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QuestionNumber:1
Thebasicelementsofthesupplychaininclude:
supply,manufacture,distribution.B)design,manufacture,inventory.
C)engineer,design,manufacture.D)supply,engineer,manufacture.
Thecorrectansweris:A
Eventhoughdifferentcompaniesproducedifferentproducts,thebasicelementsarethesame:supply,manufacture,anddistribution.
QuestionNumber:2
Inordertomaximizeprofit,acompanymusthaveallofthefollowingobjectivesexcept:
BestcustomerserviceB)Mostaccurateproductionforecast
C)LowestinventoryinvestmentD)Lowestdistributioncost
Thecorrectansweris:B
Acompany,tomaximizeprofits,musthavethelowestproductioncost,bestcustomerservice,lowestinventory
investment,andlowestdistributioncosts.Whileanaccurateproductionforecastwillcontributetolowproductioncosts,itwillnotguaranteethelowestproductioncosts.QuestionNumber:3
BASICSOFSUPPLYCHAINMGMT(BSCM):BusinesswideConcepts
Theinventoryturnsratiomeasures:
theamountofinventoryneededtoA)supportsalesgrowth.
obsoleteinventoryasapercentofsales.
howeffectivelyinventoryisbeingused.
theamountofspaceneededtostoreinventory.
Thecorrectansweris:C
Theinventoryturnsratiomeasureshoweffectivelyinventoriesarebeingused.Itiscalculatedbydividingannualcostofgoodssoldbyaverageinventoryindollars.
QuestionNumber:4
Processspecificationscanbebestdefinedasadocumentwhich:
showshowtheproductwillappear.B)showsthestepsneededtoproducetheenditem.
C)detailsthecapacityavailableataworkcenter.D)flowchartsvariousprocesses.Thecorrectansweris:B
Processspecificationsdescribethestepsneededtomakeanendproduct.Theyareusuallyprintedonarouting
sheetorkeptinthedatabaseforonlineaccess.
QuestionNumber:5
BASICSOFSUPPLYCHAINMGMT(BSCM):BusinesswideConcepts
Acompany'sstrategicplan:
A)providesthemanufacturingplanforfamiliesofenditems.
outlinesthesalesplanforthenextyear.
isastatementofgoalsandobjectivesforalongrangeperiod.
D)outlinesnewproductsforthenextyear.
Thecorrectansweris:C
Whilestrategicplansdoprovideformanufacturing,sales,andnewproductplans,theyreallyprovidetheoveralldirectionforthecompany.Theresultisastatementofgoalsandobjectivesfor2-5years,andsometimes10years.
QuestionNumber:6
Inwhichofthefollowingmanufacturingenvironmentswouldconsumerproducts,suchasfilm,food,etc.be
classified?
Assemble-to-orderB)Engineer-to-order
C)Make-to-orderD)Make-to-stock
Thecorrectansweris:D
Consumerproductsaregenerallyconsideredmake-to-stock.Thereareafewstandarditemsassembledfrommanycomponents.
QuestionNumber:7
Manydifferentenditemsaremadefromasmallnumberofcomponents.Whatmanufacturingenvironmentwouldthisbe?
A)Make-to-stockB)Make-to-order
C)Assemble-to-orderD)Engineer-to-order
Thecorrectansweris:B
Make-to-ordercompaniestypicallymakemanyenditemsfromasmallnumberofcomponents.Thescheduleis
developedfromactualcustomerorders.
QuestionNumber:8
Thepurposeofastrategicbusinessplanisto:
planproductionA)byproductfamily.B)planforbusinesschangeswhichtakealongtime.C)establishcustomerrequirementsoverthelongterm.D)establishorderpromisingstrategies.Thecorrectansweris:B
Strategicplansareusedforlongtermplanning(2-10years).Theyareusedtoallowtimetoplanforchangeswhichtakealongtimetooccur.Thesemightincludenewplantsordistributioncenters.
QuestionNumber:9
BASICSOFSUPPLYCHAINMGMT(BSCM):BusinesswideConcepts
Aggregateinventorymanagementisconcernedwith:
A)managinginventoryitemsandhowtheyareused.B)establishingtheproductionplan.
C)thecostandbenefitsofcarryingthedifferentclassesofinventory.
thedistributionnetworkandthemovementofinventory.
