Introduction to Materials Management, 9th edition By Stephen N. Chapman Test Bank

Type:

Test Bank

Introduction to Materials Resource: Management Edition:

9th Edition

Author(s):

Steve Chapman J.R. Tony Arnold Lloyd M. Cive Ann K. Gatewood

Introduction to Materials Management, 9e (Chapman) Chapter 1 Introduction to Materials Management 1) Select the best answer to the following: A) traditionally the supply-production-distribution functions have reported to different departments B) the supply, production and distribution functions are part of a total system C) materials flow into an organization, are processed in some way and distributed to the consumer D) all the above are correct E) none of the above is correct Answer: D 2) Manufacturing is important to the economy because: A) it generates wealth B) it supports service industries C) it adds value to products D) all of the above E) none of the above Answer: D 3) Which of the following is the best statement about the operating environment in which operations management functions?

A) Most organizations do not need to worry about competition B) Customers are more demanding C) Government regulation is not important for companies D) Price is more important than quality E) None of the above is true Answer: B 4) Which of the following statements is best regarding order winners?

A) They persuade a company's customers to choose its product B) They are the same in every market C) They are the same as order qualifiers, only better D) They are present in every product E) All the above are true Answer: A 5) Which of the following strategies has the shortest delivery lead time and the least customer input?

A) Engineer-to-order B) Make-to-order C) Assemble-to-order D) Make-to-stock Answer: D

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6) Which of the following statements is best?

A) The supply chain includes all activities and processes to provide a product or service to a customer B) Material in the supply chain usually flows from producer to customer C) The supply chain contains only one supplier D) All of the above are true E) A and B only are true Answer: E 7) Companies A and B supply company C, which supplies customers D and E. Which of the following statements is best?

A) The supply chain for company A includes B, C, D, and E B) The supply chain for company B includes A, C, D and E C) The supply chain for company C includes A, B, D, and E D) All the above are true Answer: C 8) Which of the following statements is best?

A) The basic elements of a supply chain are supply, production, and distribution B) The elements of a supply chain are interdependent C) Design information generally flows from customer to supplier D) All the above are true Answer: D 9) Which of the following is the best statement about the environment in which operations management functions?

A) Most organizations do not need to worry about competition B) World-wide competition is not significant for most companies C) Government regulation is not important for companies D) Customers are more demanding E) None of the above is true Answer: E 10) If a firm wishes to maximize profit, which of the following objectives are in conflict?

I. Maximize customer service II. Minimize production costs III. Minimize inventory costs IV. Minimize distribution costs A) All the above B) None of the above C) I and II only D) I and III only E) II and III only Answer: A

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11) Which of the following statements is best?

I. The conflict between marketing, finance and production centers on customer service, disruption to production, and inventory levels II. Marketing's objectives can be met with higher inventories III. Finance's objectives can be met with higher inventories IV. Production's objectives can be met with higher inventories A) All of the above are true B) I and II only C) I, II, and III only D) I, II, and IV only E) II, III, and IV only Answer: D 12) Which of the following is normally a major activity of materials management?

I. Manufacturing planning and control II. Physical supply/distribution A) Both I and II B) Neither I nor II C) I only D) II only Answer: A 13) The objective of materials management is to: I. Provide the required level of customer service II. Maximize the use of the firm's resources A) I only B) II only C) I and II D) neither I nor II Answer: C 14) Which of the following is/are primary activities of manufacturing planning and control?

I. Production planning II. Implementation and control III. Inventory management A) I and II only B) II and III only C) I and III only D) All the above are primary activities Answer: D

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15) Which of the following is (are) input(s) to manufacturing planning and control?

A) Product description B) Process description C) Available facilities D) Quantities to be produced E) All the above are inputs Answer: E 16) Which of the following is NOT an activity of physical supply/distribution?

A) Transportation B) Factory inventory C) Warehousing D) Packaging E) Materials handling Answer: B 17) Materials management can be considered a balancing act because: I. there are trade-offs between customer service and the cost of providing the service II. priority and capacity must be balanced A) neither I nor II B) I only C) II only D) I and II Answer: D 18) If the cost of manufacturing (direct labor and materials) is 50% of sales and profit is 15% of sales, what would the profit percentage be if the direct costs of manufacturing was reduced from 50% to 47%?

A) 3% B) 6% C) 12% D) 15% E) 18% Answer: E 19) Which of the following are generally considered overall objectives of an organization?

I. Providing good customer service II. Maintaining low levels of inventory investment III. Optimizing use of resources IV. Providing sufficient return on investment A) I and II only B) I, II, and III only C) I, III, and IV only D) All the above Answer: D

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20) The purpose of the materials management concept is: I. to manage materials in a production operation II. to have purchasing support the needs of production III. to have production support the needs of purchasing A) II and III only B) I and II only C) I, II, and III D) I and III only Answer: B 21) Making a pizza at a fast-food restaurant would be considered a form of: A) engineer-to-order B) assemble-to-order C) make-to-stock D) make-to-order E) none of the above Answer: B 22) Metrics in a supply chain are: A) governed by the International Metric Commission B) measurements of performance C) a charge passed on to customers D) not used on transportation E) do not apply to the supply chain Answer: B 23) Performance measures in a supply: A) should be objective B) are viewed mostly by finance C) must be measurements of one parameter only D) concentrate on cost only E) are not used once a process is automated Answer: A 24) Which statement is best?

A) Performance standards are set by the supplier B) Performance standards set the goal C) Performance measurements show how well you did D) Both B and C are correct E) None of the above applies to the supply chain Answer: D

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25) Savings in the supply chain mostly are the result of: A) members in the chain sharing information B) being able to ship in larger quantities C) members having clout with suppliers D) sticking with local competition E) cutting cost after the design phase Answer: A 26) Postponement is best described as: A) delaying payment to a supplier until the goods have been sold B) delaying the removal of inventory until the last possible moment C) reducing inventory from RM when the parent item is produced D) changing the BOM after the old components have been used up Answer: C 27) Postponement is best used with items that: A) have a long lead time and many product configurations B) are standardized and have short lead times C) experience a yield that you won't know until the product is complete D) suppliers with poor delivery performance Answer: B 28) A channel master in a supply chain: A) initiates integration of a supply chain B) is the final customer in a supply chain C) is the largest member of a supply chain D) controls the raw material supplies in a supply chain Answer: A 29) The term that describes eliminating waste throughout a company is: A) Kaizen B) lean production C) theory of constraints D) process control Answer: B 30) If the manufacturing lead time of an item is reduced by 50% the work in process inventory: A) does not change B) is reduced by approximately 70% C) is reduced by approximately 50% D) more information is needed for this problem Answer: C

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Introduction to Materials Management, 9e (Chapman) Chapter 2 Production Planning System 1) The ability of manufacturing to produce goods and services is called: A) scheduling B) production planning C) capacity D) routing E) none of the above Answer: C 2) Priority in production planning relates to: A) what should come first B) how much of what is needed and when C) capacity D) an objective of the firm E) none of the above Answer: B 3) Which of the following is an input to the production plan?

A) Strategic business plan B) Financial plan C) Market plan D) Engineering plan E) All of the above are inputs Answer: E 4) Which of the following plans has the longest planning horizon and the least level of detail?

A) Strategic business plan B) Production plan C) Master production schedule D) All of the above have the same level of detail E) None of the above Answer: A 5) In terms of INCREASING level of detail, which is the best sequence of activities?

I. Material requirements planning II. Master production scheduling III. Production planning A) I, II, and III B) I, III, and II C) II, III, and I D) II, I, and III E) III, II, and I Answer: E

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6) Over the time span of the production plan, which of the following can usually be varied to change capacity?

A) Work force B) Inventories C) Plant and equipment D) All of the above E) A and B above Answer: E 7) Which of the following is a characteristic of a production plan?

A) Time horizons are five years B) The production plan is for individual items C) The only objective is to have an efficient plant D) All of the above are characteristics of a production plan E) None of the above is characteristic of a production plan Answer: E 8) Determining the need for labor, machines, physical resources to meet the production objectives of the firm is called: A) production control B) production planning C) capacity planning D) all of the above E) none of the above Answer: C 9) The function of setting the limits or levels of manufacturing operations based on the market plan and resource availability is called: A) production planning B) production activity level C) capacity planning D) all of the above E) none of the above Answer: A 10) A statement of a schedule of requirements for individual end items is called: A) a master production schedule B) a material requirements plan C) a production plan D) a capacity plan E) none of the above Answer: A

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11) Which of the following statements is most appropriate regarding production planning?

A) A high level of detail is not needed B) A translation must be made from product demand to capacity demand C) Product groups based on similarity of manufacturing process should be used in planning D) All of the above are true E) None of the above is true Answer: D 12) Which of the following statements is best about sales and operations planning?

A) It provides a means of updating the material requirements plan B) It includes only the marketing and production plans C) It is usually updated on a monthly basis D) It has no effect on inventory levels Answer: C 13) Which of the following are characteristics of an ERP system?

I. It incorporates the plans of marketing, production and finance II. It is a fully integrated planning and control system III. It has feedback from the bottom up A) I only B) II only C) III only D) I, II, and III Answer: D 14) For the purposes of production planning, product groups should be established on the basis of: A) market segments B) similarity of manufacturing process C) the availability of materials D) the availability of machinery E) all of the above Answer: B 15) Which of the following is a basic strategy in developing a production plan?

A) Hybrid strategy B) Production leveling C) Chase strategy D) A and B above E) B and C above Answer: E

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16) A production planning strategy which turns away extra demand is called: A) production leveling B) demand matching C) hybrid strategy D) all of the above E) none of the above Answer: E 17) Which basic production planning strategy will build inventory and avoid the costs of excess capacity?

A) Demand matching (chase) B) Production leveling C) Subcontracting D) All the above E) None of the above Answer: B 18) Which basic production planning strategy avoids hiring and layoff costs and the costs of excess capacity?

A) Demand matching B) Operation smoothing C) Subcontracting D) All the above E) None of the above Answer: C 19) If the opening inventory is 100 units, the sales are 500 units and the ending inventory is 200 units, then manufacturing must produce: A) 300 units B) 400 units C) 500 units D) 600 units E) none of the above Answer: D 20) Over a 10-week period the cumulative sales are forecast at 10,000 units, the opening inventory is 200 units and the closing inventory is to be 100 units. What should be the weekly planned production for level production?

A) 990 B) 1000 C) 1010 D) 1030 E) none of the above Answer: A

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21) Firms will generally make-to-stock when: A) demand is unpredictable B) there are many product options C) delivery lead times are long D) all of the above E) none of the above Answer: E 22) Firms will generally make-to-order when: A) products are produced to customer specifications B) there are many product options C) product is expensive to make and store D) all of the above E) none of the above Answer: D 23) Which of the following information is needed to develop a make-to-stock production plan?

I. Forecast by time period for the production plan II. Opening inventory III. Opening backlog of customer orders IV. Desired ending inventory A) I, II, and III B) I, II, and IV C) 1, III, and IV D) II, III, and IV E) None of the above Answer: B 24) If the old backlog was 200 units, the forecast for the next period is 500 units, and production for the next period is 600 units, what will be the backlog at the end of the next period?

A) 100 units B) 200 units C) 300 units D) 700 units E) 800 units Answer: A 25) ________ is concerned with long-term planning of manufacturing activity.

A) Sales and operations planning B) Master production scheduling C) MRP D) Production activity control E) Master planning Answer: A

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26) Which of the following is NOT a rule of Sales and Operations Planning?

A) Product Groups need not be decided B) Planning units of measure need to be decided C) A planning horizon must include new product development time D) Performance review periods to be compared should be decided Answer: A 27) Which of the following is a complete closed loop planning system that develops plans for all materials and operations?

A) Capacity requirements planning B) Enterprise resource planning C) Supply chain management D) Material requirements planning Answer: B 28) When developing a production plan during the Sales and Operations Planning process sometimes the actual planned production is less than the expected market demand. Which of the following reasons is the most logical explanation for that condition?

A) Increased competitive pressure B) Transportation problems C) Restricted warehouse space D) Availability of resources E) Governmental pressure Answer: D 29) Which level of personnel are generally responsible for developing the Sales and Operation Plan?

A) First line supervisors B) Departmental managers C) Engineering staff D) Marketing and sales personnel E) Executive level staff Answer: E 30) Enterprise Resource Planning (ERP) is often difficult to implement for all the following reasons EXCEPT: A) inaccurate data B) poor training programs C) poor software availability D) integration across functions E) top manager commitments Answer: C

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31) Which of the following production planning strategies typically produces the smallest amount of inventory holding cost?

A) Chase B) Level C) Hybrid D) Level with subcontracting E) Chase with subcontracting Answer: A 32) Which of the following represents the primary purpose of developing a Sales and Operations Plan?

A) To evaluate and improve the forecasting method B) To plan production orders and timing C) To establish meaningful sales tactics D) To plan resource needs and timing E) To develop and refine financial statements Answer: D

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Introduction to Materials Management, 9e (Chapman) Chapter 3 Master Scheduling 1) The information needed to develop a master production schedule will be got from: A) the production plan B) the forecast of individual end items C) inventory levels for individual end items D) all of the above E) none of the above Answer: D 2) The MPS is a vital link the production planning system because it: I. keeps priorities valid II. forms the basis for determining the capacity needed III. is input to the material requirements plan IV. is input to the production plan A) I, II, III, and IV B) I, II, and III C) I, II, and IV D) II, III, and IV E) I, III, and IV Answer: B 3) The MPS: A) facilitates order promising B) works with individual end products C) is an agreed-upon plan between production and marketing D) all of the above E) none of the above Answer: D 4) The functions of a master production schedule are to: I. plan material components II. plan capacity requirements III. keep priorities valid A) I, II, and III B) I and II only C) I and III only D) II and III only E) none of the above is a function of the MPS Answer: D

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5) Which of the following are objectives of an MPS? I. Maintain the desired level of customer service II. Keep the sales department happy III. Make the best use of material, labor and equipment IV. Maintain inventory investment as required A) I only B) I and II only C) I, II, and III only D) I, III, and IV only E) II, III, and IV only Answer: D 6) The process of checking the MPS against available capacity is called: A) capacity planning B) shop-floor control C) rough-cut capacity planning D) capacity control E) process checking Answer: C 7) In an assemble-to-order company, at which level should master scheduling take place?

