logistics exam 3

A newly launched twenty-first century addition to production strategy which leverages lean manufacturing strategies, Six Sigma best practices, and real-time actionable intelligence from the factory floor is called:

Adaptive manufacturing

A project layout is:

a fixed location layout where the product remains in place for the duration of production.

A push-based strategy works well for supply chains that focus on:

the immediate delivery of off-the-shelf, low-cost, standardized goods.

A workcenter is a fixed layout where the product remains in place for the duration of production.

False

Capacity is:

the maximum amount of work that an organization is capable of completing in a given period of time.

Capacity planning and materials planning are the same.

False

Capacity requirements planning is used to check the feasibility of the materials requirement plan.

True

Companies now use strategies that are lean, flexible, or adaptive; they wait for customers to push products to the market.

False

In an MRP system, this document identifies all of the components required to assemble an independent demand item.

d. Not a single document, but you need all three above

In assemble-to-order production:

the finished product is generally a combination of common components and a limited number of options or accessories made available to the customer.

Lean production relies on:

pull-based systems.

Machine flexibility provides the ability to produce different types of products as well as change the order of operations executed on a product.

True

Manufacturing and production operations create form utility.

True

Most processes are basically organized the same.

False

MRP is most effective at managing independent demand items.

False

Offshoring is a term that means relocating an activity to a contract manufacturer in another country.

TrueP

Packaging is:

critical to logistics

Packaging is very important in the manufacturing operation.

False

Processes that can produce a range of products are said to have:

economies of scope

Processes that can produce a range of products are said to have economies of scope.

True

Resource requirements planning (RRP):

is a long-run, macro-level planning tool.

Resource requirements planning (RRP) is a long-run, macro-level planning tool.

True

Routing flexibility is a term used in connection with how spare parts move through the supply chain.

False

The materials requirement plan (MRP) is a long-range materials plan that converts information regarding end-items in the MPS into a set of time-phased component and part requirements.

False

The "bullwhip" effect occurs when forecast errors are magnified and demand variability increases as orders move upstream from retailers to distributors to producers.

True

Which of the following is not a reactive capability strategy?

resource requirements planning

Which of the following types of production processes use tools and equipment that are generalized in nature?

continuous process

Which of these is not a production method?

create-to-order

World-class organizations can improve performance along multiple dimensions without making extensive performance tradeoffs or sacrifices.

True

Adjusting a forecast for seasons basically uses a combination of seasonal factors and average demand to arrive at an adjusted forecast.

True

A sales and operations planning process (S&OP) can produce a forecast internally that all functional areas agree upon and can execute.

True

A weighted moving average typically assigns higher weights to more recent periods.

True

Bias measures how accurate the forecast is compared to actual demand.

True

Collaborative planning, forecasting, and replenishment (CPFR) has not been considered to be a good process, as it excludes transportation.

False

Demand management includes:

all of these answers (flows of services, products, and capital)

Demand management might be defined as focused efforts to estimate and manage customers' demand, with the intention of using this information to shape operating decisions.

True

Dependent demand is directly influenced by independent demand.

True

Exponential smoothing

uses the difference between actual and forecast as a feedback term.

Exponential smoothing can use constants higher than 1, but not more than 5.

False

External balancing methods involve managing production and inventory flexibility to help offset the imbalance of supply and demand.

false

Forecasting has become extremely accurate, especially since the development of the S&OP process.

false

Four types of forecast error measures can be used. Which one of the following is not one of the four types?

Exponential smoothing for trends

Materials management and physical supply are terms that cannot be used interchangeably.

false

Mean Absolute Deviation (MAD) is a good metric of forecast accuracy because it shows whether a forecast is above or below actual demand.

false

One type of demand fluctuation is caused by random variation. What is random variation?

A development that cannot normally be anticipated

Outbound-to-customer logistics systems are also referred to as physical distribution.

true

Phantom demand is created by over-ordering during peak demand.

true

The essence of demand management is to estimate and manage _____ and use this information to make operating decisions.

customer demand

The essence of demand management is to estimate and manage customer demand so that demand and supply are balanced to the point where there are zero stockouts and zero safety stocks.

false

The internal balancing method deals with:

inventory and production flexibility.