Thecorrectansweris:C
Aggregateinventorymanagementisconcernedwiththecostandbenefitofcarryingrawmaterials,work-in-process,andfinishedgoodsinventory.Itisfinanciallyoriented.
QuestionNumber:10
Whichofthefollowingareobjectivesofinventory?
Maximizecustomerservice
Efficienttransaction
Lowcostplanoperations
Minimuminventoryinvestment
A)I,II,andIIIB)I,III,andIV
C)I,II,andIVD)II,III,andIV
Thecorrectansweris:B
Inordertomaximizeprofits,acompanymustmanageinventories,providegreatcustomerservice,andhave
efficientplantoperations,whileminimizingtheamountofcapitalusedforinventory.QuestionNumber:11
Whichofthefollowingwouldbeincludedinthecostofcarryinginventory?
HeatingandI.lightingawarehouse
Obsoleteinventory
Labortomovematerial
Damagedinventory
A)I,II,andIIIB)II,III,andIVC)I,III,andIVD)I,II,III,andIV
Thecorrectansweris:D
Alloftheabovecostswouldbeincludedinthecostofinventory.Anycostsincurredastheresultofhavinginventoryshouldbeincluded.
QuestionNumber:12
Whichofthefollowingbestdescribesanormaldistribution?
A)MostvaluesclusterednearacentralpointB)Warehousescentrallylocatedtomarkets
C)ValuesaccumulatedatsixsigmaD)Acriticalratioof1.0
Thecorrectansweris:A
Normaldistributionreferstothestatisticaldistributionofvalueswherethemajorityofvalueswillaccumulate
aroundthemean.Theresultinggraphisshapedlikeabell.Itisoftenknownasa"bellcurve".QuestionNumber:13
Basedonthefollowinginformation,whatwouldthesafetystockneedtobetoensureproductisinstock99.9999%ofthetime?MAD=100,Onhand=200.Weeklydemand=400
A)100B)300C)500D)600
Thecorrectansweris:C
Toensurecoverageofproduct99.9999%ofthetime,itwouldrequire5MADforsafetystock.Therefore:5*100=500.
QuestionNumber:14
Eachdistributioncenterplacesordersfromcentralsupplyastheyareneeded.Thisiscalled:A)pullsystem.B)pushsystem.
C)Just-in-Timedelivery.D)supplychainmanagement.
Thecorrectansweris:A
Wheneachdistributioncenterordersfromcentralsupplyorthefactoryindependentlyofwhatotherdistribution
centersaredoing,itiscalledapullsystem.Theadvantageisthatcoordinationandcommunicationisless
expensive.Thedisadvantageisthatthelackofcoordinationcausesproblemswithcustomerserviceandinventories.
QuestionNumber:15
Acompanymakesalldecisionsregardingforecastingandorderscentrallyforitsdistributionnetwork.Thiscompanyisusingwhichofthefollowingsystems?
A)PullsystemB)Pushsystem
C)Just-in-TimeD)Timephasedorderpoint
Thecorrectansweris:B
Thepushsystem"pushes"inventorytodistributioncentersbymakingstockingdecisionscentrally.Theadvantageisthatinventoryissentwhereitisneededmost.Thedisadvantageisthatthecoordinationismoreexpensivethanthepullsystem.
QuestionNumber:16
Acompanywantstostore15,000cartonswith20cartonsoneachpallet.Thewarehouseissetuptostorepallets5high.Howmanypalletpositionsareneeded?
A)150B)500C)750D)3000
Thecorrectansweris:A
Thenumberofpalletpositionscanbecalculatedbydividingthenumberofcartonsofstorageneededbythenumberofcartonsperpalletwhichequalsthetotalnumberofpalletsneeded.
Dividethetotalnumberofpalletsneededbythenumberofpalletsstackedheightwhichequals
thenumberof
positionsneeded.Forthisproblem:15,000/20=750palletsneeded;750/5=150positions.QuestionNumber:17
Allofthefollowingarebasicgroupingmethodstostoreandlocatestockinawarehouseexcept:ItemsA)relatedfunctionallyB)ItemsinsequentialSKUnumber
C)ItemswhicharephysicallysimilarD)Itemswhicharefastmoving
Thecorrectansweris:B
Thepurposeofgroupingitemsinawarehouseistobemoreproductiveinstorageandinthepickingprocess.ItemswhichhavesequentialSKUnumbersmayhavenothingtodowitheachother.Asaresult,thiswouldnotbeacriteriaforgrouping.
