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144 Cards in this Set

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What is wealth?
Wealth comes from natural resources. We increase wealth by adding value to a product or service.
What are the three major external factors affecting companies today?
World competition
Quality
Customer Expectations
What are some characteristics that provide value to the customer?
Price
Quality
Delivery
Pre and post sale service
Flexibility
Define 'Order Qualifier'
Competitive characteristics needed to be a viable competitor.
Define 'Order Winners'
Order Winners are competitive characteristics that cause customers to choose a particular firm's products and services.
Give examples of 'Order Winners'
Price/cost, quality, delivery speed, delivery reliability, product design, flexibility, after-market service and image.
Define 'Lead Time'
Lead Time - A span of time required to perform a process.
Define 'Delivery Lead Time'
Delivery Lead Time - The time from the receipt of a customer order to the delivery of the product.
Define 'cummulative lead time'
Cummulative Lead Time - The longest planned length of time to accomplish the activity in question.
Name four stategies that can be used to reduce the delivery lead time
Engineer to order
Make to order
Assemble to order
Make to stock
The customer's specifications require unique engineering design or significant customization

A) Make-To-Stock
B) Make-To-Order
C) Assemble-To-Order
D) Engineer-To-Order
D) Engineer-To-Order
The manufacturer does not start to manufacture the product until a customer order is received. There is little design time required and inventory is held as raw material

A) Make-To-Stock
B) Make-To-Order
C) Assemble-To-Order
D) Engineer-To-Order
B) Make-To-Order
The product is made from standard components that the manufacturer can inventory and assemble according to a customer order

A) Make-To-Stock
B) Make-To-Order
C) Assemble-To-Order
D) Engineer-To-Order
C) Assemble-To-Order
The supplier manufactures the goods and sells from finished goods inventory.

A) Make-To-Stock
B) Make-To-Order
C) Assemble-To-Order
D) Engineer-To-Order
A) Make-To-Stock
Which manufacturing strategy has the shortest delivery lead time?

A) Make-To-Stock
B) Make-To-Order
C) Assemble-To-Order
D) Engineer-To-Order
A) Make-To-Stock
Which manufacturing strategy has the shorter delivery lead time?


B) Make-To-Order
C) Assemble-To-Order
C) Assemble-To-Order
What four activities are involved in production planning?
Forecasting
Master Planning
Material Requirements Planning
Capacity Planning
Based on the flow of materials, there are three basic plant layouts. What are they?
Product Layout
Process Layout
Project Layout
There are three ways to organize manufacturing processes. What are they?
Continuous Flow
Intermittent Manufacturing
Repetitive Manufacturing
What are three advantages of the product layout?
Little build-up occurs in WIP inventory.
Throughput and manufacturing lead times are short.
Unit cost is generally lower.
The Process Layout is best used in what type of manufacturing?
Intermittent Manufacturing (also refered to as job lot or batch lot manufacturing)
Describe some characteristics of the Process Layout
Lots or batches are produced intermittently

Workstations can process many different parts

General purpose machinery is used

Departments are based on similar types of skills and equipment

Work moves only to those stations required and skips the rest

Product or volume can be changed relatively easily

Production and inventory control are complex and expensive

WIP levels are high

Lead times are longer
The Project Layout is best used in what type of manufacturing?
The Project Layout is best used for large, complex projects: Large buildings, ships, aircraft, etc.
What are some sources of 'Demand'?
Customers, Spare Parts, Promotions, Intrcompany, other.
Demand that is demonstrated to be moving in a particular direction is described as a?
Trend
Variation in demand based on the season is charateristically called what?
Seasonality
A moving average forecast can be used to filter out random variation.

True
False
True
What is the formula for calculating a seasonal index?
Seasonal index = period average sales divided by average sales for all periods.
Production Planning is concerned with which aspects?
Planning for each PRODUCT FAMILY
Meeting desired inventory levels
Determining RESOURCES needed
Comparing with available resources
What is the Chase strategy?
Demand Matching: Produce amounts that are demanded at any time.
What are the three basic strategies that can be used indeveloping a production plan?
Match/Chase

Level Production

Combination/Hybrid
Which prodution strategy continuously produces an amount equalto the average demand?
Level Production Strategy
What are the characterstics of Make-To-Stock production?
Demand is constant & predictable