There are four strategies that firms can use to balance supply and demand; price, lead time, inventory, and _____.

production flexibility

The term functional silos refers to:

lack of coordination between departments.

The weighted moving average method assigns:

a weight to each previous period.

This type of forecast error measure is the only one to show if a stock out or overage occurred:

CFE (bias).

Which of the following does a forecast always assume?

The past always repeats itself

While there are four types of forecast error measures that can be used, none are foolproof.

true

Customer service can be defined as

anything that touches the customer.

Customer relationship management is the art and science of

positioning customers to improve the profitability of the organization.

What are the steps in the CRM process?

segment customer base, then identify service/package, then measure service and improve

Activity Based Costing

can be applied to customer segmentation.

Traditional customer profitability analyses would start with ____ less returns and allowances (net sales) and subtracts the cost of goods sold.

gross sales

Those customers who are in the "Danger Zone" segment are

the least profitable

Order management system represents the principal means by which

buyers and sellers communicate relating to individual orders of product.

The term replenishment cycle refers to

the acquisition of additional inventory.

While interest has traditionally focused more on the overall length of the OTC cycle, recent attention has been centered on

variability or consistency within this process.

The traditional role of customer service at the interface between marketing and logistics. This relationship manifests itself through the ____ dimension of the marketing mix.

place

Applying Internet technology to the order management process has allowed organizations to not only take time out of the process but also to

increase the velocity of cash back to the selling organization.

Which is not part of dependability?

consistent pricing

The SCOR model provides suggested metrics

across multiple dimensions for each of the five Level One processes.

Customer service is anything that touches the customer.

true

The buyer and seller look at order time from the same perspective.

false

There are ten principal activities to the OTC model.

false

Deliver Stocked Product in the Supply Chain Council SCOR Model is the same as the OTC model.

true

Reserve Inventory and Determine Delivery Date has traditionally been referred to as order processing.

false

A driving force behind the attention to OTC cycle variability is safety stock. The absolute length of the order cycle will influence demand inventory.

true

Customer service is of equal importance to both logistics and marketing.

true

From a marketing perspective, logistics customer service can be thought of as a feature of the augmented product that adds value for the customer product.

true

Dependability is not as important to a buyer as is absolute length of lead time.

false

There are four types of communications that exist between a buyer and a seller.

false

There are five logistics performance metrics from the buyer's point of view.

true

Most organizations employ all six definitions of customer service in their order management process.

false

A stockout always results in a back order.

false

Customer relationship management is a new concept only recently receiving attention.

false

For the best service, all products should be available at all levels regardless of cost.

false

Firms today are beginning to use techniques such as activity-based costing to more accurately allocate costs to customers. It's based on the specific costs of servicing a customer's orders relative to how, how much, what, and when a customer orders.

true

The identification of the product/service package for each customer segment is one of the easier activities in the CRM process.

false

Activity-based costing works well in warehouse-type environments but does not work for customer-service applications.

false

With the proper information on how a customer's interaction drives firm's costs, the firm can then segment its customers by profitability.

true

"Order to cash" and "order cycle" are the same.

true

"Order to cash" and "replenishment cycle" are the same.

false

ABC analysis uses a single criterion to classify SKUs from most important to least important.

true

A DRP system is usually coupled with a _____ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.

MRP

A reason to hold inventory arises when an organization anticipates that an unusual event might occur that will negatively impact its source of supply.

true

As Q decreases for EOQ, the cost per order:

decreases

Batching economies or cycle stocks usually arise from three sources. Which of these is not a source?

demand

Capital cost focuses on the cost of capital tied up in _____ and the resulting lost opportunity from investing that capital elsewhere.

inventory

Capital cost is also called interest or opportunity cost.

true

Dependent demand relates to:

demand for another inventory item or product.

EOQ can only be used for "push" inventory.

false

In comparison with the basic EOQ approach, the fixed interval model does not require close surveillance of inventory levels.

true