QuestionNumber:18
Whatisthemajordisadvantageofafixedlocationwarehouse?
A)PutawaytimeisincreasedB)Cubeutilizationispoor
C)DocktimeisincreasedD)Materialhandlingcostsrise
Thecorrectansweris:B
Fixedlocationwarehousesofferpoorcubeutilizationbecausepalletlocationsareleftemptywhentheproduct
assignedtothelocationisoutofstock.Generally,fixedlocationsareusedinsmallwarehouseswithlowthroughput.
QuestionNumber:19
Whichofthefollowingareadvantagesofpointofusestorage?
Easeofcontrol
Materialhandlingisreduced
Storagecostsarereduced
Materialisaccessibleatalltimes
A)I,II,andIIIB)II,III,andIVC)I,III,andIVD)I,II,III,andIV
Thecorrectansweris:B
Allareadvantagesofpoint-of-usestorageexcepteaseofcontrol,whichisanadvantageofcentralstorage.
QuestionNumber:20
Whichofthefollowingareadvantagesofusingcentralstorage?
Easeofcontrol
Costsarereduced
Inventoryrecordaccuracyiseasiertoattain
Safetystockisreduced
A)I,II,andIIIB)I,III,andIVC)II,III,andIVD)I,II,III,andIV
Thecorrectansweris:B
Costsarenotreducedwithcentralstorage.Therearelaborcosts,racking,papersystem,andothercostsassociatedwithcentralstorage.
QuestionNumber:21
Whichofthefollowingbestdescribescyclecounting?
A)AprocesstoreducecycletimeB)Setupreductiontoshortentheproductioncycle
C)Countinginventoryonapre-determinedscheduleD)ConductingatimestudyataworkcenterThecorrectansweris:C
Cyclecountingisusedtocountinventoryonapre-determinedscheduleforthepurposeofidentifyingerrorsandtakingcorrectiveactionsotheerrorwillnotoccuragain.QuestionNumber:22
Themovementoffinishedgoodsfromproductiontothecustomeris:
A)physicalsupply.B)supplychain.
C)physicaldistribution.D)conversioncycle.
Thecorrectansweris:C
Physicaldistributionistheactualmovementofgoodsfromproductiontothecustomer.Physicalsupplyisthe
movementofrawmaterialfromthesuppliertomanufacturing.
QuestionNumber:23
Allofthefollowingactivitiesarepartofthephysicaldistributionsystemexcept:
TransportationB)Warehousing
C)MaterialhandlingD)Forecastingofcustomerorders
Thecorrectansweris:D
Physicaldistributionincludestheactivitiesoftransportation,distribution,inventory,warehousing,material
handling,packaging,andorderprocessing.Forecastingisnotaphysicaldistributionactivity.QuestionNumber:24
Trucks,asamodeoftransportation,arebestsuitedfor:movingsmallquantitiestowidelyA)dispersedmarkets.
movinglargequantitiestowidelydispersedmarkets.
movingsmallquantitiestonarrowlydispersedmarkets.
D)movinglargequantitiestonarrowlydispersedmarkets.
Thecorrectansweris:A
Trucksarebestwhenthereisaneedtomovesmallquantitiestowidelydispersedmarkets.Trainsarebetterfor
movinglargequantities.
QuestionNumber:25
Foragivenproduct,thelinehaulcostis$1.50permile.Theproductwillmove400miles.If40,000poundsare
beingshipped,whatisthecostperhundredweight?
A)1.00B)1.50C)2.00D)2.50
Thecorrectansweris:B
Thetruckwillcost$600tomove400miles($1.50*400miles).
Tocalculatethecostperhundredweight:Dividethetotalcostforthetruckby400.(40,000poundsdividedby100).Therfore:$600dividedby400=$1.50/cwt.
QuestionNumber:26
Whichofthefollowingbestdescribesthepurposeofadistributionwarehouse?
AwarehousetostoregoodsforA)longperiodsoftimeB)AstoragewarehouseforfloorstockC)AwarehousetomoveandmixgoodsD)AsupplychainwarehouseforregionalstorageThecorrectansweris:C
Adistributionwarehouseisusedprimarilytobreakdownlargelotsintosmallerlotsforshipment.Ageneralwarehouseisusedforlongtermstorage.