A) The component/subassembly level B) The end item level C) The raw material/component level D) It does not matter, any level will do E) None of the above levels Answer: A 8) The final assembly schedule (FAS): A) schedules customer orders as they are received based on components planned in the MPS B) is used with make-to-order products C) is used with make-to-stock products D) A and B above E) none of the above Answer: A 9) Which of the following statements is best regarding the master production schedule?

A) It is an agreed-upon plan between marketing and manufacturing B) If it is poorly done, we can expect past-due schedules and unreliable delivery promises C) It is a plan for specific end items that manufacturing expects to make over some period in the future D) All of the above are true E) None of the above is true Answer: D

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10) The portion of inventory or production not committed to customer orders is called: A) free stock B) available to promise C) excess production D) waste E) excess capacity Answer: B 11) If there are customer orders the projected available is based on: A) forecast demand B) customer orders C) the greater of forecast demand and customer orders D) the opinion of the planner Answer: C 12) Which of the following is (are) TRUE about time fences in a master production schedule system?

I. Changes far out in the planning horizon can be made with little or no cost to manufacturing II. In the "frozen zone," capacity and materials are committed to specific order III. Changes in the near future on the planning horizon are less costly to make than changes far out A) I and II only B) II and III only C) I and III only D) I, II, and III E) None of the above Answer: A 13) Which of the following is NOT an input to the master production schedule?

A) Sales forecast for items B) Current inventory status C) Final assembly schedule D) Customer orders E) Production plan Answer: C 14) The MPS is constrained by: I. the availability of material.

II. available capacity.

III. inventory policies.

IV. production plan.

A) all of the above B) I, II, III only C) I and II only D) II and III only E) none of the above Answer: A 3 .

15) Given the following data, complete the table. There are 30 on hand. Order quantity is 60 units.

Week Forecast Projected available Scheduled receipts

1 20

2 30

3 50

4 20

A) The projected available in week 3 is 40 B) The projected available in week 4 is 30 C) There is a scheduled receipt in week 4 D) A and B are true E) B and C are true Answer: B 16) Given the following table, calculate the ATP. There are 50 units on hand.

Week Customer orders Scheduled receipts ATP

1 20

2 20

3 15 50

4 30

5 10

A) The ATP in week one is 10 B) The ATP in week one is 30 C) The ATP in week one is 5 D) The ATP in week two is 10 E) The ATP in week three is 35 Answer: C 17) The time span for which plans are made is called the: A) time fence B) planning horizon C) time bucket D) forecast period E) none of the above Answer: B

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18) The final assembly schedule is used: A) in a make-to-stock environment B) in a make-to-order environment C) in a assemble-to-order environment D) in any of the above E) in none of the above Answer: C 19) The PAB is calculated in which way for periods after the demand time fence?

A) PAB = prior period PAM or on-hand balance + MPS - customer orders B) PAB = prior period PAB or on-hand balance + MPS + customer orders C) PAB = prior period PAB or on-hand balance + MPS - customer orders D) PAB = prior period PAB + MPS - greater of customer orders or forecast E) PAB = prior period PAB + MPS + greater of customer orders or forecast Answer: C 20) Which of the following is the term applied to a master schedule for a purchased item?

A) Supplier scheduling B) Master scheduling C) Material scheduling D) Purchase order Answer: D 21) Which of the following is a contract between manufacturing and marketing?

A) Production plan B) Master schedule C) Forecast D) Customer order Answer: B 22) Master scheduling is a balancing act between which of the following?

A) Forecasts and orders B) Inventory and customer service C) Supply and demand D) Forecast and inventory Answer: C 23) Which of the following modules follows the Sales and Operations Plan?

A) Business planning B) Production planning C) Master scheduling D) Material requirements planning Answer: C

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24) Sales forecasting and resource capacity planning are two components of which of the following?

A) Master scheduling B) Sales and operations planning C) Production Plan D) Master production schedule Answer: C 25) On a master schedule developed for a make-to-order product, what is typically being scheduled on the master production schedule (MPS) line?

A) Raw material B) Resources C) Subassemblies D) Finished products E) Critical workforce needs Answer: A 26) Which of the following represents the minimal time horizon for a planning time fence in a master schedule?

A) The timing of the furthest out actual customer order B) The cumulative lead time of the product C) The final assembly lead time of the product D) The longest lead time of all the raw material E) The cumulative setup time for all equipment used to make the product Answer: B

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Introduction to Materials Management, 9e (Chapman) Chapter 4 Material Requirements Planning 1) In the diagram below the independent demand item is:

A) X B) 1 C) 2 D) 3 E) 4 Answer: A 2) ________ is a set of priority planning techniques for planning component items below the ________.

A) Material requirements planning; end item level B) Master production scheduling; the market plan C) Production planning; end item level D) All of the above E) None of the above Answer: A 3) The objectives of material requirements planning are to: A) issue orders to purchasing and manufacturing B) keep priorities current C) determine requirements D) all of the above E) B and C above Answer: D 4) Which of the following is (are) elements in an MRP system?

A) The computer B) Bills of material C) Inventory records D) All of the above E) None of the above Answer: D

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5) A set of priority planning techniques for planning component items below the end item level is called: A) master scheduling B) material requirements planning C) capacity planning D) production control E) none of the above Answer: B 6) A major input to an MRP system is: A) the production plan B) the capacity plan C) shop-floor activity planning and control D) the master schedule E) none of the above Answer: D 7) The document that shows the component parts and the number of parts needed to make one of an assembly or subassembly is called: A) a route sheet B) a material requirements plan C) a bill of material D) a material requisition E) none of the above Answer: C 8) A product tree shows: A) the parts that go into making a product B) the subassemblies used in making the product C) the sequence in which parts go together D) all of the above E) none of the above Answer: D 9) Which of the following statements is best?

A) A part number identifies one part only B) A part has one and only one part number C) The same part on different bills of material will have the same part number D) All of the above are true E) None of the above is true Answer: D

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10) Which of the following statements is best?

A) Item A is the parent of item B B) Item D is on level 3 C) Item A is a parent of item D D) All of the above are true E) None of the above is true Answer: A 11) A multi-level bill of material: I. reflects the way the product will be manufactured.

II. is produced by the engineering department.

III. is a parts list only and does not contain subassemblies.

A) I only B) II only C) III only D) I and II only E) I, II, and III Answer: A 12) A bill of material whose purpose is to simplify forecasting, master production scheduling and material requirements planning is called: A) a summarized parts list B) where-used bill C) planning bill D) structured bill E) multi-purpose bill Answer: C 13) Which of the following statements is best?

A) A where-used report is the same as a pegging report B) A where-used report shows all the components that go into assembly C) A pegging report shows all the parents for a component D) A where-used report shows only those parents for which there is an existing requirement E) Pegging reports show only the parents for which there are requirements Answer: E

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14) The ability to relate the demand for an item shown on an MRP record back to the particular parent causing the demand is called: A) where-used B) relating C) pegging D) any one of the above E) none of the above Answer: C 15) The lead time for each item is 1 week. If an order for 50 of A is to be delivered in week 5, in what week will there be a planned order RELEASE for item B?

A) 5 B) 4 C) 3 D) 2 E) 1 Answer: C 16) Which statement is correct?

A) Planned order releases show when the order is needed B) When an order is released, it becomes a planned order C) Scheduled receipts show when goods were put into inventory D) All of the above are correct E) None of the above is correct Answer: E 17) Which statement is correct?

A) A product tree shows the parts that go into making a product B) A part has one and only one part number C) Net requirements = gross requirements - on-hand inventory - scheduled receipts D) All of the above are correct E) None of the above is correct Answer: D

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18) In material requirements planning the process of placing the exploded requirements in the proper time periods, based on the assembly lead times involved, is known as: A) exploding B) offsetting C) netting D) all of the above E) none of the above Answer: B 19) Which statement is best?

A) The planned order release of the parent generates the gross requirement of the component B) The planned order release of the parent becomes the net requirement of the component C) The planned order release of the component becomes the order receipt of the parent D) All of the above are true E) None of the above is true Answer: A 20) Which of the following statements is best about released orders?

A) A scheduled receipt is a released order B) An open order is a released order C) A planned order release is a not a released order D) All of the above are true E) None of the above are true Answer: D 21) Which of the following is NOT true of an MRP record?

A) The current time is the beginning of the first period B) The number of periods in the record is called the planning horizon C) An item is considered to be available at the end of the time bucket in which it is required D) The projected on-hand balance is for the end of the period E) The immediate or most current period is called the action bucket Answer: C 22) In the following product trees the low-level code of item D is:

A) 0 B) 1 C) 2 D) 3 E) 4 Answer: C 5 .

23) Which of the following statements is best?

A) Every item has more than one low-level code B) Net requirements = gross requirements + on-hand + scheduled receipts C) Each part has at least one part number, depending on where it is used D) All of the above are true E) None of the above is true Answer: E 24) Given the following product tree, the parent of B is:

A) A B) B C) C D) D E) E Answer: A 25) Given the following parents and components, how many Bs are required to make an X? Quantities are shown in brackets.

Parent X A Component A(2) B(2) B(1) D(1) A) 1 B) 2 C) 3 D) 4 E) 5 Answer: E 26) Which of the following are controlled by the materials planner?

A) Firm planned orders B) Planned orders C) Released orders D) Exception messages E) All of the above Answer: A

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27) The lead time for each item is 2 weeks. If an order for 100 of A is to be delivered in week 6, in what week will there be a planned order RELEASE for item B?

A) 5 B) 4 C) 3 D) 2 E) 1 Answer: A Use the following MRP record and your calculations to answer the following question(s). The component has an order quantity of 100, a safety stock of ten, and a lead time of one period.

Complete the following MRP record.

Week Gross requirements Scheduled receipts Projected available 30 Net requirements Planned order receipt Planned order release

1 25 100

2 80

3 20

4 80

28) Complete the above MRP record. Which of the following statements is correct?

A) A planned order for 50 should be released in period two B) The projected available in period three is 55 C) The projected available in period three is five D) The net requirement in period two is 20 E) The net requirement in period three is ten Answer: B 29) The net requirement in period three is: A) 0 B) 5 C) 10 D) 15 Answer: D

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30) Which of the following statements is best regarding part numbering systems?

A) Significant part numbering systems are difficult to maintain B) It is easier to remember numbers than letters C) A random number is an identifier not a descriptor D) All of the above are true Answer: D 31) Which of the following is elapsed time from recognition of a need until the time that need is satisfied?

A) Production time B) Lead time C) Cycle time D) Schedule Answer: B 32) Which of the following comes directly from external customers?

A) Dependent demand B) Independent demand C) Bill of materials D) Order quantity Answer: B 33) Service parts experience which of the following types of demand?

A) Independent B) Dependent C) Independent and Dependent D) None of the above Answer: C 34) In material requirements planning, the process of placing the exploded requirements in the proper time periods, based on the assembly lead times involved, is known as: A) scheduling B) offsetting C) netting D) all of the above E) none of the above Answer: B 35) A bill of material for an item must change: A) when a component changes B) when there is a change in the use of the item C) when the item is used in another parent D) never E) if the item is fully interchangeable Answer: A

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36) Three inputs to the MRP process are: A) production activity control, purchasing, and the production plan B) inventory status, the master production schedule, and the product structure C) the master production schedule, inventory status, and the capacity requirements plan D) the product structure, production activity control, and inventory status E) the product structure, production activity control, and the master production schedule Answer: E 37) Which of the following statements is TRUE? I. Firm planned orders are planned orders frozen by the planner II. Released orders are planned orders that have been released by the computer III. The planner should not release an order unless satisfied the order can be carried out A) I and II only B) I and III only C) II and III only D) I, II, and III E) none of the statements is true Answer: B 38) Given the following product tree, how many product structure relationships are there?

A) 1 B) 2 C) 3 D) 4 E) 5 Answer: E 39) The document that shows the component parts and the number of parts needed to make one of an assembly or subassembly is called: A) a route sheet B) a material requirements plan C) a bill of material D) a material requisition E) none of the above Answer: C

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40) In the product structure diagram below item X has ________ demand and item 2 has ________ demand.

A) dependent, dependent B) dependent, independent C) independent, independent D) independent, dependent E) none of the above answers are correct Answer: D The following question(s) use the information in this MRP record. The lead time is 3 weeks.

Week Gross requirements Scheduled receipts Projected available Net requirements Planned order receipt Planned order release

1 60 40

2 50 100 90

3 60

4 70

30

100

41) The projected available to be shown in week three is:

A) 0 B) 75 C) 125 D) 175 E) none of the above Answer: A

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5 20 40

42) The net requirement for week four is: A) 25 B) 50 C) 75 D) 200 E) any of the above Answer: C 43) The beginning projected available is: A) 10 B) 40 C) 60 D) 100 E) cannot be determined from the data Answer: E 44) Which of the following statements is best?

A) The same part on different bills of material has different part numbers B) A part number identifies one part only C) A significant part numbering system should always be used D) All of the above are true E) None of the above are true Answer: B 45) What happens to a planned order in MRP for a purchased part once it is released by the planner?

A) It becomes a planned order for the period in which delivery is expected B) It becomes a scheduled receipt in the period in which delivery is expected C) It becomes a scheduled receipt in the same time period in which it was planned D) It disappears from MRP and is only recorded in the purchasing system E) It becomes a firm planned order in the same time period in which it was planned Answer: B

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Introduction to Materials Management, 9e (Chapman) Chapter 5 Capacity Management 1) ________ is responsible for determining the capacity required and with methods of making the capacity available.

A) Production planning B) Master production scheduling C) Production activity control D) Capacity planning E) Material requirements planning Answer: D 2) ________ is responsible for capacity planning at the master production schedule level and ________ at the material requirements planning level.

I. Resource planning II. Rough-cut capacity planning III. Capacity requirements planning A) I and II B) I and III C) II and III D) None of the above Answer: C 3) Available capacity in production planning is: A) the amount of inventory that can be held in a warehouse B) the quantity of work that can be performed in a given period of time C) a measure of the ability of a plant to consume raw materials D) all of the above E) none of the above Answer: B 4) ________ are generated by the priority planning system and involve the translation of the priorities, generally given in units of product or some common unit, into hours of work required at each work center in each time period.

