more appropriate to utilize.
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safety lead time
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Information concerning the specific source of demand is called
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pegging information
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A firm planned order (FPO) can be changed by the material requirements planning (MRP) system without human involvement.
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false
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A commitment to an external supplier (e.g. a purchase order) is represented in the material requirements planning (MRP) system by a
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schedule receipt
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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
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II only
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Order launching occurs when a planned order release is in the action bucket.
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true
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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?
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10-20
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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
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I & II
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Which type of inventory occurs as a result of the time needed to physically move goods from one location to another?
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transit stock
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Which type of inventory occurs as a result of seasonal patterns of demand?
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anticipation stock
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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
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I & II
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A measurement that relates inventory levels to product sales?
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inventory turnover
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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
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I, II & III
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Which of the following are NOT a part of inventory carrying costs? I. cost of capital II. delivery charges III. product obsolescence
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II
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If the cost of ordering decreases, what happens to the economic order quantity (EOQ)?
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decreases
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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?
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85
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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?
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165
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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?
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1200
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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?
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1850
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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?
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160
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In ABC analysis, the A group will likely contain the most items.
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false (c)
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In ABC analysis, the C group will likely have the highest usage volume (in dollars).
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false (a)
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Order point inventory control methods are generally used for items with what type of demand?
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independent
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Which type of inventory occurs as a result of order quantities being larger than needed to satisfy immediate requirements?
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cycle stock
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