QuestionNumber:27
Whichofthefollowingaretheroleswhichwarehousesserve?
Transportationconsolidation
Inventoryefficiency
Productmixing
Customerservice
A)I,II,andIIIB)I,III,andIVC)II,III,andIVD)I,II,III,andIV
Thecorrectansweris:B
Warehousesservethreeimportantroles:
Transportationconsolidation-consolidatesmallshipments(LTL)intolargeshipments(TL)
Productmixing-groupavarietyofproductsintooneorder
Customerservice-allowsproductstobeplacedclosertothecustomerInventorywilltypicallyrisewithanincreaseinthenumberofwarehouses.QuestionNumber:28
Amarketboundarycanbedefinedasthe:geographicboundaryA)ofaregion.
linewherethelaiddowncostisthesamefromtwosupplysources.
linewhereshipmentsinonedistributioncenterequalsanother.
mileageboundarywhereshipmentcostsexceedthemargintobegained.
Thecorrectansweris:B
Amarketboundaryisthelinewherethelaiddowncostfromtwosupplysourcesisequal.Thelaid-downcostisthedeliveredcostofaproducttoageographicpoint.
QuestionNumber:29
Asacompanyincreasesthenumberofwarehousesfromonetotwo,thereisanimpactonsafetystock.Safetystockwill:
A)increasebyafactorof2.B)decreasebyhalf.
C)increase,andthepercentcanbecalculated.D)decreasebyacalculatedpercentage.Thecorrectansweris:C
Thesafetystockwillincreasebyanamountwhichcanbecalculated,butitwillnotdoubleautomatically.The
amountoftheincreasewilldependonservicelevelsbypart,thedemandvariation,andotherfactors.Asthe
numberofwarehousesincreases,demandateachwilldecrease,causinggreatervariationsinproductdemand.
Therefore,safetystockwillincreaseappropriately.
QuestionNumber:30
TheJust-in-Timephilosophycanbebestdefinedas:
A)DeliveringgoodsjustbeforetheyareneededB)Fulfillingcustomerordersjustastheyareneeded
C)ManufacturingwithoutinventoryD)Eliminationofwaste
Thecorrectansweris:D
TheJust-in-Timephilosophyisconcernedwiththeeliminationofwasteornon-valueactivities.Maintaininglargeinventoriesisjustoneofmanynon-valueaddedactivities.
QuestionNumber:31
TheToyotaMotorCompanyidentifiedsevensourcesofwasteinmanufacturing.Whichofthefollowingrepresentthosesourcesofwaste?
Process
Overproduction
Wait-time
Movement
A)I,II,andIIIB)I,II,andIVC)II,III,andIVD)I,II,III,andIV
Thecorrectansweris:D
ThesevensourcesofwasteidentifiedbyToyotaareProcess,Methods,Movement,ProductDefects,Waitingtimes,Overproduction,andInventory.
QuestionNumber:32
ToachievenecessaryqualitylevelsinaJITenvironment,qualitymustbe:
A)builtintotheproductbyoperators.B)inspectedatmultiplepoints.
C)ensuredbythequalitycontrollab.D)aninspectorsfunction.Thecorrectansweris:A
Qualitymustbetheoperatorsresponsibility.Theyaretheonlyoneswhocanmakesuredefectsarenotbuiltintotheproduct.Theymustbeallowedtostoptheprocesswhendefectsarefound.QuestionNumber:33
InordertoreducethenumberoftransactionswhichoccurinaJITenvironment,companiesuseasystemcalled:
A)transactionprevention.B)pre-deduct.
C)backflushing.D)barcoding.
Thecorrectansweris:C
Backflushingisasystemfordoinginventoryandlabortransactionsbasedonthefinishedgoodsproduction.Withthissystem,onetransactionwillcreatethemanyissuestransactionsforinventory.Thisprocessworksbestwhentheleadtimefortheproductisshortandtheproductflowsdownaproductionline.
QuestionNumber:34
Theannualcostofgoodssoldforacompanyis$40millionandtheaverageinventoryis$10million.Byhowmuchwouldtheinventoryneedtobereducedtohaveannualinventoryturnsequal20turns?
