Introduction to Materials Management, 8th Edition Steve Chapman Test Bank

Type:

Test Bank

Resource:

Introduction to Materials Management

Edition:

7th Edition

Author(s):

Steve Chapman J.R. Tony Arnold Lloyd M. Cive

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is correct?

1) _______ A) Materials flow into an organization, are processed in some way and distributed to the consumer.

B) Traditionally the supply-production-distribution functions have reported to different departments.

C) The supply, production and distribution functions are part of a total system.

D) All of the above are correct.

2) Manufacturing is important to the economy because: A) it supports service industries.

B) it generates wealth.

C) it adds value to products.

D) all of the above

2) _______

3) Which of the following statements is true about the operating environment in which operations

3) _______

management functions?

A) Customers are more demanding.

B) Price is more important than quality.

C) Most organizations do not need to worry about competition.

D) Government regulation is not important for companies.

4) Which of the following statements is true regarding order winners?

A) They are present in every product.

B) They persuade a company's customers to choose its product.

C) They are the same as order qualifiers, only better.

D) They are the same in every market.

4) _______

5) Which of the following strategies has the shortest delivery lead time and the least customer

5) _______

input?

A) assemble-to-order C) make-to-stock

B) configure-to-order D) make-to-order

6) Which of the following statements is true?

A) The supply chain includes all activities and processes to provide a product or service to a

6) _______

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.

7) Companies A and B supply company C, which supplies customers D and E. Which of the

7) _______

following statements is true?

A) The supply chain for company A includes B, C, D, and E. B) The supply chain for company C includes A, B, D, and E. C) The supply chain for company B includes A, C, D and E. D) All of the above are true.

8) Which of the following statements is true?

8) _______

A) Design information generally flows from customer to supplier.

B) The basic elements of a supply chain are supply, production, and distribution.

C) The elements of a supply chain are interdependent.

D) All of the above are true.

9) Delivery lead time for an engineer-to-order product includes which of the following?

A) purchase, manufacture, assemble, ship B) design, manufacture, assemble, ship C) design, purchase, manufacture, assemble, ship D) purchase, assemble, ship

9) _______

10) If a firm wishes to maximize profit, which of the following objectives are in conflict?

10) ______

I. Maximize customer service.

II. Minimize production costs.

III. Minimize inventory costs.

IV. Minimize distribution costs.

A) II and III only B) I and II only

C) I and III only

D) I, II and III 11) ______

11) Which of the following statements are true?

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) II, III and IV only are true B) I, II and IV only are true C) I and II only are true D) I, II, III and IV are true E) I, II and III only are true

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 13) ______

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) both I and II

D) neither I nor II

14) Which of the following are primary activities of manufacturing planning and control?

I. Production planning II. Implementation and control III. Inventory management A) II and III only B) I and III only

12) ______

C) I and II only

14) ______

D) I, II, and III

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

A) quantities to be produced B) process description C) available facilities D) product description E) All of the above are inputs.

15) ______

16) Which of the following is NOT an activity of physical supply/distribution?

A) packaging B) warehousing C) transportation D) material handling E) factory inventory

16) ______

17) Materials management can be considered a balancing act because:

17) ______

I. there are trade-offs between customer service and the cost of providing the service.

II. priority and capacity must be balanced.

A) II only B) I only C) I and II D) neither I nor II

18) If the cost of manufacturing (direct labor and materials) is 50% of sales and profit is 15% of

18) ______

sales, what would the profit percentage be if the direct costs of manufacturing was reduced from 50% to 47%?

A) 18% B) 6% C) 12% D) 3% E) 15%

19) Which of the following are generally considered overall objectives of an organization?

19) ______

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, II and III only B) I, III and IV only C) I and II only D) I, II, III and IV

20) ______

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) I and II only B) I, II and III C) I and III only

D) II and III only

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 order.

D) make to stock.

21) ______

22) Metrics in a supply chain are: A) governed by the International Metric Commission.

B) a charge passed on to customers.

C) measurements of performance.

D) not used on transportation.

22) ______

23) Performance measures in a supply chain: A) concentrate on cost only.

B) are viewed mostly by finance.

C) should be objective.

D) must be measurements of one parameter only.

E) are not used once a process is automated.

23) ______

24) Which statement is true?

A) Performance standards are set by the supplier.

B) Performance measurements show how well you did.

24) ______

C) Performance standards set the goal.

D) Both B and C are correct.

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) cutting cost after the design phase.

D) sticking with local competition.

E) members having clout with suppliers.

25) ______

26) Postponement is best described as: A) delaying payment to a supplier until the goods have been sold.

B) delaying the customer-specific differentiation until the last possible moment.

C) delaying the removal of inventory until the last possible moment.

D) delaying the change to the BOM until the old components have been used up.

26) ______

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) have suppliers with poor delivery performance.

D) experience a yield that you won't know until the product is complete.

27) ______

28) A channel master in a supply chain: A) is the largest member of a supply chain.

B) initiates integration of a supply chain.

C) is the final customer in a supply chain.

D) controls the raw material supplies in a supply chain.

28) ______

29) The process of managing the recovery, recycling and reuse of material is called: A) reverse logistics.

B) Kaizen.

C) Heijunka.

D) return material authorization.

29) ______

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 50%.

C) is reduced by approximately 70%.

D) More information is needed for this problem.

30) ______

1) D 2) D 3) A 4) B 5) C 6) E 7) B 8) D 9) C 10) D 11) B 12) A 13) C 14) D 15) E 16) E 17) C 18) A 19) D 20) A 21) B 22) C 23) C 24) D 25) A 26) B 27) A 28) B 29) A 30) B

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The ability of manufacturing to produce goods and services is called: 1) _______ A) capacity.

B) scheduling.

C) routing.

D) production planning.

E) none of the above 2) Priority in production planning relates to: A) how much of what is needed and when.

B) routing.

C) capacity.

D) an objective of the firm.

E) none of the above

2) _______

3) Which of the following is an input to the production plan?

A) market plan B) strategic business plan C) financial plan D) engineering plan E) All of the above are inputs.

3) _______

4) Which of the following plans has the longest planning horizon and the least level of detail?

A) master production schedule B) strategic business plan C) production plan D) All of the above have the same level of detail.

E) none of the above

4) _______

5) In terms of INCREASING level of detail, which is the correct sequence of activities?

5) _______

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

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

6) _______

7) Which of the following is a characteristic of a production plan?

A) The production plan is for individual items.

B) The only objective is to have an efficient plant.

C) Time horizons are five years.

D) All of the above are characteristics of a production plan.

E) None of the above is characteristic of a production plan.

7) _______

8) Determining the need for labor, machines, and physical resources to meet the production

8) _______

objectives of the firm is called: A) capacity planning.

B) production planning.

C) production control.

D) all of the above E) none of the above

9) The function of setting the limits or levels of manufacturing operations based on the market

9) _______

plan and resource availability is called: A) production activity level.

B) production planning.

C) capacity planning.

D) all of the above E) none of the above

10) A statement of a schedule of requirements for individual end items is called: A) a master production schedule.

B) a capacity plan.

C) a production plan.

D) a material requirements plan.

E) none of the above

10) ______

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

A) A high level of detail is not needed.

B) Product groups based on similarity of manufacturing process should be used in planning.

C) A translation must be made from product demand to capacity demand.

D) All of the above are true.

E) None of the above is true.

11) ______

12) Which of the following statements is true about sales and operations planning?

A) It is usually updated on a monthly basis.

B) It has no effect on inventory levels.

C) It includes only the marketing and production plans.

D) It provides a means of updating the material requirements plan.

12) ______

13) Which of the following are characteristics of an MRPII system?

13) ______

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

14) For the purposes of production planning, product groups should be established on the basis of: A) the availability of machinery.

14) ______

B) market segments.

C) the availability of materials.

D) similarity of manufacturing process.

E) all of the above 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

15) ______

16) A production planning strategy which turns away extra demand is called: A) hybrid strategy.

B) demand matching.

C) production leveling.

D) all of the above E) none of the above

16) ______

17) Which basic production planning strategy will build inventory and avoid the costs of excess

17) ______

capacity?

A) production leveling B) demand matching (chase) C) subcontracting D) all of the above E) none of the above

18) Which basic production planning strategy avoids hiring and layoff costs and the costs of excess

18) ______

capacity?

A) operation smoothing B) subcontracting C) demand matching D) all of the above E) none of the above

19) If the opening inventory is 100 units, the sales are 500 units and the ending inventory is 200

19) ______

units, then manufacturing must produce: A) 600 units.

B) 300 units.

C) 400 units.

D) 500 units.

E) none of the above

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

20) ______

21) Firms will generally make-to-stock when: A) delivery lead times are long.

B) there are many product options.

C) demand is unpredictable.

D) all of the above E) none of the above

21) ______

22) Firms will generally make-to-order when: A) there are many product options.

B) product is expensive to make and store.

C) products are produced to customer specifications.

D) all of the above E) none of the above

22) ______

23) Which of the following information is needed to develop a make-to-stock production plan?

23) ______

I. II. III. IV.

Forecast by time period for the production plan Opening inventory Opening backlog of customer orders Desired ending inventory A) I, II and IV B) I, III and IV C) I, II and III D) II, III and IV E) none of the above

24) If the old backlog was 200 units, the forecast for the next period is 500 units, and production for

24) ______

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

25) Which of the following is concerned with long-term planning of manufacturing activity?

A) production activity control B) sales and operations planning C) master planning D) master production scheduling E) MRP

25) ______

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

A) Planning units of measure need to be decided.

B) Product groups need not be decided.

C) A planning horizon must include new product development time.

D) Performance review periods to be compared should be decided.

26) ______

27) Which of the following is a complete closed loop planning system that develops plans for all

27) ______

materials and operations?

A) capacity requirements planning C) supply chain management

B) material requirements planning D) enterprise resource planning

28) Which of the following represents the major reason for developing the production plan as part of Sales and Operations Planning?

A) to plan the acquisition of new manufacturing facilities

28) ______

B) to plan for resources required to produce to the agreed plan C) to decide how to best produce exactly what is in the sales plan D) to plan a schedule for the production of individual products 29) Which of the following is true?

29) ______

I. The strategic plan is stated in product terms.

II. The strategic business plan is stated in financial terms.

III. The strategic business plan is developed from the strategic plan.

A) I and II only B) II and III only C) I, II, and III D) I and III only E) None is correct.

30) Which following best represents the concept of sustainability?

A) the ability to make long production runs B) the ability to continue operation in the long term C) the ability to train labor effectively D) the ability to maintain the supplier base

30) ______

31) When a company establishes a program to recycle or reuse products discarded or returned

31) ______

from customers it is typically called which of the following?

A) customer servicing B) product return contract C) resupply planning D) reverse supply chain

32) Which of the following is most true about Sales and Operations Planning?

A) It usually includes all functions at the executive level.

B) It usually is produced only once a year.

C) It usually includes only sales and manufacturing people.

D) It is typically done in financial terms.

32) ______

1) A 2) A 3) E 4) B 5) D 6) E 7) E 8) A 9) B 10) A 11) D 12) A 13) D 14) D 15) E 16) E 17) A 18) B 19) A 20) C 21) E 22) D 23) A 24) A 25) B 26) B 27) D 28) B 29) B 30) B 31) D 32) A

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The information needed to develop a master production schedule will be obtained from: 1) _______ A) the forecast of individual end items.

B) inventory levels for individual end items.

C) the production plan.

D) all of the above E) none of the above 2) The MPS is a vital link the production planning system because it:

2) _______

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) II, IIII and IV only B) II, III and IV only C) I, II and IV only D) I, II and III only E) I, II, III and IV

3) The MPS: A) facilitates order promising.

B) is an agreed-upon plan between production and marketing.

C) works with individual end products.

D) all of the above E) none of the above

3) _______

4) The functions of a master production schedule are to:

4) _______

I. plan material components.

II. plan capacity requirements.

III. keep priorities valid.

A) I, II and III B) I and III only C) I and II only D) II and III only E) None of the above is a function of the MPS.

5) Which of the following are objectives of an MPS?

5) _______

I. II. III. IV.

Maintain the desired level of customer service.

Keep the sales department happy.

Make the best use of material, labor and equipment.

Maintain inventory investment as required.

A) Only I, II and III are objectives.

B) Only II, III and IV are objectives.

C) Only I is an objective.

D) Only I, III and IV are objectives.

E) Only I and II are objectives.

6) The process of checking the MPS against available capacity is called:

6) _______

A) shop-floor control.

B) process checking.

C) capacity planning.

D) rough-cut capacity planning.

E) capacity control.

7) In an assemble-to-order company, at which level should master scheduling take place?

A) the raw material/component level B) the end item level C) the component/subassembly level D) It does not matter, any level will do.

E) none of the above levels

7) _______

8) The final assembly schedule (FAS): A) is really a synonym for the master production schedule.

B) is basically the same as the MPS for a make-to-order product.

