Qdc1 - Supply Chain

Front 1

The three types of flow that need to be managed are:

Back 1

product and service flow, information flow, and financial flow.

Front 2

What are the 6 key tactical responsibilities of supply chain management?

Back 2

Forecasting: Prepare and evaluate forecasts. Sourcing: Choose suppliers and some make-or-buy decisions.
Operations planning: Coordinate the external supply chain and internal operations.
Managing inventory: Decide where in the supply chain to store the various types of inventory (raw materials, semifinished goods, finished goods).
Transportation planning: Match capacity with demand.
Collaborating: Work with supply chain partners to coordinate plans.

Front 3

What are the 8 key operational responsibilities of supply chain management?

Back 3

Scheduling: Short-term scheduling of operations and distribution. Receiving: Management of inbound deliveries from suppliers. Transforming: Conversion of inputs into outputs. Order fulfilling: Linking production resources and/or inventory to specific customer orders. Managing inventory: Maintenance and replenishment activities. Shipping: Management of outbound deliveries to distribution centers and/or customers. Information sharing: Exchange of information with supply chain partners. Controlling: Control of quality, inventory, and other key variables and implementing corrective action, including variation reduction, when necessary.

Front 4

elements of supply chain management:

Back 4

customers, forecasting, product and service design, processing, inventory, purchasing, suppliers, location and logistics

Front 5

The current interest in supply chains is due to a variety of factors. Among them are:

Back 5

increased competitive pressures, increased levels of outsourcing, increasing transportation costs, increasing globalization, and the need to manage inventories

Front 6

___________is concerned not only with the movement of materials, but also with the movement of information in a supply chain.

Back 6

Logistics

Front 7

involves processing returned goods, which generally involves sorting, examining/testing, restocking items that are in good condition, repairing defectives, reconditioning products, recycling materials, and disposing of obsolete or hazardous materials

Back 7

Reverse Logistics

Front 8

The goal of reverse logistics management is to

Back 8

recapture or create value in returned goods, or to properly dispose of items of goods that cannot be resold.

Front 9

Performance drivers of supply chain management include

Back 9

quality, cost, flexibility, information, inventory velocity and customer service.

Front 10

The benefits of effective supply chain management include:

Back 10

lower inventories, lower costs, higher productivity, greater agility, shorter lead times, higher profits, and greater customer loyalty.

Front 11

Possible challenges to successfully implementing a supply chain include

Back 11

barriers to the integration of separate organizations,
getting top management “on board,”
coping with inventory and transportation trade-offs,
coping with lead time and transportation cost trade-offs,
coping with product variety and inventory trade-offs,
coping with cost and customer service trade-offs, and
dealing with small businesses.

Front 12

responsible for selecting suppliers that can reliably deliver quality goods and or services in a timely manner in addition to establishing mutually beneficial relationships with suppliers

Back 12

purchasing

Front 13

is responsible for obtaining the material inputs for the operating system

Back 13

purchasing

Front 14

Purchasing objectives are to

Back 14

determine (from operations) the quality, quantity and timing requirements;
to obtain the best possible price; (not necessarily the lowest price, because other factors such as quality, flexibility, ethics, timely deliveries, and flexibility are also important) to maintain good relations with vendors,
to maintain sources of supply; and to be knowledgeable on prices, new products and new services

Front 15

lets companies reduce overhead by shifting responsibility for owning, managing, replenishing inventory to vendors.

Back 15

Vendor-managed inventory (VMI)

Front 16

involves looking at price, quality, financial stability, location, and the degree to which a supplier is willing to be flexible about product changes, and the supplier’s lead times and on-time delivery.

Back 16

Evaluating sources of supply (vendor analysis)

Front 17

Cross docking occurs when ships are between two docks so they can be unloaded from both sides, thereby cutting unloading time in half.
A) True
B) False

Back 17

B) False
Feedback: Cross docking occurs when the cargo from an inbound truck if offloaded "across a loading dock" and onto an outbound truck.