A)$2millionB)$4millionC)$6millionD)$8million
Thecorrectansweris:D
Inorderforacompanywithcostofgoodssoldof$40milliontoturntheinventory20timesannually,theinventorywouldhavetobevaluedat$2million(40/20).Sincetheaverageinventoryiscurrentlyvaluedat$10million,theinventorywouldneedtobereducedby$8million.
QuestionNumber:35
Acompanywantstoproduce1000unitsoverthenextfourmonthsusingalevelstrategy.Themonthshave20,21,19and22workingdaysineachone.Basedonthisstrategy,howmuchwouldbeproducedinthefirstmonth?
A)244B)254C)260D)262
Thecorrectansweris:A
Tofindtheanswer:Dividetheplannedproduction(1000)bythenumberofdaysavailableinthefourmonths(82)tofindthedaily;productionrate(12.2).Multiplythedailyproductionrate(12.2)bythenumberofdaysinthefirstmonth(20)toobtainthefirstmonth'sproduction(244).
QuestionNumber:36
Systemnervousnessiscausedby:
A)theinabilityoftheplannertoremaincalm.B)requirementschangingrapidly.
C)constantdemandsbymanufacturingforlongproductionruns.
purchasedmaterialswhichdonotarriveontime.
Thecorrectansweris:B
Systemnervousnessiscausedbyrequirementswhichchangerapidlyandusuallybysmallamounts.Theplannermust,inthesecases,applyjudgementtothesituationbeforechangingtheplanstoaccommodatethechange.
QuestionNumber:37
Acomponenthasafixedcostof$1,000andavariablecostof$5.00perunittoproduce.Whatwouldtheaveragecostperunitbeifthecompanyproduces4,000units?
A)$5.00B)$5.10C)$5.25D)$5.50
Thecorrectansweris:C
Toproduce4,000units,thetotalcostwouldbe$21,000.($5*4,000units+$1,000fixedcost=$21,000).
Dividethe$21,000bythenumberofunits(4000)tofindthecostperunit.($21,000/4,000=$5.25).
Analternativewaytocalculatethecostperunitwouldbetodividethefixedcost($1,000)bytheunitsproduced(4,000)whichequals$.25.
Addthefixedcosttothevariablecosttogetthecostperunit.($5.00+$.25=$5.25).QuestionNumber:38
Whichofthefollowingbestdefinesthroughput?
ThenumberofbottlenecksA)slowingproductionB)Thetotalcapacitywhichafactorycanproduce
C)ThespeedofaworkcentertoproduceD)Thetotalvolumeofproductionpassingthroughafacility
Thecorrectansweris:D
Throughputisthetotalvolumeofproductionpassingthroughafacility.Bottleneckscontrolthethroughputinthefacilityandmustbeeliminatedinordertoincreasethethroughput.QuestionNumber:39
Forecastsaretypicallymoreaccurateforthenearfuturethantheyareforthelongerfuture.Thisoccursbecause:
A)theneartermholdslessuncertaintythanthelongterm.B)moredataisavailableinthenearterm.
C)aggregatedataiseasiertoforecast.D)thefutureismoredynamicinthenearterm.Thecorrectansweris:A
Theneartermismorepredictablethanthelongterm.Mostcompaniescaneasilypredictwhattheyaregoingtodonextweekcomparedtonextyear.Thisallowsforecaststobemoreaccurateinthenearterm.
QuestionNumber:40
Forecastsareusuallywrongbutwecontinuetousethem.Theyarenecessarybecause:forecastersprovideaserviceA)totheorganization.B)forecastsareapreludetobusinessplanning.
C)themasterproductionschedule(MPS)needsone.
D)materialsrequirementsplanning(MRP)cannotoperatewithoutone.
Thecorrectansweris:B
Forecastsarethepreludetobusinessplanning.Theyprovideanestimateofwhatconditionswilllooklikeinthe
future.Soeventhoughweknowtheyarewrong,bymeasuringhowwrongtheyare,forecastscanbeconstantly
improvedforusebythebusiness.
QuestionNumber:41
Eveninanintermittentmanufacturingshop,certainJITprinciplescanbeapplied.Whichofthefollowingprinciplescanbeusedinanintermittentmanufacturingshop?