C) schedules customer orders as they are received based on components planned in the

8) _______

MPS.

D) A and B above E) None of the above is true.

9) Which of the following statements is true regarding the master production schedule?

A) If it is poorly done, we can expect past-due schedules and unreliable delivery promises.

B) It is an agreed-upon plan between marketing and manufacturing.

C) It is a plan for specific end items that manufacturing expects to make over some period in

9) _______

the future.

D) All of the above are true.

E) None of the above is true.

10) The portion of inventory or production NOT committed to customer orders is called: A) waste.

B) excess capacity.

C) free stock.

D) excess production.

E) available to promise.

10) ______

11) If there are customer orders, the projected available is based on: A) forecast demand.

B) customer orders.

C) the opinion of the planner.

D) the greater of forecast demand and customer orders.

11) ______

12) Which of the following is (are) true about time fences in a master production schedule system?

12) ______

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 orders.

III. Changes in the near future on the planning horizon are less costly to make than changes far out.

A) I and III only B) II and III only C) I and II only

D) I, II, and III E) none of the above 13) Which of the following is NOT an input to the master production schedule?

A) customer orders B) current inventory status C) final assembly schedule D) sales forecast for items E) production plan

13) ______

14) The MPS is constrained by:

14) ______

I. the availability of material.

II. available capacity.

III. inventory policies.

IV. production plan.

A) I, II, III and IV B) II and III only C) I, II, III only D) I and II only E) none of the above

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

15) ______

Week 1 2 3 4 Forecast 20 30 50 20 Projected available Scheduled receipts A) The projected available in week 4 is 30.

B) There is a scheduled receipt in week 4.

C) The projected available in week 3 is 40.

D) A and B are true.

E) B and C are true.

16) Given the following table, calculate the ATP. There are 50 units on hand.

Week 1 2 3 Customer orders 20 20 15 Scheduled receipts 50 ATP A) The ATP in week one is 5.

B) The ATP in week one is 30.

C) The ATP in week three is 35.

D) The ATP in week one is 10.

E) The ATP in week two is 10.

4 30

16) ______

5 10

17) The time span for which the master schedule extends is called the: A) forecast period.

B) planning horizon.

C) time fence.

D) time bucket.

E) none of the above

17) ______

18) The final assembly schedule as different from the master schedule is primarily used: A) in a assemble-to-order environment.

B) in a make-to-stock environment.

18) ______

C) in either environment.

D) in neither environment.

19) Which of the following is true concerning the demand time fence?

A) Inside the time fence, only customer orders are considered for planning.

B) Beyond the time fence, only forecasts are considered.

C) The demand time fence represents the cumulative lead time of the product.

D) The demand time fence is longer than the planning time fence.

E) No more orders are allowed inside the demand time fence.

19) ______

20) Which of the following is the term applied to a master schedule for a purchased item?

A) supplier scheduling B) purchase order C) material scheduling D) master scheduling

20) ______

21) Which of the following is a contract between manufacturing and marketing?

A) forecast B) production plan C) customer order D) master schedule

21) ______

22) Master scheduling is a balancing act between which of the following?

A) inventory and customer service B) supply and demand C) forecast and inventory D) forecasts and orders

22) ______

23) Which of the following modules follows the Sales and Operations Plan?

A) business planning B) production planning material requirements planning C) D) master scheduling

23) ______

24) Shifting customer design decisions as far down the supply chain as possible is typically called

24) ______

which of the following?

A) postponement C) planning time fence

B) reverse supply chain D) planning horizon

25) A customer requests a new order in a period where there is inadequate material available in the available-to-promise (ATP) for that period, and the period is within the planning time fence.

Which of the following is the best first course of action to take in such a situation?

A) Tell the customer they cannot have the order in that period.

B) Look for additional material in an earlier ATP quantity.

C) Increase the master schedule quantity for that period by enough to cover the order.

D) Shift the planning time fence inward.

25) ______

1) D 2) D 3) D 4) D 5) D 6) D 7) C 8) C 9) D 10) E 11) D 12) C 13) C 14) A 15) A 16) A 17) B 18) A 19) A 20) B 21) D 22) B 23) D 24) A 25) B

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) In the diagram below the independent demand item is: 1) _______

A) X

B) 1

C) 2

D) 3

E) 4

2) ________ is a set of priority planning techniques for planning component items below the

2) _______

________.

A) Material requirements planning; end item level B) Production planning; end item level C) Master production scheduling; the market plan D) all of the above E) none of the above

3) The objective(s) of material requirements planning is (are) to: A) keep priorities current.

B) determine requirements.

C) issue orders to purchasing and manufacturing.

D) all of the above E) B and C above

3) _______

4) Which of the following is an element in an MRP system?

A) bills of material B) inventory records C) the computer D) all of the above E) none of the above

4) _______

5) A set of priority planning techniques for planning component items below the end item level is

5) _______

called: A) capacity planning.

B) master scheduling.

C) production control.

D) material requirements planning.

E) none of the above

6) A major input to an MRP system is: A) the master schedule.

B) shop-floor activity planning and control.

C) the capacity plan.

D) the production plan.

E) none of the above

6) _______

7) The document that shows the component parts and the number of parts needed to make one of

an assembl

y or subassem bly is called:

___ ___ _

7)

A) a material requisition.

B) a route sheet.

C) a material requirements plan.

D) a bill of material.

E) none of the above 8) A product tree shows: A) the sequence in which parts go together.

B) the subassemblies used in making the product.

C) the parts that go into making a product.

D) all of the above E) none of the above

8) _______

9) Which of the following statements is true?

A) The same part on different bills of material will have the same part number.

B) A part number identifies one part only.

C) A part has one and only one part number.

D) All of the above are true.

E) None of the above is true.

9) _______

10) Which of the following statements is true?

10) ______

A) Item D is on level 3.

B) Item A is the parent of item B. C) Item A is a parent of item D. D) All of the above are true.

E) None of the above is true.

11) A multi-level bill of material:

11) ______

I. reflects the way the product will be manufactured.

II. is produced by the purchasing department.

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

A) Only I is true.

B) Only II is true.

C) Only III is true.

D) I and II are true.

E) I, II and III are true.

12) A bill of material whose purpose is to simplify forecasting, master production scheduling and material requirements planning is called:

12) ______

A) a summarized parts list.

B) multi-purpose bill.

C) where-used bill.

D) planning bill.

E) structured bill.

13) Which of the following statements is true?

A) A pegging report shows all the parents for a component.

B) A where-used report shows only those parents for which there is an existing requirement.

C) A where-used report is the same as a pegging report.

D) A where-used report shows all the components that go into assembly.

E) Pegging reports show only the parents for which there are requirements.

13) ______

14) The ability to relate the demand for an item shown on an MRP record back to the particular

14) ______

parent causing the demand is called: A) where-used.

B) any one of the above C) pegging.

D) relating.

E) none of the above

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

15) ______

what week will there be a planned order RELEASE for item B?

A) 5

B) 4

C) 3

D) 2

E) 1

16) Which statement is correct?

A) When an order is released, it becomes a planned order.

B) Planned order releases show when the order is needed.

C) Scheduled receipts show when goods were put into inventory.

D) All of the above are correct.

E) None of the above is correct.

16) ______

17) Which statement is correct?

A) A part has one and only one part number.

B) Net requirements = gross requirements - on-hand inventory - scheduled receipts.

C) A product tree shows the parts that go into making a product.

D) All of the above are correct.

E) None of the above is correct.

17) ______

18) In material requirements planning the process of placing the exploded requirements in the

18) ______

proper time periods, based on the assembly lead times involved, is known as: A) offsetting.

B) netting.

C) exploding.

D) all of the above E) none of the above 19) Which statement is true?

A) The planned order release of the component becomes the order receipt of the parent.

B) The planned order release of the parent becomes the net requirement of the component.

C) The planned order release of the parent generates the gross requirement of the

19) ______

component.

D) All of the above are true.

E) None of the above is true.

20) Which of the following statements is true about released orders?

A) A planned order release is a not a released order.

B) A scheduled receipt is a released order.

C) An open order is a released order.

D) All of the above are true.

E) None of the above is true.

20) ______

21) Which of the following is NOT true of an MRP record?

A) An item is considered to be available at the end of the time bucket in which it is required.

B) The projected on-hand balance is for the end of the period.

C) The immediate or most current period is called the action bucket.

D) The current time is the beginning of the first period.

E) The number of periods in the record is called the planning horizon.

21) ______

22) In the following product trees, the low level code of item D is:

22) ______

A) 0.

B) 1.

C) 2.

D) 3.

23) Which of the following statements is true?

A) Each part has at least one part number, depending on where it is used.

B) Every item has more than one low-level code.

C) Net requirements = gross requirements + on-hand + scheduled receipts.

D) All of the above are true.

E) None of the above is true.

24) Given the following product tree, the parent of B is:

E) 4.

23) ______

____ __

24)

A) A

B) B

C) C

D) D

E) E

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) 1 A) B) 2

C) 3

D) 4

25) ______

E) 5

26) Which of the following are controlled by the materials planner?

A) exception messages B) planned orders C) firm planned orders D) released orders E) all of the above

26) ______

27) The lead time for each item is 2 weeks. If an order for 100 of A is to be delivered in week 20, in

27) ______

what week will there be a planned order RELEASE for item C?

A) 12 B) 14 C) 16 D) 18 E) cannot be determined from data given Use the following MRP record and your calculations to answer the following two questions. 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 1 Gross requirements 25 Scheduled receipts 100 Projected available 30 Net requirements Planned order receipt Planned order release

2 80

3 20

4 80

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

A) The planned order release of 100 is in period 3.

B) The projected available in period three is five.

C) The projected available in period three is 105.

D) The planned order release of 100 is in period 5.

E) A planned order for 50 should be released in period two

28) ______

29) The projected available in period four is: A) 15.

B) 25.

29) ______ C) 0.

D) 5.

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

A) Significant part numbering systems are difficult to maintain.

B) A random number is an identifier not a descriptor.

C) It is easier to remember numbers than letters.

D) All of the above are true.

30) ______

31) Which of the following is elapsed time from recognition of a need until the time that need is

31) ______

satisfied?

A) cycle time C) schedule

B) production time D) lead time

32) Which of the following comes directly from external customers?

A) dependent demand B) order quantity independent demand C) D) bill of materials

32) ______

33) Service parts experience which of the following types of demand?

A) independent and dependent B) independent C) dependent D) none of the above

33) ______

34) In material requirements planning, the process of placing the exploded requirements in the

34) ______

proper time periods, based on the assembly lead times involved, is known as: A) offsetting.

B) scheduling.

C) netting.

D) all of the above E) none of the above

35) A bill of material for an item must change: A) when there is a change in the use of the item.

B) never.

C) if the item is fully interchangeable.

D) when a component changes.

E) when the item is used in another parent.

35) ______

36) Three inputs to the MRP process are: A) the product structure, production activity control, and inventory status.

B) the master production schedule, inventory status, and the capacity requirements plan.

C) production activity control, purchasing, and the production plan.

D) the product structure, production activity control, and the master production schedule.

E) inventory status, the master production schedule, and the product structure.

36) ______

37) Which of the following statements are true?

37) ______

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 III only B) I and II only C) II and III only D) I, II, and III E) None of the statements is true.

38) The document that shows the component parts and the number of parts needed to make one of

38) ______

an assembly or subassembly is called: A) a bill of material.

B) a material requisition.

C) a route sheet.

D) a material requirements plan.

E) none of the above

39) In the product structure diagram below item A has ________ demand, and item D has ________

39) ______

demand.

A) independent; independent B) independent; dependent C) dependent; dependent D) dependent; independent E) None of the above answers is correct.

The following two questions 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 3 50 60 100 90 30

4 70

5 20

40

100

40) The projected available to be shown in week four is: A) 0.

B) 60.

C) 70.

D) 80.

E) none of the above

40) ______

41) The net requirement for week four is: A) 25.

B) 30.

C) 40.

D) 100.

E) none of the above

41) ______

42) Which of the following statements is true?

A) A part number identifies one part only.

B) The same part on different bills of material has different part numbers.

C) A significant part numbering system should always be used.

D) All of the above are true.

E) None of the above is true.

42) ______

43) Which of the following represents a major difference between a scheduled receipt and a firm

43) ______

planned order?

A) Only the scheduled receipt represents a financial commitment.

B) The scheduled receipt is generated from the master schedule, the firm planned order generated from MRP. C) Only the scheduled receipt can occur within the planning horizon.

D) The computer can move the scheduled receipt, not the firm planned order.

1) A 2) A 3) D 4) D 5) D 6) A 7) D 8) D 9) D 10) B 11) A 12) D 13) E 14) C 15) C 16) E 17) D 18) A 19) C 20) D 21) A 22) C 23) E 24) A 25) E 26) C 27) A 28) C 29) B 30) D 31) D 32) C 33) A 34) A 35) D 36) D 37) A 38) A 39) B 40) A 41) C 42) A 43) A

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) ________ is responsible for determining the capacity required and methods of making the 1) _______ capacity available.

