CSCP 2011

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Supply Chain Professional  Practice Questions

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8 Notes: . We believe that this form of questions are more challenging and are better suited for test prep purpose. we have increased the number of choices in many of the review questions. You will often be asked to pick more than one options from the lists.In order to increase the level of difficulty. The only way for you to give the correct answer(s) is to truly understand the underlying topics and study material.

acquiring ownership of one's supply chain (in the hope of reducing supplier power and thus reducing input costs). E. ANSWER: A B C D E A supply chain is a network of retailers. B. F. delivery and production of a particular product. distributors. The concept of supply chain often involves backward integration . D. Retailers distributors Transporters storage facilities suppliers None of the choices.1. C. 9 Notes: . A supply chain consists of which of the following components (Choose all that apply): A. storage facilities and suppliers that participate in the sale. transporters.

C.acquiring ownership of one's supply chain (in the hope of reducing supplier power and thus reducing input costs). 10 Notes: .2. The concept of supply chain often involves backward integration . E. Backward Functional Cross border Downward None of the choices. The concept of supply chain often involves what type of integration? A. D. transporters. distributors. delivery and production of a particular product. B. storage facilities and suppliers that participate in the sale. ANSWER: A A supply chain is a network of retailers.

Which of the following are the functional components of most supply chains (Choose all that apply): A. D. 2. E. demand planning manufacturing planning and scheduling supply planning transportation planning None of the choices. 3.3. demand planning manufacturing planning and scheduling supply planning 11 Notes: . ANSWER: A B C D Supply chains usually include four functional components: 1. C. B.

12 Notes: .4. transportation planning Some supply chains deploy the push system. Most chains deploy a mixture of both. while some deploy the pull one.

13 Notes: . Pull systems have replenishment triggered by the usage or depletion of stock. Push Pull Just in time EOQ-II None of the choices. What systems are triggered by interpretation of the expected demand and scheduling of supply to meet that demand (Choose all that apply): A. B. JIT is pull based. E. D. C. ANSWER: A Push systems are triggered by interpretation of the expected demand and scheduling of supply to meet that demand. MRP does have elements of the push system built-in.4.

information. The product flow The information flow The finances flow The organization flow None of the choices. D. ANSWER: A B C Shorts for supply chain management.5. B. SCM refers to the oversight of materials. as well as any customer returns or service needs 14 Notes: . C. and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. The 3 major SCM flows: l The product flow: the movement of goods from a supplier to a customer. Which of the following are the major SCM flows (Choose all that apply): A. E.

updating the status of delivery and the likes The finances flow: credit terms. title ownership arrangements …etc 15 Notes: . payment schedules. consignment.l l The information flow: transmitting orders.

D. SCM ERP CRM ERM CSCP None of the choices. E. F. Shorts for Customer Relationship Management. CRM is an industry term for methodologies and technologies that helps an enterprise manages customer 16 Notes: . B.6. C. ANSWER: C Don’t confuse SCM with CRM. Which of the following is an industry term for methodologies and technologies that helps an enterprise manages customer relationships in an organized and efficient manner? A.

relationships in an organized and efficient manner. Even though customer satisfaction is the ultimate goal of SCM. 17 Notes: . CRM is not a topic covered by this CSCP exam.

B. None of the choices. D. and product design collaboration is often the critical component. Such effort is usually implemented by sharing information and even system accesses between the chain partners.7. offline analytical instruments from all links of the chain. Supply chain management solutions focus on providing: A. ANSWER: A Supply-chain collaboration is an effort which supposes to connect and invigorate enterprises and suppliers. collaboration is a MUST for your chain to run efficiently. These solutions often span an enterprise's communication with suppliers. Supply chain management solutions focus on providing more real-time data from all links of the chain. C. In fact. 18 Notes: . online communication policies from all links of the chain. real-time data from all links of the chain.

ANSWER: A B C D The technical methods of collaboration among chain partners often involve the use of modern technologies like Ecommerce. Short for electronic commerce. An extranet is a private network that uses the Internet protocol and the public communication network to securely share business information or operations with your external partners (such as your suppliers. eCommerce is the buying and selling of goods and services on the Internet. B. C. Ecommerce Internet Extranet VPN None of the choices. Internet and Extranet. D. E. this term and the term “e-business” are often used interchangeably. The technical methods of collaboration among chain partners often involve the use of which of the technologies (Choose all that apply): A. In practice.8. 19 Notes: .

VPN is an implementation of an Extranet. it can be viewed as part of a company's intranet that is extended to the outside users. 20 Notes: . partners and customers).vendors. In fact.

and the use of virtual private network (VPN) technologies that tunnel through the public internet. A successful extranet for chain members MUST be (choose the BEST answer): A.9. C. encryption of transmitted data. fast and powerful. safe and secure. you need firewall server management. 21 Notes: . B. the issuance and use of digital certificates (or similar means of user authentication). on and offline capable None of the choices. D. ANSWER: A To implement an extranet.

while low volume/high margin and designer items are demand in-elastic? A. D. cos your organization will need to have an appropriate supply chain to support each of them: l l High volume/ low margin products Low volume/ high margin products 22 Notes: .10. In general. demand patterns. and markets which constitute the broad organization strategy. ANSWER: A To provide value through the supply chain. you must make the connection between the chain and the products. what products are mostly commodities with very elastic demand. B. High volume/ low margin products Low volume/ high margin products Designer products None of the choices. The broad categories of products must be identified. C.

while low volume/high margin and designer items are demand in-elastic. high volume/low margin products are mostly commodities with very elastic demand. 23 Notes: .l Designer products In general.

well established distribution system and commodity pricing are needed management should aim at minimizing supply chain costs by keeping inventory in days of supply intense coordination of transportation logistics is not important None of the choices. which of the following statements are true (Choose all that apply): A. ANSWER: A B C High volume/low margin: 24 Notes: . the supply chain should be able to efficiently move items through the supply system in a continuous flow steady demand. E. B.11. For products that are high volume/low margin. C. low technology. D.

l l l l l l the supply chain should be able to efficiently move items through the supply system in a continuous flow steady demand. well established distribution system and commodity pricing are needed management should aim at minimizing supply chain costs by keeping inventory in days of supply and by intense coordination of transportation logistics stability should be maintained through long term relationships with suppliers suppliers should be able to dependably furnish raw materials that need no incoming inspection orders should be delivered directly to production lines in precise lot sizes 25 Notes: . low technology.

D. ANSWER: A Low volume/high margin l l use mostly regular SKUs which exhibit the classically “lumpy” demand pattern can mostly be forecast with reasonable accuracy over a long horizon 26 Notes: .12. For products that are low volume/high margin. C. B. the mostly used regular SKUs often exhibit what sort of demand pattern? A. lumpy flat seasonal None of the choices.

Keep in mind though. that inventory risk in such products is significant. as the products are expensive (relatively) 27 Notes: .l l requires flexibility and agility in the supply system may require modest buffer stocks of finished goods inventory.

True False ANSWER: A Low volume/high margin l l l use mostly regular SKUs which exhibit the classically “lumpy” demand pattern can mostly be forecast with reasonable accuracy over a long horizon requires flexibility and agility in the supply system 28 Notes: . For products that are low volume/high margin.13. A. demand can mostly be forecast with reasonable accuracy over a long horizon. B.

that inventory risk in such products is significant. Keep in mind though. as the products are expensive (relatively) 29 Notes: .l may require modest buffer stocks of finished goods inventory.

C. which of the following elements are important? A. E. B. D. flexibility and agility pure performance security and safety cost effectiveness None of the choices. For products that are low volume/high margin. ANSWER: A Low volume/high margin l use mostly regular SKUs which exhibit the classically “lumpy” demand pattern 30 Notes: .14.

that inventory risk in such products is significant. as the products are expensive (relatively) 31 Notes: .l l l can mostly be forecast with reasonable accuracy over a long horizon requires flexibility and agility in the supply system may require modest buffer stocks of finished goods inventory. Keep in mind though.

usually short life demand forecasting is mostly impossible pricing is usually generous often do not get manufactured on the same equipment as the standard items None of the choices. Which of the following statements correctly describe the nature of designer products (Choose all that apply): A. E. B.15. ANSWER: A B C Designer products: l usually short life 32 Notes: . D. C.

l l l l l demand forecasting is mostly impossible pricing is usually generous often manufactured on the same equipment as the standard items requires flexibility. quick response. rapid design and readily available production capacity waste is inherent in the supply process when rapid service is to be rendered 33 Notes: .

Manufacturing flexibility can be achieved via (Choose all that apply): A. ANSWER: A BC How is manufacturing flexibility achieved? First. B. Small Lot Production More Rapid Production Cycle Times Scheduling Techniques to Signal Production in Quick Succession None of the choices. D. C.16. you must be able to achieve the following: l l Small Lot Production More Rapid Production Cycle Times 34 Notes: .

l Scheduling Techniques to Signal Production in Quick Succession 35 Notes: .

B. Time has become a precious commercial commodity. Which of the following are the valid ways to compress time (Choose all that apply): A. Implement concurrent engineering techniques Set up reduction programs to minimize set up time Compress cycle time through industrial engineering and process realignment Develop lot sizing criteria for small lot production None of the choices. and you cannot afford to squander it through excessive down time. D. leisurely set-ups. C. ANSWER: A B C D You must be able to compress time. To compress time. and long queues and production cycles.17. E. you may do the following: l l Implement concurrent engineering techniques Set up reduction programs to minimize set up time 36 Notes: .

l l l l Compress cycle time through industrial engineering and process realignment Develop lot sizing criteria for small lot production Develop pull system scheduling and inventory systems Develop time and flexibility metrics for your own environment 37 Notes: .