A) Capacity requirements B) Capacity bills C) Work center reports D) all of the above E) none of the above Answer: A

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5) Rated capacity is calculated taking into account work center ________ and ________.

I. historical data II. utilization III. efficiency A) I and II B) I and III C) II and III D) none of the above Answer: C 6) A work center consists of 2 machines working 8 hours a day and 5 days a week. Historically, utilization has been 80% and the efficiency 90%. The effective capacity, to the nearest hour, would be: A) 80 hours B) 40 hours C) 30 hours D) 50 hours E) 58 hours Answer: E 7) The available capacity will be influenced by: I. product specification.

II. product mix.

III. work effort.

IV. units of measurement A) I, II, and III only B) I, II, and IV only C) II, III, and IV only D) III only E) IV only Answer: A 8) The percentage of time the work center is active compared to the available time is called: A) efficiency B) effectiveness C) utilization D) Murphy's factor E) up-time Answer: C 9) The ratio of standard hours of work produced to hours actually worked is called: A) efficiency B) effectiveness C) utilization D) Murphy's factor E) up-time Answer: A 2 .

10) (Available time) × (utilization) × (efficiency) is called: A) effectiveness B) useful capacity C) demonstrated capacity D) rated capacity E) work time Answer: D 11) Which of the following is NOT an input needed in capacity requirements planning?

A) Open shop orders B) Planned order releases C) Routings D) Time standards E) Rough-cut capacity Answer: E 12) Information on the standard times for an operation will be found in: A) the work center file B) the routing file C) the master file D) the product file E) the production file Answer: B 13) Which of the following is the best statement?

A) Open shop orders appear as scheduled receipts in the MRP B) Information on queue and wait time can be obtained from the work center file C) The Gregorian calendar is suitable for production planning D) A and B are true E) B and C are true Answer: D 14) A ________ shows the capacity required at each work center based on planned and released orders for each time period of the plan.

A) work center profile B) load profile C) scheduled order profile D) work-to-be-done report E) work center file Answer: B

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15) One hundred units of part A are to be processed on a work center. The setup time is 2 hours and the run time per piece is 10 minutes. The total standard time will be: A) 2 hours 10 minutes B) 3 hours 40 minutes C) 10 minutes D) 1000 minutes E) 1120 minutes Answer: E 16) In the short run, capacity can be altered by any of the following EXCEPT: A) scheduling overtime B) selecting alternate routings C) reallocating the work force D) purchasing new equipment E) subcontracting out Answer: D 17) A report that shows the future capacity requirements based on released and planned orders for each time period of the plan is called: A) load report B) capacity report C) order report D) dispatch list E) none of the above Answer: A 18) Over the previous three weeks a work center produced 36, 43, and 35 standard hours of work. What is the measured capacity?

A) 114 standard hours B) 36 standard hours C) 38 standard hours D) 43 standard hours E) Cannot be determined with this data Answer: C 19) A work center was available for work 80 hours, produced 74 standard hours of work and actually worked 67 hours. What is the efficiency of the work center?

A) 92.5% B) 110.4% C) 108.1% D) 119.4% Answer: B

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20) In one week a work center produced 130 standard hours of work. The actual hours worked was 114. The efficiency is: A) 80.8% B) 87.7% C) 92.3% D) 114.0% Answer: D 21) Determining the need for labor, machines, and resources to meet the production objectives of the firm is called: A) production control B) sales and operations planning C) capacity planning D) all of the above Answer: C 22) (Available time) × (utilization) × (efficiency) is called: A) effectiveness B) useful capacity C) demonstrated capacity D) rated capacity E) work time Answer: D 23) In one week a work center produces 130 standard hours of work. The hours scheduled are 120, and 105 hours are actually worked. The utilization is: A) 80.8% B) 87.5% C) 92.3% D) 108.3% E) 123.8% Answer: B 24) Which of the following best describes the approach to capacity planning in a lean production environment?

A) It is not very important because product designs in a lean environment tend to be standardized B) It is not very important because equipment and personnel in a lean environment tend to be very flexible C) It is very important because the inventory in a lean production environment tends to be much less D) It is very important because the equipment setup times in a lean environment tend to be much larger Answer: C

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25) Detailed capacity planning is often considered as not particularly important in a lean production environment for which of the following reasons?

A) Product throughput times tend to be longer, allowing for better development of rough-cut capacity planning B) Product throughput times tend to be shorter, negating the need or even the possibility of developing a detailed plan C) Smaller inventories in a lean production environment implies there is both more flexibility and excessive capacity available D) MRP systems are almost never used in an MRP environment, implying a significant lack of data needed for detailed capacity planning Answer: B

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Introduction to Materials Management, 9e (Chapman) Chapter 6 Production Activity Control 1) ________ is concerned with very short-term detailed planning of the flow of orders through manufacturing.

A) Production planning B) Master production scheduling C) MRP D) Production activity control E) Master planning Answer: D 2) Planning the flow of work requires production activity control to: I. be sure the material needed is available II. be sure the tooling needed is available III. schedule the start and stop dates at each work center IV. advise the plant supervisor of future orders A) all of the above B) I, II, and III C) I, II, and IV D) II, III, and IV E) I, III, and IV Answer: B 3) The activities of production activity control can be classified as: I. planning II. implementation III. control IV. process control A) I, II, and III B) I, II, and IV C) II, III, and IV D) I, III, and IV E) all of the above Answer: A 4) Work authorization can be classified under the function of: A) planning B) scheduling C) implementation D) load leveling E) control Answer: C

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5) Which of the following are characteristics of intermittent manufacturing?

I. Work centers are arranged according to the routing II. Work centers are dedicated to producing a limited range of similar products III. Work flow through the shop is not constant IV. Throughput times are generally high A) I and II B) I and III C) I and IV D) II and III E) III and IV Answer: E 6) Which of the following files is used by PAC for planning?

I. Shop order master file II. Shop order detail file III. Item master file IV. Routing file A) All of the above B) I and II C) I and III D) II and III E) III and IV Answer: E 7) Which of the following files will contain information on manufacturing lead time and quantity on hand?

A) Item master B) Bill of material C) Work center file D) Shop order detail file E) Industrial engineer's file Answer: A 8) The ________ shows the total standard time required to produce one end product in each work center required for its manufacture.

A) work center bill B) routing file C) capacity bill D) bill of material E) none of the above Answer: C

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9) Which file contains information on the efficiency and utilization of a work center?

A) Efficiency file B) Utilization file C) Routing file D) Work center file E) Either a or b Answer: D 10) A shop order for 1000 pieces is to be processed on work station 123. The setup time is 4 hours and the run time per piece is .08 hours. What is the required capacity on this work center in standard hours?

A) 4.08 B) 0.08 C) 80 D) 84 E) 4000 Answer: D 11) All of the following are elements of manufacturing lead time EXCEPT: A) design time B) setup time C) run time D) wait time E) move time Answer: A 12) Which of the following statements is best?

A) The largest element of manufacturing lead time is queue B) The larger the load, the longer the queue C) If queue is reduced, the lead time and work in process will be reduced D) All of the above are true E) None of the above is true Answer: D 13) A scheduling system in which the last operation on a routing is scheduled first and for completion on the due date is called: A) forward scheduling B) backward scheduling C) infinite scheduling D) finite scheduling E) none of the above Answer: B

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14) A scheduling system that assumes the required capacity will always be available is called: A) forward scheduling B) backward scheduling C) infinite scheduling D) finite scheduling E) none of the above Answer: C 15) Which of the following statements is best?

A) Implementation is achieved by issuing a shop order to manufacturing B) Engineering drawings, bills of material and routings may be included in a shop packet C) The dispatch list is the instrument of priority control D) All of the above are true E) None of the above is true Answer: D 16) Which of the following are methods of reducing manufacturing lead time?

I. Subcontracting II. Forward scheduling III. Operation overlapping IV. Operation splitting A) All of the above B) I and II C) I and III D) II and III E) III and IV Answer: E 17) Operation overlapping means: A) the same job running on two machines at the same time B) using alternate routings C) moving work to the next operation as a group of pieces is completed D) running two or more jobs at the same time E) locating work centers close together to reduce materials handling Answer: C 18) Which of the following statements is best?

A) A bottleneck (capacity constraint resource) will control the throughput of all products processed by it B) A time buffer should be established before a CCR C) Work centers feeding a CCR should work at full capacity D) A and B are true E) B and C are true Answer: D

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19) Which of the following statements is TRUE? I. Throughput is the total volume of production passing through a facility II. Throughput is controlled by the total capacity of a system III. Work centers feeding bottlenecks should be 100% utilized A) I only B) I and II only C) II and III only D) II only E) III only Answer: A 20) Which of the following statements is best?

A) Using a non-bottleneck 100% of the time produces 100% utilization B) Time saved at a non-bottleneck saves nothing C) The capacity of a system depends on the capacity of the bottleneck D) A and B only E) B and C only Answer: E 21) Which of the following is NOT a principle of managing bottlenecks?

A) A time buffer should be established after each bottleneck B) The rate of material fed to a bottleneck should be controlled C) Do anything to increase the capacity of a bottleneck D) Use alternate routings E) Change the schedule Answer: A 22) If the previous backlog was 20 units, the planned input was 25 units and the planned output was 30 units the planned backlog would be: A) 5 units B) 10 units C) 15 units D) 20 units E) 25 units Answer: C 23) For the last week a work center had a planned input of 40 standard hours and an actual input of 36 standard hours. The planned output was 40, the actual output 42 standard hours and the beginning backlog was 30 hours. The cumulative input variance was: A) 0 B) -2 C) +2 D) -4 E) +4 Answer: E

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24) For the last week a work center had a planned input of 40 standard hours and an actual input of 36 standard hours. The planned output was 40, the actual output 42 standard hours and the beginning backlog was 30 hours. The planned backlog was: A) 30 B) 36 C) 40 D) 42 E) 66 Answer: A 25) Which of the following dispatching rules ignore due dates?

A) First come, first served B) Earliest operation due date C) Shortest processing time D) A and B above both ignore due dates E) A and C above both ignore due dates Answer: E 26) Given the following information, which sequence will the orders be run in?

ORDER CRITICAL RATIO A 1.5 B 1.0 C 0.7 A) ABC B) BCA C) ACB D) CBA E) BAC Answer: D 27) If today is manufacturing day 100 and an order has a due date of 120 and a lead time remaining of 25 days, the critical ratio would be: A) 0.8 B) 1.2 C) 1.25 D) 0.25 E) 0.2 Answer: A 28) In a drum-buffer-rope scheduling system, the "drum" represents which of the following?

A) A drum of jobs to be selected B) The master schedule for the operation C) A safety stock of material D) The constraint against too much being loaded into the master schedule Answer: B

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29) Which of the following is concerned with very short-term detailed planning of the flow of orders through manufacturing?

A) Sales and operations planning B) Master production scheduling C) Material requirements planning D) Production activity control Answer: D 30) A scheduling system that assumes the required capacity will NOT always be available is called: A) forward scheduling B) backward scheduling C) infinite scheduling D) finite scheduling Answer: D 31) An order for 100 of a product is processed on work center 123. The setup time is 60 minutes and the run time is 5 minutes per piece. If the order is run on two machines in the work center, and the setups are made simultaneously, the elapsed time will be: A) 560 minutes B) 500 minutes C) 250 minutes D) 310 minutes Answer: D 32) The selection and sequencing of available jobs to be run at individual work stations and the assignment of these jobs to workers is called: A) dispatching B) scheduling C) priority management D) production control Answer: A 33) Given the following data, which job(s) will be late if the shortest process time sequencing rule is used?

Today is day 100.

Job Process Due Time Date A 4 104 B 1 106 C 5 109 A) All jobs will be on time B) A and B will be late C) A and C will be late D) B and C will be late Answer: C 7 .

34) Operation overlapping means: A) the same job running on two machines at the same time B) using alternate routings C) moving work to the next operation as a group of pieces is completed D) running two or more jobs at the same time on the same machine E) locating work centers close together to reduce materials handling Answer: E 35) Priority rules should be which of the following?

I. Simple to use II. Clear to users so they can understand them III. Followed without question IV. Consistent with the objectives of the planning system A) all the above B) I, II, and III only C) I, II, and IV only D) II, III, and IV only E) none of the above Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 7 Fundamentals of Supply Chain Management 1) Which of the following approaches to better manage production is most commonly credited with being the "catalyst" to the development of the modern supply chain concepts?

A) Enterprise Resource Planning (ERP) B) Sales and Operation Planning (S&OP) C) Production Activity Control (PAC) D) Just In Time production (JIT) Answer: D 2) Which of the following activities are typically included in managing a supply chain?

I. Procurement II. Warehousing III. Physical Distribution A) I and II only B) I and III only C) II and III only D) I, II, and III Answer: D 3) If an organization designs a product for global distribution but production of the final design is postponed in order to meet the needs of a particular local market, which of the following terms is often used to describe it?

A) Crossdocking B) Glocalization C) Supply chain agility D) Risk mitigation Answer: B 4) If an organization develops a system to evaluate and determine the needs of their customers and then work to align their activities around the needs of the customers, it is commonly known by which of the following?

A) Total Sales Analysis B) Enterprise Resource Management (ERP) C) Customer Relationship Management (CRM) D) Collaborative Planning, Forecasting, and Replenishment (CPFR) Answer: C 5) Which of the following terms is used to describe what happens when lot sizing and poor communication linkages in the supply chain cause large upheavals in the raw material demand in the supply chain?

A) The bullwhip effect B) Capacity disruption effect C) Erratic logistic effect D) The supply disruption effect Answer: A 1 .

6) A system of linking final retail sales back through the supply chain all the way to production and transportation is frequently called which of the following?

A) A supply linkage program B) A quick response program C) Collaborative planning, forecasting and replenishment D) Enterprise resource planning Answer: B 7) An approach that utilizes data and information from several sources to analyze future potential problems or disruptions in the supply chain is frequently called which of the following: A) future forecasting B) intrinsic forecasting C) economic modeling D) threatcasting Answer: D 8) An organization attempts to minimize the impact of a risk event. Which of the following terms is generally used to describe that attempt?