A) Material requirements planning B) Capacity planning C) Master production scheduling D) Production activity control E) Production planning

2) ________ is responsible for capacity planning at the master production schedule level and

2) _______

________ at the material requirements planning level: I. Resource planning II. Rough-cut capacity planning III. Capacity requirements planning A) II and III B) I and III C) I and II D) none of the above

3) Available capacity in production planning is: A) the amount of inventory that can be held in a warehouse.

B) a measure of the ability of a plant to consume raw materials.

C) the quantity of work that can be performed in a given period of time.

D) all of the above

3) _______

4) ________ are generated by the priority planning system and involve the translation of the

4) _______

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) Work center reports B) Capacity requirements C) Capacity bills D) all of the above

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

I. historical data II. utilization III. efficiency A) II and III C) I and II

5) _______

B) I and III D) none of the above

6) A work center consists of 2 machines working 8 hours a day and 5 days a week. Historically,

6) _______

utilization has been 80% and the efficiency 90%. The effective capacity, to the nearest hour, would be: A) 30 hours.

B) 80 hours.

C) 40 hours.

D) 58 hours.

E) 50 hours.

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 IV only B) IV only

7) _______

C) II, III and IV only D) III only E) I, II and III only 8) The percentage of time the work center is active compared to the available time is called: A) up-time.

B) effectiveness.

C) utilization.

D) efficiency.

8) _______

9) The ratio of standard hours of work produced to hours actually worked is called: A) efficiency.

B) utilization.

C) effectiveness.

D) up-time.

9) _______

10) (Available time) × (utilization) × (efficiency) is called: A) demonstrated capacity.

B) useful capacity.

C) rated capacity.

D) work time.

E) effectiveness.

10) ______

11) Which of the following is NOT an input needed in capacity requirements planning?

A) routings B) rough-cut capacity C) planned order releases D) open shop orders E) time standards

11) ______

12) Information on the standard times for an operation will be found in: A) the work center master.

B) the bill of materials.

C) the routing.

D) the product master.

12) ______

13) Which of the following is a true statement?

A) Information on queue and wait time can be obtained from the work center file.

B) Open shop orders appear as scheduled receipts in the MRP. C) The Gregorian calendar is suitable for production planning.

D) A and B are true.

E) B and C are true.

13) ______

14) A ________ shows the capacity required at each work center based on planned and released

14) ______

orders for each time period of the plan.

A) scheduled order profile C) load profile

B) work center profile D) work center master

15) One hundred units of part A are to be processed on a work center. The setup time is 2 hours

15) ______

and the run time per piece is 10 minutes. The total standard time will be: A) 3 hours 40 minutes.

B) 10 minutes.

C) 2 hours 10 minutes.

D) 1000 minutes.

E) 1120 minutes.

16) In the short run, capacity can be altered by any of the following EXCEPT: A) subcontracting out.

B) purchasing new equipment.

16) ______

C) reallocating the work force.

D) selecting alternate routings.

E) scheduling overtime.

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) capacity report.

C) order report.

B) dispatch list.

D) load report.

18) Over the previous three weeks a work center produced 36, 43, and 35 standard hours of work.

What is the demonstrated capacity?

A) 38 standard hours C) 36 standard hours

17) ______

18) ______

B) 114 standard hours D) 43 standard hours

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) 119.4% B) 108.1% C) 110.4%

19) ______

D) 92.5%

20) The capacity available with no regard for downtime, utilization and efficiency is: A) finite capacity.

B) available time.

C) theoretical capacity.

D) measured capacity.

20) ______

21) Available capacity planned to exceed capacity required is: A) safety capacity.

B) alternate capacity. infinite capacity.

C) D) theoretical capacity.

21) ______

22) The difference between backward scheduling and forward scheduling is which of the

22) ______

following?

A) Backward scheduling uses standard times; forward scheduling uses actual lead times.

B) Backward scheduling begins from the start date; forward scheduling begins with the due date.

C) Backward scheduling uses firm and planned orders; forward scheduling uses only planned orders.

D) Backward scheduling begins from the due date; forward scheduling begins with the start date.

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) 108.3%.

B) 87.5%.

C) 92.3%.

D) 123.8%.

E) 80.8%.

23) ______

1) B 2) A 3) C 4) B 5) A 6) D 7) E 8) C 9) A 10) C 11) B 12) C 13) D 14) C 15) E 16) B 17) D 18) A 19) C 20) C 21) A 22) D 23) B

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) A production environment in which each unit or a small group of units is managed by a 1) _______ process created especially for that purpose is called: A) intermittent.

B) job shop.

C) flow.

D) project.

2) Planning the flow of work requires production activity control to:

2) _______

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) I, II, III and IV B) I, II and IV C) I, II and III D) II, III and IV E) I, III and IV

3) The activities of production activity control can be classified as:

3) _______

I. II. III. IV.

planning. implementation. control. process control.

A) II, III and IV B) I, II and IV C) I, III and IV D) I, II and III E) I, II, III and IV

4) Work authorization can be classified under the function of: A) implementation.

B) planning.

C) control.

D) scheduling.

E) load leveling.

4) _______

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

5) _______

I. II. III. IV.

Work centers are arranged according to the routing.

Work centers are dedicated to producing a limited range of similar products.

Work flow through the shop is NOT constant.

Throughput times are generally high.

A) III and IV B) I and III C) I and IV D) I and II E) II and III

6) Which of the following files are used by PAC for planning?

I. II. III. IV.

Shop order master Work center master Item master Routing A) I and III only C) I and II only

B) II and III only D) II, III and IV only

6) _______

7) Which of the following files will contain information on manufacturing lead time and lot size?

A) work center master B) item master shop order master C) D) bill of material

7) _______

8) The ________ shows the total standard time required to produce one end product in each work

8) _______

center required for its manufacture.

A) bill of material C) routing

B) work center master D) item master

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

A) routing B) work center master item master C) D) bill of material

9) _______

10) A shop order for 1000 pieces is to be processed on work station 123. The setup time is 4 hours

10) ______

and the run time per piece is .08 hours. What is the required capacity on this work center in standard hours?

A) 0.08 B) 4.08 C) 4000 D) 84 E) 80

11) All of the following are elements of manufacturing lead time EXCEPT: A) wait time.

B) move time.

C) design time.

D) run time.

E) setup time.

11) ______

12) Which of the following statements is true?

A) The largest element of manufacturing lead time is queue.

B) If queue is reduced, the lead time and work in process will be reduced.

C) The larger the load, the longer the queue.

D) All of the above are true.

12) ______

13) A scheduling system in which the last operation on a routing is scheduled first and for

13) ______

completion on the due date is called: A) finite scheduling.

C) backward scheduling.

B) forward scheduling.

D) infinite scheduling.

14) A scheduling system that assumes the required capacity will always be available is called: A) finite scheduling.

B) infinite scheduling.

C) backward scheduling.

D) forward scheduling.

14) ______

15) Which of the following statements is true?

A) Engineering drawings, bills of material and routings may be included in a shop packet.

B) Implementation is achieved by issuing a shop order to manufacturing.

C) The dispatch list is the instrument of priority control.

D) All of the above are true.

15) ______

16) Which of the following are methods of reducing manufacturing lead time?

IV. n splittin oper g atio

I. subcontracting II. forward scheduling III. operation overlapping

16)

______ A) I, II, III and IV B) III and IV C) I and III D) II and III E) I and II

17) Operation overlapping means: A) using alternate routings.

B) moving work to the next operation as a group of pieces is completed.

C) locating work centers close together to reduce materials handling.

D) the same job running on two machines at the same time.

E) running two or more jobs at the same time.

17) ______

18) Which of the following statements is true?

A) A bottleneck (capacity constraint resource) will control the throughput of all products

18) ______

processed by it.

B) A time buffer should be established before a bottleneck.

C) Work centers feeding a bottleneck should work at full capacity.

D) A and B are true.

E) B and C are true.

19) ______

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 and II only are true.

B) II only is true.

C) III only is true.

D) I only is true.

E) II and III only are true.

20) Which of the following statements is true?

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 are true.

E) B and C only are true.

20) ______

21) Which of the following is NOT a principle of managing bottlenecks?

A) Do anything to increase the capacity of a bottleneck.

B) A time buffer should be established after each bottleneck.

C) Use alternate routings.

D) The rate of material fed to a bottleneck should be controlled.

E) Change the schedule.

21) ______

22) If the previous backlog was 20 units, the planned input was 25 units, and the planned output

22) ______

was 30 units, the planned backlog would be: A) 5 units.

B) 20 units.

C) 10 units.

D) 25 units.

E) 15 units.

23) The following information is to be used in this and the next question. For the last week a work

cent er had

____ __

a planned 23) 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 cumulativ e input variance was:

A) +4.

B) -4.

24) The planned backlog was: A) 36.

B) 42.

C) +2.

D) -2.

E) 0.

24) ______

C) 40.

D) 66.

E) 30.

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.

25) ______

26) Given the following information, which sequence will the orders be run in?

26) ______

ORDER A B C A) ABC

CRITICAL RATIO 1.5 1.0 0.7 B) BAC

C) ACB

D) BCA

E) CBA

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) 0.2 B) 0.8

C) 0.25

D) 1.2

27) ______

E) 1.25

28) In a drum-buffer-rope scheduling system, the "drum" represents which of the following?

A) a safety stock of material

28) ______

B) the constraint against too much being loaded into the master schedule C) a drum of jobs to be selected D) the master schedule for the operation 29) Which of the following is concerned with very short-term detailed planning of the flow of orders through manufacturing?

A) MRP C) master production scheduling

29) ______

B) sales and operations planning D) production activity control

30) A scheduling system that assumes the required capacity will NOT always be available is called: A) finite scheduling.

B) forward scheduling.

C) backward scheduling.

D) infinite scheduling.

30) ______

31) An order for 100 of a product is processed on work center 123. The setup time is 60 minutes and

31) ______

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) 500 minutes.

B) 250 minutes.

C) 560 minutes.

D) 310 minutes.

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) production control.

C) priority management.

32) ______

B) scheduling.

D) dispatching.

33) Given the following data, which job(s) will be late if the shortest process time sequencing rule is

33) ______

used?

Today is day 100.

Job

Process Due Time Date A 4 104 B 1 106 C 5 109 A) A and B will be late.

C) A and C will be late.

B) B and C will be late.

D) All jobs will be on time.

34) Operation overlapping means: A) locating work centers close together to reduce materials handling.

B) running two or more jobs at the same time on the same machine.

C) using alternate routings.

D) moving work to the next operation as a batch is completed.

34) ______

35) Operation splitting means: A) moving work to the next operation as a batch is completed.

B) locating work centers close together to reduce materials handling.

C) the same job running on two jobs at the same time.

D) running two or more jobs at the same time on the same machine.

35) ______

1) D 2) C 3) D 4) A 5) A 6) D 7) B 8) C 9) B 10) D 11) C 12) D 13) C 14) B 15) D 16) B 17) B 18) D 19) D 20) E 21) B 22) E 23) A 24) E 25) E 26) E 27) B 28) D 29) D 30) A 31) D 32) D 33) C 34) D 35) C

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following is an objective of purchasing?

1) _______ 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.

2) Which of the following is NOT a step in the purchasing cycle?

A) receipt and analysis of purchase requisition B) receive and accept the goods.

C) selection of vendor D) make up the specification for the product E) issue a purchase order

2) _______

3) Purchasing departments usually have the responsibility and authority to: A) satisfy the needs of the user department.

B) legally commit the company to a contract.

C) determine price and source.

D) all of the above

3) _______

4) ________ originates with the department or person who will be the ultimate user.

A) A purchase order B) A purchase requisition C) Vendor selection D) any of the above

4) _______

5) The decision on what is the "best buy" involves consideration of: A) functional requirements.

B) quantity required.

C) price.

D) all of the above

5) _______

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

A) Functional specification B) Quantity required C) Production department D) all of the above

6) _______

7) Which of the following is NOT a phase in providing user satisfaction?

7) _______

I. II. III. IV.

Quality and production planning Quality and product design Quality and manufacturing Quality and use A) I, II, III and IV are all phases in providing user satisfaction.

B) I only C) II only D) III only E) IV only

8) Functional specifications set out: A) the purpose for which the product is required.

B) all those aspects or characteristics of a product that are determined by its final use.

C) how the product is to work.

D) none of the above

8) _______

9) The replacement of internal capacity and production with that of a supplier's is known as: A) capacity buying.

B) outsourcing.

C) outpartnering.

D) capacity cushioning.

9) _______

10) Which of the following terms is an inquiry sent to multiple suppliers to receive information?

A) material authorization B) purchase order C) request for quote D) purchase requisition

10) ______

11) Which of the following applies to standard products?