Front 18

Every business organization is part of a supply chain.
A) True
B) False

Back 18

A) True

Front 19

Inventory velocity refers to the rate at which inventory moves through the supply chain.
A) True
B) False

Back 19

A) True

Front 20

Outsourcing can reduce some of the need for actively managing a supply chain.
A) True
B) False

Back 20

B) False
Feedback: Outsourcing is one reason for the increased need for managing the supply chain.

Front 21

Logistics involves the flow of goods and the flow of information in a supply chain.
A) True
B) False

Back 21

A) True

Front 22

Active RFID requires more worker involvement than passive RFID, which can operate independently.
A) True
B) False

Back 22

B) False
Feedback: Neither requires much worker involvement.

Front 23

CPFR depends on centralized purchasing for its success.
A) True
B) False

Back 23

B) False
Feedback: CPFR stands for collaborative planning, forecasting, and replenishment.

Front 24

Service organizations often have shorter supply chains than manufacturing organizations.
A) True
B) False

Back 24

A) True

Front 25

A key different between active and passive RFID tags is that active tags have a power supply.
A) True
B) False

Back 25

A) True

Front 26

An important goal of purchasing is to obtain low prices for goods and services.
A) True
B) False

Back 26

B) False
Feedback: Price is only one of several important factors, and might not be the most important. Other factors include quality, reliability, flexibility, and lead time.

Front 27

Supplier audits are intended to keep current on suppliers' production or service capabilities.
A) True
B) False

Back 27

A) True

Front 28

Supply chain visibility is enhanced when supply trucks have a company's name prominently displayed.
A) True
B) False

Back 28

B) False
Feedback: Visibility refers to the ability of supply chain partners to access sales and inventory records and other aspects of supply chain partners' operations.

Front 29

Fill rate refers to the rate at which goods are loaded onto ships or trucks.
A) True
B) False

Back 29

B) False
Feedback: The fill rate is the percentage of demand that is filled from supply on hand.

Front 30

E business enhances the ability of small businesses to compete with large businesses.
A) True
B) False

Back 30

A) True

Front 31

VMI is a way that companies can reduce costs related to replenishing inventory.
A) True
B) False

Back 31

A) True
Feedback: Vendors manage replenishment with their employees.

Front 32

The term bullwhip effect is most closely related to:
A) assertive customers
B) demand variations
C) inventory turnover
D) return of inventory
E) inventory security

Back 32

B) demand variation

Front 33

Cross docking results in cost savings associated with
A) dock space
B) ordering goods
C) cargo ships
D) storage space
E) down time

Back 33

D) storage space

Front 34

Which one is not an a requirement of effective supply chain management?
A) low cost
B) trust
C) event management
D) visibility

Back 34

A) low cost

Front 35

The term "3PL" is most closely associated with
A) outsourcing
B) e-commerce
C) learning curves
D) mass customization
E) cross docking

Back 35

A) outsourcing
Feedback: 3PL stands for third party logistics, meaning outsourcing of the logistics function.

Front 36

The letters RFID are most closely associated with
A) outsourcing
B) tracking items
C) cross docking
D) event management
E) None of these.

Back 36

B) tracking items
Feedback: RFID tags on shipments provide tracking capability.

Front 37

Which one of these would have a negative impact on inventory costs?
A) disintermediation
B) delayed differentiation
C) cross docking
D) bullwhip effect

Back 37

D) bullwhip effect
Feedback: Demand oscillations lead to inventory shortages and excesses at various points in the supply chain.

Front 38

Which one is not a reason for increased emphasis on supply chain management?
A) increased levels of outsourcing
B) increased transportation costs
C) trends towards globalization
D) the need to improve internal operations

Back 38

D) the need to improve internal operations
Feedback: Companies have the least control over external operations, and hence, more need to manage those portions of the supply chain.

Front 39

Which one of these best describes disintermediation?
A) The mediation of supply chain disputes by a disinterested third party.
B) Elimination of supply chain middlemen.
C) Delayed differentiation.
D) Overcoming the bullwhip effect.

Back 39

B) Elimination of supply chain middlemen.

