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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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