A) Their prices are comparatively stable.

B) They are readily available.

C) They are purchased ONLY after firm quotations.

D) Only A and B above apply.

E) All of the above apply.

11) ______

12) Long-term supplier partnerships are supported by which of the following types of sourcing?

A) sole B) single C) buyer/planner D) multiple

12) ______

13) In which of the following situations would a company probably specify by brand?

A) when the item to be bought is patented B) when buying small quantities C) when the item to be bought is made to an industry standard D) A and B above E) B and C above

13) ______

14) Which of the following is FALSE regarding description of a product by specification?

A) The minimum specifications set by the buyer are likely to become the maximum

14) ______

furnished by the supplier.

B) Allows purchase from a number of sources C) Developing specifications is an inexpensive process.

D) All of the above E) B and C above 15) Which of the following terms identifies materials whose price is set by market supply and demand?

A) commodities C) made-to-order items

15) ______

B) items of small value D) standard products

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

A) getting the best quality B) getting the best price C) selecting the best source D) ensuring goods are delivered on time

16) ______

17) Which of the following is NOT a factor to consider when selecting a supplier?

A) size of organization B) reliability

17) ______

C) manufacturing capability D) technical ability E) price 18) Buyers should realize that when they make a continuing purchase they buy more than the

18) ______

supplier's product. They also buy the supplier's: A) procurement capabilities.

B) production capabilities.

C) managerial capabilities.

D) technical capabilities.

E) all of the above

19) Which of the following will help a purchasing officer select potential sources of supply?

A) trade journals B) advertising C) purchasing department's own records D) all of the above

19) ______

20) Supplier relationships are necessary because: A) the buyer and vendor depend upon each other for communication and problem solving.

B) the buyer can expect presents from the vendor.

C) the buyer can expect price concessions.

D) all of the above

20) ______

21) When using the ranking method of evaluating suppliers: A) suppliers are rated against each factor.

B) weight and rating of each supplier is multiplied for each factor and the total taken as the

21) ______

ranking of the supplier.

C) each supplier is ranked for overall suitability.

D) important factors are selected and assigned a "weight."

E) all of the above are used.

22) Which of the following is (are) a qualification(s) of a good supplier?

A) has a sound financial position B) has reasonable prices C) has adequate plant and facilities D) All of the above are qualifications of a good supplier.

22) ______

23) Which of the following refers to a means of replenishing inventory through a supplier's review

23) ______

and responsibility to maintain targeted inventory levels?

A) vendor-managed inventory B) environmentally-responsible purchasing C) enterprise resource planning D) safety stock

24) Special items will generally be purchased on the basis of a quotation. The purchasing agent will

24) ______

select on the basis of: A) the most reliable bidder.

B) the preference of the department that will use the item.

C) the lowest price.

D) consideration of all of the above.

25) In comparing prices, which of the following factors should be considered?

A) base price B) installation and tooling costs

25) ______

C) shipping point

D) All of the above should be considered.

26) The fluctuation in the supply upstream in a supply chain generated by a small change in

26) ______

demand downstream in the supply chain is known as: A) demand variation.

B) break-even point.

C) bullwhip effect.

D) forecast error.

27) Which of the following is a function of supplier scheduling and follow-up?

A) establishing specifications B) negotiation C) price determination D) taking corrective action on issues E) selecting suppliers

27) ______

28) Which of the following statements are true about planner/buyers?

28) ______

I. II. III. IV.

Planner/buyers handle more components than planners do.

Planner/buyers issue material releases to suppliers.

Planner/buyers establish supplier delivery priorities.

Planner/buyers negotiate prices with suppliers.

A) II, III, and IV are true.

B) I and II are true.

C) II and III are true.

D) I, II, and III are true.

E) III and IV are true.

29) Which of the following statements is true?

A) EDI does not eliminate much of the paper work associated with buying.

B) In contract buying, price and delivery are negotiated each time an order is released.

C) Contract buying is useful for short term purchases.

D) Contract buying assures suppliers they have a given amount of business and commits

29) ______

them to allocating that amount of their capacity to the customer.

30) Intranet stands for: A) a net shared by two or more companies.

B) an internal net normally used within the boundaries of the company.

C) an external net that can be used by all people.

D) a net that includes all who are connected to it.

30) ______

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

A) obtaining goods and services at the lowest cost B) selecting products that reduce the impact on the environment C) developing good supplier relations D) ensuring the best possible service and prompt delivery by the supplier E) issuing a regular quantity of purchase orders

31) ______

32) If the fixed cost to produce an item is $500, labor is $2.00 per unit and materials are $2.50 per

32) ______

unit, then the unit cost for an order of 1,000 would be: A) $5.00.

B) $5,000.

C) $504.50.

D) $6.50.

33) A price that is competitive and allows the seller to make a profit is considered to be a price that is:

33) ______

A) fair.

B) the final price.

C) an incentive.

D) the lowest price.

E) optimal.

34) Which of the 3R's has the most positive impact on the environment?

A) Recycle B) Reduce C) Reuse D) All of the above have equal impact.

34) ______

35) Which of the following departments is most likely to be familiar with knowledge of waste

35) ______

products, the legislation governing their handling and other uses in the company?

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

36) A Purchasing Agent, wishing to dispose of waste plastic from one of their processes should first

36) ______

contact: A) the customer who buys the products.

B) plant maintenance.

C) local government regulators.

D) the supplier.

E) a buyer of waste materials.

37) After the supplier's invoice is received, which documents are needed to approve payment?

A) the purchase order and the receiving report B) the bill of lading and the receiving report C) the purchase order and the invoice D) the approved budget and the purchase order E) Approval can be made from the purchase order.

37) ______

38) Verifying shipments for quantity and having no damage is the responsibility of: A) the quality department.

B) accounts payable.

C) the purchasing department.

D) the shipping department.

E) the receiving department.

38) ______

1) E 2) D 3) D 4) B 5) D 6) A 7) A 8) B 9) B 10) C 11) D 12) B 13) D 14) C 15) A 16) C 17) A 18) E 19) D 20) A 21) E 22) D 23) A 24) D 25) D 26) C 27) D 28) C 29) D 30) B 31) E 32) A 33) A 34) B 35) D 36) D 37) A 38) E

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is a true statement about forecasting?

1) _______ I. II.

It must be done by all who wish to meet the demands of the future.

Companies who make to order do NOT have to forecast.

A) I and II are true.

B) II only is true.

C) I only is true.

D) Neither I nor II are true.

2) Which of the following is NOT a component of a demand pattern?

A) seasonal variation B) standard deviation C) random variation D) trend E) All of the above are components of a demand pattern.

2) _______

3) Given this product tree, which item(s) should be forecast?

3) _______

A) D and E B) B, C, D, and E C) A, B and C D) only A E) All items should be forecast.

4) Which of the following is a true statement about the general principles of forecasting?

A) Forecasts are more accurate for larger groups of items.

B) Every forecast should include an estimate of error.

C) Forecasts are more accurate for nearer periods of time.

D) All of the above are general principles of forecasting.

E) None of the above is a general principle of forecasting.

4) _______

5) Which of the following statements is true?

A) Forecasts for families of products should be built up from individual product forecasts.

B) Dependent demand items should be forecast.

C) A forecast for sales next week will not be as accurate as for a year from now.

D) All of the above are true.

E) None of the above is true.

5) _______

6) Which of the following statements is true?

A) Forecasts should be made for all items, models, and options manufactured.

B) Forecasts made in dollars for total sales should be used for manufacturing.

C) If we wish to forecast demand, then past sales must be used for the forecast.

6) _______

D) All of the above are true.

E) None of the above is true.

7) A firm manufactures a line of vacuum cleaners composed of standard, custom and deluxe

7) _______

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 and add the forecasts together C) each model D) all of the above E) none of the above

8) Which of the following is NOT true?

A) Demand for different groups should be recorded separately.

B) Number of orders shipped is a good measure of demand for an item.

C) Circumstances relating to historical data should be recorded.

D) None of the above is true.

8) _______

9) Which of the following statements is true regarding forecasting techniques?

A) Techniques that use external economic indicators are classified as extrinsic.

B) Qualitative techniques are based on judgment.

C) Intrinsic techniques use historical data.

D) All of the above are true.

E) None of the above is true.

9) _______

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

A) The past is a valid indicator of the future.

B) Seasonal variations are small.

C) Demand trend is seldom linear.

D) Random variations are small.

E) all of the above

10) ______

11) Which of the following methods can be used to forecast the demand for a NEW product?

A) moving averages B) qualitative techniques C) equation fitting D) all of the above E) none of the above

11) ______

12) A forecasting technique that takes the average demand for some past number of periods is

12) ______

called: A) moving average.

B) trend time analysis.

C) exponential smoothing.

D) none of the above E) all of the above

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) 750 B) 900 C) 822

D) 783

E) 700

13) ______

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) 225 B) 200

C) 212 1/2

D) 210

14) ______

E) 205

15) Which of the following statements is true?

A) The seasonal index is an estimate of how much the demand during the season will be

15) ______

above or below the average demand.

B) Demand fluctuations that depend on the time of the year, week or day are called seasonality.

C) Seasonality ALWAYS occurs in summer, winter, spring and fall.

D) A and B are true.

E) B and C are true.

16) If the average quarterly demand is 200 units and the first quarter demand is 350 units, what is

16) ______

the seasonal index for the quarter?

A) 350 B) .57 C) 200 D) 1.75 E) none of the above

17) Which of the following statements is true?

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 true.

E) B and C are true.

17) ______

18) If the February demand for a product is 5,000 units and the seasonal index for February is 0.75,

18) ______

what is the deseasonalized February demand?

A) 8,750 B) 15,000 C) 10,000

D) 6,667

E) 3,750

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

19) ______

20) Which of the following statements is true?

A) Usually forecast error is distributed normally about the average demand.

B) In a normal distribution, the error will be within 1 MAD of the average about 60% of the

20) ______

time.

C) The mean absolute deviation can be used as a measure of forecast error.

D) All of the above are true.

E) None of the above is true.

21) Which of the following statements is true?

A) Forecast error does not need to be measured.

B) When actual demand exceeds a reasonable error, it should be investigated to discover the cause of the error.

C) Forecasts do not need to be tracked.

21) ______

D) All of the above are true.

E) None of the above is true.

22) Forecasts are far more accurate for which of the following?

A) individual items B) product families short term C) D) end use components

22) ______

23) Which of the following is good for short-range forecasts, can detect trends, but lags the trend?

A) forecast smoothing B) exponential smoothing C) delphi technique D) stable forecasting

23) ______

24) Which of the following is NOT a source of demand?

A) spare parts B) internal customers C) stockholders D) external customers

24) ______

25) When the demand for one item can be used to forecast the demand for another item, the

25) ______

demand for the first item is called which of the following?

A) a seasonal index B) a demand manager C) a forward commodity D) a leading indicator

26) Which of the following best describes the concept of Collaborative Planning, Forecasting, and

26) ______

Replenishment?

A) supply chain partners developing joint business plans B) supply chain partners combining production facilities C) supply chain partners sharing MRP outputs D) supply chain partners sharing inventory positions and demands

27) Which of the following correctly describes demand management?

A) setting priorities for demand when supply will not cover all demand B) making delivery promises C) synchronizing market demand with company capabilities D) all of the above E) none of the above

27) ______

1) C 2) B 3) D 4) D 5) E 6) E 7) A 8) B 9) D 10) A 11) B 12) A 13) D 14) E 15) D 16) D 17) D 18) D 19) D 20) D 21) B 22) B 23) B 24) C 25) D 26) A 27) D

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is true about inventory management?

1) _______ A) Inventories and production can be managed separately.

B) Inventories are usually insignificant on the balance sheet.

C) Inventory is not important at the production planning level.

D) All of the above are true.

E) None of the above is true.

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) II and III B) I and III C) I and II D) III and IV

2) _______

E) II and IV

3) Inventories that are built up in advance of a peak selling season, a promotion program or a

3) _______

plant shut-down are known as: A) anticipation inventories.

B) lot-size inventories.

C) safety stocks.

D) transportation inventories.

E) none of the above

4) Transportation inventories can be reduced by: A) reducing the order point.

B) reducing order quantities.

C) increasing order quantities.

D) reducing transportation time.

E) none of the above

4) _______

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

5) _______

________ inventories.

A) hedge B) lot size C) anticipation D) any of the above E) none of the above

6) Which of the following statements is true?

A) Inventories allow manufacturing to reduce production runs, reducing unit cost.

B) Inventories allow manufacturers to operate different work centers at the same output.

C) Inventories allow manufacturing to level out production and to satisfy peak demand.

D) All of the above are true.

E) None of the above is true.

6) _______

7) Which of the following company objectives are in conflict?

I. II.Maximize custo

___ ___ _

Low- 7) cost plant operation.