Front 40

Which one of these relates to avoiding warehousing costs?
A) cross docking
B) delayed differentiation
C) disintermediation
D) gatekeeping
E) strategic partnering

Back 40

A) cross docking

Feedback: Cross docking involves transferring goods from incoming trucks directly to outbound trucks, thereby avoiding a warehouse.

Front 41

Which one refers to reverse logistics?
A) cross docking
B) delayed differentiation
C) customer refusal to accept damaged goods
D) returned goods
E) retracing the steps in a supply chain

Back 41

D) returned goods

Front 42

Inventories are held for a variety of reasons, such as:

Back 42

meeting anticipated demand
smoothing production, decoupling internal operations
protecting against stockouts
taking advantage of quantity discounts
hedging against price increases.

Front 43

The requirements for effective inventory management are:

Back 43

an accounting system to keep track of on-hand and on-order merchandise
reliable forecasting of demand
estimates of lead times between placing an order and receiving goods
and lead-time variability, estimates of inventory holding costs, ordering costs and shortage (backorder) costs, and a classification system

Front 44

Explain the ABC Classification

Back 44

The A-B-C approach can be used to classify inventory items according to some measure of importance, often in annual dollar volume

Generally there will be a small percentage of items (10% to 15%) with relatively high annual volumes. These should be classified as A items, and given disproportionately high attention by management. At the other end of the scale will be a large percentage of items (around 50% to 60%) that have relatively low annual volume. These should be classified as C items and given disproportionately low attention by management. The middle group in terms of annual volume (25% to 40%) should be classified as B items and given moderate attention by management.

Front 45

identify the optimal order quantity by minimizing the sum of certain annual costs that vary with order size.

Back 45

an Economic Order Quantity (EOQ) model

Front 46

The fundamental versions of the deterministic EOQ model include:

Back 46

a. EOQ for purchased end items or semi-finished goods acquired from outside vendors.
b. Economic Production Quantity (EPQ) for internal production orders in batch processing and non-instantaneous replacement.
c. EOQ for quantity discounts.

Front 47

keeps track of removals from inventory on a continuous basis, so the system can provide information on the current level of inventory for each item. When the amount on hand reaches a predetermined minimum, a fixed quantity, Q, is ordered.

Back 47

perpetual inventory system

Front 48

a very elementary system, uses two containers for inventory. Items are withdrawn from the first bin until its contents are exhausted. It is then time to reorder. Sometimes an order card is placed at the bottom of the first bin. The second bin contains enough stock to satisfy expected demand until the order is filled, plus an extra cushion of stock that will reduce the chance of a stockout if the order is late or if usage is greater than expected.

Back 48

two-bin system

Front 49

the time between submitting an order and receiving it

Back 49

lead time

Front 50

_________relate to physically having items in storage. Costs include interest, insurance, taxes (in some states), depreciation, obsolescence, deterioration, spoil- age, pilferage, breakage, and warehousing costs (heat, light, rent, security)

Back 50

Holding, or carrying, costs

Front 51

the costs of ordering and receiving inventory. They are the costs that vary with the actual placement of an order. Besides shipping costs, they include determining how much is needed, preparing invoices, inspecting goods upon arrival for quality and quan- tity, and moving the goods to temporary storage.

Back 51

Ordering costs

Front 52

______result when demand exceeds the supply of inventory on hand. These costs can include the opportunity cost of not making a sale, loss of customer goodwill, late charges, and similar costs.

Back 52

Shortage costs

Front 53

a physical count of items in inventory

Back 53

cycle counting

Front 54

occurs when the quantity on hand drops to a predetermined amount. That amount generally includes expected demand during lead time and perhaps an extra cushion of stock,

Back 54

reorder point (ROP)

Front 55

used when orders must be placed at fixed time intervals (weekly, twice a month, etc.): The timing of orders is set. The question, then, at each order point, is how much to order.