A) Risk avoidance B) Risk prevention C) Risk mitigation D) Risk acceptance Answer: C 9) Organizations will often develop programs to reduce waste, produce reusable outputs and minimize resource use. Which of the following term best describes that approach?

A) Economic utilization B) Sustainability C) Resource planning D) Capacity management Answer: B 10) Which of the waste activities is generally the most environmentally "friendly" and therefore is generally placed at the top of the waste hierarchy pyramid?

A) Recover B) Recycle C) Reuse D) Reduce Answer: D

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11) The United Nations Global Compact generally addresses principles recommended for use in which of the following areas?

A) Approaches for safe internet use B) Environmental impacts C) Social responsibility D) Cross-country financial stability Answer: C 12) Which of the following life cycle stages tends to promote the use of long-term contract between partners in the supply chain?

A) Introduction B) Growth C) Maturity D) Decline Answer: C 13) Which of the following terms is used to describe a growing list of records in the supply chain that tend to be linked and stored using cryptography?

A) Cloud computing B) Automated storage and retrieval systems C) The Internet of Things (IoT) D) Blockchain Answer: D 14) Which of the following descriptions best describes supply chain event management?

A) Using supplier relationship management to evaluate and forecast future needs throughout the supply chain B) Establishing a data base that gathers and classifies shortages or late deliveries throughout the supply chain C) A software that monitors activity in the supply chain to trigger alerts when something unexpected occurs D) An approach to consolidate and standardize quality approach between supply chain partners Answer: C

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Introduction to Materials Management, 9e (Chapman) Chapter 8 Purchasing 1) Which of the following is an objective of purchasing?

I. Obtain goods and services of the required specification and quality II. Obtain goods and services at the lowest cost III. Be sure the best possible service and delivery are provided by the supplier A) I only B) II only C) III only D) IV only E) all are objectives of purchasing Answer: E 2) Which of the following is NOT a step in the purchasing cycle?

A) Receipt and analysis of purchase requisition B) Selection of vendor C) Make up the specification for the product D) Issue a purchase order E) Receive and accept the goods Answer: C 3) Purchasing departments usually have the responsibility and authority to: A) legally commit the company to a contract B) satisfy the needs of the user department C) determine price and source D) all of the above E) none of the above Answer: D 4) ________ originates with the department or person who will be the ultimate user.

A) A purchase requisition B) A purchase order C) Vendor selection D) Any of the above E) None of the above Answer: A 5) The decision on what is the "best buy" involves consideration of: A) functional requirements B) price C) quantity required D) all of the above E) none of the above Answer: D

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6) ________ is concerned with the end use of the item and what it is expected to do.

A) Quantity required B) Functional specification C) Production department D) All of the above E) None of the above Answer: B 7) Which of the following is NOT a phase in providing user satisfaction?

I. Quality and production planning II. Quality and product design III. Quality and manufacturing IV. Quality and use A) All the above are phases in providing user satisfaction B) I only C) II only D) III only E) IV only Answer: A 8) Functional specifications set out: A) how the product is to work B) the purpose for which the product is required C) all those aspects or characteristics of a product that are determined by its final use D) none of the above Answer: C 9) From the buyer's point of view the best quality is: A) the most expensive B) the least expensive C) that which is best adapted to a particular use D) that which technically does the best job E) none of the above Answer: C 10) Which of the following statements is best in describing quality by specification?

A) Standard specifications are set by government and non-government agencies B) Specifications are usually more costly to develop than using a brand C) Specifications tend to ensure more equitable competition D) All of the above are true E) None of the above are true Answer: D

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11) Which of the following applies to standard products?

A) Their prices are comparatively stable B) They are quoted on the basis of list price less discounts C) They are purchased ONLY after firm quotations D) Only A and B above apply E) All of the above apply Answer: D 12) Products should be specified by brand because: A) price levels of brand items are low B) the number of potential suppliers is restricted C) it is difficult to develop accurate specifications for an item D) all of the above E) A and B above Answer: C 13) In which of the following situations would a company probably specify by brand?

A) When buying small quantities B) When the item to be bought is patented C) When the item to be bought is made to an industry standard D) A and B above E) B and C above Answer: D 14) Which of the following is FALSE regarding description of a product by specification?

A) Allows purchase from a number of sources B) Developing specifications is an inexpensive process C) The minimum specifications set by the buyer are likely to become the maximum furnished by the supplier D) All the above E) B and C above Answer: B 15) Which of the following is an advantage of specifying by company-developed specification?

A) The cost of establishing specifications is low B) It is always possible to draw up specifications for any product C) Unless a performance specification is used, the buyer takes responsibility for performance D) All of the above are advantages E) None of the above is an advantage Answer: E

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16) Which of the following is the most important responsibility of a purchasing officer?

A) Getting the best price B) Getting the best quality C) Selecting the best source D) Ensuring goods are delivered on time E) None of the above Answer: C 17) Which of the following is NOT a factor to consider when selecting a supplier?

A) Technical ability B) Manufacturing capability C) Reliability D) Price E) Political affiliation Answer: E 18) Buyers should realize that when they make a continuing purchase they buy more than the vendor's product. They also buy the supplier's: A) managerial capabilities B) procurement capabilities C) production capabilities D) technical capabilities E) all the above Answer: E 19) Which of the following will help a purchasing officer select potential sources of supply?

A) Trade journals B) Purchasing department's own records C) Advertising D) All the above E) None of the above Answer: D 20) Supplier goodwill is necessary because: A) the buyer can expect price concessions B) the buyer can expect presents from the vendor C) the buyer and vendor depend upon each other for communication and problem solving D) all of the above E) none of the above Answer: C

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21) When using the "ranking method" of evaluating suppliers: A) each supplier is ranked for overall suitability B) important factors are selected and assigned a "weight" C) suppliers are rated against each factor D) weight and rating of each supplier is multiplied for each factor and the total taken as the ranking of the supplier E) all the above are used Answer: E 22) Which of the following is (are) a qualification(s) of a good supplier?

A) Has adequate plant and facilities B) Has a sound financial position C) Has reasonable prices D) All the above are qualifications of a good supplier E) None of the above is a qualification of a good supplier Answer: D 23) Vendors' costs are important to a purchasing agent because: A) they help in estimating a fair price B) they help in negotiating a fair price C) cost determines market price D) a vendor is entitled to a profit just because he is in business E) A and B above Answer: E 24) Special items will generally be purchased on the basis of a quotation. The purchasing agent will select on the basis of: A) the lowest price B) the most reliable bidder C) the preference of the department that will use the item D) consideration of all the above E) none of the above Answer: D 25) In comparing prices, which of the following factors should be considered?

A) Base price B) F.O.B. point C) Installation and tooling costs D) All the above should be considered E) None of the above should be considered Answer: D

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26) A fair price is: A) the lowest price B) the lowest price that ensures a constant supply of the quality and allows the seller to make a profit C) a competitive price D) all the above E) B and C above Answer: E 27) Which of the following is a function of supplier scheduling and follow-up?

A) Selecting suppliers B) Establishing specifications C) Releasing orders D) Price determination E) Negotiation Answer: C 28) Which of the following statements is TRUE about planner/buyers?

I. Planner/buyers handle more components than planners do II. Planner/buyers issue material releases to suppliers III. Planner/buyers establish supplier delivery priorities IV. Planner/buyers negotiate prices with suppliers A) I and II only B) II and III only C) III and IV only D) I, II, and III only E) II, III, and IV only Answer: B 29) Which of the following statements is TRUE? A) In contract buying, price and delivery are negotiated each time an order is released B) Contract buying assures suppliers they have a given amount of business and commits them to allocating that amount of their capacity to the customer C) Contract buying is useful for short term purchases D) EDI does not eliminate much of the paper work associated with buying E) None of the above is true Answer: B 30) Intranet stands for which of the following?

A) A net that includes all who are connected to it B) An external net that can be used by all people C) An internal net normally used within the boundaries of the company D) An net shared by two or more companies E) None of the above Answer: C

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31) Which of the following is NOT an objective of the Purchasing Department?

A) Ensuring the best possible service and prompt delivery by the supplier B) Developing good supplier relations C) Issuing a regular quantity of purchase orders D) Selecting products that reduce the impact on the environment E) Obtaining goods and services at the lowest cost Answer: C 32) If the fixed cost to produce an item is $500, labor is $2.00 per unit and materials are $2.50 per unit; then the unit cost for an order of 1,000 would be: A) $6.50 B) $5,000 C) $5.00 D) $504.50 E) more information is needed to solve this problem Answer: C 33) A price that is competitive and allows the seller to make a profit is considered to be a price that is: A) optimal B) fair C) an incentive D) the final price E) the lowest price Answer: B 34) Which of the 3R's has the most positive impact on the environment?

A) Reduce B) Reuse C) Recycle D) All of the above have equal impact Answer: A 35) Which of the following departments is most likely to be familiar with knowledge of waste products, the legislation governing their handling and other uses in the company.

A) Purchasing B) Maintenance C) Engineering D) Direct Customer Sales E) Human Resources Answer: A

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36) A Purchasing Agent, wishing to dispose of waste plastic from one of their processes should first contact: A) plant maintenance B) a buyer of waste materials C) local government regulators D) the supplier E) the customer who buys the products Answer: D 37) After the supplier's invoice is received which document(s) are needed to approve payment?

A) The approved budget and the purchase order B) The purchase order and the receiving report C) The purchase order and the invoice D) The bill of lading and the receiving report E) Approval can be made from the purchase order Answer: B 38) Verifying shipments for quantity and having no damage is the responsibility of: A) the quality department B) the purchasing department C) accounts payable D) the receiving department E) the shipping department Answer: D 39) Which of the following represents the best example of environmentally responsible purchasing?

A) Standardizing product designs to reduce waste in supplier production processes B) Using multiple warehouses of supplier material, thereby reducing fuel usage to transport to those warehouses C) Working with suppliers to reduce packing materials or developing reusable packaging materials D) Developing measurement systems for supplier to use to shut down equipment when not directly used for production Answer: C 40) Which of the following is the best example of a purchasing practice that might be considered unethical?

A) Giving preference to suppliers that are also customers B) Using single source suppliers for all information technology systems C) Working with a customer to establish locating some supplier inventory in the customer's warehouse D) Using private contract carriers for transportation of supplier inventory Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 9 Forecasting 1) Which of the following statements is best statement about forecasting?

I. It must be done by all who wish to meet the demands of the future II. Companies who make-to-order to NOT have to forecast A) I and II only B) I only C) II only D) Neither I nor II Answer: B 2) Which of the following is NOT a component of a demand pattern?

A) Trend B) Standard deviation C) Seasonal variation D) Random variation E) All of the above are components of a demand pattern Answer: B 3) Given this product tree which item(s) should be forecast?

A) Only A B) A, B and C C) D and E D) B, C, D, and E E) All items should be forecast Answer: A 4) Which of the following is the best statement about the general principles of forecasting?

A) Forecasts are more accurate for larger groups of items B) Forecasts are more accurate for nearer periods of time C) Every forecast should include an estimate of error D) All of the above are general principles of forecasting E) None of the above is a general principle of forecasting Answer: D

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5) Which of the following statements is best?

A) Dependent demand items should be forecast B) A forecast for sales next week will not be as accurate as for a year from now C) Forecasts for families of products should be built up from individual product forecasts D) All of the above are true E) None of the above is true Answer: E 6) Which of the following statements is best?

A) If we wish to forecast demand, then past sales must be used for the forecast B) Forecasts made in dollars for total sales should be used for manufacturing C) Forecasts should be made for all items, models, and options manufactured D) All of the above are true E) None of the above is true Answer: E 7) A firm manufactures a line of vacuum cleaners composed of standard, custom and deluxe models. All are essentially the same except for the options and add-ons. What should they forecast?

A) The total of all models B) Each model C) Each model and add the forecasts together D) All of the above E) None of the above Answer: A 8) Which of the following is NOT true?

A) Number of orders shipped is a good measure of demand for an item B) Circumstances relating to historical data should be recorded C) Demand for different groups should be recorded separately D) None of the above is true Answer: A 9) Which of the following statements is best regarding forecasting techniques?

A) Qualitative techniques are based on judgment B) Techniques that use external economic indicators are classified as extrinsic C) Intrinsic techniques use historical data D) All of the above are true E) None of the above is true Answer: D

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10) What important assumption is made about statistical (quantitative) forecasting methods?

A) The past is a valid indicator of the future B) Demand trend is seldom linear C) Seasonal variations are small D) Random variations are small E) All of the above Answer: A 11) Which of the following methods can be used to forecast the demand for a NEW product?

A) Equation fitting B) Moving averages C) Qualitative techniques D) All of the above E) None of the above Answer: C 12) A forecasting technique that takes the average demand for some past number of periods is called: A) trend time analysis B) moving average C) exponential smoothing D) none of the above E) all of the above Answer: B 13) Demand over the past three months has been 700, 750, and 900. Using a three-month moving average, what is the forecast for month four?

A) 700 B) 750 C) 900 D) 783 E) 822 Answer: D 14) The old forecast was for 200 units and last month's sales were 225 units. If α (alpha) is 0.2 what is the forecast for next month?

A) 200 B) 225 C) 212-1/2 D) 205 E) 210 Answer: D

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15) Select the one best answer from the following: A) demand fluctuations that depend on the time of the year, week or day are called seasonality B) the seasonal index is an estimate of how much the demand during the season will be above or below the average demand C) seasonality ALWAYS occurs in summer, winter, spring and fall D) A and B are true E) B and C are true Answer: A 16) If the average quarterly demand is 200 units and the first quarter demand is 350 units, what is the seasonal index for the quarter?

A) .57 B) 200 C) 350 D) 1.75 E) None of the above Answer: D 17) Select the one best answer from the following: A) deseasonalized data should be used for forecasting B) seasonalize the base forecast to predict actual demand for future periods C) actual sales should only be compared on a month-to-month basis D) A and B are best E) B and C are best Answer: D 18) If the February demand for a product is 5,000 units and the seasonal index for February is 0.75, what is the deseasonalized February demand?