Employeeinvolvement
Totalpreventivemaintenance
Inventoryreduction
Continuousflowlines
A)IandIIIB)IIandIVC)I,II,andIIID)I,II,III,andIV
Thecorrectansweris:C
Anintermittentmanufacturerischaracterizedbyprocessinginbatches,andlargevariationindesignandorder
quantities.Attheextreme,everyjobcouldbemadetocustomerspecification.Theproductlacksacontinuous
flow.However,JITprinciplecanbeappliedforemployeeinvolvement,workplacelayout,totalqualitycontrol,
preventivemaintenance,setuptimereduction,supplierpartnerships,andinventoryreduction.
QuestionNumber:42
Whichofthefollowingmanufacturingtypeswouldtypicallyhavethelongestdeliverytime?
A)Make-to-orderB)Engineer-to-orderC)Make-to-stockD)Assemble-to-order
Thecorrectansweris:B
Deliverytimeisdefinedasthetimeelapsedfromreceiptofthecustomer'sordertothedeliveryoftheproducttothecustomer.Engineer-to-ordercompanieswillgenerallyhavethelongestdeliverytimeduetothedesignandengineeringtimerequiredtocreateaproduct.Incontrast,make-to-ordercompanieswillmakeaproductfromexistingcomponentsafteranorderisreceived.Make-to-stockcompanieswillshiptothecustomerfromstock.Assemble-to-ordercompanieswillassembleacustomerorderfromexistingsub-assemblies.
QuestionNumber:43
Whichofthefollowingstatementswouldbetrueregardingthedeliverytimeinanengineertoordercompany?
A)Deliverytimeisshorterthanamake-to-ordercompany.
Itwouldbethesameasamake-to-stockitem.C)Itwouldbelongerthananassemble-to-ordercompany.
D)Itwouldbeshorterthananassemble-to-ordercompany.
Thecorrectansweris:C
Deliverytimeisdefinedasthetimeelapsedbetweenreceiptofthecustomer'sorderandthedeliverytothe
customer.Engineer-to-ordercompanieshavethelongestdeliverytimeduetotheengineeringwhichmustoccur
beforetheproductcanbemanufacturedfordelivery.
QuestionNumber:44
Whichofthefollowingwouldbeconsideredafunctionofphysicaldistribution?
A)MaterialhandlingB)RoutingsC)KanbansizeD)Pullsignal
Thecorrectansweris:A
Physicaldistributionincludesalltheactivitiesassociatedwithphysicallymovinggoods;fromthesuppliertothestartofproduction,andfromtheendofproductiontotheconsumer.Materialhandlingisinvolvedwithphysicallymovingthegoods.Theothersarefunctionswithinmanufacturing.
QuestionNumber:45
Whichofthefollowingwouldbeconsideredpartofthephysicaldistributionsystem?
A)MovingmaterialsbetweenworkcentersB)Receivinggoodsfromsuppliers
Planningthetransferofgoodstooutsidecontractors
Forecastinginventorylevelstosupportmanufacturing
Thecorrectansweris:B
Physicaldistributionisdefinedasthephysicalmovementofgoodsfromsupplierstothebeginningofproductionandfromtheendofproductiontotheconsumer.Receivingwouldbeincludedaspartofthefunctionofphysicaldistribution.
QuestionNumber:46
Whichofthefollowingwouldmostlikelybeanindependentdemanditem?
A)InventoriedsubassemblyforaprinterB)Manufacturedsubassemblyinacar
C)PurchasedcomponentforaforktruckD)SparepartforajetengineThecorrectansweris:D
Independentdemandisdefinedasdemandforanitemwhichisunrelatedtothedemandforanotheritem.Servicepartswouldtypicallybeforecastindependentlyfromtheiruseduringthemanufactureofthejetengine.Therefore,thejetenginemighthaveindependentanddependentdemand.
QuestionNumber:47
Productionplanningisgenerallyadirectinputto:
materialrequirementsA)planning.B)purchaseorderplanning.
C)capacityloadataworkcenter.D)masterproductionscheduling.
Thecorrectansweris:D
Productionplansareagreeduponmanagementplansformanufacturing,shippingandinventory/backlog.These
plansaredevelopedattheaggregatelevel(e.g.monthly,productfamilies).Theplanprovidesmanagement
approvalforthemasterschedulertodevelopthedetailedmasterschedule(endproducts,weekly).