III. Mini mum inventory investmen t.

A) I, II and III B) II and III, not I C) I and II, not III D) I and III, not II E) none 8) In managing inventory, the problem is to balance the inventory investment with:

8) _______

I. II. III. IV.

customer service. costs associated with changing production levels. costs of placing orders. transportation costs.

A) II, III and IV only B) II and III only C) III and IV only D) I, II and III only E) I, II, III, and IV

9) Which of the following costs are relevant to inventory management decisions?

A) ordering costs B) carrying costs C) capacity-related costs D) all of the above E) none of the above

9) _______

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

A) purchase cost B) storage costs C) capital costs D) all of the above E) none of the above

10) ______

11) Which of the following are considered ordering costs?

11) ______

I. II. III.

production control costs lost capacity costs risk costs A) I and II B) II and III C) I and III D) I, II and III E) none of the above

12) Which of the following statements is NOT true?

A) The annual cost of carrying inventory can be decreased by ordering less at one time.

12) ______

B) The annual cost of ordering depends on the number of orders per year.

C) The annual cost of ordering can be reduced by ordering less at any one time.

D) All of the above are true.

E) None of the above is true.

13) Which of the following costs would NOT be included in the cost of placing an order?

A) setup costs B) back-order costs C) costs of placing a purchase order D) all of the above E) none of the above

13) ______

14) Which of the following would NOT be included in calculating inventory carrying costs?

A) ordering costs B) obsolescence costs C) capital costs D) all of the above E) none of the above

14) ______

15) Which of the following equations is correct?

A) Profit = revenue + owner's equity B) Assets = liabilities + revenue C) Revenue = accounts receivable - liabilities D) Liabilities = assets - owner's equity

15) ______

16) If the annual cost of goods sold is $10,000,000 and the average inventory is $2,000,000, what is

16) ______

the turns ratio?

A) 0.2 B) $8,000,000 C) 5 D) 20% E) cannot be calculated from the information given

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) 33

17) ______

D) 7

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.

18) ______

19) Of the following statements:

19) ______

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 are true.

B) II and III are true.

C) Only I is true.

D) I and III are true.

E) Only III is true.

20) Which of the following statements is true?

A) Two items with the same part number in the same inventory would be one SKU. B) Two items with the same part number but in two different inventories would be one

20) ______

stock keeping unit (SKU).

C) Two white shirts of different sizes in the same inventory would be one SKU. D) All of the above are true.

E) None of the above is true.

21) Delivery of goods from a supplier is in transit for 14 days. If the annual demand is 2600 units,

21) ______

what is the average annual inventory in transit?

A) 100 units B) 1.97 units C) 89.7 units D) cannot be determined from the data given

22) A company carries an average annual inventory of $1,000,000. If the cost of capital is 10%,

22) ______

storage costs are 8%, and risk costs are 7%, what does it cost per year to carry this inventory?

A) $250,000 B) $100,000 C) $80,000 D) $70,000 E) cannot be determined from the data given

23) Which of the following would NOT be considered work-in-process inventory? finished goods in the stockroom processed material waiting for inspection raw materials not issued components in queue ahead of a milling machine A) II and III B) I and IV C) I and III

23) ______

I. II. III. IV.

D) I and II 24) ______

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) II and IV only B) I, II and III only C) II, III and IV only D) I, II, III and IV

25) ______

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) 4.0 B) 0.25

C) 5.0

26) All of the following are reasons to keep inventory EXCEPT: A) Couple supply with demand.

B) Meet fluctuations in product demand.

D) 0.20 26) ______

C) Provide a safeguard against delivery time variations.

D) Allow flexibility in production scheduling.

27) Which of the following represents a major method to establish a forecast for the need for MRO supplies?

A) Base the forecast on the exponential smoothing approach.

B) Base the forecast on extrinsic methods.

C) Base the forecast on the lot sizes of production material.

D) Base the forecast on the mean time between failures.

27) ______

1) E 2) E 3) A 4) D 5) B 6) C 7) A 8) E 9) D 10) A 11) A 12) C 13) B 14) A 15) D 16) C 17) A 18) D 19) C 20) A 21) C 22) A 23) C 24) D 25) A 26) A 27) D

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following is NOT an assumption on which the economic order quantity (EOQ) is 1) _______ based?

A) The item is produced continuously.

B) Replacement occurs all at once.

C) Order preparation costs, inventory carrying costs and lead times are constant and known.

D) Demand is relatively constant and known.

E) All of the above are true assumptions.

2) In developing the standard economic order quantity formula, the following assumption(s) is

2) _______

(are) made: A) Demand for the item is relatively uniform.

B) Lead time is constant.

C) Replenishment is in lots or batches that arrive at once.

D) All of the above are assumed.

E) None of the above is assumed.

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) inventory holding costs and costs of changing production levels.

D) ordering costs and inventory carrying costs.

E) ordering costs and costs of changing production levels.

3) _______

4) If the order quantity is increased, the annual cost of carrying inventory will: A) remain the same.

B) increase.

C) not be affected.

D) decrease.

E) none of the above

4) _______

5) Assuming the cost per order is constant, increasing the order quantity will cause annual

5) _______

ordering costs to: A) increase.

B) increase at a decreasing rate.

C) remain the same.

D) decrease.

E) cannot be determined

6) In the simple EOQ model, annual inventory carrying costs and annual ordering costs vary: A) with seasonally adjusted demand.

B) with the order quantity.

C) in an unknown manner.

D) according to the time of year.

E) They do not vary in any way.

6) _______

7) While working a simple EOQ problem, you notice that, with a certain lot size, the annual

ordering

___ ___ _

cost is 7) exactly the same value as the annual inventory carrying cost.

Which of the following is true?

A) Total cost is at its maximum.

B) The annual carrying cost will decrease if the order quantity is increased.

C) The lot size is the economic order quantity.

D) all of the above E) none of the above; the phenomenon is merely a coincidence 8) A firm uses $20,000 of an item per year. The carrying cost is 25%, the cost of ordering is $10 and

8) _______

the order quantity is $1,000. The annual total cost of carrying plus ordering would be: A) $500.

B) $5,000.

C) $2,500.

D) $816.

E) none of the above

9) For a particular item the usage is 2000 units per year, the ordering cost is $10, the inventory

9) _______

carrying cost is 20% and the unit cost is $5. The economic order quantity is: A) 2000 units.

B) 4000 units.

C) 200 units.

D) 400 units.

E) 20 units.

10) If the economic order quantity is to be calculated in DOLLARS, then: A) ordering costs MUST be stated on a per UNIT basis.

B) carrying costs are stated in dollars per unit.

C) the annual demand must be stated in dollars.

D) All of the above are true.

E) None of the above is true.

10) ______

11) A supplier offers a quantity discount. Which of the following will influence the decision to

11) ______

accept the discount or not?

A) purchase cost B) cost of placing one order C) cost of carrying inventory D) All of the above are relevant.

E) None of the above is relevant.

12) If a purchase discount is taken: I. II.

there is a saving in purchase cost. ordering costs are reduced.

III. 12) carrying costs a IV. there is not nece

______

A) I, II, II, and IV are true.

B) Only II, III and IV are true.

C) Only III and IV are true.

D) Only II and III are true.

E) Only II and IV are true.

13) For a certain group of items, the cost of carrying inventory and the cost of placing orders is not

13) ______

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) $50,000.

C) $20,000.

D) $10,000.

E) none of the above

14) Which of the following statements is correct?

A) You must know the ordering cost to use the EOQ concept.

B) Inventory levels can be lowered by raising the order quantity.

C) If stock is not received all at once into inventory, then EOQ formula can be modified and

14) ______

used.

D) Quantity discounts will not change the total inventory costs of the item.

E) None of the above is correct.

15) The EOQ for an item is 5500 units and the annual demand is 78,000 units. What is the period

15) ______

order quantity?

A) 14.18 B) 3.67 C) 4 D) 0.27 E) cannot be determined from the given data

16) Which of the following statements is true?

16) ______

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) II and III only are true.

B) I and III only are true.

C) I and II only are true.

D) I, II, III and IV are true.

E) None of the above is true.

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 y = 0 per units unit = $200 .00 Ope ning inve ntor

17)

______ A) $280 B) $340 C) $140 D) $400 E) none of the above

18) Quantity discounts cause companies to: A) order sooner.

B) always save money.

C) increase ordering costs.

D) order less at a time.

E) increase their inventory.

18) ______

19) The period order quantity is equal to: A) EOQ divided by average period demand.

B) annual demand divided by EOQ. C) the carrying cost up, to but not exceeding, the ordering cost.

D) the part period cost times average inventory.

E) the sum of the carrying costs divided by cost per unit.

19) ______

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

20) ______

sizing?

A) The time interval of inventory coverage is constant.

B) POQ is better suited to lumpy demand than EOQ. C) POQ and EOQ will try to order the same number of times per year.

D) The order quantity is constant.

E) POQ is derived directly from the EOQ.

21) K, the constant used for lot sizing, is calculated as the: A) annual demand divided by the order quantity.

B) reciprocal of order quantity times the economic order quantity.

C) standard deviation of the demand divided by the square root of demand.

D) sum of the square roots of demand divided by the number of orders per year.

E) order point minus safety stock.

21) ______

22) The period order quantity: A) works like a quantity discount.

B) orders the same quantity each period.

C) can only be applied to continuous demand.

D) orders a constant amount for a set number of periods.

E) is based on the same assumptions as the EOQ model.

22) ______

23) Which of the following techniques balances the cost of ordering with the cost of carrying

23) ______

inventory?

A) the constant K C) POQ

B) EOQ D) all of the above

24) The letter "K" used in lot sizing makes the order quantities: A) increase the average inventory.

B) maintain the current inventory level while decreasing the number of orders.

24) ______

C) decrease the average inventory by gradually ordering more often.

D) order the big items more often and the low volume items less often.

E) balance the safety stock of items with demand.

25) Quantity discounts: A) always advantage the seller at a cost to the buyer.

B) persuade the buyer to buy more often.

C) decrease the annual carrying costs but increase the ordering cost.

D) make buyers order more than is economical.

E) can be a good decision if the total annual costs are reduced.

25) ______

1) A 2) D 3) D 4) B 5) D 6) B 7) C 8) D 9) C 10) C 11) D 12) A 13) A 14) C 15) B 16) A 17) B 18) E 19) A 20) D 21) D 22) E 23) D 24) D 25) E

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following are basic systems for determining when to order INDEPENDENT 1) _______ demand items?

I. Order point system II. Periodic review system III. Material Requirements Planning A) I only B) II only C) I and III only D) II and III only E) I and II only

2) Which of the following statements is true?

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.

2) _______

3) When using the order point system, which of the following is true?

A) The order point depends upon the demand during the lead time plus safety stock.

B) Order quantities are usually fixed.

C) Time intervals between orders are constant.

D) A and B are true.

E) B and C are true.

3) _______

4) Which of the following statements is true about safety stock?

A) It depends on the required service level.

B) It must always be carried.

C) It depends only on the amount of demand.

D) All of the above are true.

E) None of the above is true.

4) _______

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

5) _______

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 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

6) _______

E) none of the above 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

7) _______

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

8) Among other things, the amount of safety stock carried will depend upon: A) variability of demand during the lead time.

B) the service level desired.

C) the frequency of reorder.

D) all of the above E) A and B above

8) _______

9) Which of the following statements is correct?

A) Safety stock depends on the variation of demand during the lead time.

B) Safety stock depends on the length of the lead time.

C) Safety stock depends on the service level desired.

D) All of the above are correct.

E) None of the above is correct.

9) _______

10) If the standard deviation of demand is 100 units and the average demand is 1000 units, then we

10) ______

can be 95% confident that actual sales will be 1000 units plus or minus about: A) 400 units.

B) 200 units.

C) 100 units.

D) 150 units.

E) 300 units.

11) Which of the following statements is true?

A) Most demand patterns tend to be stable and predictable.

B) The normal curve can be described by its average (mean) and the variation of actual

11) ______

demand about the average.

C) The most common predictable pattern is called a normal distribution.

D) All of the above are true.

E) Only A and B are true.

12) If the sum of the absolute deviations of demand was 500 for 10 periods, MAD would be: A) 50.

B) 500.

C) 0.02.

D) 5.

E) none of the above

12) ______

13) Management states that they will tolerate one stockout every year for a specific item. If 10

13) ______

orders are placed for the item each year, the service level desired is: A) 85%.

B) 90%.

C) 95%.

D) 80%.

E) none of the above

14) The average demand for an item is 1000 per month. The mean absolute deviation of monthly

14) ______

demand is 300 units. The MAD for yearly sales will be approximately: A) 3600 units.

B) 1040 units.

C) 3464 units.

D) 12,000 units.

E) none of the above

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) 140 units.

B) 120 units.

C) 180 units.

D) 200 units.

15) ______

E) 160 units.

16) Management is willing to tolerate one stockout every 2 years for a specific item. If 10 orders are

16) ______

placed for the item each year the service level desired is: A) 95%.