18. C. E. Work cells are usually staffed by team members who are empowered to (Choose all that apply): A. B. G. F. ANSWER: A B C D 38 Notes: . self inspect their work adhere to the set schedule meet productivity metrics produce greater quantities of goods in smaller lots authorize purchases meet customers None of the choices. D.

Work cells are usually staffed by team members who have a strong sense of quality: they are employees who are empowered to: l l l l l self inspect their work adhere to the set schedule meet productivity metrics produce greater quantities of goods in smaller lots carry out production with less inventory and higher quality 39 Notes: .

E. the following must be done: l aim at lean and agile manufacturing 40 Notes: . D. ANSWER: A B C To achieve efficient work cells manufacturing.19. aim at lean and agile manufacturing design a plant layout for greater throughput and productivity develop and encourage product oriented work cell organization develop supply based continuous flow manufacturing; deploy asynchronous manufacturing techniques None of the choices. C. How do you achieve efficient work cells manufacturing (Choose all that apply): A. B. F.

l l l l l design a plant layout for greater throughput and productivity develop and encourage product oriented work cell organization develop demand based continuous flow manufacturing; deploy synchronous manufacturing techniques establish cross functional work teams in both cellular and traditional organizations; 41 Notes: .

A.20. B. FMS is a configuration of computer-managed numerical work stations where materials are automatically handled and machine loaded. and an auxiliary work stations to control loading. cleaning and inspection. an integrated material transport system and a computer to control the flow of materials. unloading. Such a system is principally used in mid-volume mid-variety production. True False ANSWER: A Shorts for flexible manufacturing system. FMS is principally used in mid-volume mid-variety production. tools. with two or more computer-managed numerical work stations to perform a series of operations. and information. 42 Notes: .

ANSWER: C D E F The benefits of a FMS are: 43 Notes: . lowering indirect labor cost providing better access security control minimizing scrap.21. Which of the following are the benefits of a FMS (Choose all that apply): A. re-work. G. F. D. C. E. B. and material wastage requiring less skilled labor eliminating the need for batch processing reducing the production lead time None of the choices.

and material wastage requiring less skilled labor eliminating the need for batch processing reducing the production lead time providing better process control 44 Notes: . re-work.l l l l l l lowering direct labor cost minimizing scrap.

B. the “Theory of Constraints” focuses your attention on successive management of constraints by a systematic process beginning with identification and following through to elimination. D. ANSWER: A All factories on earth have constraints. E. Regardless of how they are called. C. Throughput Accounting Management Accounting Account costing Material Budgeting None of the choices. Sometimes these constraints are being referred to as bottlenecks. “Throughput Accounting" is a financial analysis technique that accompanies the implementation of constraints management with a 45 Notes: . Which of the following is a financial analysis technique that accompanies the implementation of constraints management with a focus on maximizing contribution margins through identification and exploitation of constraints? A.22.

focus on maximizing contribution margins through identification and exploitation of constraints. 46 Notes: .

if you are achieving the goal of delighted end customers. B. ship to customers. collect the receivables and handle the payables. None of the choices. how quickly you get materials from suppliers. E. C. ANSWER: A Perfect fill rate: it tells if you are achieving the goal of delighted end customers. the amount of time between the placing of an order and the receipt of the goods ordered. how fast you are able to move materials through the supply chain. convert them into product.23. 47 Notes: . D. Perfect fill rate tells: A.

None of the choices. Cash to cash cycle tells: A. E. the amount of time between the placing of an order and the receipt of the goods ordered. collect the receivables and handle the payables. C. D. ANSWER: B Cash to cash cycle: it is the indicator of chain velocity that tells how quickly you get materials from suppliers. ship to customers. convert them into product. ship to customers. collect the receivables and handle the payables. B. how fast you are able to move materials through the supply chain.24. how quickly you get materials from suppliers. 48 Notes: . if you are achieving the goal of delighted end customers. convert them into product.

it is the ratio of annual sales to inventory or the fraction of a year that an average item remains in inventory. B. Inventory turn tells: A. convert them into product. ANSWER: D Inventory turns: also known as turnover. the amount of time between the placing of an order and the receipt of the goods ordered. collect the receivables and handle the payables.25. 49 Notes: . if you are achieving the goal of delighted end customers. D. how quickly you get materials from suppliers. None of the choices. C. how fast you are able to move materials through the supply chain. ship to customers. For a company. E. it is the indicator of the speed with which you are able to move materials through the supply chain. Note that low turnover indicates poor efficiency.

it is the ratio of annual sales to inventory or the fraction of a year that an average item remains in inventory. B. E. D. ANSWER: A It is the indicator of the speed with which you are able to move materials through the supply chain. turnover fill over turn rate turn to turn ratio None of the choices. 50 Notes: . “Inventory turns” is also known as (Choose all that apply): A. C. Note that low turnover indicates poor efficiency.26. For a company.

you should always attempt to lower such cost (as it is not adding value to the production process). Even though there is a cost to hold stock. A. The basic function of inventory is to insulate the production process from changes in the environment. True False ANSWER: A In regards to inventory: The basic function of inventory is to insulate the production process from changes in the environment.27. 51 Notes: . B.

C. 52 Notes: . E. D. They indicate how well you repeatedly receive and manufacture in small lots and fulfill customer needs. Lot sizes Fill rate Cash count Satisfaction index None of the choices. ANSWER: A Lot sizes: includes the average lot size for purchases and the average lot size in manufacturing. What indicate how well you repeatedly receive and manufacture in small lots and fulfill customer needs? A. B.28.

Velocity can be defined as: A. C. 53 Notes: . D. ANSWER: A Velocity can be defined as “The average number of units sold by day or week for a grouping of merchandise. Indicates the impact on inventory levels (fast sales can cause shortages. None of the choices. the average number of units sold by day or week for a grouping of merchandise.29. slow sales can cause excess stock)”. B. the aggregate number of units sold by day or week for a grouping of merchandise. the average number of units sold by hours or days for a grouping of merchandise.

C. The simplest form of BOM lists only the Materials and Quantities being used to manufacture a finished good or sub assembly. B.30. it is a table-like document that lists all the items that go into a finished good or subassembly. 54 Notes: . E. The simplest form of BOM lists (Choose all that apply): A. the Skills being used. the Materials being used. None of the choices. ANSWER: A B Shorts for Bill of Materials. the Quantities being used. D. the Machines being used.

Note that a BOM that is flat is perceived to be better than a staged one. None of the choices. It may indicate all the steps of assembly.31. Which of the following statements about BOM is true (Choose all that apply): A. BOM can be nested. In such a tree. It can be structured in a tree like format. It can be nested. ANSWER: A B C D A BOM describes the parent/child relationship between an assembly and its component parts or raw materials. the finished good or subassembly is shown as root. C. B. In addition. E. It describes the parent/child relationship between an assembly and its component parts or raw materials. cos 55 Notes: . BOM can be structured in a tree like format to indicate all the steps of assembly. D.

a flat BOM can accommodate parallel progresses. We will talk about this in the MRP section. the BOM for products released to manufacturing is a key part of a MRP system's database. BOMs are needed to support the assembly process. Also. 56 Notes: . Always remember.

It is a list of components that are most frequently use for building a product. and vice versa. You must define a primary bill before you can define an alternate. An alternate bill is another list of components for the same basic assembly. but not vice versa. D. Which of the following statements are true about a primary bill (Choose all that apply): A. None of the choices. Any bill of material type can have an alternate. A primary bill can have many alternate bills. ANSWER: A B C A primary bill is a list of components that are most frequently use for building a product. E. Note that: l l l l The primary bill is always the default. It is always the default bill to use. B. You must define a primary bill before you can define an alternate.32. C. A primary bill can have many alternate bills. 57 Notes: .

D. What is known as a type of standard bill that provides a set of option choices made from a model bill that comprises a buildable product? A. Configuration Bill Primary Bill Alternate Bill Process Bill Model Bill None of the choices. F. B. In a computerized system. C.33. 58 Notes: . E. ANSWER: A Configuration Bill .a type of standard bill that provides a set of option choices made from a model bill that comprises a buildable product. configuration items and bills are automatically created from model bills after a customer chooses her options on a sales order.

F. It specifies mandatory components or included items that are required for each configuration of that model. 59 Notes: . ANSWER: E Model Bill of Material . C.34.it defines the list of options and option classes you can choose for ordering a configuration. D. G. Configuration Bill Primary Bill Alternate Bill Process Bill Model Bill Planning Bill None of the choices. What type of bill defines the list of options and option classes you can choose for ordering a configuration? A. B. E.

ANSWER: F Planning Bill of Material . F.It is a BOM structure that includes a percentage distribution for its components. E. G. What type of bill represents a BOM structure that includes a percentage distribution for its components? A. Keep in mind that the percentages associated with the components on such a 60 Notes: .35. B. Configuration Bill Primary Bill Alternate Bill Process Bill Model Bill Planning Bill None of the choices. C. D.

61 Notes: . planning items are commonly nested within one another.bill do not need to add to 100%. Also.

F. G. B.This is often used as an alternate for a manufacturing bill.36. Engineering Bill Primary Bill Alternate Bill Process Bill Model Bill Planning Bill None of the choices. C. D. What bill is typically used to prototype variations from the primary bill that produces the same assembly? A. E. It is typically used to prototype variations from the primary bill that produces the same assembly. ANSWER: A Engineering Bills of Material . 62 Notes: .

ANSWER: A Phantom Assembly . one BOM can represent a phantom subassembly for one parent item. you can specify whether a component is a phantom. 63 Notes: . When you create a BOM for a parent item. B. In general. Phantom Assembly Shadow Assembly Image Assembly Classic Assembly None of the choices. The non-stocked assembly that groups together material needed to produce a subassembly is known as: A.37. E.It is a non-stocked assembly that groups together material needed to produce a subassembly. and a stocked subassembly for another parent item. D. C.