A) 3,750 B) 6,667 C) 8,750 D) 10,000 E) 15,000 Answer: A 19) Forecast error will be caused by: A) random variation from the average demand B) errors in forecasting average demand C) differences in lead times D) A and B above E) none of the above Answer: D

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20) Select the one best answer from the following: A) the mean absolute deviation can be used as a measure of forecast error B) usually forecast error is distributed normally about the average demand C) in a normal distribution the error will be within 1 MAD of the average about 60% of the time D) all the above are true E) none of the above is true Answer: D 21) Select the one best answer from the following: A) forecasts do not need to be tracked B) forecast error does not need to be measured C) when actual demand exceeds a reasonable error, it should be investigated to discover the cause of the error D) all the above are true E) none of the above is true Answer: C 22) Forecasts are far more accurate for which of the following?

A) Short term B) Individual items C) Product families D) End use components Answer: B 23) Which of the following is good for short-range forecasts, can detect trends, but lags the trend?

A) Exponential smoothing B) Stable forecasting C) Forecast smoothing D) Moving average Answer: A 24) Which of the following is NOT a source of demand?

A) Internal customers B) External customers C) Stockholders D) Spare parts Answer: C

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Introduction to Materials Management, 9e (Chapman) Chapter 10 Inventory Fundamentals 1) Which of the following statements is best about inventory management?

A) Inventories and production can be managed separately B) Inventory is not important at the production planning level C) Inventories are usually insignificant on the balance sheet D) All the above are true E) None of the above is true Answer: E 2) ________ are materials that have entered the production process and ________ are materials that are used in the production process but do not become part of the product.

I. Raw materials II. Work in process III. Finished goods IV. Maintenance, repair and operational supplies A) I and II B) II and III C) III and IV D) I and III E) II and IV Answer: E 3) Inventories that are built up in advance of a peak selling season, a promotion program or a plant shut-down are known as: A) lot-size inventories B) transportation inventories C) safety stocks D) anticipation inventories E) none of the above Answer: D 4) Transportation inventories can be reduced by: A) reducing transportation time B) reducing order quantities C) increasing order quantities D) reducing the order point E) none of the above Answer: A

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5) Items that are purchased or manufactured in quantities greater than needed immediately create ________ inventories.

A) anticipation B) lot size C) hedge D) any of the above E) none of the above Answer: B 6) Select the one best of the following statements: A) inventories allow manufacturing to level out production and to satisfy peak demand B) inventories allow manufacturing to reduce production runs, reducing unit cost C) inventories allow manufacturers to operate different work centers at the same output D) all the above are true E) none of the above is true Answer: A 7) Which of the following company objectives are in conflict?

I. Maximize customer service II. Low-cost plant operation III. Minimum inventory investment A) I, II, and III B) I and II only C) I and III only D) II and III only E) None of the above Answer: A 8) In managing inventory, the problem is to balance the inventory investment with: I. Customer service II. Costs associated with changing production levels III. Costs of placing orders IV. Transportation costs A) II and III only B) III and IV C) I, II, and III only D) II, III, and IV only E) I, II, III, and IV Answer: E 9) Which of the following costs are relevant to inventory management decisions?

A) Carrying costs B) Ordering costs C) Capacity-related costs D) All the above E) None of the above Answer: D 2 .

10) Which of the following is NOT a cost of carrying inventory?

A) Capital costs B) Storage costs C) Purchase cost D) All the above E) None of the above Answer: C 11) Which of the following are considered ordering costs?

I. Production control costs II. Lost capacity costs III. Risk costs A) I, II, and III B) I and II C) I and III D) II and III E) None of the above Answer: B 12) Which of the following statements is NOT true?

A) The annual cost of ordering depends on the number of orders per year B) The annual cost of ordering can be reduced by ordering less at any one time C) The annual cost of carrying inventory can be decreased by ordering less at one time D) All the above are true E) None of the above is true Answer: B 13) Which of the following costs would NOT be included in the cost of placing an order?

A) Setup costs B) Costs of placing a purchase order C) Back-order costs D) All the above E) None of the above Answer: C 14) Which of the following would NOT be included in calculating inventory carrying costs?

A) Capital costs B) Ordering costs C) Obsolescence costs D) All the above E) None of the above Answer: B

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15) Which of the following equations is correct?

A) Assets = liabilities + revenue B) Profit = revenue + owners' equity C) Liabilities = assets - owners' equity D) Revenue = accounts receivable - liabilities Answer: C 16) If the annual cost of goods sold is $10,000,000 and the average inventory is $2,000,000, what is the turns ratio?

A) $8,000,000 B) 5 C) 0.2 D) 20% E) Cannot be calculated from the information given Answer: B 17) If there are 20 working days in a month, the monthly usage is 660 units, and there are 100 units on hand, approximately how many days' supply are there?

A) 3 B) 5 C) 7 D) 33 Answer: A 18) Which of the following statements is most accurate?

A) About 20% of the items will usually account for about 80% of the total value B) "A" class items should have the tightest possible control C) The general rule using the ABC approach is to have plenty of everything in stock D) A and B only are true E) None of the above is true Answer: D 19) Of the following statements, which are TRUE? I. "A" items usually account for about 70%−80% of the total usage value II. About 50% of the items usually account for 50% of the value III. "C" items should be given the top priority in inventory management A) I and II only B) II and III only C) I and III only D) III only E) I only Answer: E

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20) Which of the following statements is best?

A) Two items with the same part number but in two different inventories would be one stock keeping unit (SKU) B) Two white shirts of different sizes in the same inventory would be one SKU C) Two items with the same part number in the same inventory would be one SKU D) All the above are true E) None of the above is true Answer: C 21) Delivery of goods from a supplier is in transit for 14 days. If the annual demand is 2600 units, what is the average annual inventory in transit?

A) 99.7 units B) 100 units C) 1.97 units D) Cannot be determined from the data given Answer: A 22) A company carries an average annual inventory of $1,000,000. If the cost of capital is 10%, storage costs are 8%, and risk costs are 7%, what does it cost per year to carry this inventory?

A) $100,000 B) $80,000 C) $70,000 D) $250,000 E) Cannot be determined from the data given Answer: D 23) Which of the following would not be considered work-in-process inventory?

I. Finished goods in the stockroom II. Processed material waiting for inspection III. Raw materials not issued IV. Components in queue ahead of a milling machine A) I and II B) I and III C) I and IV D) II and III Answer: B 24) Which of the following are reasons for keeping inventory?

I. To allow for goods in transit II. To build up stock for seasonal demand III. To reduce production costs IV. To guard against uncertainty in supply and demand A) I, II, and III only B) II, III, and IV only C) II and IV only D) All the above are valid reasons Answer: D 5 .

25) Given the following information, calculate the inventory turns.

Sales = $200,000,000 Cost of sales = $160,000,000 Average inventory = $40,000,000 Carrying cost = 12% A) 0.20 B) 0.25 C) 4.0 D) 5.0 Answer: C 26) All of the following are reasons to keep inventory EXCEPT: A) allow flexibility in production scheduling B) couple supply with demand C) meet fluctuations in product demand D) provide a safeguard against delivery time variations Answer: B

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Introduction to Materials Management, 9e (Chapman) Chapter 11 Order Quantities 1) Which of the following are NOT assumptions on which the economic order quantity (EOQ) is based?

A) Demand is relatively constant and known B) The item is produced continuously C) Order preparation costs, inventory carrying costs and lead times are constant and known D) Replacement occurs all at once E) All of the above are true assumptions Answer: B 2) In developing the standard economic order quantity formula the following assumption(s) is (are) made: A) demand for the item is relatively uniform B) replenishment is in lots or batches that arrive at once C) lead time is constant D) all of the above are assumed E) none of the above is assumed Answer: D 3) In determining the economic order quantity (EOQ) the following costs are considered: A) costs of a stockout and ordering costs B) costs of a stockout and inventory holding costs C) ordering costs and inventory carrying costs D) ordering costs and costs of changing production levels E) inventory holding costs and costs of changing production levels Answer: C 4) If the order quantity is increased the annual cost of carrying inventory will: A) increase B) decrease C) remain the same D) not be affected E) none of the above Answer: A 5) Assuming the cost per order is constant, increasing the order quantity will cause annual ordering costs to: A) decrease B) increase C) remain the same D) increase at a decreasing rate E) cannot be determined Answer: A

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6) In the simple EOQ model annual inventory carrying costs and annual ordering costs vary: A) according to the time of year B) with seasonally adjusted demand C) with the order quantity D) do not vary in any way E) in an unknown manner Answer: C 7) While working a simple EOQ problem, you notice that, with a certain lot size, the annual ordering cost is exactly the same value as the annual inventory carrying cost. Which of the following is TRUE? A) The lot size is the economic order quantity B) Total cost is at its maximum C) The annual carrying cost will decrease if the order quantity is increased D) All of the above E) None of the above; the phenomenon is merely a coincidence Answer: A 8) A firm uses $20,000 of an item per year. The carrying cost is 25%, the cost of ordering is $10 and the order quantity is $1,000. The annual total cost of carrying plus ordering would be: A) $2,500 B) $5,000 C) $100 D) $325 E) none of the above Answer: D 9) For a particular item the usage is 2000 units per year, the ordering cost is $10, the inventory carrying cost is 20% and the unit cost is $5. The economic order quantity is: A) 20 units B) 200 units C) 2000 units D) 400 units E) 4000 units Answer: B 10) If the economic order quantity is to be calculated in DOLLARS, then: A) the annual demand must be stated in dollars B) ordering costs MUST be stated on a per UNIT basis C) carrying costs are stated in dollars per unit D) all the above are true E) none of the above is true Answer: A

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11) A supplier offers a quantity discount. Which of the following will influence the decision to accept the discount or not?

A) Purchase cost B) Cost of carrying inventory C) Cost of placing one order D) All of the above are relevant E) None of the above is relevant Answer: D 12) If a purchase discount is taken: I. there is a saving in purchase cost II. ordering costs are reduced III. carrying costs are increased IV. there is not necessarily a net saving A) all the above are true B) 2 and 3 are true C) 1 and 4 are true D) 2 and 4 are true E) 3 and 4 are true Answer: A 13) For a certain group of items, the cost of carrying inventory and the cost of placing orders is not exactly known but is about the same for all the items. The company has calculated K = 20 for these items. If one item has an annual demand (A) = $10,000 the NEW order quantity should be: A) $2,000 B) $10,000 C) $20,000 D) $50,000 E) none of the above Answer: A 14) Which of the following statements is correct?

A) You must know the ordering cost to use the EOQ concept B) Quantity discounts will not change the total inventory costs of the item C) Inventory levels can be lowered by raising the order quantity D) If stock is not received all at once into inventory then EOQ formula can be modified and used E) None of the above is correct Answer: D 15) The EOQ for an item is 5500 units and the annual demand is 78,000 units. What is the period order quantity?

A) 14.18 B) 0.27 C) 3.67 D) 4 E) Cannot be determined from the given data Answer: C 3 .

16) Which of the following statements are TRUE? I. The EOQ should be used with lumpy demand II. Transportation cost should be included in the cost of ordering III. Anticipation inventory should be built based on capacity and future demand A) I and II only B) I and III only C) II and III only D) All the above E) None of the above Answer: C 17) Using the POQ method of ordering, calculate the total cost of carrying and ordering inventory for the 6 week period shown. Use a POQ = 3 weeks for your answer.

Week 1 2 3 4 5 6 Net requirements 60 40 10 50 20 30 Planned order receipts Ending inventory Cost to place an order = $100.00 Cost to carry inventory = $1.00 per unit per week Annual demand = 1,500 units Cost per unit = $200.00 Opening inventory = 0 units A) $140 B) $280 C) $340 D) $400 E) None of the above Answer: C 18) Quantity discounts cause companies to: A) order sooner B) order less at a time C) increase their inventory D) increase ordering costs E) always save money Answer: C 19) The period order quantity is equal to: A) annual demand divided by EOQ B) EOQ divided by average period demand C) the carrying cost up to but not exceeding the ordering cost D) the sum of the carrying costs divided by cost per unit E) the part period cost times average inventory Answer: B

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20) Which of the following is NOT true regarding period order quantity method (POQ) of lot sizing?

A) The order quantity is constant B) The time interval of inventory coverage is constant C) POQ is derived directly from the EOQ D) POQ is better suited to lumpy demand than EOQ E) POQ and EOQ will try to order the same number of times per year Answer: A 21) K the constant used for lot sizing is calculated as the: A) order point minus safety stock B) sum of the square roots of demand divided by the number of orders per year C) standard deviation of the demand divided by the square root of demand D) annual demand divided by the order quantity E) the reciprocal of order quantity times the economic order quantity Answer: B 22) The period order quantity: A) can only be applied to continuous demand B) orders a constant amount for a set number of periods C) works like a quantity discount D) is based on the same assumptions as the EOQ model E) orders the same quantity each period Answer: D 23) Which of the following techniques balances the cost of ordering with the cost of carrying inventory?

A) EOQ B) POQ C) The constant K D) All of the above Answer: D 24) The letter "K" used in lot sizing makes the order quantities: A) order the big items more often and the low volume items less often B) increase the average inventory C) decrease the average inventory by gradually ordering more often D) maintains the current inventory level while decreasing the number of orders E) balances the safety stock of items with demand Answer: A

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25) Quantity discounts: A) make buyers order more than is economical B) decrease the annual carrying costs but increase the ordering cost C) can be a good decision if the total annual costs are reduced D) always advantage the seller at a cost to the buyer E) persuade the buyer to buy more often Answer: C

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Introduction to Materials Management, 9e (Chapman) Chapter 12 Independent Demand Ordering Systems 1) Which of the following are basic systems for determining when to order INDEPENDENT demand items?

I. Order point system II. Periodic review system III. Material Requirements Planning A) I only B) II only C) I and II D) I and III E) II and III Answer: C 2) Which of the following statements is best?

A) Order point = DDLT + SS B) Average inventory = Q ÷ 2 + SS C) Safety stock is always needed D) A and B are true E) D and C are true Answer: D 3) When using the order point system which of the following is TRUE? A) Order quantities are usually fixed B) The order point depends upon the demand during the lead time plus safety stock C) Time intervals between orders are constant D) A and B above E) B and C above Answer: D 4) Which of the following statements is TRUE about safety stock?