B) 90%.

C) 80%.

D) 85%.

E) none of the above

17) Which of the following statements is true?

A) Stockouts do not depend on the frequency of reorder.

B) Stockouts do not cost money because customers are willing to wait.

C) The cost of a stockout will vary depending on the market served, the customer, and

17) ______

competition.

D) Stockouts can occur at any time in the inventory cycle.

E) All of the above statements are true.

18) Which of the following systems are used to determine when the order point is reached?

18) ______

I. II. III. IV.

Two-bin system Perpetual inventory system Periodic inventory system Safety stock system A) All are used to tell when the order point is reached.

B) I, II and III only are used.

C) I and II only are used.

D) II and III only are used.

E) I and III only are used.

19) ________ is an inventory record system that keeps a continuous account of transactions as they

19) ______

occur: A) Two-bin system B) Periodic inventory system C) Safety stock system D) Perpetual inventory system E) All of the above keep a continuous account.

20) The demand placed on a factory or a central warehouse by distribution centers is considered: A) independent.

B) uniform.

C) dependent.

D) all of the above

20) ______

E) none of the above 21) An order system in which the order quantity is allowed to vary and the order cycle is fixed is

21) ______

called the: A) red-tag system.

B) reorder point system.

C) periodic review system.

D) two-bin system.

E) none of the above

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) 550 units.

B) 200 units.

C) 250 units.

D) 150 units.

22) ______

E) 300 units.

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

23) ______

24) If the lead time is 1 week, the review period 1 week, the average demand 100 units per week

24) ______

and the safety stock is 50 units, the target level will be: A) 250 units.

B) 150 units.

C) 300 units.

D) 200 units.

E) none of the above

25) Which of the following is true?

A) The two-bin system is an example of the order point system.

B) Order quantities are fixed in the periodic review 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.

25) ______

26) Which of the following statements is true?

26) ______

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 III only are true.

B) I and II only are true.

C) II and III only are true.

D) All of the above are true.

E) None of the above is true.

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) I, II, III and IV

27) ______

B) I, III and IV C) I, II and III D) II, III and IV E) I, II and IV 28) The distribution inventory management system which forecasts when the various demands

28) ______

will be made by the system on central supply is called: A) inventory replenishment.

B) push system.

C) distribution requirements planning.

D) pull system.

E) order point system.

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) 80 units.

B) 20 units.

C) 40 units.

D) 100 units.

29) ______

E) 60 units.

30) For a given item the lead time is 1 week, the on hand inventory is 50 units, demand is 20 units

30) ______

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) 120 units.

C) 60 units.

D) 40 units.

E) 50 units.

31) A company that keeps no safety stock can expect an average service level of: A) 85%.

B) 0%.

C) 50%.

D) 15%.

E) Safety stock does not affect the service level.

31) ______

32) A company that has regular replenishments of small value items such as a grocery store would

32) ______

use the ________ system.

A) Kanban B) Periodic Review C) Order Point D) Materials Requirements Planning E) Push

33) Management has carefully measured the standard deviation of the demand of a product and

33) ______

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) 90%.

C) 100%.

D) 85%.

E) 35%.

34) Lead time for a given item is 3 weeks and sales have been recorded in 1 week intervals. If the

34) ______

Standard Deviation for the sales interval is 25 then the Standard Deviation for the lead time should be approximately: A) 43.

B) 25.

C) 14.

D) 8.

E) 75.

35) For a given item controlled by a periodic review system the target level is 100 units. If there are

35) ______

40 units on the shelf and the lead time is 2 weeks then the order quantity should be: A) 85 units.

B) 140 units.

C) 40 units.

D) 120 units.

E) 60 units.

36) A product has a standard deviation of demand of 15. The safety stock for a service level of 98%

wou ld be

approxim ately:

____ __

36) A) 31.

B) 15.

C) 8.

D) 14.7.

E) 26.

Use the following information to answer the next two questions.

Distribution Center A Transit time: 1week 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) 1 and 2.

B) 2 and 3.

C) 1, 2 and 3.

D) 1 and 3.

E) Intransit inventory will cover all the orders.

37) ______

38) What will be the projected available for periods 2, 3 and 4?

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

38) ______

39) Demand on Central Supply tends to be: A) monotonous.

B) lumpy.

C) smoothed out with planned orders.

D) lower than the Distribution Centers.

E) continuous.

39) ______

40) The Gross Requirements on Central Supply are: A) taken from the Distribution Centers and offset by the lead time.

B) the sum of the gross requirements for the DC's offset by the lead time.

C) the sum of the planned order releases from the Distribution Centers.

D) the sum of the gross requirements for the Distribution Centers.

E) the same as the Intransit Inventory.

40) ______

1) E 2) D 3) D 4) A 5) E 6) B 7) A 8) D 9) D 10) B 11) D 12) A 13) B 14) B 15) A 16) A 17) C 18) C 19) D 20) C 21) C 22) A 23) D 24) A 25) A 26) E 27) E 28) C 29) A 30) A 31) C 32) B 33) D 34) A 35) E 36) A 37) B 38) B 39) B 40) C

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements are true about warehouse operation?

1) _______ I. The major operating cost is labor.

II. Labor productivity depends on warehouse layout.

III. Capital costs are those of transport and space.

A) I, II and III B) I and II only C) I only D) II and III only E) I and III only

2) The operating costs of a warehouse will depend on:

2) _______

I. the type of material handling equipment used.

II. the stock location system used.

III. the warehouse layout.

A) I, II and III B) II and III only C) I and III only D) I only E) I and II only

3) Which of the following is NOT a warehouse activity?

A) order picking B) transportation C) identifying D) receiving E) dispatching

3) _______

4) Which of the following statements is true?

A) The complexity of a warehouse operation will depend on the number of SKUs handled,

4) _______

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) A and B are both true.

D) Neither A nor B are true.

5) Which of the following statements is true?

A) Inventory is typically stored only on the floor.

B) Increasing cube utilization will increase accessibility.

C) Accessibility means being able to get at the goods with a minimum amount of work.

D) A pallet position refers to which side of the pallet is loaded.

E) None of the above statements is true.

6) If items were stacked against a wall as shown, the cube utilization would be:

5) _______

6)

_______

A) 80 percent.

B) 100 percent.

C) 20 percent.

D) cannot be determined from the data given E) none of the above 7) In a floating location system:

7) _______

I. II. III. IV.

goods are stored wherever there is appropriate space for them. the same SKU may be stored in several locations at the same time. an accurate and up-to-date information system is required. the system is appropriate for all warehouses.

A) I, II, III and IV B) II, III and IV only C) I, II and IV only D) I, II and III only E) None of the above is true.

8) Which of the following statements is true?

A) All warehouses need to keep accurate records of where each item is located.

B) Among other things, warehousing labor productivity will depend on warehouse layout.

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.

8) _______

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

A) Group functionally related items together.

B) Group fast-moving items together.

C) Group physically similar items together.

D) all of the above E) none of the above

9) _______

10) Which of the following is NOT a method of order picking?

A) zone system B) floating location system C) area system D) multi-order system E) All of the above are methods of order picking.

10) ______

11) Which of the following is NOT an advantage of point-of-use storage?

A) Central storage costs are reduced.

B) Material is accessible at all times.

C) Material handling is reduced or eliminated.

D) Materials are readily accessible to users.

E) Inventory record accuracy is easier to maintain.

11) ______

12) Among other things, a good physical control and security of inventory will depend on:

12) ______

I. a good part-numbering system.

II. a well-trained work force.

III. free access to stock.

A) II only B) I and II only

C) I and III only D) II and III only E) I only 13) Which of the following is a true statement?

A) A transaction occurs ONLY when goods are received or issued.

B) Inventory is a tangible asset that is easy to lose track of unless properly controlled.

C) The steps in a transaction system are: identify the goods, verify quantity, record the

13) ______

transaction, and physically execute the transaction.

D) A and B are true.

E) B and C are true.

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

14) ______

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) I, II and III B) I and II only C) I and III only D) II and III only E) none of the above

15) Which of the following are causes of inventory record errors?

15) ______

I. Unauthorized withdrawals of material II. Unsecured stockroom III. Audit capability A) I, II and III B) I and II only C) I and III only D) II and III only E) I only

16) ______

16) Which of the following statements is true?

I. It is NOT always practical to expect 100% inventory accuracy on all items.

II. "C" items should be expected to have a higher inventory accuracy than "A" items.

III. Tolerance is the amount of permissible variation between an inventory record and a physical count.

A) I, II and III B) I and II only C) I and III only D) II and III only E) I only

17) The three factors in good preparation for a physical inventory are: I. housekeeping.

II. identification.

III. verification.

IV. training.

A) I, III and IV only C) II, III and IV only

17) ______

B) I, II and IV only D) I, II and III only

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

18) ______

A) Make a random audit of the items.

B) Count all items once a year.

C) Count only "A" and "B" items.

D) Count all items the same number of times a year.

E) Base the frequency of count on annual dollar usage.

19) Which of the following are true when cycle counting inventory?

19) ______

I. Inventory should be audited for count and location.

II. Cycle counts can be scheduled at regular intervals or special times.

II. A good time to cycle count an item is when an order is placed.

A) I, II and III B) I and II only C) I and III only D) II and III only E) I only

20) Which of the following are advantages of cycle counting?

20) ______

I. Timely detection and correction of problems II. Reduction of loss of production III. Making use of spare labor A) I, II and III B) I and II only C) I and III only D) II and III only E) I only

21) Which of the following is NOT a basic stock location system?

A) Group fast-moving items together.

B) Group functionally related items together.

C) Group physically similar items together.

D) Locate working stock and reserve stock separately.

E) Locate all stock for fast access.

21) ______

22) In a cycle counting system: A) all items are counted each month.

B) item counts are determined by their ABC classification.

C) count the A items first, then B's then C's.

D) counts are done at the end of the business year.

E) the purpose is to correct inventory imbalances.

22) ______

23) In a cycle counting system, "A" items are usually:

23) ______

I. expensive items.

II. items which often experience imbalances.

III. difficult to get items.

A) I only B) I and II only C) III only D) I and III only E) I, II and III

24) Cycle counting uses which of the following methods?

24) ______

A) location audit method B) zone method C) ABC method D) A and B only E) all of the above 25) A simple method of determining when an item should be cycle counted is: A) count items which have been in storage for a given period of time.

B) count items which don't appear to be used often.

C) count each time the item is picked.

D) count each item once per month.

E) count when the item is ordered.

25) ______

26) The most important reason for cycle counting is to: A) keep stock in correct rotation.

B) correct inventory valuation.

C) correct inventory balances.

D) find and correct errors.

E) train warehouse staff in location methods.

26) ______

27) Which of the following is NOT an objective of a warehouse operation?

A) Minimize warehouse effort.

B) Keep track of item location and quantity.

C) Provide communication links with customers.

D) Provide timely customer service.

E) Minimize cube utilization.

27) ______

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

A) space B) labor C) management overhead D) materials handling equipment E) damage and loss of goods

28) ______

29) What type of storage system is best suited for a Just in Time environment?

A) floating location B) zone method C) central storage D) point-of-use storage E) bulk location storage

29) ______

30) In which order picking and assembly method is the order picker NOT confined to one location?

A) multi-order system B) only in the area system and the multi-order system C) area system D) zone system E) They are confined to one location in all these systems.

30) ______

31) After picking the order and prior to shipment, the goods are: A) disaggregated.

B) added to inventory.

31) ______

C) put away.

D) consolidated.

E) sorted.

1) A 2) A 3) B 4) C 5) C 6) A 7) D 8) B 9) D 10) B 11) E 12) B 13) E 14) B 15) B 16) C 17) B 18) E 19) A 20) B 21) E 22) B 23) E 24) E 25) E 26) D 27) E 28) A 29) D 30) C 31) D

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is true regarding distribution channels?

1) _______ 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 of the above are true.

E) B and C only are true.

2) The particular way materials move will depend upon: A) types of markets served.

B) the channels of distribution the firm is using.

C) characteristics of the product.

D) all of the above E) none of the above

2) _______

3) Which of the following activities is NOT considered a function of physical distribution?

A) order processing B) warehousing C) distribution inventory D) transportation E) production control

3) _______

4) The two criteria for establishing a particular physical distribution system are: A) cost of the system and service level desired.

B) cost of warehousing and cost of inventory.

C) service level and cost of carrying inventory.

D) cost of transportation and cost of warehousing.

E) cost of transportation and materials handling.

4) _______

5) Which of the following statements is true?

A) The objective of distribution management is to provide the required level of service at

5) _______

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.

6) Which of the following statements is true?

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.

6) _______

7) Which of the following are elements in the cost of carriage?

III. 7) Terminals

I. II.

Ways Vehicles

_______

A) I, II and III

B) II and III only

C) I and III only

D) I and II only

8) Which of the following statements is true?

A) Air cargo should be used for fast service over short distances.