38. let’s say. E. C. B. as well as any other requirements? A. the planned order releases for parents below the MPS level. explosion derivation aggregation profiling None of the choices. a MRP system). The process will continue down through all levels of the BOM and is therefore known as "explosion. D. What BOM related process involves the determination of an item's gross requirements from the MPS for immediate parents that are end items." The explosion process involves the determination of an item's gross requirements from the MPS 64 Notes: . additional material requirements will be created for the components needed by these new work orders. ANSWER: A As new work orders are suggested (by. which in turns will create additional suggested work orders and purchase orders.

the planned order releases for parents below the MPS level. as well as any other requirements (such as demand for replacement parts). 65 Notes: .for immediate parents that are end items.

SKU is an identification of a particular product that allows it to be tracked for inventory purposes. It may or may not be made visible to a customer. Typically. E. an SKU is alphanumeric and is associated with any purchasable item in a catalog. D. SKU CRU ADU ADR None of the choices. ANSWER: A Short for stockkeeping unit. C. and is definitely not the same as a product model number from a manufacturer (although the model 66 Notes: . B. What is the commonly used identification of a particular product that allows it to be tracked for inventory purposes? A.39.

The SKU is established by the merchant or the manufacturer. 67 Notes: .number could be used to form all or part of the SKU). not by any industry or trade association.

Typically. not by any industry or trade association. True False ANSWER: B Short for stockkeeping unit. and is definitely not the same as a product model number from a manufacturer (although the model number could be used to form all or part of the SKU). The SKU is established by the merchant or the manufacturer. B. The SKU is established by an industry wide trade association. SKU is an identification of a particular product that allows it to be tracked for inventory purposes. It may or may not be made visible to a customer.40. an SKU is alphanumeric and is associated with any purchasable item in a catalog. 68 Notes: . A.

considering the applicable procurement and inventory costs. The basic assumption of EOQ is that: A. EOQ is the amount of orders that minimizes total variable costs required to order and hold inventory. “The basic assumption of EOQ is that as the lot size increases.41. B. the setup cost per unit decreases. as the lot size increases. the setup cost per unit decreases. C. as the lot size decreases. It can also be described as the most economical quantity of parts to order at one time. the setup cost per unit increases. D. ANSWER: A Shorts for Economic Order Quantity. since setup costs can be amortized over a larger quantity of parts. since setup costs can be amortized over a larger quantity of parts. since setup costs can be amortized over a larger quantity of parts. as the lot size increases. None of the choices. the setup 69 Notes: .

Thus EOQ drives to minimize unit cost. as the lot size increases. the inventory carrying cost per unit increases. since setup costs can be amortized over a larger quantity of parts. Conversely. 70 Notes: .cost per unit decreases. because parts are carried in inventory for a longer period of time. The EOQ is determined by the point at which the total of inventory and setup costs is at a minimum. but not total operating cost”.

what assumptions must be made (Choose all that apply): A. ANSWER: A B C D E To use EOQ. F. lead time and supply None of the choices.42. E. B. C. Constant demand rate Whole lots Holding cost and ordering cost Item independence Certainty in demand. 5 assumptions must be made: 71 Notes: . To use EOQ. D.

lead time and supply 72 Notes: .l l l l l Constant demand rate Whole lots Holding cost and ordering cost Item independence Certainty in demand.

B. C. EOQ EOQ Plus ELS JIT-2 None of the choices. ELS represents the number of units of material or a manufactured item that can be purchased or produced within the lowest unit cost range. Which of the following represents the number of units of material or a manufactured item that can be purchased or produced within the lowest unit cost range? A. The determination of ELS involves reconciling the decreasing trend in preparation unit costs and 73 Notes: . E.43. ANSWER: C Shorts for Economic Lot Size. D.

the increasing trend in unit costs (of storage. and other costs) incident to ownership. 74 Notes: . insurance. as the size of the lot is increased. depreciation. interest.

a reorder level is established for each item based on: o usage 75 Notes: . E. a reorder level is established for each item based on what criteria (Choose all that apply): A. With reorder point planning.usfca. B.edu/~villegas/classes/984-307/307ch12/sld022.htm found here: Many organizations use a minimum stock level and reorder point to order and schedule materials.44. ANSWER: A B C An example of reorder point calculation can be http://www. D. With reorder point planning. usage lead time safety stock needs sales level None of the choices. C.

o lead time o safety stock needs 76 Notes: .

C. Which of the following are the biggest problems with reorder point planning (Choose all that apply): A.45. E. D. B. it only works for short to medium term planning it only works with simple BOM it is not easy to be maintained at “regular enough” intervals it can easily lead to stocking levels lower than what are actually needed None of the choices. ANSWER: B C The biggest problems with reorder point planning: o it only works for very short term planning o it only works with simple BOM o it is not easy to be maintained at “regular enough” intervals 77 Notes: .

or component gets delayed. subassembly.o it can easily lead to stocking levels higher than what are actually needed o whenever a finished good. all of the supporting schedules will get delayed too 78 Notes: .

Make as late as possible.46. Make as late as possible. one should (Choose all that apply): A. D. 1 O'Grady. one should: · · · Make only what he/she can sell. None of the choices. He said that based on the JIT philosophy. Based on the JIT philosophy. Make only when he/she can sell it. Make as quick as possible. P J. C. ANSWER: A B C O'Grady’s definition of JIT is more strategic1. Putting the Just-in-time Philosophy into Practice: A Strategy for Production Managers 79 Notes: . B. Make only what he/she can sell. E. Make only when he/she can sell it.

10 80 Notes: . None of the choices. Reduced manufacturing lead time. purchased goods. Smoother sales flow with fewer disruptions. may include: · · 2 Reduced levels of in-process inventories. purchased goods. Reduced space requirements. F. G.47. Just-in-Time Manufacturing. and finished goods. Cheng and Podolsky. Which of the following are benefits that can be produced by JIT (Choose all that apply): A. in general. and finished goods. Greater flexibility in changing the production sales. Reduced levels of in-process inventories. pg. D. B. ANSWER: A B C D Based on Cheng and Podolsky’s summary2 we may conclude that the benefits of implementing JIT. C. Increased product quality and reduced scrap and rework. E. Reduced space requirements.

Greater flexibility in changing the production mix. Pressure to build good relationships with vendors.· · · · · · · · Increased product quality and reduced scrap and rework. Worker participation in problem solving. Reduced manufacturing lead time. 81 Notes: . Reduction in the need for certain indirect labor. Increased productivity levels and utilization of equipment. Smoother production flow with fewer disruptions.

Kanban maintains an orderly and efficient flow of materials throughout the entire manufacturing process. B. C. D. Kanban Pull bin Push bin Dual Trays None of the choices. Being recognized as one of the primary tools of JIT system. E. By definition. What is known as a manufacturing strategy in which parts are produced or delivered only as needed? A.48. Toyota Motor has been credited with developing the Kanban system. 82 Notes: . ANSWER: A Kanban is often associated with JIT. Kanban is a manufacturing strategy in which parts are produced or delivered only as needed. which takes its name from the Japanese word for "sign" or "placard".

it is used on an assembly line or work cell with a square drawn on the bench or floor between two operators. she would put it into the Kanban square and wait for it to be taken before herself is allowed to make another one. With Kanban square. instead of giving it to the next operator.49. When one operator has finished a part. an assembly line or work cell with a square drawn on the bench or floor between two factories is used. A. True False ANSWER: B Kanban square . B. 83 Notes: .

50. what card is used to authorize the movement of material from the supplier to the using company? A. D. C. the "move" card the "production" card the “flow” card the “close” card None of the choices. ANSWER: A Double card Kanban . 84 Notes: . while the "production" card is used by the supplying company to launch another batch of work into his manufacturing facility when he returns with an empty container from the customer. E. With double card Kanban.the "move" card is used to authorize the movement of material from the supplier to the using company. B.

ANSWER: A B C The advantages of the Kanban concept are: o it allows you to only make what is needed when it is needed o it allows for a more responsive method of satisfying needs o it requires a simpler control system 85 Notes: . Which of the following are the advantages of the Kanban concept (Choose all that apply): A. D. B. it allows you to only make what is needed when it is needed it allows for a more responsive method of satisfying needs it requires a simpler control system it requires NO buffer stock None of the choices. C.51. E.

o it requires less buffer stock o it produces lower work-in-progress inventory o it can deliver in shorter lead times 86 Notes: .

In order to successfully implement TQM. Ethics Integrity Trust Training Teamwork None of the choices. ANSWER: A B C D E To truly unlock the ultimate potential of TQM. one must concentrate on what key elements (Choose all that apply): A. that it fosters openness. B. D. E. fairness and 87 Notes: . F. integrity and trust. C.52. it is important for you to realize that TQM is built on a foundation of ethics.

sincerity and allows involvement by everyone.com/library/content/c021230a.isixsigma.asp 88 Notes: . one must concentrate on eight key elements: l l l l l l l l Ethics Integrity Trust Training Teamwork Leadership Recognition Communication 3 http://www. in order to successfully implement TQM. As described by Nayantara Padhi3.

None of the choices.htm 89 Notes: . D. which: A. which ignored the potential for parallel working.uk/materials_management_stock_control. and parallel working not only simplified the administration of production but also reduced lead-times"4. C. ANSWER: A "One of the major criticisms of MRP is the concept of a staged Bill of Material. One of the major criticisms of MRP is the concept of a staged Bill of Material. ignored the potential for parallel working. ignored the potential for serial working. Work by Burbidge.smthacker. ignored the use of EOQ.53.co. 4 http://www. showed that by flattening the Bill of Material. B. which represented the stages of manufacture and also enshrined that into a sequential process.