Back 55

fixed-order-interval (FOI) model

Front 56

The two basic questions in inventory management are how much to order and when to order.
A) True
B) False

Back 56

A) True

Front 57

Using the EOQ model, if an item's holding cost increases, its order quantity will decrease.
A) True
B) False

Back 57

A) True

Feedback: It will decrease because holding cost is in the denominator of the EOQ formula.

Front 58

Use of the fixed-interval model requires having a perpetual inventory system.
A) True
B) False

Back 58

B) False

Feedback: A periodic system would be used.

Front 59

With the A-B-C approach, items which have high unit costs are classified as A items.
A) True
B) False

Back 59

B) False
Feedback: A-B-C is based on the product of unit cost and annual volume.

Front 60

When using EOQ ordering, the order quantity must be computed in every order cycle.
A) True
B) False

Back 60

B) False
Feedback: Unless demand, holding cost, or ordering cost changing, the order quantity will not change.

Front 61

The economic order quantity cannot be used when holding costs are a percentage of purchase cost.
A) True
B) False

Back 61

B) False
Feedback: Refer to Example 3 in the textbook.

Front 62

Companies that can successfully use the A-B-C approach can avoid using EOQ models.
A) True
B) False

Back 62

B) False
Feedback: They still need to determine how much to order.

Front 63

Inventory might be held to take advantage of order cycles.
A) True
B) False

Back 63

A) True
Feedback: Using an economic order quantity is an example of this.

Front 64

The objective of inventory management is to minimize holding costs.
A) True
B) False

Back 64

B) False
Feedback: The objective of inventory management is to minimize total cost, which includes ordering costs and sometimes purchase costs (e.g., quantity discount models).

Front 65

Holding and ordering costs are inversely related to each other.
A) True
B) False

Back 65

A) True
Feedback: Changes in order quantity will cause one to increase and the other to decrease.

Front 66

A two-bin system is essentially a simple reorder point system.
A) True
B) False

Back 66

A) True

Feedback: Reorder when the first bin is empty.

Front 67

In the basic EOQ model, annual ordering cost and annual ordering cost are equal for the optimal order quantity.
A) True
B) False

Back 67

A) True

Front 68

Increasing the order quantity so that it is slightly above the EOQ would not increase the total cost by very much.
A) True
B) False

Back 68

A) True
Feedback: The total cost curve is flat to the right of the EOQ.

Front 69

A fixed-interval ordering system would be used for items that have independent demand.
A) True
B) False

Back 69

A) True

Front 70

A store that sells daily newspapers could use the single-period model for reordering.
A) True
B) False

Back 70

A) True

Feedback: The period is one day, and the news in "perishable" beyond one day.

Front 71

Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:
A) order size
B) order frequency
C) reorder point

Back 71

C) reorder point

Feedback: Quantity models do not involve lead time.

Front 72

If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:
A) 84
B) 46
C) 42
D) none of these

Back 72

B) 46

Feedback: ROP = d x LT + SS = 21 x 2 + 4 = 46.

Front 73

In an A-B-C system, B items typically represent about this percentage of items:
A) 90%
B) 75%
C) 50%
D) 30%
E) 15%

Back 73

D) 30%

Front 74

Which model does not take into account the amount of inventory on hand?
A) FOI
B) ROP
C) EOQ

Back 74

C) EOQ

Feedback: The EOQ factors are demand, ordering costs, and carrying costs.

Front 75

Which product is usually bought on an ROP basis?
A) textbooks
B) wedding gifts
C) sugar
D) newspaper

Back 75

C) sugar

Feedback: Buy more went the quantity on hand gets low.

Front 76

Which product is usually bought on a fixed interval basis?
A) textbooks
B) wedding gifts
C) sugar
D) brownies

Back 76

A) textbooks
Feedback: Usually bought once a semester.

Front 77

In the two-bin system, the quantity in the second bin is equal to the:
A) EOQ
B) ROP
C) FOI
D) None of these.

Back 77

B) ROP
Feedback: The second bin holds the reorder point quantity.

Front 78

Using the basic EOQ model, if the ordering cost doubles, the order quantity will be
A) double if former value
B) about 50% of its former value
C) about 71% of its former value
D) unaffected

Back 78

C) about 71% of its former value
Feedback: Because S in under the square root sign, multiplying its value be 2 will increase the EOQ by the square root of 2, which is .707.