QuestionNumber:48
Whichofthefollowingwouldmostlikelybeadependentdemanditem?
A)SafetyglovesB)Officesupplies
C)PurchasedcomponentD)Itembeingshippedtocustomer
Thecorrectansweris:C
Dependentdemandisdefinedas"demandthatisdirectlyrelatedtoorderivedfromthebillofmaterialstructureforotheritemsorendproducts."(APICSDictionary)Therefore,apurchasedcomponentwouldbepartofabillofmaterialstructureanddemandwouldberelatedtothedemandforotherpartsinthatstructure.
QuestionNumber:49
Ifacompanyisgoingtoestablishacyclecountprogram,aprimaryobjectiveshouldbeto:correcttheA)inventoryrecords.B)reducetheheadcount.
C)identifythecausesofinventoryerrors.D)eliminatethephysicalinventory.
Thecorrectansweris:C
Theprimaryobjectiveofacyclecountprogramistoidentifythecausesofinventoryerrorsandeliminatethem
permanently.Onlybycorrectingthecausesoferrorwilltherecordsstayaccurateforthesystemtooperateproperlyand,perhapsinthefuture,eliminatethephysicalinventory.QuestionNumber:50
Acompanyneedstoincreaseproductioninthecurrentweektomeetacustomerrequest.Thequickestwaytoaccomplishthisisto:
A)workovertime.B)hiremoreworkers.
C)hiretemporaryworkers.D)subcontractthework.
Thecorrectansweris:A
Workingovertimeallowsskilledworkerstofinishthecustomersjob.Thiswouldbequickerthanhiringworkerswhichcantakeagreatdealoftime.Temporaryworkerscanbehiredquickly,however,thequalitywouldsuffer,andfindingashorttermsubcontractorwouldnotgenerallybefeasible.
QuestionNumber:51
Whichofthefollowingdoesatrackingsignalidentifyinaforecast?
A)MeanabsolutedeviationB)StandarddeviationC)BiasD)Aggregatesummarization
Thecorrectansweris:C
Biasoccurswhenthecumulativeactualdemandvariesfromtheforecastonaconsistentbasis.
Atrackingsignal
providesamathematicalmethodtodetermineiftheforecasterroristrulybiasedorifrandomerrorisoccurring.
Randomerrorwillcorrectitselfwhilebiaswillnot.AtrackingsignaliscalculatedbydividingthealgebraicsumoftheforecasterrorsbytheMAD(MeanAbsoluteDeviation).
QuestionNumber:52
Anincomestatementofacompanywillshowwhichofthefollowing?
A)InventorylevelsB)LongtermdebtC)CostofproductssoldD)NetcashavailableThecorrectansweris:C
Incomestatementsreflecttherevenuesandexpensesofacompanygeneratingeitheraprofitorloss.Costofproductssoldissubtractedfromtherevenuetoobtainagrossprofit.Fromthegrossprofit,expensesaredeductedtoarriveatanetincomeorloss.
QuestionNumber:53
Whichofthefollowingisareasontomaintaininventory?
A)ImprovecustomerserviceB)Reducetransportationcosts
C)IncreasemachineoperatingtimeD)Reducecosts
Thecorrectansweris:A
Oneoftheprimaryreasonstomaintaininventoryistoprovidecompetitivecustomerservice.Byhavinginventory,acompanycanavoidcostlystockouts,lostsales,andlostcustomers.Insomeindustries,suchasconsumergoods,itisimperativethattheproductbeinstockwhenthecustomerorders.
QuestionNumber:54
WhichofthefollowingbestdescribestheABCapproachtoinventorycontrol?
MaintainahighinventoryA)of"A"parts.B)Haveplentyof"C"parts.
C)Keepthe"B"partstoaminimumlevel.D)Alwayskeepplentyofinventory.Thecorrectansweris:B
TheABCmethodofinventorycontroloperatesontheassumptionthatacompany'slimitedresourcesshouldbe
usedtomaintainthehighpriorityitems,orAitems.TheCpartshavelessvalueandshouldthereforebemaintainedataveryhighlevelofinventorysoinaccuracieswillnotimpacttheoperation.Thiswouldallowlessresourcestobecommittedmanagingthelowpriorityitems.QuestionNumber:55
Thelawwhichstatesthatasmallpercentageofthegroupusuallyaccountsforalargepercentoftheresultsiswhichofthefollowing?