Only a few product options exist

Delivery times are shorter than time needed to make the product.
How do you calculate Ending Inventory?
Ending Inventory = (Opening Inventory + Received/Produced Inventory) - Shipped/Used Inventory.
Opening inventory = 400 units
Demand = 1,100 units
Production = 1,300 units
Ending inventory = ?
Ending inventory = 400 + 1300 = 1700 - 1100 = 600 units
States requirements for individual end items and options by date and quantity
Master Production Schedule
Disaggregates the production plan
Master Production Schedule
What are the objectives of Master Scheduling?
Maintain desired level of Customer Service

Make best use of resources

Keep inventories at desired levels
Which basic production planning strategy will build inventory and avoid the costs of excess capacity?

A. Chase Strategy
B. Level Production Strategy
C. Cycle counting strategy
D. Demand matching strategy
B. Level Production Strategy
Opening inventory = 100
Sales = 500
Ending inventory = 200
Production = ?
Production = 600
Which determines the materials required?

A. Production Plan
B. MPS
C. MRP
D. Rough-cut capacity plan
C. MRP
Which establishes and maintains PRIORITIES?

A. Production Plan
B. MPS
C. MRP
D. Rough-cut capacity plan
C. MRP
Why is manufacturing important to the economy?

A. It generates wealth

B. It uses natural resources and prevents waste.

C. It decreases empoyment and generates wealth.

D. It prevents waste and decreases employment
A. It generates wealth
In a traditional maufacturing enviroment, which of the following objectives are in conflict?

A. Maiximizing customer service and increasing inventory investment

B. Minimizing production costs and increasing inventory investment

C. Minimizing production costs and decreasing inventory investment

D. Minimizing customer service and decreasing inventory investment
C. Minimizing production costs and decreasing inventory investment
Which of the following statments is true?

A. The objectives of marketing and production can be met with higher inventories

B. The obejctives of marketing and finance can be met with higher inventories

C. The obejectives of marketing and production can be met with lower inventories

D. The objectives of marketing and finance can be met with lower inventories
A. The objectives of marketing and production can be met with higher inventories
Which of the following strategies produces the longest delivery lead time?

A. Make to order

B. Assemble to order

C Make to stock

D. Continuous manufacturing
A. Make to order
Which of the following is a major objective of materials management?

A. Provide sufficient equitable employment

B. Provide the required level of customer service

C. Support cost accounting by decreasing inventory turns

D. Provide cost information for management decisions
B. Provide the required level of customer service
Which of the following are primary activities of manufacturing planning and control?

A. Inventory management and cost information.

B. Sales support and cost information.

C. Production planning and inventory management.

D. Sales support, implementation and control.
C. Production planning and inventory management.
Which of the following is an activiy of physical supply/distribution?

A. Transportation

B. Work in process

C. Production activity control

D. Materials requirements planning.
A. Transportation
Which of the following statements is most accurate?

A. Marketing objectives can be met with low inventories and disruptions to production.

B. Finance objectives can be met with disruptions to production of high inventories.

C. Production objectives can be met with high customer service and no disruptions to production.

D. The conflict between marketing, production and finance centers on customer service, disruption to production and inventory levels.
B. Finance objectives can be met with disruptions to production of high inventories.
Which of the following statements is true about the product layout (continuous process)?

A. Workstations are located accoding to the type of machinery.

B Workflow is lumpy

C. A wide variety of different products can be produced.

D. There is little build-up of WIP
D. There is little build-up of WIP
Which of the following statments is true regarding process layout (intermittent manufacturing)?

A. Capital costs are generally higher than for product layout.

B. Special purpose machinery is used.

C. Each workstation must be flexible.

D. There is little build up of WIP
C. Each workstation must be flexible.
Which of the following is a characteristic of demand?

A. Mean absolute variation

B. Seasonal variation

C. Average variation

D. Standard deviation
B. Seasonal variation
Product A is made from components B and C. Component B is made from parts D and E. Which items should be forecast?

A. Only A

B. A,B, and C

C. D and E

D. B,C,D and E
A. Only A
Which of the following is the best statement about the general principles of forecasting?

A. Forecasts are more accurate for individual items than for groups of items.

B. Forecasts are more accurate for distant periods of time

C. Every forecast should include and estimate of error.

D. Forecasts are usually accurate.
C. Every forecast should include and estimate of error.
What important assumption is made about statistical (quantitative) forecasting methods?