Front 79

Which area is not strategic for reducing inventory costs?
A) Record keeping
B) Supply chain management.
C) Lean operation.
D) Variance reduction
E) Internet ordering

Back 79

E) Internet ordering

Front 80

Setup costs are analogous to which one of these costs?
A) shortage
B) holding
C) excess
D) ordering

Back 80

D) ordering

Feedback: Both setup and ordering costs are in the numerator of the quantity formula; and both are independent of order size.

Front 81

planning for general levels of employment and output to balance supply and demand typically for periods of one year or less.

Back 81

Aggregate planning

Front 82

What are the elements of aggregate planning that planners take into account?

Back 82

projected demand, capacity, and costs of various options in devising an aggregate plan. Among the variables available to planners are adjustments in output rate, employment level, overtime/undertime, and subcontracting

Front 83

The goal of aggregate planning is

Back 83

to achieve a production plan that will effectively utilize the firm’s resources.

Front 84

In order to effectively plan, in addition to knowledge of company policy, estimates of the following items must be available to planners:

Back 84

a. Demand for each period
b. Capacity for each period
c. Costs (regular time, overtime, subcontracting, backorders, etc.)

Front 85

In order to translate an aggregate plan into meaningful terms for production, it must be

Back 85

In order to translate an aggregate plan into meaningful terms for production, it must be

Front 86

indicates the desired quantity and timing of deliveries

Back 86

A master schedule

Front 87

three basic inputs to the master schedule

Back 87

Beginning inventory, forecasts for each period in the schedule, and customer orders.

Front 88

Outputs of the scheduling process include

Back 88

projected inventory, production requirements, and the amount of uncommitted inventory, which is referred to as available-to-promise (ATP) inventory.

Front 89

Among the strategies aggregate planners might try are to:

Back 89

a. maintain a level work force and meet demand variations in some other manner, such as holding inventories or subcontracting.
b. use some combination of pricing differentials, promotions and back orders to smooth out fluctuations in demand.
c. match demand period by period with some combination of overtime and part time work, or putting workers on leave.
d. Use a combination of decision variables

Front 90

Aggregate planning is intermediate range planning for goods and services.
A) True
B) False

Back 90

A) True

Front 91

Aggregate planning typically covers a time interval of 2 to 4 years.
A) True
B) False

Back 91

B) False
Feedback: The typical range is 6 to 18 months

Front 92

Sales and operations planning is intermediate-range decisions to balance supply and demand, integrating financial and operations planning.
A) True
B) False

Back 92

A) True

Front 93

Aggregate planning is concerned with both the quantity and timing of anticipated demand.
A) True
B) False

Back 93

A) True

Front 94

Supply options include pricing and using part-time workers.
A) True
B) False

Back 94

B) False
Feedback: Pricing is a demand option.

Front 95

Use of backorders is a demand option rather than a supply option.
A) True
B) False

Back 95

A) True
Feedback: Backorders shift demand to a later period

Front 96

Inventories can enable firms to increase capacity in future periods.
A) True
B) False

Back 96

A) True

Feedback: Firms can produce during slow periods and hold the inventory for a later period.

Front 97

A level capacity strategy attempts to keep capacity level with demand.
A) True
B) False

Back 97

B) False
Feedback: That is the goal of a chase strategy.

Front 98

A level strategy is more dependent on forecast accuracy than is a chase strategy.
A) True
B) False

Back 98

A) True
Feedback: This is due to the inflexibility associated with a level strategy

Front 99

An advantage of a level approach is lower inventories than with a chase approach.
A) True
B) False

Back 99

B) False
Feedback: It is just the opposite: chase involves lower investment in inventory.

Front 100

A level approach works best when demand is stable.
A) True
B) False

Back 100

A) True

Front 101

Automobile assembly plants and oil refineries are well-suited for a chase approach.
A) True
B) False

Back 101

B) False
Feedback: They are designed for high, steady output.