A)Fredo'slawB)Newton'sfirstlaw
C)Pareto'slawD)Nielsen'slaw
Thecorrectansweris:C
ParetowasanItalianeconomistwhodevelopedtheobservationthat80%oftheItalianwealthwasconcentratedin20%ofthepopulation.ThisobservationcanapplytomanyareasandisusedtoanalyzetheinventoryforclassifyingA,B,andCitems.Generally,80%oftheinventorydollarsrestwith20%oftheparts.
QuestionNumber:56
Inventoryisusedtodecouple:productionplansfromA)masterschedules.B)roughcutcapacityfromcapacityplans.
C)supplierordersfromsupplierdeliveries.D)supplyfromthedemand.Thecorrectansweris:D
Inventoryisusedtoseparatesupplyfromdemand.Thisallowsthemanufacturingtooccursmoothlywithoutas
muchdisruptioncausedbyfluctuatingdemand.Theinventoryactslikeashockabsorbersothespikesindemandarenotreflectedinthemanufacturingschedule.
QuestionNumber:57
Asupervisor'sprimaryroleinatotalemployeeinvolvementcompanyis:
A)controlling.B)cheerleading.
C)coaching.D)qualitycontrol.
Thecorrectansweris:C
Totalemployeeinvolvementallowsemployeestoparticipateindecisionmakingwhichwaspreviouslyreservedformanagement.Inthisenvironment,thesupervisor'sroleistohelpemployeessucceedbyassistingemployeesinadecisionmakingprocessratherthantellingemployeeswhattodo.Thiscoachingprocesshelpsemployeesimprovethedecisionstheymake.QuestionNumber:58
Conformancecanbebestdescribedas:
A)makingthehighestqualityproducts.B)meetingthespecifiedrequirements.
C)workingtogetherasateam.D)flowingproductthroughcells.Thecorrectansweris:B
Conformance,asdefinedbytheAPICSDictionary,is"anaffirmativeindicationorjudgementthataproductor
servicehasmettherequirementsofarelevantspecification,contract,orregulation."Thisdoesnotmeanthata
manufacturerisnecessarilymakingthehighestqualityproductsinthemarketplace.QuestionNumber:59
Theobjectiveofschedulingisto:ensureworkcentersareA)properlyloaded.B)meetdeliverydates.
C)providecapabletopromiseinformation.D)meetcosttargets.Thecorrectansweris:B
Theprimaryobjectiveofschedulingistomeetdeliverydateswhileutilizingmanufacturingresourceseffectively.
QuestionNumber:60
Ifavarietyofproductsaremadeinafactory,themostcommonunitofcapacityis:
A)machineturns.B)inventoryturns.C)time.D)dollars.
Thecorrectansweris:C
Whenfactoriesmakeavarietyofproducts,themostcommonunitofcapacityistimeorhours.Infactorieswhichmakecommonunits,ameasureofcapacitywillbetheunitofoutput.Forexample,beerismeasuredinbarrels,automobilesaremeasuredincarsproduced,etc.QuestionNumber:61
Whichofthefollowingbestdefinesthetermbreakevenpoint?
ThepointatwhichA)aproductfailsB)Currentassets=currentliabilities
C)Requiredcapacity=availablecapacityD)Revenues=totalcosts
Thecorrectansweris:D
Thebreak-evenpointoccurswhenrevenuesequaltotalcosts.Whenvolumeislessthanthebreakeven-point,a
lossoccurs.Conversely,whenvolumeexceedsthebreakevenpoint,aprofitoccurs.QuestionNumber:62
Thethroughputofamanufacturingprocessisdeterminedby:
A)overloadedworkcenters.B)firstworkcenterintheprocess.
C)underloadedworkcenters.D)lastworkcenterintheprocess.
Thecorrectansweris:A
Thefactorythroughputisregulatedbytheconstraintworkcenter.Theconstraintworkcenterisbydefinitiontheworkcenterthathasnoavailablecapacity.Therefore,theoverloadedworkcenterregulatesthethroughput.
QuestionNumber:63
InaJITmanufacturingenvironment,wastecanbedescribedas:
A)componentscr
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