A. The past is a valid indicator of the future.

B. Demand trend is seldom linear

C. Seasonal variations are small

D. Random variations are small
A. The past is a valid indicator of the future.
Which forecasting technique takes the average demand for some past number of periods?

a. Trend time average

B. Moving average

C. Demand smoothing

D. Qualitative analysis
B. Moving average
Why is it important to monitor the forecast?

A. To compare the actual sales with the forecast.

B. To improve our forecasting methods.

C. To utilize actual sales data.

D. To satisfy marketing's need to know.
B. To improve our forecasting methods.
Which of the following statements is most accurate?

A. Demand fluctuations that depend on the time of the year, week, or day are called trend.

B. The seasonal index is an estimate of how much the demand during the season will be above or below the average demand.

C. Seasonality ALWAYS occurs in summer, winter, spring and fall.

D. Random variation is constant from period to period.
B. The seasonal index is an estimate of how much the demand during the season will be above or below the average demand.
Wich of the following causes forecast error?

A. Random variation from the average demand.

B. Errors in monitoring the forecast.

C. Differences in lead times

D. Differences between sales and demand.
A. Random variation from the average demand.
Which of the following statements is most accurate?

A. Independent demand items should be forecast.

B. A forecast for sales next year will not be as accurate s a forecast for a year from now.

C. Forecasts for families of products should be built up from individual product forecasts.

D. Forecasts are almost always accurate.
A. Independent demand items should be forecast.
Which of the following statements is most accurate?

A. If we wish to forecast demand, past sales must be used for the forecast.

B. Forecasts made in dollars for total sales should be used by manufacturing

C. Forecasts should e made for individual items in a group.

D. The circumstances relating to demand data should be recorded.
D. The circumstances relating to demand data should be recorded.
Why is it important to monitor the forecast?

A. To compare the actual sales with the forecast.

B. To improve our forecasting methods.

C. To utilize actual sales data.

D. To satisfy marketing's need to know.
B. To improve our forecasting methods.
Which of the following statements is most accurate?

A. Demand fluctuations that depend on the time of the year, week, or day are called trend.

B. The seasonal index is an estimate of how much the demand during the season will be above or below the average demand.

C. Seasonality ALWAYS occurs in summer, winter, spring and fall.

D. Random variation is constant from period to period.
B. The seasonal index is an estimate of how much the demand during the season will be above or below the average demand.
Wich of the following causes forecast error?

A. Random variation from the average demand.

B. Errors in monitoring the forecast.

C. Differences in lead times

D. Differences between sales and demand.
A. Random variation from the average demand.
Which of the following statements is most accurate?

A. Independent demand items should be forecast.

B. A forecast for sales next year will not be as accurate s a forecast for a year from now.

C. Forecasts for families of products should be built up from individual product forecasts.

D. Forecasts are almost always accurate.
A. Independent demand items should be forecast.
Which of the following statements is most accurate?

A. If we wish to forecast demand, past sales must be used for the forecast.

B. Forecasts made in dollars for total sales should be used by manufacturing

C. Forecasts should e made for individual items in a group.

D. The circumstances relating to demand data should be recorded.
D. The circumstances relating to demand data should be recorded.
Which basic production planning strategy will build inventory and avoid the costs of excess capacity?

A. Chase strategy

B. Level production strategy

C. Cycle counting strategy

D. Demand matching strategy
B. Level production strategy
For the purposes of production planning, product families should be established on the basis of?

A. Market segments

B. Similarity of manufacturing process

C. The availability of materials

D. The availability of machinery
B. Similarity of manufacturing process
If the opening inventory is 100 units, sales are 500 units and the ending inventory is 200 units, what will manufacturing produce?

A. 300 units

B. 400 units

C. 500 units

D. 600 units
D. 600 units
Under which of the following circumstances will firms generally make to stock?

A. Demand is unpredictable

B. Many product options exist

C. Required delivery times are shorter that the time needed to make the product.

D. Customers require special engineering
C. Required delivery times are shorter that the time needed to make the product.
The information needed to develop an MPS will come from which of the following?

A. The capacity requirements plan

B. The forecast of individual end items

C. Production activity control

D. the material requirements plan
B. The forecast of individual end items
Which of the following is a characteristic of the MPS?