Front 102

Yield management involves the application of pricing strategies to alter supply.
A) True
B) False

Back 102

B) False
Feedback: Pricing strategies alter demand

Front 103

Goods producers are the primary users of yield management because it enhances their bottom lines.
A) True
B) False

Back 103

B) False
Feedback: Airlines, theaters, motels, and restaurants are among the primary users.

Front 104

A master schedule is used to assign workers to specific jobs.
A) True
B) False

Back 104

B) False
Feedback: A master schedule shows quantity and timing of end items for a time horizon.

Front 105

Rough cut capacity planning is used to test the feasibility of a proposed master schedule.
A) True
B) False

Back 105

A) True

Front 106

Disaggregating the aggregate relates to
A) yield management
B) planning a chase approach
C) master scheduling
D) short-range planning

Back 106

C) master scheduling

Front 107

Which one is not considered a capacity option?
A) Use of backorders.
B) Use of overtime.
C) Use of subcontractors.
D) Use of temporary workers.

Back 107

A) Use of backorders.
Feedback: Backorders are a demand option because they shift demand to another time period.

Front 108

Which one is not a disadvantage of a level approach compared to a chase approach?
A) greater inventory costs.
B) increased overtime and idle time
C) varying resource utilization
D) varying workforce levels

Back 108

D) varying workforce levels
Feedback: Workforce levels are stable.

Front 109

The terms frozen, slushy, and liquid are most closely associated with
A) yield management
B) time fences
C) rough-cut capacity planning
D) a chase strategy

Back 109

B) time fences

Front 110

The term available-to-promise is most closely associated with
A) sales and operations planning
B) rough-cut capacity planning
C) disaggregating the aggregate plan
D) master production scheduling

Back 110

D) master production scheduling
Feedback: An output of the master production scheduling process is the amount of uncommitted inventory that is available.

Front 111

Which one is unrelated to the master scheduling process?
A) yield management
B) rough-cut capacity planning
C) time fences.
D) available-to-promise

Back 111

A) yield management

Feedback: Yield management relates to pricing strategies to allocate capacity.

Front 112

Capacity requirements can be more difficult to predict for services than for manufacturing.
A) True
B) False

Back 112

A) True

Feedback: For example, the time to allow for doctors' office visits and the time to repair an appliance are more difficult to predict than the time to assemble an automobile.

Front 113

variations in demand are met by using some combination of inventories, overtime, part-time workers, subcontracting, and back orders while maintaining a steady rate of output

Back 113

level capacity strategy

Front 114

the planned output for any period would be equal to expected demand for that period

Back 114

chase demand strategy

Front 115

an approach that seeks to maximize revenue by using a strategy of variable pricing; prices are set relative to capacity availability. Thus, during periods of low demand, price discounts are offered to attract a wider population. Conversely, during peak periods, higher prices are posted to take advantage of limited supply relative to demand

Back 115

Yield management

Front 116

involves testing the feasibility of a proposed master schedule relative to available capacities, to assure that no obvious capacity constraints exist. This means checking capacities of pro- duction and warehouse facilities, labor, and vendors to ensure that no gross deficiencies exist that will render the master schedule unworkable.

Back 116

rough-cut capacity planning (RCCP)

Front 117

divide a scheduling time horizon into three sec- tions or phases, sometimes referred to as frozen, slushy, and liquid, in reference to the firm- ness of the schedule

Back 117

Time fences

Front 118

uncommitted inventory

Back 118

available-to-promise (ATP) inventory.

Front 119

the average amount of inventory in a system is equal to the product of the average rate at which inventory units leave the system (i.e., the average demand rate) and the average time a unit is in the system

Back 119

Little’s Law

Front 120

atio of annual cost of goods sold to average inventory investment

Back 120

inventory turnover,

Front 121

a physical count of items in inventory is made at periodic intervals (e.g., weekly, monthly) in order to decide how much to order of each item.

Back 121

periodic system,

Front 122

the order size that minimizes total annual cost

Back 122

economic order quan- tity (EOQ)

Front 123

Aggregate planning strategies can be described as

Back 123

proactive, reactive, or mixed.