A) It must always be carried B) It depends only on the amount of demand C) It depends on the required service level D) All the above are true E) None of the above is true Answer: C 5) Select the description which most closely fits the term ORDER POINT: A) the time it takes to replenish an item in inventory B) extra inventory of an item carried to protect against variations in demand during lead time C) a listing of components required to manufacture a product D) the time when an order should be placed E) none of the above Answer: E 1 .

6) Select the description which most closely fits the term SAFETY STOCK: A) the time it takes to replenish an item in inventory B) extra inventory of an item carried to protect against variations in demand during lead time C) a listing of components required to manufacture a product D) the time when an order should be placed E) none of the above Answer: B 7) Select the description which most closely fits the term LEAD TIME: A) the time it takes to replenish an item in inventory B) extra inventory of an item carried to protect against variations in demand during lead time C) a listing of components required to manufacture a product D) the time when an order should be placed E) none of the above Answer: A 8) Among other things the amount of safety stock carried will depend upon: A) the frequency of reorder B) the service level desired C) variability of demand during the lead time D) all the above E) A and B above Answer: D 9) Which of the following statements is best?

A) Safety stock depends on the service level desired B) Safety stock depends on the length of the lead time C) Safety stock depends on the variation of demand during the lead time D) All of the above are correct E) None of the above is correct Answer: D 10) If the standard deviation of demand is 100 units and the average demand is 1000 units, then we can be 95% confident that actual sales will be 1000 units plus or minus about: A) 100 units B) 150 units C) 200 units D) 300 units E) 400 units Answer: C

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11) Which of the following statements is best?

A) Most demand patterns tend to be stable and predictable B) The most common predictable pattern is called a normal distribution C) The normal curve can be described by its average (mean) and the variation of actual demand about the average D) All the above are true E) Only A and B are true Answer: D 12) If the sum of the absolute deviations of demand was 500 for 10 periods, MAD would be: A) 5 B) 500 C) 50 D) 0.02 E) none of the above Answer: C 13) Management states that they will tolerate one stockout every year for a specific item. If 10 orders are placed for the item each year the service level desired is: A) 80% B) 85% C) 90% D) 95% E) none of the above Answer: C 14) The average demand for an item is 1000 per month. The mean absolute deviation of monthly demand is 300 units. The MAD for yearly sales will be approximately: A) 3600 units B) 12,000 units C) 1040 units D) 3464 units E) none of the above Answer: C 15) Given that the lead time is 1 week and the sigma is 100 units, if the lead time changes to 2 weeks then the sigma would change to about: A) 200 units B) 180 units C) 160 units D) 140 units E) 120 units Answer: D

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16) Management is willing to tolerate one stockout every 2 years for a specific item. If 10 orders are placed for the item each year the service level desired is: A) 80% B) 85% C) 90% D) 95% E) none of the above Answer: D 17) Which of the following is the best statement?

A) Stockouts do not cost money because customers are willing to wait B) The cost of a stockout will vary depending on the market served, the customer, and competition C) Stockouts can occur at any time in the inventory cycle D) Stockouts do not depend on the frequency of reorder E) All the above statements are true Answer: B 18) Which of the following systems are used to determine when the order point is reached?

I. Two-bin system.

II. Perpetual inventory system.

III. Periodic inventory system.

IV. Safety stock system.

A) All are used to tell when the order point is reached B) I and II are used C) I, II, and III are used D) I and III are used E) II and III are used Answer: B 19) ________ is an inventory record system that keeps a continuous account of transactions as they occur.

A) Perpetual inventory system B) Periodic inventory system C) Two-bin system D) Safety stock system E) All the above keep a continuous account Answer: A 20) The demand placed on a factory or a central warehouse by distribution centers is considered: A) dependent B) independent C) uniform D) all of the above E) none of the above Answer: A 4 .

21) An order system in which the order quantity is allowed to vary and the order cycle is fixed is called the: A) periodic review system B) two-bin system C) reorder point system D) red-tag system E) none of the above Answer: A 22) If the lead time is 1 week, the review period 4 weeks, the average demand 100 units per week and the safety stock is 50 units, the target level will be: A) 150 units B) 200 units C) 250 units D) 300 units E) 550 units Answer: E 23) Using the periodic review system, the target level is: A) forecast demand during lead time B) forecast demand during the review period C) the sum of A and B D) the sum of A and B plus the safety stock E) none of the above Answer: D 24) If the lead time is 1 week, the review period 1 week, the average demand 100 units per week and the safety stock is 50 units, the target level will be: A) 150 units B) 200 units C) 250 units D) 300 units E) none of the above Answer: C 25) Which of the following is correct?

A) Order quantities are fixed in the periodic review system B) The two-bin system is an example of the order point system C) The safety stock does not depend upon the frequency of reorder D) All of the above are true E) None of the above is true Answer: B

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26) Which of the following statements is TRUE? I. In a pull system central supply determines what is needed by the distribution centers II. In a push system all decisions are made by the distribution centers III. An advantage of a pull system is central coordination A) I and II only B) II and III only C) I and III only D) All the above E) None of the above Answer: E 27) Which of the following are objectives of distribution inventory management?

I. To provide the required level of customer service II. To minimize the costs of transportation and handling III. To always have enough of everything on hand so there are no stockouts IV. To be able to interact with the factory so as to minimize scheduling problems A) All the above are objectives B) I, II, and III C) I, II, and IV D) I, III, and IV E) II, III, and IV Answer: C 28) The distribution inventory management system which forecasts when the various demands will be made by the system on central supply is called: A) pull system B) push system C) distribution requirements planning D) inventory replenishment E) order point system Answer: C 29) If the on hand inventory is 40 units, the safety stock 20 units and the target level is 120 units then an order should be placed for: A) 100 units B) 80 units C) 60 units D) 40 units E) 20 units Answer: B

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30) For a given item the lead time is 1 week, the on hand inventory is 50 units, demand is 20 units per week, safety stock is set at 3 weeks supply and the item is ordered every 2 weeks. The order quantity should be: A) 70 units B) 60 units C) 50 units D) 40 units E) 120 units Answer: A 31) A company that keeps no safety stock can expect an average service level of: A) 0% B) 15% C) 50% D) 85% E) safety stock does not affect the service level Answer: C 32) A company that has regular replenishments of small value items such as a grocery store would use the ________ system.

A) Order Point B) Materials Requirements Planning C) Push D) Kanban E) Periodic Review Answer: E 33) Management has carefully measured the standard deviation of the demand of a product and plans to use this to calculate the level of safety stock. If they keep one Standard Deviation of safety stock then the expected service level should be approximately: A) 15% B) 35% C) 85% D) 90% E) 100% Answer: C 34) Lead time for a given item is 3 weeks and sales have been recorded in 1 week intervals. If the Standard Deviation for the sales interval is 25 then the Standard Deviation for the lead time should be approximately: A) 25 B) 43 C) 75 D) 14 E) 8 Answer: B 7 .

35) For a given item controlled by a periodic review system the target level is 100 units. If there are 40 units on the shelf and the lead time is 2 weeks then the order quantity should be: A) 140 units B) 120 units C) 85 units D) 60 units E) 40 units Answer: D 36) A product has a standard deviation of demand of 15. The safety stock for a service level of 98% would be approximately: A) 15 B) 26 C) 31 D) 8 E) 14.7 Answer: C Use the following information to answer the next question(s).

Distribution Center A Transit time: 1 week Order Quantity 200 units Week Gross Requirements In Transit Projected Available 75 Planned Order Release

1 150 200

2 125

3 125

4 100

5 150

37) There will be a planned order release(s) in weeks: A) 2 and 3 B) 1 and 2 C) 1 and 3 D) 1, 2 and 3 E) intransit inventory will cover all the orders Answer: A 38) What will be the projected available for periods 2, 3 and 4?

A) 200, 75, 175 B) 125, 0, 100 C) 75, 175, 25 D) 0, 75, 175 E) 125, 0, 75 Answer: D

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39) Demand on Central Supply tends to be: A) smoothed out with planned orders B) continuous C) monotonous D) lower than the Distribution Centers E) lumpy Answer: E 40) The Gross Requirements on Central Supply are: A) the sum of the planned order releases from the Distribution Centers B) taken from the Distribution Centers and offset by the lead time C) the sum of the Gross Requirements for the Distribution Centers D) the sum of the gross requirements for the DC's offset by the lead time E) the same as the Intransit Inventory Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 13 Physical Inventory and Warehouse Management 1) Which of the following statements are TRUE about warehouse operation?

I. The major operating cost is labor II. Labor productivity depends on warehouse layout III. Capital costs are those of transport and space A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: A 2) The operating costs of a warehouse will depend on: I. the type of material handling equipment used II. the stock location system used III. the warehouse layout A) all the above B) I and II only C) I and III only D) II and III only E) I only Answer: A 3) Which of the following is NOT a warehouse activity?

A) Receiving B) Identifying C) Dispatching D) Order picking E) Transportation Answer: E 4) Which of the following statements is best?

A) The complexity of a warehouse operation will depend on the number of SKUs handled, the quantities of each SKU and the number of orders received and filled B) Most of the activity in a warehouse is material handling C) Warehouse management is NOT concerned with space utilization and effective use of labor and equipment D) A and B are true E) B and C are true Answer: D

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5) Which of the following statements is best?

A) Inventory is stored only on the floor B) A pallet position is a position where pallets are stored C) Accessibility means being able to get at the goods with a minimum amount of work D) There is always a tradeoff between accessibility and cube utilization E) None of the above statements is true Answer: C 6) If items were stacked against a wall as shown, the cube utilization would be:

A) 100 percent B) 80 percent C) 20 percent D) cannot be determined from the data given E) none of the above Answer: B 7) In a floating location system: I. goods are stored wherever there is appropriate space for them II. the same SKU may be stored in several locations at the same time III. an accurate and up-to-date information system is required IV. the system is appropriate for all warehouses A) all the above B) I, II, and III C) I, II, and IV D) II, III, and IV E) none of the above is true Answer: B 8) Which of the following statements is best?

A) Among other things, warehousing labor productivity will depend on warehouse layout B) All warehouses need to keep accurate records of where each item is located C) The space required in a warehouse will depend on the amount of labor used D) All of the above are true E) None of the above is true Answer: A

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9) Which of the following is a principle of merchandise location in the warehouse?

A) Group functionally related items together B) Group physically similar items together C) Group fast-moving items together D) All of the above E) None of the above Answer: D 10) Which of the following is NOT a method of order picking?

A) Area system B) Floating location system C) Zone system D) Multi-order system E) All the above are methods of order picking Answer: B 11) Which of the following is NOT an advantage of point-of-use storage?

A) Materials are readily accessible to users B) Material handling is reduced or eliminated C) Central storage costs are reduced D) Inventory record accuracy is easier to maintain E) Material is accessible at all times Answer: D 12) Among other things a good physical control and security of inventory will depend on: I. a good part-numbering system II. a well-trained work force III. free access to stock A) I and II B) I and III C) II and III D) I only E) II only Answer: A 13) Which of the following is the best statement?

A) A transaction occurs ONLY when goods are received or issued B) The steps in a transaction system are: identify the goods, verify quantity, record the transaction, and physically execute the transaction C) Inventory is a tangible asset that is easy to lose track of unless properly controlled D) A and B are true E) B and C are true Answer: E

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14) Which of the following statements are TRUE about inventory accuracy?

I. Inventory accuracy is essential for planning II. It is important to find the cause of record error III. Periodic audits of inventory will find the cause of record error A) All the above B) I and II C) I and III D) II and III E) None of the above Answer: B 15) Which of the following are causes of inventory record errors?

I. Unauthorized withdrawals of material II. Unsecured stockroom III. Audit capability A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: B 16) Which of the following statements is best?

I. It is not always practical to expect 100% inventory accuracy on all items II. Variance is the amount of variation between an inventory record and a physical count III. Tolerance is the amount of permissible variation between an inventory record and a physical count A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: C 17) The three factors in good preparation for a physical inventory are: I. housekeeping II. identification III. verification IV. training A) I, II, and III B) I, II, and IV C) II, III, and IV D) I, III, and IV Answer: B

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18) Which of the following techniques can be used to select items for cycle counting?

A) Count all items once a year B) Count only "A" and "B" items C) Base the frequency of count on annual dollar usage D) Count all items the same number of times a year E) Make a random audit of the items Answer: C 19) Which of the following are TRUE when cycle counting inventory?

I. Inventory should be audited for count and location II. Cycle counts can be scheduled at regular intervals or special times III. A good time to cycle count an item is when an order is placed A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: A 20) Which of the following are advantages of cycle counting?

I. Timely detection and correction of problems II. Reduction of loss of production III. Making use of spare labor A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: B 21) Which of the following is NOT a basic stock location system?

A) Group functionally related items together B) Locate all stock for fast access C) Group fast-moving items together D) Group physically similar items together E) Locate working stock and reserve stock separately Answer: B 22) In a cycle counting system: A) all items are counted each month B) item counts are determined by their ABC classification C) the purpose is to correct inventory imbalances D) count the A items first, then B's then C's E) counts are done at the end of the business year Answer: B

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23) In a cycle counting system A items are usually: I. expensive items II. items which often experience imbalances III. difficult to get items A) I only B) I and II only C) I and III D) III only E) all of the above Answer: E 24) Cycle counting uses which of the following methods?

A) ABC method B) Zone method C) Location audit method D) A and B only E) All of the above Answer: E 25) A simple method of determining when an item should be cycle counted is: A) count when the item is ordered B) count each time the item is picked C) count each item once per month D) count items which have been in storage for a given period of time E) count items which don't appear to be used often Answer: A 26) The most important reason for cycle counting is to: A) correct inventory balances B) train warehouse staff in location methods C) correct inventory valuation D) find and correct errors E) keep stock in correct rotation Answer: D 27) Which of the following is NOT an objective of a warehouse operation?

A) Provide timely customer service B) Minimize cube utilization C) Keep track of item location and quantity D) Provide communication links with customers E) Minimize warehouse effort Answer: B

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28) In a warehouse operation, which of the following is usually the largest capital cost?

A) Labor B) Space C) Materials handling equipment D) Damage and loss of goods E) Management overhead Answer: B 29) What type of storage system is best suited for a Just in Time environment?