A. It facilitates forecasting

B. It wokrs with families of products

C. It is an agreed upon plan between production and marketing/sales

D. It cannot be used for order promising
C. It is an agreed upon plan between production and marketing/sales
Which of the following is an objective of an MPS?

A. To maximize utilization of equipment

B. To keep the sales department happy

C. To maintain the desired level of customer service.

D. T minimize inventory investment.
C. To maintain the desired level of customer service.
Which of the following statements is most accurate about the MPS?

A. It is an agreed upon plan between finance and manufacturing.

B. If it is poorly done, we can expect past due schedules and unreliable delivery promises.

C. It is a plan for families of products that manufacturing expects to make over some period in the future.

D. It porvides input to the production plan.
B. If it is poorly done, we can expect past due schedules and unreliable delivery promises.
What is the portion of inventory or production that is not committed to customer orders called?

A. Free stock

B. Available to promise

C. Excess production

D. Waste
B. Available to promise
which of the following is true about time fences in an MPS system?

A. Changes far out in the planning horizon can be made with little or no cost to manufacturing

B. In the frozen zone, capacity and materials can easily be committed to new orders.

C. Changes in the near future on the planning horizon are less costly to make than changes in the distant future.

D. The master planner should be authorized to make changes in the frozen zone.
A. Changes far out in the planning horizon can be made with little or no cost to manufacturing
Which of the following is an objective of material requirements planning?

A. Keep the factory busy

B. Keep priorities current

C. Determine the forecast

D. Minimize inventory investment
B. Keep priorities current
What is the name of the set of priority planning techniques for planning component items below the end-item level?

A. Master scheduling

B. Material requirements planning

C. Capacity planning

D. Production control
B. Material requirements planning
Which of the following is a major input to an MRP system?

A. The production plan

B. The capacity plane

C. Shop floor activity planning and control

D. The master production schedule.
D. The master production schedule.
What is the name of the document that shows the component parts and the number of parts needed to make one of an assembly or subassembly?

A. A route sheet

B. A material requirments plan

C. A bill of material

D. A material requisition
C. A bill of material
Which of the following statements is true?

A. The same part number can be used to identify similar products.

B. A part has one, and only one, part number.

C. The same part on different bills of material will have a different number.

D. An item can be either a parent or a component, but not both.
B. A part has one, and only one, part number.
Which is the term for the ability to relate the demand for an item shown on an MRP record back to the parent causing the demand?

A. Where-used

B. Relating

C. Pegging

D. Item planning
C. Pegging
Which statement is correct?

A. Planned order receipts show when the order is needed.

B. When an order is released, it becomes a planned order.

C. Scheduled receipts show when goods were put into inventory.

D. Gross requirements come from the planned order receipt of the parent.
A. Planned order receipts show when the order is needed.
A work center consist of two machines working eight hourss a day and five days a week. Historically, utilization has been 80% , and efficiency has been 90%. To the neares hour, what is the rated capacity?

A. 80 hurs

B. 58 hours

C. 40 hours

D. 30 hours
B. 58 hours
What term indicates the percentage of time the work center is active compared to the available time?

A. Efficiency

B. Effectiveness

C. Utilization

D. Uptime
C. Utilization
What term is used for the ratio of standard hours of work produced to hours actually worked?

A. Efficiency

B. Effectiveness

C. Utilization

D. Uptime
A. Efficiency
What term is used for calculating (available time) x (utilization) x (efficiency) ?

A. Effectiveness

B. Useful capacity

C. Demonstrated capacity

D. Rated capacity
D. Rated capacity
Which of the following shows the capacity required at each work center based on planned and released orders for each time period of the plan?

A. Work center profile

B. Load profile

C. Scheduled order profile

D. Work-to-be-done report.
B. Load profile
Which of the following must production activity control do when planning the flow of work?

A. Be sure the material and tooling needed are available.

B. Advise the plant supervisor of future orders

C. Refer to the production plan for what orders to run

D. Complete a material requisition plan
A. Be sure the material and tooling needed are available.
Which of the following is concerned with very short-term detailed planning of the flow of orders through manufacturing?

A. Production planning

B. Master production scheduling

C. Material requirements planning

D. Production activity control
D. Production activity control
Which of the following is an element of manufacturing lead time?