Front 124

_________ strategies involve demand options: They attempt to alter demand so that it matches capacity.

Back 124

Proactive

Front 125

strategies involve capacity options: They attempt to alter capacity so that it matches demand

Back 125

Reactive

Front 126

Demand options include

Back 126

pricing, promotions, using back orders (delay- ing order filling), and creating new demand.

Front 127

Supply options include

Back 127

hiring/laying off workers, overtime/slack time, part-time or temporary workers, inventories, and subcontractors.

Front 128

When demand for items is derived from plans to make certain products, as it is with raw materials, parts, and assemblies used in producing a finished product, those items are said to have

Back 128

dependent demand

Front 129

a computer-based information system that translates the finished product requirements of the master schedule into time-phased require- ments for subassemblies, component parts, and raw materials, working backward from the due date using lead times and other information to determine when and how much to order

Back 129

Material requirements planning (MRP)

Front 130

An MRP system has three major sources of information:

Back 130

a master schedule, a bill-of-materials file, and an inventory records file

Front 131

The quantities in a master schedule come from a number of different sources, including

Back 131

customer orders, forecasts, and orders from warehouses to build up seasonal inventories.

Front 132

amounts to the sum of the lead times that sequential phases of the production or assembly process require

Back 132

cumulative lead time

Front 133

contains a listing of all of the assemblies, subassemblies, parts, and raw materials that are needed to produce one unit of a finished product.

Back 133

bill of materials (BOM)

Front 134

provides a visual depiction of the subassemblies and components needed to assemble a product.

Back 134

product structure tree,

Front 135

what is this chart

Back 135

A master schedule

Front 136

total expected demand for an item or raw material during each time period without regard to the amount on hand

Back 136

Gross requirements

Front 137

Open orders (orders that have been placed and are scheduled to arrive from vendors or elsewhere in the pipeline by the beginning of a period)

Back 137

Scheduled receipts

Front 138

he expected amount of inventory that will be on hand at the begin- ning of each time period: scheduled receipts plus available inventory from last period.

Back 138

Projected on hand

Front 139

The quantity expected to be received by the beginning of the period in which it is shown

Back 139

Planned-order receipts

Front 140

a planned amount to order in each time period; equals planned-order receipts offset by lead time

Back 140

Planned-order releases

Front 141

approach that updates MRP records periodically

Back 141

regenerative system

Front 142

approach that updates MRP records continuously

Back 142

net-change system

Front 143

a procedure in which an end item’s bill of materials (BOM) is periodically exploded to determine the quantities of the various components that were used to make the item, eliminating the need to collect detailed usage information on the production floor.

Back 143

Backflushing

Front 144

integration of financial, manufacturing and HR on a single computer system

Back 144

ERP

Front 145

There are three major reasons why companies undertake ERP

Back 145

To integrate financial data
To standardize manufacturing processes
To standardize HR information

Front 146

puts a given type of assembly at the same level in the tree, no matter what levels the "parents" may be at: a parent is the next higher level of assembly.

Back 146

Low-level coding of a product-structure tree

Front 147

Benefits of MRP.

Back 147

a. Low levels of in-process inventories.
b. The ability to keep track of material requirements.
c. The ability to evaluate capacity requirements generated by a given master schedule.
d. A means of allocating production time.

Front 148

integrate marketing and finance into production planning and enable capacity requirements planning.

Back 148

MRP II systems

Front 149

MRP is used for independent demand items.
A) True
B) False

Back 149

B) False
Feedback: It is used for dependent demand items (i.e., assembled goods).

Front 150

MRP applications are limited to manufacturing; services do not use it.
A) True
B) False

Back 150

B) False

Front 151

Pegging can be used to identify the supplier that provided a specific component of an item.
A) True
B) False

Back 151

B) False
Feedback: It is used to show what parent items have generated the demand for a component.