A) Zone method B) Floating location C) Central storage D) Point-of-use storage E) Bulk location storage Answer: D 30) In which order picking and assembly method is the order picker NOT confined to one location?

A) Multi-order system B) Zone system C) Floating system D) Area system E) Mobile system Answer: D 31) After picking the order and prior to shipment the goods are: A) sorted B) put away C) marshaled D) added to inventory E) dis-aggregated Answer: C 32) Which of the following descriptions best represents the major purpose of cycle counting?

A) To update inventory record quantities and locations B) To establish the financial value of the inventory C) To evaluate and fix process problems leading to inaccuracy D) To establish which in-process inventory to use first in production Answer: C 33) The Internet of Things (IoT) can be useful in a warehouse setting for which of the following reasons?

A) To provide truck locations and delivery estimates B) To update ERP records for suppliers C) To establish real-time product cost estimates D) To establish order promise dates for customers Answer: A 7 .

34) Which of the following descriptions represents a typical use of cross-docking in a warehouse?

A) To minimize material handling for fragile items B) To reduce the need for disposable packaging C) To establish accurate cost estimates for transportation D) To break down deliveries and repackage by customer order Answer: D

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Introduction to Materials Management, 9e (Chapman) Chapter 14 Physical Distribution 1) Which of the following statements is best regarding distribution channels?

A) There are only two members in any distribution channel B) The transaction channel is concerned with transfer of ownership C) The distribution channel is concerned with the transfer of goods D) all the above are true E) B and C only are true Answer: E 2) The particular way materials move will depend upon: A) the channels of distribution the firm is using B) types of markets served C) characteristics of the product D) all of the above E) none of the above Answer: D 3) Which of the following activities is NOT considered a function of physical distribution?

A) Transportation B) Production control C) Distribution inventory maintenance D) Warehousing E) Order processing Answer: B 4) The two criteria for establishing a particular physical distribution system are: A) cost of the system and service level desired B) service level and cost of carrying inventory C) cost of transportation and cost of warehousing D) cost of transportation and materials handling E) cost of warehousing and cost of inventory Answer: A 5) Which of the following statements is best?

A) The objective of distribution management is to provide the required level of service at least cost B) There will be cost trade-off between the various activities in physical distribution C) Distribution can operate separately from marketing and production D) A and B are true E) B and C are true Answer: D

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6) Which of the following statements is best?

A) Physical distribution provides a bridge between marketing and production B) Physical distribution contributes towards creating demand C) Replenishment orders to replace field warehouse stocks will not affect production D) A and B are true E) B and C are true Answer: D 7) Which of the following are elements in the cost of carriage?

I. Ways II. Vehicles III. Terminals A) I, II, and III B) II and III C) I and II D) I and III E) None of the above Answer: A 8) Which of the following statements is TRUE? A) Railways are best at moving small volumes of bulky goods over short distances B) Road transport is the least flexible of all the modes C) Air cargo should be used for fast service over short distances D) All of the above are true E) None of the above is true Answer: E 9) A shipper moving expensive goods of small size from Boston to Seattle would likely use: A) air B) motor C) rail D) water E) none of the above Answer: A 10) Considering the service desired and the relative cost of the item, which of the following would you most likely ship by truck?

A) Regular shipments of cut flowers B) Regular shipments of iron ore C) Regular shipments of grain D) A and B above E) B and C above Answer: A

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11) Which of the following is TRUE? A) Because of high capital cost, rail must have a large volume of traffic to justify the expense B) Water transport requires low rates of energy per ton mile moved C) Operating costs per ton mile tend to be low for trucks D) A and B above E) B and C above Answer: D 12) Of the five modes of transportation, which one requires the lowest capital investment?

A) Air B) Motor C) Rail D) Water E) Pipeline Answer: B 13) Which mode would provide the fastest service capability?

A) Air B) Motor C) Rail D) Water Answer: A 14) Which of the following statements is FALSE? A) Pipeline capital costs are high in comparison with other modes B) Air cargo is generally used for low value bulky items C) Truck transport is suitable for distribution of small volume goods to a dispersed market D) Water transport is slower than rail E) Rail transport is more suited to bulky low value items than road transport Answer: B 15) Which of the following is TRUE? A) The service capability of mode depends only on transit time B) Air transport is the most expensive mode C) Reliability of service and area covered are not important in selecting a mode D) All of the above E) B and C above Answer: B 16) Which mode would provide the slowest service capability?

A) Air B) Motor C) Rail D) Water Answer: D

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17) A contract carrier provides: A) a service available to the general public B) a scheduled service C) published rates D) all of the above E) none of the above Answer: E 18) In which case(s) would you use common carriers instead of contract carriers?

A) Regular delivery by a food chain to its stores B) Shipment to customers by a mail order house C) Regular shipment of paper from a mill to its warehouse D) A and B above E) A and C above Answer: B 19) Which of the following types of transportation will provide the best service capability?

A) Common B) Contract C) Private D) All of the above are equal E) None of the above Answer: C 20) In which case(s) would you use contract carriers instead of common carriers?

A) Regular delivery by a food chain to its stores B) Shipment to customers by a mail order house C) Regular shipment of paper from a mill to its warehouse D) A and B above E) A and C above Answer: E 21) Which mode of transportation would cost the MOST per ton mile?

A) Air B) Motor (truck) C) Rail D) Water Answer: A 22) Which mode of transportation would cost the LEAST per ton mile?

A) Air B) Motor (truck) C) Rail D) Water Answer: D

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23) Which of the following are elements in transportation cost?

A) Line haul B) Pickup and delivery C) Terminal handling D) All of the above E) None of the above Answer: D 24) Which of the following is correct?

A) Consolidating shipments reduces billing and collecting costs B) Line-haul cost per hundredweight can be reduced by increasing the weight shipped C) Shipping costs will be higher with common carriers than contract carriers D) All of the above E) None of the above Answer: D 25) A shipper wishing to reduce transportation costs will: A) ship only in small quantities B) ship to LTL lots C) use trucks for all his shipments D) all of the above E) none of the above Answer: E 26) Consolidating shipments will reduce which of the following costs?

A) Pickup and delivery B) Terminal handling C) Billing and collecting D) All of the above E) None of the above Answer: D 27) TOTAL line-haul costs will vary directly with: A) the distance moved B) the weight moved C) the density of the goods D) A and B above E) B and C above Answer: A

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28) The rate charged by a carrier will vary with: I. the value of the goods II. the density of the goods III. the color of the goods A) all the above B) I and II only C) I and III only D) II and III only E) I only Answer: B 29) To decrease shipping costs a shipper will: I. increase the weight shipped II. consolidate shipments III. use a common carrier rather than contract carrier A) all the above B) I and II only C) I and III only D) II and III only E) I only Answer: B 30) Which of the following statements is TRUE? A) Goods are stored in a distribution warehouse for long periods of time B) A depository for documents is an example of a security warehouse C) Warehouses improve customer service D) A and B E) B and C Answer: E 31) Which of the following is NOT an important role of distribution centers?

A) Transportation consolidation B) In-transit inventory C) Product mixing D) Break-bulk storage E) Customer service Answer: B 32) The market boundary is: A) a location beyond which a source cannot supply B) the line between two or more supply sources where the laid-down cost is the same C) an agreed-upon boundary beyond which competition will not sell D) the extent of a market area E) a legal limitation placed on the delivery of goods Answer: B

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33) Which of the following is a basic role of packaging in distribution?

I. identify the product II. contain and protect the product III. contribute to physical distribution efficiency IV. be an important part of the marketing program A) All the above B) I, II, and III only C) I, II, and IV only D) II, III, and IV only E) None of the above Answer: B 34) The consolidation of several units into larger units for fewer handlings is called: A) unitization B) consolidation C) cube utilization D) packaging E) materials handling Answer: A 35) Which of the following statements is TRUE regarding materials handling in distribution systems?

I. One objective of materials handling is to increase cube utilization II. Materials handling can increase the service level III. Gasoline powered industrial trucks are used indoors A) all the above B) I and II only C) I and III only D) II and III only E) I only Answer: B 36) Which of the following statements is best?

A) Materials handling costs are relatively constant as warehouses are added but after a point will start to rise B) Inventory costs remain constant as the number of warehouses increase C) Packaging costs increase as the number of warehouses increase D) A and B are true E) A and C are true Answer: A

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37) As more warehouses are added to a physical distribution system we can expect the cost of: A) TL and CL shipments to increase B) LCL and LTL shipments to decrease C) total transportation costs to decrease D) all of the above E) A and B above Answer: D 38) Which of the following is best?

A) As more warehouses are added to a system, TL and CL shipment costs increase B) Pickup and delivery costs are reduced by consolidation C) Water transportation requires less energy per ton mile moved than any other mode D) All of the above are best E) None of the above is best Answer: D 39) Which of the following statements is TRUE regarding goods in a reverse logistics system?

A) Volumes are equal to the forward logistics system B) They travel through the same terminals as the forward logistics system C) The goods tend to be small in quantity D) Little product information is required E) All of the above are true Answer: C 40) Reverse logistics: A) calculates total delivery cost from customer to producer B) is the return of goods C) is easily automated D) is always done by a company's carrier selection E) is best applied to small diverse markets Answer: B 41) Which management area does NOT normally have transportation responsibility?

A) Logistics B) Purchasing C) Manufacturing D) Marketing E) All of the above normally have responsibility for transportation Answer: C 42) The distances in today's supply chains produce: A) higher costs B) longer transit times C) higher costs and more disruptions D) all of the above Answer: D 8 .

43) Transportation efficiencies promote: A) competition B) decreased capacity C) KPIs D) slower services E) longer distances Answer: A 44) The LTL costs a product moving through a supply chain are $1 per mile and there is a warehouse 200 miles from Central supply. Truckload costs to the ware house are $50 and the warehouse handling and storage costs are $10. The cost to ship the product to the warehouse $50.

The market boundary for this supply chain is: A) 260 miles B) 130 miles C) 125 miles D) 100 miles E) 50 miles Answer: B 45) Which of the following costs is NOT included in the total laid down cost of a product shipped through a regional warehouse?

A) Product cost B) Warehouse cost C) TL to warehouse D) Warehousing cost E) Market boundary cost Answer: E 46) Fourth -party logistics (4PL) provides for all the activities of 3PL plus which of the following activities?

A) Managing the full logistics operation for the customer B) Developing tracking software for all transportation C) Handling financial payments from customers to suppliers D) Scheduling supplier production based on customer needs Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 15 Products and Processes 1) The process of making something less complex or less difficult is called: A) standardization B) simplification C) specialization D) any of the above E) none of the above Answer: B 2) Which of the following statements regarding standardization is TRUE? I. All products made to a given specification will be interchangeable II. A range of standard specifications can be established so that the range covers the majority of uses for the item III. Standardization results in a larger variety of parts A) I and II only B) II and III only C) I and III only D) I, II, and III E) None of the above Answer: A 3) The establishment of a common size for electric light sockets is an example of: A) simplification B) diversification C) standardization D) product focus E) none of the above Answer: C 4) The concentration of effort in a given field of endeavor is called: A) simplification B) concentration C) standardization D) all the above E) none of the above Answer: E 5) Specialization increases output and decreases costs by: A) enabling labor to develop speed and dexterity B) reducing setup time for each part C) allowing a company to make a wide variety of different products D) A and B above only E) none of the above Answer: A 1 .

6) Which of the following is an advantage of product specialization?

A) It allows a large variety of finished goods to be made B) It lets the firm pay only for the skills required C) It allows labor to develop speed and dexterity D) All the above E) B and C above Answer: E 7) Standardization can reduce costs by: A) reducing inventories B) increasing lot sizes C) allowing the use of general-purpose equipment D) all the above E) A and B only Answer: E 8) Which of the following statements is TRUE? I. Serving similar customers with similar demand characteristics is an example of II. A company specializing in assembling cars is an example of process focus III. A focused factory specializes in a wide product mix A) I only B) I and II only C) I and III only D) II and III only E) all the above Answer: A 9) Which of the following is an objective of product design?

A) To design a product that will function as expected in the marketplace B) To design a product for minimum processing cost C) To design a product that will have minimum design costs D) All the above E) A and B only Answer: E 10) Tolerance is: A) an allowable deviation from the desired result B) specified by process designers C) another word for variation D) none of the above E) A and B above Answer: A

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11) Which of the following are advantages of simultaneous engineering?

I. Time to market is reduced II. Avoids the need for marketing and design to work together III. Less communication is necessary A) I only B) I and II only C) I and III only D) II and III only E) All the above Answer: A 12) Which of the following statements is/are TRUE? A) Product design is a major factor in determining the cost of a product B) Product design is a major factor in the quality of a product C) Product design is a trial-and-error process D) A and B only E) All the above Answer: D 13) General-purpose equipment: A) is designed for maximum flexibility B) is used extensively in intermittent manufacturing C) is designed and used to produce one or a few specific parts D) both A and B are true E) none of the above are true Answer: D 14) Which of the following is a characteristic of special-purpose machinery?

A) It can perform a variety of operations on a variety of work pieces B) Capital costs are low compared to general purpose machinery C) It generally produces better quality than general purpose machinery D) All the above E) None of the above Answer: C 15) In designing a process, which of the following needs to be considered?

A) The volume to be produced B) The degree of customer involvement C) The desired quality level D) All the above E) None of the above Answer: D

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16) Which of the following statements is TRUE about flow manufacturing?

I. Work stations are located in the sequence needed to make the product II. Work flows at a relatively constant rate III. They can produce a wide variety of different products IV. There is little buildup of inventory A) All the above B) I, II, and III are true C) I, II, and IV are true D) II, III, and IV are true E) I, III, and IV are true Answer: C 17) Which of the following statements is best regarding intermittent manufacturing?

I. Goods are produced in lots or batches II. General purpose machinery is mostly used III. Each work station must be flexible A) None of the above are true B) I, II, and III are true C) I, II, and IV are true D) II, III, and IV are true E) I, III, and IV are true Answer: B 18) In a particular process, the fixed costs are calculated at $40,000 and the variable costs at $1.50 per unit. If 10,000 units are to be produced, what is the average cost per unit?

A) $1.50 B) $2.00 C) $4.00 D) $5.50 E) None of the above Answer: D 19) Which of the following are reasons a firm would buy a product rather than make it in its factory?