A. Design time

B. Delivery lead time

C. Wait time

D. Purchase lead time
C. Wait time
What is the name given to a scheduling system in which the last operation on a routing is scheduled first and for completion on the due date?

A. Roward scheduling

B. Backward scheduling

C. Infinite scheduling

D. Finite scheduling
B. Backward scheduling
Which of the following statements is most accurate?

A. Work centers located after a bottleneck should work at full capacity.

B. A time buffer should be established after a bottleneck.

C. Work centers feeding a bottleneck shoud work at full capacity.

D. A bottleneck will control the throughput of all products processed by it.
D. A bottleneck will control the throughput of all products processed by it.
Which of the following statements is most accurate about inventory management?

A. Inventories and produciton must be managed together.

B. Inventory is not important at the production planning level.

C. Inventories are usually insignificant on the balance sheet.

D. Inventory does not cost much to carry.
A. Inventories and produciton must be managed together.
What is the name of materials used in the production process that do not become part of the product/

A. Raw materials

B. Work in process

C. Finished goods

D. Maintenance, repair, and operating supplies.
D. Maintenance, repair, and operating supplies.
What is the name given to inventories of items that are purchased or manufactured in quantities greater than needed immediately?

A. Fluctuation inventory

B. Lot size inventory

C. Transportation inventory

D. Scheduled receipts
B. Lot size inventory
Which of the following company objectives are in conflict?

A. Maximum customer service and low-cost plant operation

B. Low-cost plant opeation and cash flow

C. Maximum inventory investment and customer service

D. Cash flow and profitability
A. Maximum customer service and low-cost plant operation
Which of the follwing costs will increase if order quantity is increased?

A. Annual cost of carrying inventory

B. Cost of ordering

C. Cost of manufacturing operations

D. Cost of customer service
A. Annual cost of carrying inventory
Which of the folowing are costs of carrying inventory?

A. Capital costs and production control costs.

B.Capital costs and storage costs

C. Production control costs and purchase costs

D. Storage costs and purchasing costs
B.Capital costs and storage costs
Which of the following are considered ordering costs?

A. Production control costs

B. Capital costs

C. Risk costs

D. Obsolescence costs
A. Production control costs
Which of the follwoing equations is correct?

A Assets = Liabilities - owners' equity

B. Income = Revenue - liabilities

C. Owners' equity = Assets - liabilities

D. Revenue = Cost of goods sold - general and administrative expenses
C. Owners' equity = Assets - liabilities
If the annual cost of goods sold is $10 million and the average inventory is $2.5 million, what is the turns ratio?

A. $7.5 million

B. .25

C. 2.5

D. 4
D. 4
Which of the following costs is relevant to inventory management decisions?

A. Run costs

B. Storage costs

C. Marketing costs

D. New product development costs
B. Storage costs
Which of the following statements best describes stockkeeping units?

A. sodas in a 6-pack and 12-pack are the same SKU because the cans are the same SKU.

B. White shirts of different sizes but in the same size box are the same SKU

C. Wires of different guages that are stocked in reels are the same SKU

D. Two white shirts in the same inventory but of different sizes or styles would be different SKU's
D. Two white shirts in the same inventory but of different sizes or styles would be different SKU's
If the order quantity is increased, which of the following occurs?

A. The cost of carrying inventory decreases and the cost of ordering increases

B. The cost of carrying inventory increases and the cost of ordering decreses

C. The cost of carrying inventory increases and the cost of ordering increases

D. The cost of carrying inventory decreases and the cost of ordering decreases
B. The cost of carrying inventory increases and the cost of ordering decreses
In developing the standard economic order quantity (EOQ) formula, which of the following assumptions are made?

A. Demand for the item is relatively uniform.

B. Rpelnishment is in lots or batches that arrive all at once.

C. Ordering and carrying costs are constant and known

D. All of the above are assumed
D. All of the above are assumed
Which of the following statements is best?

A. Order point = DDLT + SS

B. Average inventory = (Q+SS)/2

C. Safety stock is always needed

D. Safety stock = order point+order quantity
A. Order point = DDLT + SS
Safety stock will depend on which of the following?

A. Variablility of demand

B. Cost of carrying inventory

C. Cost of placing an order

D. Product obsolescence
A. Variablility of demand
Assuming that the cost per order and the demand are constant, what effect will increasing the order quantity have on the annual ordering cost?