Front 152

With lot-for-lot order, planned order releases equal net requirements.
A) True
B) False

Back 152

A) True

Front 153

Planned order releases and planned order receipts must be equal.
A) True
B) False

Back 153

A) True

Front 154

Planned order releases differ from planned order receipts in terms of timing, but not in terms of quantity.
A) True
B) False

Back 154

A) True

Front 155

A bill of materials contains a listing of all the materials needed to produce an item.
A) True
B) False

Back 155

A) True

Front 156

Capacity requirements planning involves determining short-range capacity requirements.
A) True
B) False

Back 156

A) True

Front 157

A regenerative system updates MRP records continuously.
A) True
B) False

Back 157

B) False
Feedback: Records are updated periodically.

Front 158

MRP II is an expand approach to production resource planning.
A) True
B) False

Back 158

A) True

Front 159

Backflushing refers to cleaning out the system in preparation for the next job.
A) True
B) False

Back 159

B) False
Feedback: It refers to exploding an end items bill of materials to determine the quantities of components that were used to assemble it.

Front 160

The planned order releases at each level of MRP are one determinant of the gross requirements at the next lower level.
A) True
B) False

Back 160

A) True

Front 161

MRP is typically part of an ERP system.
A) True
B) False

Back 161

A) True

Front 162

MRP is primarily used in this setting:
A) job shop
B) continuous
C) batch

Back 162

C) batch

Front 163

Which of these describes lot sizing? Determining
A) planned order releases
B) net requirements
C) when to order
D) how much to order
E) None of these.

Back 163

D) how much to order

Front 164

In MRP, planned order receipts must always equal
A) scheduled receipts
B) planned order releases
C) net requirements
D) gross requirements

Back 164

B) planned order releases

Front 165

Which is true about scheduled receipts?
A) They are orders previously placed, and not yet completed or received.
B) They must be less than the Net Requirements in any period.
C) They are included in Planned Order Receipts.
D) They are added to Gross Requirements to get Net Requirements.

Back 165

A) They are orders previously placed, and not yet completed or received.

Front 166

In MRP, the listing of all the subassemblies and components needed to produce a unit of an end item is called the:
A) material requirements plan
B) master schedule
C) bill of materials
D) master production schedule

Back 166

C) bill of materials

Front 167

Which one is not a primary report for MRP?
A) Planned orders
B) Order releases.
C) Changes.
D) Exceptions.

Back 167

D) Exceptions.
Feedback: Exception reports are secondary reports.

Front 168

Low level coding refers to
A) Having low level employees input product codes into computer data banks.
B) Structuring a bill of materials so that multiple occurrences of an item coincide with the lowest level that the item occurs.
C) Using low levels of coding to simplify identification of components in an MRP setup.
D) None of these.

Back 168

B) Structuring a bill of materials so that multiple occurrences of an item coincide with the lowest level that the item occurs.

Front 169

In MRP, which one of these could not be a factor in determining the net requirements of a component?
A) Planned Order Releases
B) Scheduled Receipts
C) Projected on-hand
D) Gross Requirements

Back 169

B) Scheduled Receipts
Feedback: Net requirements are determined by the other three choices.

Front 170

Closed loop MRP relates most closely to:
A) Capacity planning
B) ERP
C) Scheduled Receipts
D) Planned Order Receipts.

Back 170

A) Capacity planning

Front 171

A key goal of MRP is to:
A) Avoid cost overruns.
B) Use Scheduled Receipts only when necessary.
C) Match supply and demand.
D) Order early to avoid late-order penalties.
E) All are key goals.

Back 171

C) Match supply and demand

Front 172

Which one is not included in a list of ERP hidden costs?
A) Waiting for ROI.
B) Consultants ad infinitum.
C) Data analysis and conversion.
D) High purchase costs.
E) Integration and testing.

Back 172

D) High purchase costs.
Feedback: Purchase costs are not "hidden."

Front 173

Which one would not be a reason for using ERP, or would all be reasons?
A) Integration of financial data.
B) Standardize production processes.
C) Standardize HR information.
D) Interconnect production, sales, and distribution on a single server.
E) All are reasons.

Back 173

E) All are reasons.