90 Notes: . It is also an essential component in many of the popular MRP-II implementations. What is a time-phased planning chart that can help the master scheduler create the MPS? A. A master schedule is a time-phased planning chart that can help the master scheduler create the MPS. which is the anticipated build schedule which applies only to items assigned to the master scheduler. C. The MPS drives the MRP. master schedule production plan capacity plan flow schedule None of the choices. ANSWER: A MPS is the product of Master Scheduling.54. E. D. B.

which is the anticipated build schedule which applies only to items assigned to the master scheduler. A master schedule is a time-phased planning chart that can help the master scheduler create the MPS. A. The MRP drives the MPS.55. It is also an essential component in many of the popular MRP-II implementations. The MPS drives the MRP. B. 91 Notes: . True False ANSWER: B MPS is the product of Master Scheduling.

Which of the following items should you master schedule (Choose all that apply): A. H. F.56. ANSWER: A B C D E F G 92 Notes: . B. end items in a make-to-stock environment components in an assembly-to-order environment raw materials & components in a make-to-order environment item with critical impact on lower level components high-value materials long lead time materials key production resources None of the choices. C. E. G. D.

to ensure the proper execution of the production plan. Which items should you master schedule? l l l l l l l end items in a make-to-stock environment components in an assembly-to-order environment raw materials & components in a make-to-order environment item with critical impact on lower level components high-value materials long lead time materials key production resources 93 Notes: . Thirdly. Secondly. to manage the impact on key production resources.Why do you master schedule? Firstly. to provide stability to materials plans.

MRP-2 can be thought of as (Choose all that apply): A. None of the choices. B. a formula for calculating complicated Manufacturing operations using scientific technologies. E. it stands for Manufacturing Resources Planning. When the manufacturing data has been collected. C.57. a modeling technique for analyzing and controlling complicated Manufacturing operations using computer technologies. which is a modeling technique for analyzing and controlling complicated Manufacturing operations using computer technologies. version 2 of MRP a direct outgrowth and extension of MRP. D. ANSWER: A D MRP2 is not the version 2 of MRP. In fact. the lead time and cost of every component can be predicted under any manufacturing 94 Notes: .

And as soon as an order is received. 95 Notes: .conditions. the workload on the manufacturing organization and the delivery time can be calculated quite accurately.

Variability can be induced in the supply chain by (Choose all that apply): A. B. ANSWER: A B C D Variability can be induced in the supply chain by: l Sales processes . E. Sales processes Management accounting Demands communicated to suppliers Interpretation of demand by suppliers None of the choices.sales people are often motivated with financial incentives by short-term considerations.58. C. D. that there are no sales at all at the beginning of the following period. thus leading to feverish activity spurred by special deals at the end of the accounting period. 96 Notes: .

Interpretation of demand by suppliers .l Management accounting .the customer frequently base their demand statements on forecasts. Then you should know the consequences..due to the need for monthly and annual accounting cycles. Demands communicated to suppliers . pressure is applied to operations management to ship things to make the numbers at the end of the accounting period... and that the forecast once produced is usually forgotten and never measured against reality.. l l 97 Notes: .a process of second guessing the customers demand because you found that they do not know what they want.

5 http://www. D. C.com/article46. But these efforts are often frustrated by unusual activity imbedded in historic usage data"5.effectiveinventory. ANSWER: A B C As stated by Jon Schreibfeder.. the wrong forecast formula or method being applied to the item. "Today's competitive market requires accurate forecasts for the future demand of each product in inventory. Actual material usage might deviate significantly from the forecast because of (Choose all that apply): A.59. B. unusual usage activity that will probably not occur again in the future. the start of a significant new trend in the usage of the product.html 98 Notes: .e. We are constantly looking for ways to reduce the forecasting error (i. the difference between a forecast and the resulting usage). None of the choices.

Based on Jon’s reasoning. actual usage might deviate significantly from the forecast because of: l l l unusual usage activity that will probably not occur again in the future. the start of a significant new trend in the usage of the product. the wrong forecast formula or method being applied to the item. 99 Notes: .

60. Standard moving averages Exponential average Weighted average EO average Smoothed average None of the choices. D. This results in the average over a specific time period. C. Which of the following put more weight on recent and less on past data (Choose all that apply): A. Exponential average puts more weight on recent data and less weight on past data. The exponential moving average applies a percentage of today's closing to yesterday's moving average. F. B. The formula used is as follow: Moving Average = ((today's close)*x) + ((yesterday's moving average)*x) while x = the selected 100 Notes: . It adds the closing number for a number of time periods and divides this total by the number of periods. E. ANSWER: B C Standard moving averages apply equal weight to the numbers.

Weighted average puts more weight on recent and less on past data as well. it works by multiplying each of the previous day's data by a predetermined weight.percentage. 101 Notes: . However.

D. ANSWER: A B C A typical capacity model used for capacity management has the following principal categories of capacity use: o productive 102 Notes: . productive nonproductive idle tangible intangible None of the choices. C. B. F. A typical capacity model used for capacity management has what principal categories of capacity use (Choose all that apply): A. E.61.

o nonproductive o idle 103 Notes: .

Rated capacity is often set as 100 per cent. such as set-ups. 100 per cent 1. ANSWER: A Rated capacity = productive capacity (used for producing goods as well as in process and product improvement efforts) + nonproductive capacity (uses of capacity which do not produce goods. maintenance. setup and other kinds of downtime. and standby) + idle capacity (capacity that is not marketable or not in demand). 104 Notes: . waste. Rated capacity is often set as: A. and may sometimes be overstated intentionally.9% None of the choices. This rate is without allowance for repair. B. it’s rated capacity is the full productive speed as determined by the manufacturer. E.0 90% 99.62. C. which is 24 hours a day and seven days a week. D. If a production machine is being measured.

B.63. dependent demand refers to the demand that is directly related to or derived from the BOM structure for other items or products. D. On the other hand. Demand for finished goods is an example of: A. 105 Notes: . Demand for finished goods is one such example. Independent demand Dependent demand Mixed demand None of the choices ANSWER: A Independent demand refers to the demand for an item that is unrelated to the demand for other items. C.

106 Notes: . Note that it is possible for an inventory item to have both dependent and independent demand at any given time. while independent demands have to be forecasted. B. Independent demand Dependent demand Mixed demand None of the choices ANSWER: B Dependant demands can be calculated. Which of the following types of demand can be calculated? A. D. C.64.

Which of the following refers to the planning process for predicting the demand of products and services based on forecasts? A. B. 107 Notes: . By accurately forecasting customer demand. one can improve the level of customer service while decreasing costs through reducing demand uncertainty. C. D. E.65. Demand Planning Demand Aggregation Demand summarization Demand Analyst None of the choices ANSWER: A Demand Planning refers to the planning process for predicting the demand of products and services based on forecasts.

asp 108 Notes: . optimized demand management can be achieved as follow6: o use advanced price optimization to enhance revenue 6 http://www.66.com/solutions/profitable_demand_management. C. price elasticity customer locations supply base optimization demand seasoning None of the choices ANSWER: A As mentioned by Manugistics. E.manugistics. D. B. You may achieve increasingly accurate demand forecasts by integrating volume predictions based on: A.

and dynamic market changes (this is important) o smooth demand over peak and valley periods (this is important) o determine the best product mix to optimize the profitability of existing assets o optimize price lists and customer quotes to maximize margins and gain market share o steer demand between products. improving enterprise profitability and customer service (this is important) o adaptively manage volatile demand. short product life cycles. understanding and cannibalization and halo effects (this is VERY important) leveraging product 109 Notes: .o achieve increasingly accurate demand forecasts by integrating volume predictions based on price elasticity o bring your supply and demand chains into balance.

67.manugistics. Optimized demand management can be achieved via which of the following ways (choose all that apply): A.com/solutions/profitable_demand_management. optimized demand management can be achieved as follow7: o use advanced price optimization to enhance revenue 7 http://www. advanced price optimization bring your supply and demand chains into balance adaptively manage volatile demand smooth demand over peak and valley periods determine the best product mix None of the choices ANSWER: A B C D E As mentioned by Manugistics. E.asp 110 Notes: . B. F. C. D.

o achieve increasingly accurate demand forecasts by integrating volume predictions based on price elasticity o bring your supply and demand chains into balance. improving enterprise profitability and customer service (this is important) o adaptively manage volatile demand. understanding and cannibalization and halo effects (this is VERY important) leveraging product 111 Notes: . and dynamic market changes (this is important) o smooth demand over peak and valley periods (this is important) o determine the best product mix to optimize the profitability of existing assets o optimize price lists and customer quotes to maximize margins and gain market share o steer demand between products. short product life cycles.

E. C.68. 112 Notes: . D. Actual usage might deviate significantly from the forecast due to which of the following reasons (choose all that apply): A. the wrong forecast formula being applied the wrong forecast method being applied price elasticity None of the choices ANSWER: A B C D As stated by Jon Schreibfeder. unusual usage activity that will probably not occur again the start of a significant new trend in the usage of the product. B. F.

actual usage might deviate significantly from the forecast because of: l l l unusual usage activity that will probably not occur again in the future. 8 http://www. the start of a significant new trend in the usage of the product.effectiveinventory."Today's competitive market requires accurate forecasts for the future demand of each product in inventory.com/article46. Based on Jon’s reasoning.. the difference between a forecast and the resulting usage). But these efforts are often frustrated by unusual activity imbedded in historic usage data"8. We are constantly looking for ways to reduce the forecasting error (i. the wrong forecast formula or method being applied to the item.html 113 Notes: .e.

or the wrong forecasting method has been applied to the item. Which of the following represents a better way of forecasting? A. 114 Notes: . C. a significant new trend has begun. items that might have experienced unusual usage activity. and/or salespeople review the list of items and determine whether unusual activity actually occurred. B. identify items that might have experienced unusual usage activity and perform manual adjustment. planners. but not correct. D. They can then manually adjust actual usage to reflect what usage would have been had no unusual activity occurred”. identify AND correct items that might have experienced unusual usage activity on the spot. E.69. use computer simulation use advanced forecast modeling (AFM) techniques None of the choices ANSWER: A Jon believes that one better way of forecasting is “to identify. Buyers.