A. Ordering cost will decrease

B. Ordering cost will increase

C. Ordering cost will remain the same

D. Ordering cost will increase at a decreasing rate
A. Ordering cost will decrease
What effect will increasing the order quantity have on the annual cost of carrying inventory?

A. Annual cost of carrying inventory will increase

B. Annual cost of carrying inventory will decrease

C. Annual cost of carrying inventory will remain the same

D. Annual cost of carrying inventory is not affected by the order quantity.
A. Annual cost of carrying inventory will increase
Wha type of inventory record system keeps a continuous account of transactions as they occur?

A. Perpetual inventory system

B. Periodic inventory system

C. Two-bin system

D. Safety stock system
A. Perpetual inventory system
If the lead time is one week, the review period one week, the average demand 100 units per week and the safety stock 50 units, the target level will be?

A. 150 units

B. 200 units

C. 250 units

D. 300 units
C. 250 units
Which of the following is an advantage of cycle counting?

A. Timely detection and correction of problems

B. Reduction of direct labor costs

C. Use of spare labor

D. Replenishment of inventory
A. Timely detection and correction of problems
Which of the following statements is most accurate?

A. About 20% of the items will usually account for about 80% of the total value.

B. A items should have the loosest possible control.

C. The general rule for using the ABC approach is to have plenty of everything in stock.

D. C items account for about 50% of the total value.
A. About 20% of the items will usually account for about 80% of the total value.
Which of the following statements is best?

A. A items usually account for about 50% of the total usage value.

B. About 50% of the items usually account for 5% of the value.

C. C items should be given top priority in inverntory management.

D. All inventory items should be managed in the same way.
B. About 50% of the items usually account for 5% of the value.
Which is the best statement regarding floating location systems?

A. goods are always stored in the same location.

B. The same SKU may be stored in several locations at the same time.

C. An informal information system can be used.

D. The system is appropriate for all warehouses.
B. The same SKU may be stored in several locations at the same time.
Which of the following is a major objective of distribution inventory management?

A. To provide the required level of customer service

B. To minimize the costs of warehouse space

C. To always have enough of everything on hand so there are no stockouts

D. To minimize labor costs
A. To provide the required level of customer service
Which of the following is not an activity in a physical distribution system?

A. Distribution inventory

B. Protective packaging

C. Shop floor control

D. Order processing
C. Shop floor control
Which of the following activities is NOT considered a function of physical distribution?

A. Transportation

B. Production control

C. Distribution inventory

D. Warehousing
B. Production control
Which of the following statements is best?

A. Physical distribution provides a bridge between marketing and production.

B. Physical distribution is a factor creating customer demand.

C. Replenishment orders to replace field warehouse stocks will not affect production.

D. Both A and B are true
D. Both A and B are true
Considering the service desired and the relative cost of the item, which of the following would you most likely ship by truck?

A. Regular shipments of cut flowers direct to a florist shop

B. Regular shipments of iron ore

C. Regular shipments of grain

D. Emergency maintenance parts.
A. Regular shipments of cut flowers direct to a florist shop
Total line-haul costs will vary directly with which of the following?

A. the distance moved

B. The packaging

C. Customer discounts

D. The perishability of the goods
A. the distance moved
What is the name for the consolidation of several units into a larger unit for less handling?

A. Unitization

B. Consolidation

C. Cube utilization

D. Packaging
A. Unitization
A fishbone diagram is an example of which of the following?

A. A cost buildup method

B. Organization method

C. Capability analysis

D. Another name for Pareto analysis
B. Organization method
Which of the following will ensure quality in manufactured parts?

A. Applying as much automation as possible

b. Inspecting all parts for known defectives

C. Improving customer warranty coverage

D. Reducing the variation in the process
D. Reducing the variation in the process
Which of the following statements is true?

A. In the long run, quality is more expensive but necessary for survival in today's business world.

B. Most companies spend less than 10% on quality-related activities.

C. In the long run, quality is less expensive

D. Quality-related costs (failure costs) are an integral part of doing business and should be built into every product cost buildup.
C. In the long run, quality is less expensive
Which of the following statements is true regarding Pareto analysis?

A. It separates the significant few fromt the trivial many.

B. It wuses the six categories of quality.

C. It is an extension of the 50-50 rule of quality.

D. It assigns weighted costs associated with internal versus external failure costs.
A. It separates the significant few fromt the trivial many
Which of the following statements is best regarding building quality into products?