A) Secrecy of design B) Utilizing idle workforce C) Providing known and competitive prices D) All the above E) A and B only Answer: C

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20) Which of the following is/are characteristic(s) of line-flow manufacturing?

A) Requires less work-in-process inventory than intermittent manufacturing B) Is suitable for high-volume items C) Makes extensive use of special-purpose machinery D) All the above E) None of the above Answer: D 21) What is the Cost Equalization Point for the two processes shown?

Process A Process B Fixed cost $30.00 $120.00 Variable cost $3.00 $2.00 A) $90.00 B) 90 units C) 100 units D) 120 units E) None of the above Answer: B 22) Intermittent manufacturing: A) is particularly suited to the production of low-volume items B) processes items in lots or batch C) generally uses general purpose machinery D) all the above E) none of the above Answer: D 23) The cost equalization point: A) is used to show the potential profit of a process B) shows the lot size where costs are minimized C) is used to select the lowest cost of two or more alternative processes D) is the point where unit cost of a process are at a minimum E) uses all the above Answer: C 24) Some purposes of continuous process improvement are: A) the reduction of worker fatigue and effort without reduction of levels of output B) the improvement of production processes and procedure C) the improvement of factory, department, and work-station layout to improve work flows D) improvement of levels of worker safety E) all the above Answer: E

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25) In selecting a project for method study, which of the following factors should be considered?

A) Human B) Economic C) Marketing D) All the above E) A and B only Answer: E 26) Which of the following steps in method study ensures all elements of a job are studied?

A) Install B) Select C) Record D) Examine E) None of the above Answer: C 27) A disadvantage of intermittent manufacturing is: A) high inventories are required B) high flexibility is required C) no flexibility exists D) work place utilization is minimized Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 16 Lean Production 1) Which of the following statements is best regarding JIT? I. It is a philosophy that relates to the way in which a manufacturing company organizes and operates its business II. It is a set of techniques to make manufacturing more productive III. It is concerned with adding value to the product A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: A 2) Which of the following statements is TRUE? I. Value starts in the marketplace II. Cost and value are the same thing III. Counting and storing add value to the product A) I and II B) I and III C) II and III D) I only E) III only Answer: D 3) If a company standardizes on the components that are used in different models it will: A) reduce waste B) reduce the variety of options offered to the customer C) reduce the length of production runs D) require the use of general-purpose machinery Answer: A 4) The ideal product is one that: I. meets or exceeds the needs of the customer II. makes the best use of material III. can be manufactured at least cost A) all the above B) I and II only C) II and III only D) I only Answer: A

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5) Overproduction causes waste by: A) consuming unneeded raw materials and labor B) creating excess inventory C) causing confusion and hiding problems D) A and B E) all the above Answer: E 6) Which of the following are advantages of reducing inventory?

I. Engineering changes can be made sooner II. Quality can be improved III. Less space is needed in manufacturing IV. Lead time will be shorter A) all the above B) I, II, and III only C) I, II, and IV only D) II, III, and IV only E) III and IV only Answer: A 7) Which of the following is NOT an advantage of work cells?

A) Queue and lead time are reduced B) Production activity control is simplified C) Need for floor space is reduced D) Immediate feedback E) Maximum machine utilization Answer: E 8) Which of the following contribute to machine flexibility?

A) Small general-purpose machinery B) Mobility of machines C) Automated high-capacity machines D) A and B above E) B and C above Answer: D 9) Reduced setup has which of the following advantages?

I. Reduced lot sizes II. Reduce lead time and queue III. Improved quality A) All the above B) I and II only C) I and III only D) II and III only E) I only Answer: A 2 .

10) Which of the following statements is best about quality?

I. Quality can be inspected into a product II. Poor quality has no effect on work flow III. The process must be capable of producing the required quality consistently IV. Machinery must be maintained in excellent condition A) All the above B) I and II only C) II and III only D) III and IV only E) I and IV only Answer: D 11) Which of the following concepts is needed to achieve uninterrupted material flow?

A) Uniform plant loading B) Pull system C) Valid schedules D) All the above are needed E) A and B only are needed Answer: D 12) Linearity in a JIT environment means: A) produce small lot sizes B) plan level schedules C) each day achieve the plan, no more or less D) eliminate all idle time E) statistical process control Answer: C 13) The buyer expects that a supplier will provide each of the following EXCEPT: A) the quality needed at all times B) information on competitors C) frequent deliveries D) improved quality and cost Answer: B 14) Employee involvement in a JIT environment means: I. operators must take responsibility for improving the process II. management must take more of a leadership role III. staff must be trainers and assist line people A) all the above B) I and II only C) I and III only D) II and III only E) none of the above Answer: A

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15) Which of the following statements is best?

I. JIT and manufacturing planning and control cannot work together II. The JIT philosophy simplifies and reduces manufacturing planning and control problems III. JIT requires a very good planning and control system A) All the above are true B) I and II C) I and III D) II and III E) None of the above Answer: D 16) JIT will influence master production scheduling by: A) reducing time fences and making the MPS more responsive to customer demand B) making it possible to use daily time buckets C) making the MPS more unstable D) A and B only E) B and C only Answer: D 17) JIT practices will change the material requirements planning process by: A) reducing the number of levels in the bill of material B) making the bill of material more complex C) increasing the need for offsetting D) increasing the need for netting E) eliminating the need for MRP Answer: A 18) Which of the following is a benefit to the purchaser in supplier partnerships?

A) Frequent deliveries on a just-in-time basis B) Better quality C) Improved performance and cost D) All the above E) A and B above only Answer: D 19) A pull system is developed to provide which of the following?

A) An alternative to a classic MRP system B) To provide only what is needed and when it is needed C) Can only be used when demand is constant and known D) Can only be used when demand is unknown E) None of the above Answer: B

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20) The primary purpose for establishing small-group improvement activities among production employees is: A) direct labor efficiency improvement B) improved scheduling C) morale improvement D) product improvement E) work methods improvement Answer: C 21) Bills of material used for MRP planning in a JIT environment are likely to have which of the following characteristics?

A) Fewer "phantom" or "blow-through" assemblies B) Increased complexity with regard to options C) Weekly time buckets D) No need for where-used references E) Fewer levels in product structures Answer: E 22) Each of the following contributes to machine flexibility EXCEPT: A) ease of maintenance B) mobility C) variable speed D) multipurpose E) quick setup Answer: A 23) The principle of cellular manufacturing is also known as: A) work cell layout B) clustered flow C) functional organization D) pull systems E) continuous flow Answer: E 24) Which of the following represents the best reason for using hybrid systems in a lean production environment?

A) They utilize the best benefits from ERP and traditional "pull" production systems B) They can capture production costs earlier in the production process C) They can minimize production of scrap or other quality problems D) They can allow for maximum standardization of work rules in the process Answer: A

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Introduction to Materials Management, 9e (Chapman) Chapter 17 Total Quality Management 1) Which of the following statements is best?

A) The basic quality level of a product is specified by senior management B) Manufacturing is responsible for meeting at least the minimum specifications of the product C) The product designer builds the quality level into the product by design and specification D) All the above are true E) A and B are true Answer: E 2) Which of the following is NOT a basic concept of total quality management?

A) Customer focus B) Competitive supplier bidding C) Continuous process improvement D) Performance measures E) Involvement of the total workforce Answer: B 3) Which of the following statements regarding TQM is TRUE? I. TQM is organization wide and everyone's responsibility II. Customer focus is not a requirement of TQM III. Only junior management is involved in TQM A) I only B) II only C) III only D) I and II only E) All the above Answer: A 4) Giving people the authority to make decisions and take action in their work areas is called which of the following?

A) Teamwork B) Organizational skills C) Empowerment D) Any of the above E) None of the above Answer: C

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5) Which of the following statements is best regarding performance measures?

I. They are not necessary for performance improvement II. They should be appropriate and useful III. They should be simple and easy for users to understand A) I and II only B) I and III only C) II and III only D) All the above Answer: C 6) The cost of failure to control quality includes which of the following?

A) Scrap, rework and spoilage B) Warranty charges C) Returned materials D) All the above E) None of the above Answer: D 7) The costs of controlling quality include which of the following?

A) Prevention and appraisal costs B) Prevention and process control costs C) Appraisal and process control costs D) Any of the above E) None of the above Answer: A 8) Which of the following is/are included in the cost of preventing poor quality?

A) Operator training B) Final inspection C) Warranty charges D) All the above are included in the costs of preventing poor quality E) None of the above is included in the costs of preventing poor quality Answer: A 9) Which of the following statements is TRUE regarding process variation?

I. All variation is due to chance II. Chance variation is inherent in the process III. Assignable variation is due to a specific cause A) I and II only B) I and III only C) II and III only D) I only E) II only Answer: C

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10) Chance variation in a process can be caused by which of the following?

A) People B) Machinery C) Materials D) All the above E) None of the above Answer: D 11) Which of the following can be used to describe the spread of the pattern of variability?

A) Arithmetic mean B) Average C) Range D) Upper control limit E) None of the above Answer: C 12) Which of the following statements is TRUE if the standard deviation of a process is .02 and the average is 1?

A) About 68.3% of the output will be within 1± .02 B) The specification limits are ± .02 C) The upper control limit is 1.02 D) All the above are true E) None of the above is true Answer: A 13) The permissible limits of deviation from perfection is called which of the following?

A) Spread B) Tolerance C) Control limits D) Process capability Answer: B 14) Which of the following statements is TRUE? I. The capability of a process is related to the product specification limits II. Quality does not depend on the process used III. Defects can only be produced by a shift in the mean A) I only B) I and III only C) I and III only D) All the above E) None of the above Answer: A

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15) Which of the following statements is best if a process has a capability index (Cp) of 0.83?

A) The process is capable B) The process is not capable C) Cannot tell whether the process is capable or not from the information D) The product specifications are adequate Answer: B 16) Which of the following statements is best if a process has a Cpk of between 1 and 1.33?

A) The process is not capable B) The process is marginal C) The process is capable D) None of the above is true Answer: B 17) The purpose of process control is to: A) make sure the process does not stop B) self-correct the process C) to show when there is a high probability of an assignable cause for defect D) to help designers develop the steps to automate a process E) all the above Answer: C 18) Which of the following statements is TRUE regarding control charts?

I. Specification limits are the same as control limits II. If there is no assignable cause of variation the process is in control III. A shift in the mean or average will show up on the X portion of the X and R chart A) I and II only B) I and III only C) II and III only D) All the above E) None of the above Answer: C 19) Which of the following statements is TRUE regarding sample inspection?

A) Acceptance sampling requires 100% inspection B) One reason to sample inspect is because of human error C) The sample should be taken from the last parts produced because there is less chance of error D) There is no risk to either the consumer or producer Answer: B

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20) Which of the following statements is correct regarding acceptance sampling?

A) Sample inspection is 100% accurate B) The consumer's risk is that a lot with less than the acceptable number of defects will be accepted C) The producer's risk is that a batch with more than the acceptable number of defects will be rejected D) The cost of the sampling plan must be balanced against the consumer's risk and the producer's risk E) Lots are accepted when the consumer's risk equals the producer's risk Answer: D 21) Under which of the following conditions is acceptance sampling appropriate?

A) Testing of the product is destructive B) Time is available for 100% inspection C) The sample can be taken from the top of the batch D) The batch to be sampled is small E) Sampling is a natural part of the process Answer: A 22) Which of the following statements is TRUE concerning ISO 9000 standards?

I. They are intended to prevent nonconformities during all stages of inspection II. There is only one ISO 9000 standard and it only applies to manufacturing III. ISO 9000 requires third party registration A) I only B) II only C) III only D) I and II only E) all of the above Answer: C 23) ISO 9000:2000 is designed as: A) a complete set of documentation to run any business B) a process approach to management C) a 12 step process D) a method of sampling to prevent defects in any process E) a set of technical standards to establish inspection limits Answer: B 24) Which of the following statements is TRUE concerning benchmarking?

A) It seeks improvement by analyzing the internal process B) It studies only organizations in the same industry C) It studies the "best in class" organizations D) It is a process for determining performance measures for the shop floor Answer: C

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25) A House of Quality is used to: A) Organize a company into departments focusing on quality B) Structure the engineering team C) Translate customer needs into design specifications D) Calculate specifications for desired cost reductions E) Calculate capability of a process to meet customer specifications Answer: C 26) The voice of the customer is: A) The response heard from market promotions B) An expression for customer wants C) The communication method used for network marketing D) A measure of capability of a process Answer: B 27) QFD is an acronym for: A) Quality Function Deployment B) Quality For Design C) Quality Forms Development D) Quality through Frequent Delivery E) Queen For a Day Answer: A 28) Six Sigma is a strategy designed to: A) reduce defects B) measure the capability of the quality function C) calculate productivity D) increase the total output of processes E) none of the above Answer: A 29) Six Sigma: A) is only applicable if a process is repetitive B) is an offshoot of the 5-S program C) is an award sponsored by the Malcolm Baldridge Foundation D) is about more than measurement of parts production E) A and B above only Answer: D 30) The Top Six Sigma project managers are known as: A) Black Belts B) White Hats C) Best-In-Class D) World Class E) Biero Answer: A 6 .

31) The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards showed an average length of 11.8 inches and a standard deviation of .1 inches. The Cp for this process is: A) 5 B) 2 C) 2.33 D) 1.67 E) 1 Answer: D 32) A process has been sampled and it is found to have a Cpk on the upper side of 2.4 and a Cpk on the lower side of 1.4. The Cp for this process would be: A) 2 B) 1.9 C) 3.8 D) 4.8 E) the value of the process mean is needed to solve this problem Answer: B 33) The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards showed an average length of 11.8 inches and a standard deviation of .1 inches. The Cpk for this process is: A) 7 B) 3 C) 2.33 D) 1 E) .42 Answer: D 34) Which of the following quality processes is part of QFD? A) House of quality B) Statistical Process Control C) Lean D) ISO:9000:2010 E) Quality for delivery Answer: A 35) Which of the common quality decision making techniques compares products to the competition?

A) Fishbone diagrams B) Six Sigma C) Quality Function Deployment D) Statistical Process Control E) Product sampling inspection Answer: C

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