Sporadic usage items are items that are: A. C. sold seasonally. B. It is not easy to forecast the demand of such items. sol AS IS. D. None of the choices ANSWER: A Sporadic usage items are items that are sold infrequently. sold frequently. and the key point to make here is that you must carefully avoid using an incorrect forecast method or you will risk stocking the wrong quantity of the wrong item in the wrong location at the wrong time. sold infrequently. E. 115 Notes: .70.

drive cycle counts. C. you may spend more resources on managing the demand for A items (and spend less to take care of B and C items). perform short term forecast. E. where items of high value (A items) are counted very frequently. If safety stock is a way of reacting to rising demands. you may. None of the choices ANSWER: C Many companies use ABC Analysis to manage inventory: they drive their cycle counts based on the ABC classifications. manage order levels. and items of lower value are counted less frequently. perform long term forecast. for example. In the case of demand management. Many companies use ABC Analysis to: A. D. B.71. have all “A” 116 Notes: . In fact. the use of ABC Analysis is not restricted to cycle counting.

all “B” items get 3 weeks. 117 Notes: . and all “C” items get 2 weeks…etc.items get 4 weeks of safety stock.

None of the choices ANSWER: D The ABC approach is believed to be flawed though. 118 Notes: . The primary drawbacks of the ABC approach are (choose all that apply): A. it is not clear whether the three classes can cover the length of priority periods. B. it is not clear whether the three classes can capture the diversity and differences of the large number of SKUs many companies carry. C. it is not clear whether the three classes suffice for longer term estimation period. E.72. D. One primary drawback of this approach is that it is not clear whether the three classes can capture the diversity and differences of the large number of SKUs many companies carry. it is not clear whether % or decimal values should b used in the three classes.

C. E.73. D. Which of the following statements correctly describe the “Bullwhip effect” (choose all that apply): A. B. Demand variability increases as one moves up the supply chain away from the retail customer Any small changes in consumer demand can result in large variations in orders placed upstream The supply network can oscillate in very large swings The supply network can oscillate in very small and frequent swings Any small changes in consumer demand can result in large variations in orders placed downstream None of the choices ANSWER: A B C 119 Notes: . F.

the network can oscillate in very large swings as each organization in the supply chain seeks to solve the problem from its own perspective”9. and small changes in consumer demand can result in large variations in orders placed upstream.quickmba.com/ops/bullwhip-effect/ 120 Notes: .“Demand variability increases as one moves up the supply chain away from the retail customer. 9 http://www. Eventually.

The variability and delays are mostly the results of: o Overreaction to backlogs 121 Notes: . D. Overreaction to backlogs Shortage gaming Demand forecast inaccuracies Free return policies None of the choices ANSWER: A B C D It is the variability coupled with time delays in the transmission of information up the supply chain and time delays in manufacturing and shipping goods down the supply chain that produce this kind of bullwhipping effect. Bullwhipping effect is caused by variability and delays that are mostly the results of (choose all that apply): A.74. B. C. E.

o Poor communication along the supply chain o Order batching produces larger orders which can produce more variance. o Free return policies (this is especially true in the US where 30-day money back guarantee is the norm) 122 Notes: . independent multiple forecasts in the demand chain is believed to be the first cause of the bullwhip effect. o Shortage gaming (customers order more than they need during a period of short supply) o Demand forecast inaccuracies – in fact.

75. C. E. the quality of the forecast the update frequency of the forecast the reorder frequency the reorder batch size protective buying speculative buying None of the choices ANSWER: G 123 Notes: . B. D. Which of the following are NOT the basic determinants for the bullwhip effect (choose all that apply): A. F. G.

leading to speculative buying 10 http://www. leading to protective buying o the special price schemes.htm 124 Notes: .stud. Padmanabhan and Whang (1997) identified the basic determinants for the bullwhip effect10: o the quality of the forecast and its update frequency o the reorder frequency and the reorder batch size o the expectation of shortage.fernuni-hagen.Lee.de/q5153735/research/bullwhiptop.

If information can flow through the chain timely and accurately.76. The most typical rationales include (choose 3): A. 125 Notes: . protection against stockout lot size economics speculative ordering price optimization labor agreement bargaining ANSWER: A B C To reduce the impact of the effect. Sometimes a decision maker along the chain may order in higher quantities than he receives customer orders. bullwhip effect can be minimized. E. B. D. C. better communication and cooperation among chain members is the key.

The most typical rationales are: o protection against stockout o lot size economics o speculative ordering 126 Notes: .Sometimes a decision maker along the chain may order in higher quantities than he receives customer orders.

F. The deliverables of S&OP are: A. MRP schedules. The end goal is an agreement between various departments on the best course of action to achieve the optimal balance 127 Notes: . None of the choices ANSWER: A “S&OP is a formal process that consists of a series of meetings. finishing with a high level meeting where key long term decisions are made. lower level short term decisions. In these meetings. C. E. lower level long term decisions.77. G. key long term decisions. B. income statements. D. key short term decisions. data from various areas of your business is discussed.

It's a tool that helps you properly manage your business”11. 11 http://www.between supply and demand and to meet your profitability goals.sopoverview.com/definition.htm 128 Notes: .

E. increasing teamwork between cross functional areas facilitating the setting of targets allowing progress against the Business Plan to be reviewed putting your operational plan in line with your job shop flows facilitating the setting of internal controls None of the choices ANSWER: A B C Shorts for Sales & Operations Planning. S&OP can: o increase teamwork between cross functional areas 129 Notes: . F. B. D. In theory. S&OP is intended for helping companies to maximize customer satisfaction and meet profitability goals by achieving an optimal balance of demand and supply.78. Sales & Operations Planning is intended for achieving which of the following purposes (choose all that apply): A. C.

o put your operational plan in line with your Business Plan o facilitate the setting of targets o allow progress against the Business Plan to be reviewed 130 Notes: .

D.79. C. Reduced lead times Improved service levels Reduced inventory management costs Reduced obsolete inventory Reduce expediting costs Entire elimination of safety-stock None of the choices ANSWER: A B C D E 131 Notes: . G. E. F. B. Proper Sales & Operations Planning can contribute to which of the following results (choose all that apply): A.

com/solutions/sales. proper S&OP can contribute to the following results: o Reduce lead times o Profitably deploy inventory across the enterprise o Synchronize material planning.asp 132 Notes: .adexa. capacity planning and allocation planning o Improve service levels o Reduce inventory management costs and obsolete inventory o Reduce expediting costs o Manage by/co products o Optimize safety-stock and raw-material levels 12 http://www.As suggested by Adexa12.

C. D.80. E. Which of the following correctly describe the order of the stages of S&OP? A. Demand Review -> Supply Review -> Partnership Meeting -> Sales and Operations Planning Meeting Supply Review -> Demand Review -> Partnership Meeting -> Sales and Operations Planning Meeting Demand Review -> Sales and Operations Planning Meeting -> Supply Review -> Partnership Meeting Sales and Operations Planning Meeting -> Demand Review -> Supply Review -> Partnership Meeting None of the choices ANSWER: A 133 Notes: . B.

In the article “Sales and Operations Planning overview”, four stages of the S&OP process have been mentioned13: o Demand Review - chaired by the Sales and Marketing Director, attended by Sales and Marketing Managers plus development engineers where relevant. o Supply Review - chaired by the Logistics Director, and attended by manufacturing and planning personnel o Partnership Meeting - bringing together the demand and supply reviews and often chaired by the Finance Director o Sales and Operations Planning Meeting - full review and commitment to the plan, chaired by the Managing Director

13

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Notes:

81, During the S&OP process, Demand Review is often chaired by:

A. B. C. D. E.

the Sales and Marketing Director the Logistics Director the Finance Director the Managing Director None of the choices

ANSWER: A In the article “Sales and Operations Planning overview”, four stages of the S&OP process have been mentioned14: o Demand Review - chaired by the Sales and Marketing Director, attended by Sales and Marketing Managers plus development engineers where relevant.
14

http://www.bpic.co.uk/sop.htm
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o Supply Review - chaired by the Logistics Director, and attended by manufacturing and planning personnel o Partnership Meeting - bringing together the demand and supply reviews and often chaired by the Finance Director o Sales and Operations Planning Meeting - full review and commitment to the plan, chaired by the Managing Director

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82, Rate this comment: “Short term forecasts are always more accurate than their long term counterparts”. A. B. C. D. This is mostly true unless the short term forecasts use improper methods This is always true This is true only if the long term forecasts use improper methods None of the choices

ANSWER: A

Short term forecasts are always more accurate than their long term counterparts. If the forecast time frame has to be long, you may consider the use of a time phased forecast process — have your forecast spread out by day or week or month. As recommended by Calvin (above), such a forecast could better support manufacturing and warehouse capacity planning, work force assignments, sales forecasting, and budgeting. However, to obtain an accurate time-phased forecast, careful modeling of day-of-week, trend, and seasonal effects and consideration of supplier constraints within the demand chain are required.
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83, In order to obtain an accurate time-phased forecast, which of the following are required (choose all that apply):

A. B. C. D. E.

careful modeling of day-of-week, trend, and seasonal effects consideration of supplier constraints within the demand chain careful modeling of work flows consideration of customer constraints within the supply chain None of the choices

ANSWER: A B

Short term forecasts are always more accurate than their long term counterparts. If the forecast time frame has to be long, you may consider the use of a time phased forecast process — have your forecast spread out by day or week or month. As recommended by Calvin (above), such a forecast could better support manufacturing and warehouse capacity
138

Notes:

planning, work force assignments, sales forecasting, and budgeting. However, to obtain an accurate time-phased forecast, careful modeling of day-of-week, trend, and seasonal effects and consideration of supplier constraints within the demand chain are required.

