SCM Exam 2 McGraw Hill

The match between a commercially available material, good, or service and the intended function is known as ________

suitability

Process variation that are intrinsic to the process are ________

common, non assignable causes of variation

The real costs of quality ________

rise significantly as defects increase in the finished product

ISO 9001 provides a tested framework for a systematic approach to consistently delivering product that satisfies customers’ expectations by ________

providing a set of standardized requirements a quality system must meet

If a process is stable and predictable ________

the probability of it meeting customer specifications can be predicted

A supplier certification program ________

may enable the buyer and seller to lower costs and improve quality

Examples of prevention costs include ________

machine, tool, material, and labor assessment costs

The best type of inspection to use is ________

dependent on the nature of the purchase

In a situation where there are high supply chain economies of scale and short lead time, the supply chain strategy should focus on ________

an accurate short-term forecast with strong tactics and less consideration of history

In a situation where there are low economies of scale and a long response time, the supply chain strategy should focus on ________

production flexibility since detailed and accurate forecasting is not of critical importance

All of the following are benefits of sales and operations planning (S&OP) EXCEPT:

the S&OP process eliminates the need to have finished goods inventory.

In sales and operations planning, operations generally prefers to offer customers ________blank lead times while sales prefers to offer ________blank lead times to customers

long, short

The monthly sales and operations planning (S&OP) process should begin with:

determining the business planning vs financial objectives.

Which of the following is NOT a key to making sales and operations planning (S&OP) work in an organization?

S&OP should focus 12-18 months into the future

If Dell computer is making a forecast for the next year, which of the following forecasts would most likely have the largest forecast error (as measured by the mean absolute percentage error, MAPE)?

Total number of laptops with 8 Gigabytes RAM, 512 Gigabyte hard drive and the fastest graphics card to be sold next year in US

Forecasts plus customer orders plus promotions equals ________

period demand

Forecasts plus customer orders plus promotions minus inventory-on-hand minus planned receipts equals ________

period logistics requirements

The resource optimization module of an advanced planning and scheduling (APS) system ________

is the computational engine of the supply chain planning system

Ordering cost only consists of the shipping cost from supplier to customer.

False

Ordering cost is which type of cost?

Fixed

Which of the following would be considered part of ordering cost? (Choose all that apply)

Minimum shipping charge

Renting a truck to haul the order (and only this order, no other business is used for this truck’s one time rental)

The newsvendor model works well for perishable products.

True

The newsvendor model balances which two costs? (Choose all that apply)

Cost of ordering too many

Running out and losing profits

The basic calculation in the newsvendor model will result in a calculation of:

optimal probability of running out.

The P-system of inventory submits inventory orders at random times.

False

What is another name for the “P-system” of inventory?

Periodic Review Inventory System

What are the two main challenges of the P-system? (Select two options)

• Length of review period

• Amount of inventory to have

What is the great benefit of the P-system?

Simplicity in managing the system

The time value of money, opportunity cost, is not part of the calculation of EOQ holding cost.

False

Holding cost is which type of cost?

Variable

Which of the following would be considered a direct holding cost? (Choose all that apply)

Refrigeration Costs

Weekly inventory quality checks for every unit in inventory

The Q-system of inventory submits inventory orders at random times.

True

What is another name for the “Q-system” of inventory?

Continuous Review Inventory System

What are the three main challenges of the Q-system? (Select three options)

inventory monitoring system

Having enough when you order

Figuring out how much to order

What is the great benefit of the Q-system?

Responsiveness

Safety stock is inventory held to guard against uncertainty.

True

Which two things drive the need for safety stock? (Choose two options)

Demand Variability

Delays

The “right” amount of safety stock is often a function of Service Level. Service Level is:

the probability of meeting demand during a delay.

The impact of supply management actions on the balance sheet is measured by the ________blank.

return on assets effect

On average, the dollars spent with suppliers as a percent of revenues ________

is greater in manufacturing organizations than in service organizations

Supply has the potential to contribute to ________

profitability, competitive position, and sustainability performance

Company image may be directly influenced by ________

treating suppliers in a fair and equitable manner, complying with regulatory requirements, and supplier sustainability performance

Evidence of supply function growth and influence in an organization includes ________

both activities under the management or span of control of supply and involvement in corporate activities

Evaluation of the supply function’s contribution to organizational goals and strategies can be viewed in the context of ________

both operational and strategic and direct and indirect

Supply decisions can affect ________

the income statement and the balance sheet

A systems approach to managing the flow of information, materials, and services from tiers of suppliers through the buying organization to tiers of customers is ________

supply chain management

For an organization with revenue of $100 million, purchases of $60 million, and profit of $8 million before tax, a 10 percent reduction in purchase spend would result in an increase in profit of ________blank.

75%

The return-on-assets effect (ROA) quantifies and measures ________

the impact of supply actions on inventory and the balance sheet