A. It is ver difficult to do.

B. It is most easily accomplished through automation.

C. It is best accomplished by production workers.

C. It is the responsibility of the quality inspectors.
C. It is best accomplished by production workers.
Which of the follwing is an objective of purchasing?

A. To keep many sources of supply available to ensure competitive pricing.

B.To control budgetary expenditures of all employees through sound purchase order control

C. to obtain goods and services of the required specification and quality.

C. To ensure that goods are always purchased at the lowest price.
C. to obtain goods and services of the required specification and quality.
In a purchasing system, which of the following originates with the department or person who will be the ultimate user?

A. A purchase requisition

B. A purchase order

C. Vendor selection

D. A request for quotation
A. A purchase requisition
When an invoice is received for payment, it is compared with which of the following documents before payment is made?

A. The bill of lading

B. The original purchase order

C. the purchase requisition

D. The account debit memo posted at the time of entry
B. The original purchase order
Which of the following would be considered the most important factor in supplier selection?

A. Proximity to the plant

B. Lowest price

C. Product quality

D. Reciprocal arrangements
C. Product quality
A control chart is primarily used to determine which of the following?

A. The percentage defective in the goods being produced

B. The specification limits

C. The capability of the process

D. Normal variation versus assignable variation
D. Normal variation versus assignable variation
Which of the following statements is true?

A. Cost buildup and storage add value to a product.

B. Value starts in the marketplace.

C. cost and value are interchangeable terms.

D. Just-in-Time means having product always ready for the customer.
B. Value starts in the marketplace.
Which of the following will happen if a company stadardizes the components that are used in different models?

A. Waste will be reduced

B. the number of product options available to the customer will be reduced.

C. General-purpose equipment will be used more frequently in production.

D. Production runs will be reduced.
A. Waste will be reduced
Which of the following statements is true regarding JIT?

A. It is a philosphy that relates to the way in which a manufacturing company organizes and operates its business.

B. It involves getting the goods to the customer as fast as possible at all costs.

C. It is a culturally based method of management

D. It is concerned with adding cost to the product
A. It is a philosphy that relates to the way in which a manufacturing company organizes and operates its business.
Which of the follwing statements is best regarding employeed empowerment?

A. Management is relieved of the responisibility for decisions thae company makes.

b. Employees are empowered to set their wage rates and hours of work.

C. line employees are given more authority to make decisions.

D. Decision-making power is concentrated in a small, upper-level management group.
C. line employees are given more authority to make decisions.
Which of the follwoing is an advantage of work cells?

A. Maximum machine utilzation

B. Simplified production activity control

C. Larger batches and lower unit costs

D. Reduced worker skills required
B. Simplified production activity control
Which of the following statements is true regarding total productive maintenance?

A. Skilled mechanics are used to ensure proper setup of every die change.

B. Cleaner-inspectors are used to ensure that every machine is ready for work at all times.

C. Operators report regularly to management of maintenance productivity.

D. Machine operators take responsibility for most of the routine machine maintenance.
D. Machine operators take responsibility for most of the routine machine maintenance.
Which of the following statements is true regarding JIT and MRP?

A. With JIT in place, MRP is no longer needed.

B. By increasing the number of levels in the bill of material, MRP becomes just like JIT.

C. MRP is used for planning, while JIT is used to put the plan into effect.

D. JIT is the same as a bucketless MRP system.
C. MRP is used for planning, while JIT is used to put the plan into effect.
The quantity in a JIT pull signal

A. Is always the same as the upstream pull signal

B. Is always one

C. Can be any quantity

D. Often includes a small safety factor
C. Can be any quantity
Which of the following statements is true regarding the relationship with suppliers in a JIT environment?

A. All cost reductions will be awarded directly to the buyer.

B. short-term contracts for multiple small deliveries will be used.

C. Planning becomes more erratic and difficult.

D. The supplier is viewed as an upstream work center.
D. The supplier is viewed as an upstream work center.
TQM can educe batch sizes by

A. Reducing lead time

B. Using statistical analysis and destructive testing

C. Increasing per-order costs

D. Lowering fixed costs associated with batch-size calculations.
D. Lowering fixed costs associated with batch-size calculations.