139

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84. E. for certain items at the top 2 levels of your BOM. for any item at any level of your BOM. None of the choices ANSWER: A You may define and maintain forecasts for any item at any level of your BOM. You may define and maintain forecasts: A. C. You may forecast demand for products directly. D. or forecast product families and explode forecasts to individual products through your planning bills. B. for certain items at the top 3 levels of your BOM. 140 Notes: . for only the top level items at any level of your BOM.

E. each time your customers place order demand for the entire line of products. each time you place manufacturing order for the promoted products. each time you place manufacturing order for the competing products. None of the choices ANSWER: A Forecasts are consumed each time your customers place order demand for the forecasted product.85. C. When are forecasts consumed (choose the BEST answer)? A. 141 Notes: . D. each time your customers place order demand for the forecasted product. B.

but at a slower pace. C. B. It adds the closing number for a number of time periods and divides this total by the number of periods. Standard moving averages Exponential average Weighted average None of the choices ANSWER: B C The moving average is a way of calculating the average over a given time span. Which of the following moving average techniques apply more weight on recent data (choose all that apply): A. the average reflects the change.86. This results in the average over a specific time period. o Standard moving averages apply equal weight to the numbers. D. o Exponential average puts more weight on recent data and less weight on past data. The exponential moving average applies a percentage of today's closing to yesterday's 142 Notes: . As the numbers change over time.

moving average. The formula used is as follow: Moving Average = ((today's close)*x) + ((yesterday's moving average)*x) while x = the selected percentage o Weighted average puts more weight on recent and less on past data as well. 143 Notes: . However. it works by multiplying each of the previous day's data by a predetermined weight.

D. Standard moving averages Exponential average Weighted average None of the choices ANSWER: A The moving average is a way of calculating the average over a given time span. As the numbers change over time. 144 Notes: . B. It adds the closing number for a number of time periods and divides this total by the number of periods. o Standard moving averages apply equal weight to the numbers. This results in the average over a specific time period. the average reflects the change. but at a slower pace. Which of the following moving average methods adds the closing number for a number of time periods and divides this total by the number of periods? A.87. C.

The exponential moving average applies a percentage of today's closing to yesterday's moving average. However. it works by multiplying each of the previous day's data by a predetermined weight.o Exponential average puts more weight on recent data and less weight on past data. The formula used is as follow: Moving Average = ((today's close)*x) + ((yesterday's moving average)*x) while x = the selected percentage o Weighted average puts more weight on recent and less on past data as well. 145 Notes: .

and so on. To be precise. C. B. "ABC" refers to the rankings you assign your items as a result of this analysis. D. an ABC analysis determines the relative value of a group of inventory items based on your valuation criterion. 146 Notes: . ABC Analysis is a method for determining: A. you can produce a list of priority – you decide what is the most important item to take care of. E. where "A" items are ranked higher than "B" items. With ABC Analysis. priority stock turns inventory level EOQ None of the choices ANSWER: A To maintain accurate forecast for every item and to manage the demand for every item can be an exhaustive task – no one can afford to do good on everything.88. and what items can receive less focus.

and what items can receive less focus. C.89. Which of the following statements correctly describe ABC Analysis? A. it determines the relative value of a group of inventory items based on your valuation criterion it determines the absolute value of a group of inventory items based on your valuation criterion it determines the relative composition of a group of inventory items based on your valuation criterion None of the choices ANSWER: A To maintain accurate forecast for every item and to manage the demand for every item can be an exhaustive task – no one can afford to do good on everything. To be precise. B. D. you can produce a list of priority – you decide what is the most important item to take care of. With ABC Analysis. an ABC analysis determines the relative 147 Notes: .

value of a group of inventory items based on your valuation criterion. 148 Notes: . "ABC" refers to the rankings you assign your items as a result of this analysis. where "A" items are ranked higher than "B" items. and so on.

the lead time it takes to get in. ANSWER: A For many make-to-stock companies that require on-hand inventory. C. a reorder level that triggers purchase orders is being deployed. and is no good for longer time frame (as it tends to inflate the needed inventory estimation). This approach is typically workable for a very short time horizon (of less than several weeks). E.90. a reorder level that triggers purchase orders is being deployed. For many make-to-stock companies that require on-hand inventory. B. 149 Notes: . Any combination of requirements that causes the inventory level to dip below the pre-determined reorder level will trigger a purchase order. Such a reorder level approach is typically workable for (choose all that apply): A. D. a very short time horizon a very long time frame make-to-order companies only items with a flat BOM only None of the above choices. and the amount of safety stock for covering unusual usage. Such a reorder level is typically determined by the average usage of material.

to provide stability to materials plans. to provide stability to materials plans to manage the impact on key production resources to ensure the proper execution of the production plan. Why do you master schedule (choose all that apply): A. 150 Notes: . B. to ensure the proper execution of the production plan. ANSWER: A B C Why do you master schedule? Firstly. C.91. to ensure defect-free production None of the above choices. to manage the impact on key production resources. D. Secondly. Thirdly. E.

E. 151 Notes: . Year-end physical inventories (choose all that apply): A. B. None of the above choices. D. tend to help a lot for inventory accuracy. tend to do very little for inventory accuracy. should be eliminated entirely. ANSWER: A You should count your inventory on a continuous basis via cycle counting to maintain high levels of accuracy.92. C. are tools for accounting purpose. Year-end physical inventories are tools for accounting purpose and can do very little for inventory accuracy.

blind count informed count guess count ineffective count random count None of the above choices. D. When you send your counters out without giving them any quantity information on the item being counted. B. You then compare the count quantities to on-hand quantities and investigate any variances. ________ occurs. F. 152 Notes: . ANSWER: A A blind count occurs when you send your counters out without giving them any quantity information on the item being counted. A. E.93. C. Such method is believed to be inferior because it produces lower first-pass accuracy rates and can be very time consuming. They count the product and write down the quantity.

B. Clear Process Definition Procedure Documentation Employee Training and Testing Monitoring Processes for Compliance Setting Standards Tracking Accuracy None of the above choices. E. F. C.94. G. ANSWER: A B C D E F Dave Piasecki in his article "Guide to Inventory Accuracy" lists the factors that are essential to maintaining inventory accuracy: 153 Notes: . Which of the following are the valid factors that are essential to maintaining inventory accuracy (choose all that apply): A. D.

Be prepared to dismiss or reassign employees. Don't be afraid to put Checks in place.l l l l l l l l l l l l l l l Correct attitude (at both the individual level and the top management level) Clear Process Definition Procedure Documentation Employee Training and Testing Monitoring Processes for Compliance Setting Standards Tracking Accuracy Accountability Cycle counting Re-evaluate regularly Dedicate positions for managing inventory.Crowded unorganized areas often become the "black holes" for missing product. 154 Notes: . Storage Areas . Control employee turnover.

l Know your inventory system. 155 Notes: .

Which of the following are the major categories of bar codes (choose all that apply): A. Automated Identification AutoID. B. D. E. ANSWER: A B Shorts for Automated Data Collection. ADC is also known as Automated Data Capture. Automated Identification and Data Capture AIDC or just Barcoding.95. F. 1D 2D 3D 4D 5D None of the above choices. C. There are two major categories of bar codes: 156 Notes: .

consist of different symbologies including UPC. Code 128. The symbology to use is usually dictated by supply chain partners through a standardized compliance label program. 2D .most popular nowadays.. Code 39.etc. Interleaved 2 of 5 . can store more data and require special scanners to read.. l 157 Notes: .uses bar code symbologies such as UPS's MaxiCode.l 1D .

E. B. F. ANSWER: B Types of bar-code scanners include: l Laser. or Charged Coupled Device CCD scanner. BSA scanner CCD scanner RAD scanner Biometric scanner Keyboard-wedge scanner None of the above choices. Talking about bar-code scanners. D. which acts like a 158 Notes: . which uses a laser beam that moves back and forth across the bar code reading the light and dark spaces. C. the device that acts like a small digital camera and takes a digital image of the bar code which is then decoded is known as: A.96.

which connects between a computer keyboard and the computer and collect data to the computer as if the scanner were an input device.small digital camera and take a digital image of the bar code which is then decoded. l Keyboard-wedge scanner. 159 Notes: . CCD scanners are cheaper but are limited to a shorter scan distance.