B) Road transport is the least flexible of all the modes.

C) Railways are best at moving small volumes of bulky goods over short distances.

D) All of the above are true.

E) None of the above is true.

8) _______

9) A shipper moving expensive goods of small size from Boston to Seattle would likely use: A) air.

B) water.

C) motor.

D) rail.

E) none of the above

9) _______

10) Considering the service desired and the relative cost of the item, which of the following would

10) ______

you most likely ship by truck?

A) regular shipments of grain B) regular shipments of iron ore C) regular shipments of cut flowers D) A and B above E) B and C above

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

11) ______

12) Of the five modes of transportation, which one requires the lowest capital investment?

A) air B) pipeline C) rail D) water E) motor

12) ______

13) Which mode would provide the fastest service capability?

A) air B) water C) rail

13) ______ D) motor

14) Which of the following statements is FALSE? A) Rail transport is more suited to bulky low value items than road transport.

B) Water transport is slower than rail.

C) Truck transport is suitable for distribution of small volume goods to a dispersed market.

D) Air cargo is generally used for low value bulky items.

E) Pipeline capital costs are high in comparison with other modes.

14) ______

15) A network of companies that participate in the flow of goods and services from producer to

15) ______

final consumer is a: A) transportation channel.

C) channel of distribution.

B) supply flow.

D) logistics supply chain.

16) Which mode would provide the slowest service capability?

16) ______

A) motor

B) water

C) air

D) rail

17) A contract carrier provides: A) published rates.

B) a service available to the general public.

C) a scheduled service.

D) all of the above E) none of the above

17) ______

18) In which case(s) would you use common carriers instead of contract carriers?

A) regular shipment of paper from a mill to its warehouse B) shipment to customers by a mail order house C) regular delivery by a food chain to its stores D) A and B above E) A and C above

18) ______

19) Which of the following types of transportation will provide the best service capability?

A) contract B) common C) private D) All of the above are equal.

E) none of the above

19) ______

20) In which case(s) would you use contract carriers instead of common carriers?

A) regular shipment of paper from a mill to its warehouse B) shipment to customers by a mail order house C) regular delivery by a food chain to its stores D) A and B above E) A and C above

20) ______

21) A service provider that provides product warehouse and delivery services is known as a: A) third party logistics provider.

B) freight broker.

C) distribution partner.

D) freight forwarder.

21) ______

22) Which mode of transportation would cost the LEAST per ton mile?

A) air B) rail C) motor (truck)

22) ______ D) water

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

A) pickup and delivery B) line haul C) terminal handling D) all of the above E) none of the above

23) ______

24) Which of the following is correct?

A) Line haul cost per hundredweight can be reduced by increasing the weight shipped.

B) Consolidating shipments reduces billing and collecting costs.

C) Shipping costs will be higher with common carriers than contract carriers.

D) all of the above E) none of the above

24) ______

25) A shipper wishing to reduce transportation costs will: A) ship to LTL lots.

B) ship only in small quantities.

C) use trucks for all his shipments.

D) all of the above E) none of the above

25) ______

26) Consolidating shipments will reduce which of the following costs?

A) pickup and delivery B) billing and collecting C) terminal handling D) all of the above E) none of the above

26) ______

27) TOTAL line haul costs will vary directly with: A) the density of the goods.

B) the weight moved.

C) the distance moved.

D) A and B above E) B and C above

27) ______

28) The rate charged by a carrier will vary with:

28) ______

I. the value of the goods.

II. the density of the goods.

III. the color of the goods.

A) I, II and III B) I and III only C) I and II only D) I only E) II and III only

29) To decrease shipping costs, a shipper will:

29) ______

I. increase the weight shipped.

II. consolidate shipments.

III. use a common carrier rather than contract carrier.

A) I, II and III B) I and II only C) I and III only D) I only E) II and III only

30) The terms which specify who owns and pays for the cost of the transportation are: A) freight on board (FOB) terms.

B) incoterms.

C) both A and B D) neither A nor B

30) ______

31) Which of the following is NOT an important role of distribution centers?

A) product mixing B) transportation consolidation C) break-bulk storage D) in-transit inventory E) customer service

31) ______

32) The market boundary is: A) a legal limitation placed on the delivery of goods.

B) the extent of a market area.

C) the line between two or more supply sources where the landed cost is the same.

D) a location beyond which a source cannot supply.

E) an agreed-upon boundary beyond which competition will not sell.

32) ______

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

33) ______

I. II. III. IV.

Identify the product.

Contain and protect the product.

Contribute to physical distribution efficiency.

Be an important part of the marketing program.

A) I, II, III and IV B) I, II and IV only C) I, II and III only D) II, III and IV only E) none of the above

34) The consolidation of several units into larger units for fewer handlings is called: A) cube utilization.

B) unitization.

C) materials handling.

D) consolidation.

E) packaging.

34) ______

35) Which of the following statements are true regarding material handling in distribution

35) ______

systems?

I. One objective of material handling is to increase cube utilization.

II. Material handling can increase the service level.

III. Gasoline powered industrial trucks are used indoors.

A) I, II and III are true.

B) II and III are true.

C) I and III are true.

D) I only is true.

E) I and II are true.

36) Which of the following statements is true?

A) Material handling costs will start to rise when nonunitized loads are shipped.

B) Packaging costs increase as the number of warehouses increase.

C) Inventory costs remain constant as the number of warehouses increase.

D) A and B are true E) A and C are true.

36) ______

37) As more warehouses are added to a physical distribution system we can expect the cost of: A) LCL and LTL shipments to decrease.

B) TL and CL shipments to increase.

C) total transportation costs to decrease.

D) all of the above E) A and B above

37) ______

38) Which of the following statements is true regarding goods in a reverse logistics system?

A) They travel through the same terminals as the forward logistics system.

B) Little product information is required.

C) Volumes are equal to the forward logistics system.

D) The goods tend to be small in quantity.

E) All of the above are true.

38) ______

39) The term used for placing the responsibility on the supplier to dispose of packaging or

39) ______

restricted materials is called: A) vendor-managed inventory.

C) fourth party logistics.

B) sustainability.

D) green reverse logistics.

40) Which management area does NOT normally have transportation responsibility?

A) Marketing B) Purchasing C) Logistics D) Manufacturing E) All of the above normally have responsibility for transportation.

40) ______

41) The LTL costs a product moving through a supply chain are $1 per mile and there is a

41) ______

warehouse 200 miles from central supply. Truckload costs to the warehouse are $50 and the warehouse handling and storage costs are $10. The cost to ship the product to the warehouse is $50. The market boundary for this supply chain is: A) 260 miles.

B) 50 miles.

C) 125 miles.

D) 100 miles.

E) 130 miles.

42) Which of the following costs is NOT included in the total laid down cost of a product shipped through a regional warehouse?

A) TL to warehouse B) market boundary cost C) warehouse cost D) warehousing cost E) product cost

42) ______

1) E 2) D 3) E 4) A 5) D 6) D 7) A 8) E 9) A 10) C 11) D 12) E 13) A 14) D 15) C 16) B 17) E 18) B 19) C 20) E 21) A 22) D 23) D 24) D 25) E 26) D 27) C 28) C 29) B 30) C 31) D 32) C 33) C 34) B 35) E 36) A 37) D 38) D 39) D 40) D 41) E 42) B

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The process of making something less complex or less difficult is called: 1) _______ A) standardization.

B) specialization.

C) simplification.

D) any of the above E) none of the above 2) Which of the following statements regarding standardization is true?

2) _______

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) II and III are true.

B) I and III are true.

C) I, II and III are true.

D) I and II are true.

E) None of the above is true.

3) The establishment of a common size for electric light sockets is an example of: A) diversification.

B) product focus.

C) simplification.

D) standardization.

E) none of the above

3) _______

4) The concentration of effort in a given field of endeavor is called: A) simplification.

B) specialization.

C) concentration.

D) standardization.

4) _______

5) Specialization increases output and decreases costs by: A) reducing setup time for each part.

B) enabling labor to develop speed and dexterity.

C) allowing a company to make a wide variety of different products.

D) A and B above only E) none of the above

5) _______

6) During which phase of the product life cycle does the unit cost of the product decrease?

A) Growth B) Introduction C) Decline D) Maturity

6) _______

7) Standardization can reduce costs by: A) reducing inventories.

B) increasing lot sizes.

C) allowing the use of general purpose equipment.

D) all of the above E) A and B only

7) _______

8) _______

8) Which of the following statements is true?

I. Serving similar customers with similar demand characteristics is an example of market focus.

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 and II only are true.

B) II and III only are true.

C) I and III only are true.

D) I only is true.

E) I, II and III are true.

9) _______

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 of the above E) A and B above 10) During which phase of the product life cycle do profits start to decline?

A) Growth B) Introduction C) Maturity 11) Which of the following are advantages of simultaneous engineering?

10) ______ D) Decline 11) ______

I. Time to market is reduced.

II. Avoids the need for marketing and design to work together.

III. Less communication is necessary.

A) II and III only are true.

B) I only is true.

C) I and II only are true.

D) I and III only are true.

E) I, II and III are true.

12) Which of the following statements is 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 above only E) All of the above are true.

12) ______

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) A and B only are true.

E) None of the above is true.

13) ______

14) Which of the following is a characteristic of special-purpose machinery?

A) It generally produces better quality than general purpose machinery.

B) It can perform a variety of operations on a variety of work pieces.

C) Capital costs are low compared to general purpose machinery.

D) all of the above E) none of the above

14) ______

15) In designing a process, which of the following needs to be considered?

A) the desired quality level B) the degree of customer involvement C) the volume to be produced D) all of the above E) none of the above

15) ______

16) Which of the following statements are true about flow manufacturing?

16) ______

I. II. III. IV.

Work stations are located in the sequence needed to make the product.

Work flows at a relatively constant rate.

They can produce a wide variety of different products.

There is little buildup of inventory.

A) I, III and IV are true.

B) I, II, III and IV are true.

C) II, III and IV are true.

D) I, II and IV are true.

E) I, II and III are true.

17) Which product design principle permits the practice of postponement?

A) Simplification B) Specialization C) Standardization D) Modularization

17) ______

18) In a particular process, the fixed costs are calculated at $40,000 and the variable costs at $1.50

18) ______

per unit. If 10,000 units are to be produced, what is the average cost per unit?

A) $4.00 B) $1.50 C) $5.50 D) $2.00 E) none of the above

19) Which of the following are reasons a firm would buy a product rather than make it in its

19) ______

factory?

A) utilizing idle workforce B) secrecy of design C) providing known and competitive prices D) all of the above E) A and B only

20) A plant specializing on a limited, concise, manageable set of products, technologies, volumes, and markets is known as a: A) 3PL. C) work cell.

B) focused factory.

D) job shop.

21) What is the Cost Equalization Point for the two processes shown?

Fixed cost Variable cost A) $90.00 B) 100 units C) 90 units

Process A $30.00 $3.00

20) ______

Process B $120.00 $2.00

21) ______

D) 120 units E) none of the above 22) Intermittent manufacturing: A) generally uses general purpose machinery.

B) processes items in lots or batch.

C) is particularly suited to the production of low-volume items.

D) all of the above E) none of the above

22) ______

23) The cost equalization point: A) is used to select the lowest cost of two or more alternative processes.

B) is used to show the potential profit of a process.

C) shows the lot size where costs are minimized.

D) is the point where unit cost of a process are at a minimum.

E) all of the above

23) ______

24) Some purposes of continuous process improvement are: A) the improvement of factory, department, and work-station layout to improve work flows.

B) the reduction of worker fatigue and effort without reduction of levels of output.

C) improvement of levels of worker safety.

D) the improvement of production processes and procedure.

E) all of the above

24) ______

25) In selecting a process for continuous improvement study, which of the following factors should

25) ______

be considered?

A) human B) economic C) marketing D) all of the above E) A and B only

26) Which of the following steps in a continuous improvement study ensures all elements of a job

26) ______

are studied?

A) select B) install C) record D) examine E) none of the above

27) An analysis for ranking problems from most significant to least significant is called a: A) mass customization.

B) flow chart.

C) cause-and-effect.

D) Pareto.

27) ______

28) A diagram used to illustrate the main causes and sub-causes leading to a problem or symptom

28) ______

is a:

A) cause-and-effect.

C) root cause.

B) flow chart.

D) Pareto.

29) A management style that enables workers to make improvements in their workplace is: A) cross-training.

B) employee empowerment.

29) ______

C) human resource enrichment.

D) management by objective.

30) A graphical representation of the steps and operations in a process is a: A) cause-and-effect.

B) Pareto.

C) flow chart.

D) root cause.

30) ______

1) C 2) D 3) D 4) B 5) B 6) A 7) E 8) D 9) E 10) C 11) B 12) D 13) D 14) A 15) D 16) D 17) D 18) C 19) C 20) B 21) C 22) D 23) A 24) E 25) E 26) C 27) D 28) A 29) B 30) C

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is/are true regarding lean production?