Period Order Quantity POQ is based on EOQ with more information being taken account into. None of the above choices. Economic Order Quantity tends to ignore the actual demand pattern. E. A. Actual demand pattern is not relevant anyway. B. D. 160 Notes: .97. True False This must be considered on a case by case basis. C. but still cannot make use of all of the available data. ANSWER: A Economic Order Quantity EOQ ignores the actual demand pattern but is simple enough to implement.

but still cannot make use of all of the available data. A. B. Period Order Quantity POQ is based on EOQ with more information being taken account into. True False ANSWER: B Economic Order Quantity EOQ ignores the actual demand pattern but is simple enough to implement. 161 Notes: . Period Order Quantity is superior to Economic Order because it can make use of all of the available data.98.

the Least Unit Cost LUC method works out an irregular interval between replenishment orders on the basis of what number of weeks will minimize unit cost. E. C. B. LUC makes use of all of the available data and gives room for intuitive interpretation. 162 Notes: .99. ANSWER: A Whereas the Period Order Quantity POQ method computes a fixed number of weeks. but is more complicated than POQ and EOQ. LUC POQ EOQ ROQ POQ None of the above choices. D. Which of the following methods works out an irregular interval between replenishment orders on the basis of what number of weeks will minimize unit cost (choose all that apply): A. F.

ANSWER: A Based on the "Theory of Constraints". C. 163 Notes: . E. Theory of Constraints Economy of Scale Theory of Competitive Advantages Theory of Absolute Advantages None of the above choices. Which of the following theories states that the capacity of the supply chain system was governed by the capacity of it's weakest link? A. D. that overproduction in other areas would simply produce unwanted inventory. the capacity of the supply chain system was governed by the capacity of it's weakest link. B.100.

101. productive nonproductive idle max half min None of the above choices. A typical capacity model used for capacity management should have which of the following principal categories of capacity use (choose 3): A. C. G. D. F. B. E. ANSWER: A B C A typical capacity model used for capacity management has the following principal categories of capacity use: l productive 164 Notes: .

l l nonproductive idle 165 Notes: .

maintenance. and standby) + idle capacity (capacity that is not marketable or not in demand). 166 Notes: . D. ANSWER: D Rated capacity = productive capacity (used for producing goods as well as in process and product improvement efforts) + nonproductive capacity (uses of capacity which do not produce goods. waste. Which of the following formulas is correct? A. C. Rated capacity = productive capacity + nonproductive capacity Rated capacity = productive capacity + idle capacity Rated capacity = nonproductive capacity + idle capacity Rated capacity = productive capacity + nonproductive capacity + idle capacity None of the above choices. B. such as set-ups.102. E.

water. it is recommended that the following information be obtained as well as the capital cost: l l Installation costs: There may well be costs associated with building alterations special utility requirements i. F. Installation costs Training costs Annual Operating costs Maintenance costs Disposal costs None of the choices. however.103. ANSWER: A B C D E When drawing up tenders for the purchase of major equipment. electrical supply; Training costs: usually training is provided by the successful supplier as part of their overall package. which of the following information should be obtained (choose all that apply): A. there may well be instances when more specific training is required and can only be provided by the supplier over an extended period at an external location. When drawing up tenders for the purchase of major equipment. Suppliers should be asked to provide a breakdown of any associated costs; 167 Notes: . D. C. B. E.e.

e. This should include all service/replacement parts. which are required on an annual basis together with call-out charges for non-scheduled visits; Disposal costs. running/consumable costs: An assessment of the anticipated annual workload through the equipment should be established and tenderers should be asked to provide a breakdown of associated costs; Maintenance costs over the proposed life of the equipment: These days because of technical advancement the figure usually used is between 3-5 years.l l l Annual Operating costs i. 168 Notes: .

169 Notes: . Potential sources of conflict are identified.104. define mutual goals and identify the major obstacles to success for the project. E. The facilitator helps the parties establish a non-adversarial relationship. C. D. preventing disputes. partnering is a technique to prevent disputes from occurring. lowering procurement cost. B. sharing development cost. It involves purchasing organization and contractor management staff mutually developing a "plan for success. Partnering is a technique for: A. sharing market information. Many agencies have successfully used partnering on construction projects and are now beginning to apply these principles in the automated data processing/information resources management area." usually with the assistance of a neutral facilitator. The process results in the parties developing a partnership charter. None of the choices. ANSWER: A Often used as an alternative dispute resolution technique. and the parties seek cooperative ways to resolve any disputes that may arise during contract performance. which serves as a roadmap for contract success.

105. Which of the following are factors that must be seriously considered regarding material disposal (choose all that apply): A. Purchasing staff must took on the nonpurchasing responsibility of manifesting waste. ANSWER: A B C D E Nowadays. Below are factors that must be seriously considered: . Staff should be highly motivated to find workable alternatives to hazardous materials. E. D. environmental hazards potential for creating liability worker exposure concerns storage safety requirements handling and use requirements None of the choices. they must think about the waste disposal costs it will create. C.environmental hazards 170 Notes: . B. F. Before purchasing personnel buy a hazardous material.

worker exposure concerns .potential for creating liability ..storage safety requirements .handling and use requirements 171 Notes: .

172 Notes: . The terms below are all examples of such concept: l l Early Supplier Involvement (ESI) Early Purchasing Involvement (EPI) Never focus on price alone. what does ESI stand for (Fill in the blank please): ___________________ ANSWER: Early Supplier Involvement Now the trend is towards using fewer suppliers and maintaining closer relationships / cooperation with them. In terms of supplier management. And this is what Supply Chain management is all about. Emphasizing WIN WIN relationship with them is the key here.106. You need good service and reliability as well as the willingness to co-operate.

Emphasizing WIN WIN relationship with them is the key here. what does EPI stand for (Fill in the blank please): ___________________ ANSWER: Early Purchasing Involvement Now the trend is towards using fewer suppliers and maintaining closer relationships / cooperation with them. 173 Notes: . You need good service and reliability as well as the willingness to co-operate. And this is what Supply Chain management is all about. The terms below are all examples of such concept: l l Early Supplier Involvement (ESI) Early Purchasing Involvement (EPI) Never focus on price alone. In terms of supplier management.107.

forward integration. distributors. delivery and production of a particular product. C. D.108. storage facilities and suppliers that participate in the sale.acquiring ownership of one's supply chain (in the hope of reducing supplier power and thus reducing input costs). transporters. ANSWER: A A supply chain is a network of retailers. E. The concept of supply chain often involves: A. 174 Notes: . The concept of supply chain often involves backward integration . backward integration. B. None of the choices. horizontal integration. no integration.

ANSWER: B Push systems are triggered by interpretation of the expected demand and scheduling of supply to meet that demand. D. Pull systems have replenishment triggered by the usage or depletion of stock. A. MRP does have elements of the push system built-in. JIT is pull based. Push Pull Push + Pull None of the choices. C. JIT is ______ based. B.109. 175 Notes: .

D. MPR MRP SKU SSU SDU SRK None of the choices.110. C. ANSWER: C 176 Notes: . B. E. F. Which of the following is an identification of a particular product that allows it to be tracked for inventory purposes? A. G.

an SKU is alphanumeric and is associated with any purchasable item in a catalog. Typically. The SKU is established by the merchant or the manufacturer. SKU is an identification of a particular product that allows it to be tracked for inventory purposes. not by any industry or trade association. It may or may not be made visible to a customer.Short for stockkeeping unit. and is definitely not the same as a product model number from a manufacturer (although the model number could be used to form all or part of the SKU). 177 Notes: .

and is definitely not the same as a product model number from a manufacturer (although the model number could be used to form all or part of the SKU). The SKU is established by: A. It may or may not be made visible to a customer. E. not by any industry or trade association. an SKU is alphanumeric and is associated with any purchasable item in a catalog. Typically. the merchant or the manufacturer the industry trade association the government ANSI None of the choices. C.111. 178 Notes: . B. ANSWER: A Short for stockkeeping unit. D. The SKU is established by the merchant or the manufacturer. SKU is an identification of a particular product that allows it to be tracked for inventory purposes.

Demographics. Technology infrastructure of the supplier. Financial solvency.112. If a RFP is used. Experience. once the evaluation is completed. Environmentally conscious policies …etc). What does RFP stand for (Fill in the blank please): _______________ ANSWER: Request for Proposal Pay particular attention to Request for Quote (RFQ). but include other considerations too. On-time & cost-effective delivery of products. the project is usually awarded to the vendor who presents the best value (not only in terms of price. such as Quality of the product or service provided. Request for Information (RFI) and Request for Proposal (RFP). 179 Notes: .

ANSWER: A Central to the concept of the Incoterms is the understanding that at any given point where either risk. D. 180 Notes: . so they must instantly initiate from the buyer's perspective. three-letter codes three-alphanumeric codes four-letter codes four-alphanumeric codes None of the choices. responsibility. C. B. All of the Incoterms are expressed as: A. All of the Incoterms are expressed as threeletter codes for facilitating the use of EDI. E.113. liability or costs terminate from the seller's perspective.

D.the buyer undertakes to take responsibility for the cargo from the seller’s factory. C. Under EXW arrangement. who undertakes to take responsibility for the cargo from the production factory? A. Once the seller has made the goods available for collection. 181 Notes: .114. E. B. the seller the buyer the trading agent no body None of the choices. ANSWER: B EXW . the seller’s physical obligations under the contract have been completely met.

C.115. ANSWER: A B C D Packaging serves the functions of: l l l l l l containment protection apportionment unitization convenience communication (such as the use of UPC Universal Product Code) 182 Notes: . containment protection apportionment unitization None of the choices. D. B. E. Packaging serves the functions of (choose all that apply): A.

116, Which of the following extends DRP-I by including the planning of key enterprise resources? A. B. C. D. E. DRP-II MRP-II LDR-II CDR-II None of the choices.

ANSWER: A

Distribution Resource Planning (DRP-II) extends DRP-I by including the planning of key enterprise resources like warehouse spaces, manpower, transport capacity and financials. Simply put, a DRP-II system can translate demand forecasts for each SKU at each warehouse/distribution center into a proper time phased replenishment plan.

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117, Which of the following are the valid types of distribution mode in a production environment where goods of different nature are produced and marketed (choose all that apply): A. B. C. D. E. Intensive distribution Selective distribution Exclusive distribution Evaluative distribution None of the choices.