1) _______ 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) I, II and III are true.

B) II and III are true.

C) I and II are true.

D) I only is true.

E) I and III are true.

2) _______

2) Which of the following statements is/are 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 only B) II and III C) I and III

D) I and II

E) III only

3) If a company standardizes on the components that are used in different models, it will: A) require the use of general-purpose machinery.

B) reduce waste.

C) reduce the variety of options offered to the customer.

D) reduce the length of production runs.

3) _______

4) The ideal product is one that:

4) _______

I. meets or exceeds the needs of the customer.

II. makes the best use of material.

III. can be manufactured at least cost.

A) I, II and III B) II and III only

C) I only

D) I and II only

5) Overproduction causes waste by: A) creating excess inventory.

B) causing confusion and hiding problems.

C) consuming unneeded raw materials and labor.

D) all of the above E) A and B only

5) _______

6) Which of the following are advantages of reducing inventory?

6) _______

I. II. III. IV.

Engineering changes can be made sooner.

Quality can be improved.

Less space is needed in manufacturing.

Lead time will be shorter.

A) I, II, III and IV B) I, II and IV only C) I, II and III only D) III and IV only E) II, III and IV only

7) Which of the following is NOT an advantage of work cells?

A) Immediate feedback B) Production activity control is simplified.

C) Maximum machine utilization D) Queue and lead time are reduced.

E) Need for floor space is reduced.

7) _______

8) Which of the following contribute(s) to machine flexibility?

A) mobility of machines B) small general-purpose machinery C) automated high-capacity machines D) A and B above E) B and C above

8) _______

9) Reduced setup has which of the following advantages?

9) _______

I. Reduced lot sizes II. Reduced lead time and queue III. Improved quality A) I, II and III B) I and II only C) I only D) I and III only E) II and III only

10) Which of the following statements are true about quality?

10) ______

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) I, II, III and IV B) I and IV only C) I and II only D) II and III only E) III and IV only

11) Which of the following concepts is needed to achieve uninterrupted material flow?

A) pull system B) valid schedules C) uniform plant loading D) All of the above are needed.

E) A and B only are needed.

11) ______

12) Linearity in a lean environment means: A) plan level schedules.

B) statistical process control.

C) produce small lot sizes.

D) eliminate all idle time.

E) each day achieve the plan, no more or less.

12) ______

13) The buyer expects that a supplier will provide each of the following EXCEPT: A) improved quality and cost.

B) information on competitors.

13) ______

C) frequent deliveries.

D) the quality needed at all times.

14) Employee involvement in a lean environment means:

14) ______

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) I, II and III B) II and III only C) I and III only D) I and II only E) none of the above

15) Which of the following statements are true?

15) ______

I. Lean and manufacturing planning and control cannot work together.

II. The lean philosophy simplifies and reduces manufacturing planning and control problems.

III. Lean requires a very good planning and control system.

A) I, II and III B) II and III only C) I and III only D) I and II only E) none of the above

16) Lean production 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

16) ______

17) Lean practices will change the material requirements planning process by: A) increasing the need for offsetting.

B) increasing the need for netting.

C) making the bill of material more complex.

D) eliminating the need for MRP. E) reducing the number of levels in the bill of material.

17) ______

18) Which of the following is a benefit to the purchaser in supplier partnerships?

A) better quality B) improved performance and cost C) frequent deliveries on a just-in-time basis D) all of the above E) A and B above only

18) ______

19) A pull system is developed to provide which of the following?

A) only used when demand is constant and known B) to provide only what is needed and when it is needed C) only used when demand is unknown D) an alternative to a classic MRP system

19) ______

20) An example of using the poka-yoke technique in process design is: A) reducing the number and type of fasteners.

20) ______

B) using tooling to prevent a part from being inserted upside down.

C) eliminating bill of material levels.

D) using standardized tooling.

21) Bills of material used for MRP planning in a lean environment are likely to have which of the

21) ______

following characteristics?

A) fewer levels in product structures B) no need for where-used references C) weekly time buckets D) increased complexity with regard to options E) fewer "phantom" or "blow-through" assemblies

22) The term that describes eliminating waste throughout a company is: A) Process Control.

B) Theory of Constraints.

C) Kaizen.

D) Lean Production.

22) ______

23) Which of the following techniques reduces the cost of processing transactions?

A) Backflushing B) SMED C) Pareto analysis D) Mean absolute deviation

23) ______

24) Which of the following terms refers to a pull system in which signals are used to withdraw

24) ______

parts from feeding operations or suppliers?

A) Poka-yoke B) Andon

C) Kanban

D) Dispatching

25) Employee participation in small, incremental improvements is known as: A) value stream mapping.

B) drum-buffer-rope. motion economy.

C) D) Kaizen.

25) ______

26) Matching the pace of production to match the rate of customer demand is known as: A) bullwhip.

B) drum-buffer-rope.

C) poka-yoke.

D) takt time.

26) ______

27) Which of the following define the 5S approach to housekeeping?

A) Sort, Straighten, Safety, Schedule, Source B) Shine, Standardize, Sustain, Schedule, Smooth C) Straighten, Shine, Standardize, Source, Smooth D) Sort, Straighten, Shine, Standardize, Sustain

27) ______

1) A 2) A 3) B 4) A 5) D 6) A 7) C 8) D 9) A 10) E 11) D 12) E 13) B 14) A 15) B 16) D 17) E 18) D 19) B 20) B 21) A 22) D 23) A 24) C 25) D 26) D 27) D

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Which of the following statements is true?

1) _______ 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 of the above are true.

E) A and B are true.

2) Which of the following is NOT a basic concept of total quality management?

A) performance measures B) customer focus C) continuous process improvement D) competitive supplier bidding E) involvement of the total workforce

2) _______

3) Which of the following statements regarding TQM is true?

3) _______

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 is true.

B) II only is true.

C) III only is true.

D) I and II only are true.

E) I, II, and III are true.

4) Giving people the authority to make decisions and take action in their work areas is called

4) _______

which of the following?

A) teamwork B) empowerment C) organizational skills D) any of the above E) none of the above

5) _______

5) Which of the following statements is true 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) II and III only C) I and III only

6) The cost of failure to control quality includes which of the following?

A) returned materials B) warranty charges C) scrap, rework and spoilage D) all of the above E) none of the above

D) I, II and III 6) _______

7) The costs of controlling quality include which of the following?

A) appraisal and process control costs B) prevention and process control costs C) prevention and appraisal costs D) any of the above E) none of the above

7) _______

8) Which of the following is included in the cost of preventing poor quality?

A) warranty charges B) operator training C) final inspection D) All of 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.

8) _______

9) Which of the following statements is true regarding process variation?

9) _______

I. All variation is due to chance.

II. Random variation is inherent in the process.

III. Assignable variation is due to a specific cause.

A) II and III are true.

B) I only is true.

C) II only is true.

D) I and II are true.

E) I and III are true.

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

A) materials B) people C) machinery D) all of the above E) none of the above

10) ______

11) Which of the following can be used to describe the spread of the pattern of variability?

A) upper control limit B) average C) arithmetic mean D) range E) none of the above

11) ______

12) Which of the following statements is true if the standard deviation of a process is .02 and the

12) ______

average is 1?

A) The upper control limit is 1.02.

B) The specification limits are ± .02.

C) About 68.3% of the output will be within 1± .02.

D) All of the above are true.

E) None of the above is true.

13) The permissible limits of deviation from the desired amount is called which of the following?

A) control limits B) process capability C) spread D) tolerance

13) ______

14) Which of the following statements is true?

I.

Th

____ __

e 14) capability of a process is related to the product specificati on limits.

II. Qualit y does NOT depend on the process used.

III. Defec ts can only be produced by a shift in the mean.

A) I only is true.

B) I and III only are true.

C) I and II only are true.

D) All of the above are true.

E) None of the above is true.

15) Which of the following statements is true if a process has a capability index (C p) of 0.83?

A) The process is not capable.

B) The process is capable.

C) Cannot tell whether the process is capable or not from the information.

D) The product specifications are adequate.

15) ______

16) Which of the following statements is true if a process has a Cpk of between 1 and 1.33?

A) The process is capable.

B) The process is not capable.

C) The process is marginal.

D) None of the above is true.

16) ______

17) The purpose of process control is to: A) self-correct the process.

B) make sure the process does not stop.

C) show when there is a high probability of an assignable cause for defect.

D) help designers develop the steps to automate a process.

E) all of the above

17) ______

18) Which of the following statements are true regarding control charts?

III. in the averag A e will shift show

I. II.

Specification limits are the same as control limits.

If there is no assignable cause of variation, the process is in control.

up on the

____ __

18)

portion of the and R chart.

A) II and III only are true.

B) I and II only are true.

C) I and III only are true.

D) I, II, and III are true.

E) None of the above is true.

19) Which of the following statements is true regarding sample inspection?

A) Acceptance sampling requires 100% inspection.

B) There is no risk to either the consumer or producer.

C) The sample should be taken from the last parts produced because there is less chance of

19) ______

error.

D) One reason to sample inspect is because of human error.

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

A) The cost of the sampling plan must be balanced against the consumer's risk and the

20) ______

producer's risk.

B) Sample inspection is 100% accurate.

C) The consumer's risk is that a lot with less than the acceptable number of defects will be accepted D) Lots are accepted when the consumer's risk equals the producer's risk.

E) The producer's risk is that a batch with more than the acceptable number of defects will be rejected.

21) Under which of the following conditions is acceptance sampling appropriate?

A) Sampling is a natural part of the process.

B) The sample can be taken from the top of the batch.

C) The batch to be sampled is small.

D) Testing of the product is destructive.

E) Time is available for 100% inspection.

21) ______

22) Which of the following statements is true concerning ISO 9000 standards?

22) ______

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. They describe the fundamental concepts of a quality management system.

A) III only is true.

B) I and II only are true.

C) I only is true.

D) II only is true.

E) I, II and III are true.

23) ISO 9000:2015 is designed as: A) a process approach to management.

B) a complete set of documentation to run any business.

C) a set of technical standards to establish inspection limits.

D) a 12-step process.

E) a method of sampling to prevent defects in any process.

23) ______

24) Which of the following statements is true concerning benchmarking?

A) It is a process for determining performance measures for the shop floor.

B) It studies the "best in class" organizations.

C) It studies only organizations in the same industry.

D) It seeks improvement by analyzing the internal process.

24) ______

25) A House of Quality is used to: A) calculate capability of a process to meet customer specifications.

B) calculate specifications for desired cost reductions.

C) structure the engineering team.

D) translate customer needs into design specifications.

E) organize a company into departments focusing on quality.

25) ______

26) The voice of the customer is: A) a measure of capability of a process.

B) the communication method used for network marketing.

C) an expression for customer wants.

D) the response heard from market promotions.

26) ______

27) QFD is an acronym for: A) Quality Function Deployment.

C) Quality For Design.

27) ______ B) Quality Forms Development.

D) Quality through Frequent Delivery.

28) Six Sigma is a strategy designed to: A) reduce defects.

B) measure the capability of the quality function.

C) increase the total output of processes.

D) calculate productivity.

E) none of the above

28) ______

29) Six Sigma: A) is an award sponsored by the Malcolm Baldridge Foundation.

B) is an offshoot of the 5-S program.

C) is about more than measurement of parts production.

D) is only applicable if a process is repetitive.

29) ______

30) The top Six Sigma project managers are known as: A) Best-In-Class.

B) Black Belts.

C) White Hats.

D) Biero.

E) World Class.

30) ______

31) The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards

31) ______

showed an average length of 11.8 inches and a standard deviation of .1 inches. The C p for this process is: A) 2

B) 1

C) 2.33

D) 1.67

E) 5

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:

32) ______

A) 1.9 B) 4.8 C) 2 D) 3.8 E) The value of the process mean is needed to solve this problem.

33) The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards

33) ______

showed an average length of 11.8 inches and a standard deviation of .1 inches. The C pk for this process is: A) 2.33

B) .42

C) 3

D) 1

E) 7

34) Which of the following quality processes is part of QFD? A) Lean B) Quality for delivery C) Statistical Process Control D) House of quality E) ISO:9000:2015

34) ______

35) Which of the common quality decision making techniques compares products to the

35) ______

competition?

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

36) An international standard to assist organizations in contributing to sustainable development through an understanding of social responsibility is: A) ISO 14001:2015.

B) ISO 26000:2010.

C) ISO 9000:2015.

D) ISO 9001:2015.

36) ______

1) E 2) D 3) A 4) B 5) B 6) D 7) C 8) B 9) A 10) D 11) D 12) C 13) D 14) A 15) A 16) C 17) C 18) A 19) D 20) A 21) D 22) A 23) A 24) B 25) D 26) C 27) A 28) A 29) C 30) B 31) D 32) A 33) D 34) D 35) D 36) B