ANSWER: A B C

Through effective logistical measures one may achieve market coverage objectives to the fullest extent by implementing proper distribution tactics. Types of distributions can include: l l l Intensive distribution Selective distribution Exclusive distribution

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118, Which of the following supply chain modeling approaches provides normative models for strategic decisions by focusing on the design aspect of the supply chain? A. B. C. D. E. Network Design Rough Cut Simulation based Risk based None of the choices.

ANSWER: A

There are three major kinds of supply chain modeling approaches. They are Network Design methods, Rough Cut methods, and simulation based methods. Network design methods provide normative models for strategic decisions by focusing on the design aspect of the supply chain. Rough cut methods which emphasize the development of inventory control policies can provide guiding policies for the various operational decisions. Simulation methods allow a comprehensive supply chain model to be analyzed with both strategic and operational elements considered.

185

Notes:

119, Which of the following supply chain modeling approaches primarily emphasizes the development of inventory control policies? A. B. C. D. E. Network Design Rough Cut Simulation based Risk based None of the choices.

ANSWER: B

There are three major kinds of supply chain modeling approaches. They are Network Design methods, Rough Cut methods, and simulation based methods. Network design methods provide normative models for strategic decisions by focusing on the design aspect of the supply chain. Rough cut methods which emphasize the development of inventory control policies can provide guiding policies for the various operational decisions. Simulation methods allow a comprehensive supply chain model to be analyzed with both strategic and operational elements considered.

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Notes:

120, Decisions involved in SCM can generally be classified as: A. B. C. D. E. either tactical or operational either regressive or proactive either directional or unidirectional either strategic or operational None of the choices.

ANSWER: D Decisions involved in SCM can generally be classified as either strategic or operational, and may be further grouped into four major areas, including location decisions, production decisions, inventory decisions, and transportation decisions.

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Notes:

121, Decisions involved in SCM can generally be grouped into which 4 major areas (choose 4): A. B. C. D. E. F. location decisions production decisions inventory decisions transportation decisions human decisions training decisions

ANSWER: A B C D Decisions involved in SCM can generally be classified as either strategic or operational, and may be further grouped into four major areas, including location decisions, production decisions, inventory decisions, and transportation decisions.

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E. 189 Notes: . Which of the following correctly describes simulation methods for analyzing supply chain? A. Rough cut methods which emphasize the development of inventory control policies can provide guiding policies for the various operational decisions. Rough Cut methods. D. It allows a comprehensive supply chain model to be analyzed with both strategic and operational elements considered. It is a MUST for SCRM. None of the choices. B. They are Network Design methods. ANSWER: D There are three major kinds of supply chain modeling approaches. Network design methods provide normative models for strategic decisions by focusing on the design aspect of the supply chain. It allows a comprehensive supply chain model to be analyzed with primarily operational elements considered and fine tuned. and simulation based methods. C. It allows a comprehensive supply chain model to be analyzed with primarily strategic elements considered.122. Simulation methods allow a comprehensive supply chain model to be analyzed with both strategic and operational elements considered.

It takes a pro-active approach to ensure effective management of all potential risks throughout the supply chain. 190 Notes: . D. Which of the following disciplines aims at reducing dependency and promoting synergy among supply chain partners? A. C.123. SCRM SCCM SCEM SCTM None of the choices. with greater focus placed on the various unpredictable factors along the chain. B. ANSWER: A Supply Chain Risk Management (SCRM) aims at reducing dependency and promoting synergy among supply chain partners. E.

D. B. with greater focus placed on the various unpredictable factors along the chain. 191 Notes: . C. ANSWER: A Supply Chain Risk Management (SCRM) aims at reducing dependency and promoting synergy among supply chain partners. Which of the following best describes SCRM? A. It takes a pro-active approach to ensure effective management of all potential risks throughout the supply chain. E.124. It has to be proactive It has to be reactive It must be quarterly budgeted It must be reviewed at the company policy level None of the choices.

and customer green. the valid types of GREEN are (choose all that apply): A. The three types of GREEN are scientific green. or from cradle to grave. stock green scientific green government green customer green None of the choices. government green. C. D. ANSWER: B C D The concept of Green Supply Chain Management (GSCM) covers every stage in manufacturing. Talking about GSCM. E.125. B. 192 Notes: . from product design to recycle.

Planning & Operation (3 rd) by Chopra and Meindl (2007) 193 Notes: . Lambert. Stock and Ellram (2006) Supply Chain Management: Strategy. We accordingly create this special module with more questions for your in-depth practice and review. Jacobs and Aquilano (2006) Fundamentals of Logistics Management by Grant. Answers to the review questions were defined through referencing the following reference textbooks: Global Logistics Management (2 rd) by Kent Gourdin (2006) Operations Management for Competitive Advantage (11 ed) by Chase.Additional Practice Review Questions The CSCP exam is highly comprehensive.

194 Notes: .Additional Review Questions Module 1: Question 1: A large percentage of a railroad’s total costs are: Possible Choices: fixed in the short run fixed in the long run but not so in the short run fixed in the short run and in the long run None of the choices.

2006 .89 “GLOBAL LOGISTICS 195 Notes: .Answer: fixed in the short run Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 2: Rail companies are technically: Possible Choices: monopolistics not monopolistics highly competitive. None of the choices. 196 Notes: .

Answer: monopolistics Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .89 “GLOBAL LOGISTICS 197 Notes: .

Question 3: Road haulage offers MOST flexibility to shippers. Possible Choices: True False True only in the US True only outside of the US 198 Notes: .

91 “GLOBAL LOGISTICS 199 Notes: . 2006 .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 4: Pipelines are ALWAYS the MOST efficient mode of transport for certain commodities. Possible Choices: True False True only in the US True only outside of the US 200 Notes: .

Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .93 “GLOBAL LOGISTICS 201 Notes: .

Question 5: Air freight can SOMETIMES be way more cost effective than other shipment modes. Possible Choices: True False True only when insurance coverage is not a concern. 202 Notes: .

93 “GLOBAL LOGISTICS 203 Notes: .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .

Question 6: Commercial water transport would occur only in inland waterways. Possible Choices: True False 204 Notes: .

94 “GLOBAL LOGISTICS 205 Notes: .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .

Possible Choices: True Not so true in the US Not so true in the UK False 206 Notes: .Question 7: Deregulation takes place MOSTLY for domestic transport only.

Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .97 “GLOBAL LOGISTICS 207 Notes: .

208 Notes: .Question 8: Which of the following involves placing US customs in major seaports worldwide? Possible Choices: CSI AIS ISPS None of the choices.

102 “GLOBAL LOGISTICS 209 Notes: . 2006 .Answer: CSI Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Possible Choices: True False 210 Notes: .Question 9: MOST warehouses serve as points of gathering.

Answer: False Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .134 “GLOBAL LOGISTICS 211 Notes: .

Possible Choices: True True only for expensive products False 212 Notes: .Question 10: Centralizing warehouses can cut inventory holding costs in general.

2006 .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.135 “GLOBAL LOGISTICS 213 Notes: .

214 Notes: .Question 11: Which of the following are the valid kinds of facility location techniques (choose all that apply): Possible Choices: optimization simulation heuristics None of the choices.

heuristics Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .137 “GLOBAL LOGISTICS 215 Notes: . simulation.Answer: optimization.

Possible Choices: True False 216 Notes: .Question 12: Private warehousing has the risk of sub-optimization.

139 “GLOBAL LOGISTICS 217 Notes: . 2006 .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

218 Notes: .Question 13: The basic kinds of packages are (choose all that apply): Possible Choices: consumer package industrial package liquid package solid package None of the choices.

Answer: consumer package. industrial package Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .156 “GLOBAL LOGISTICS 219 Notes: .

220 Notes: .Question 14: The main kinds of bar code scanners are (choose all that apply): Possible Choices: automatic handheld laser radio None of the choices.

2006 . handheld Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.160 “GLOBAL LOGISTICS 221 Notes: .Answer: automatic.

Question 15: Inbound logistics is often being referred to as: Possible Choices: materials management source management procurement management source package management None of the choices. 222 Notes: .

2006 .185 “GLOBAL LOGISTICS 223 Notes: .Answer: materials management Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

224 Notes: . Possible Choices: True False True only without a centralized warehouse True only with a centralized warehouse None of the choices.Question 16: Inventory concerns are virtually the SAME for raw materials and for finished goods.

2006 .Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.187 “GLOBAL LOGISTICS 225 Notes: .

226 Notes: . cost of service pricing: Possible Choices: is usually difficult to implement is usually very easy to implement is highly regulated None of the choices.Question 17: Concerning shipping.

2006 .114 “GLOBAL LOGISTICS 227 Notes: .Answer: is usually difficult to implement Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 18: DRP begins with: Possible Choices: supplier demand customer demand warehouse demand None of the choices. 228 Notes: .

2006 .Answer: customer demand Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.77 “GLOBAL LOGISTICS 229 Notes: .

Question 19: DRP is a _________ approach to demand satisfaction. Possible Choices: push pull 230 Notes: .

77 “GLOBAL LOGISTICS 231 Notes: . 2006 .Answer: push Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 20: Inventory that no one wants is: Possible Choices: speculative stock seasonal stock stop stock halt stock dead stock 232 Notes: .

2006 .65 “GLOBAL LOGISTICS 233 Notes: .Answer: dead stock Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 21: Which of the following is NOT an example of inventory holding costs? Possible Choices: theft insurance handling taxes None of the choices. 234 Notes: .

Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .Answer: None of the choices.65 “GLOBAL LOGISTICS 235 Notes: .

Question 22: With new technologies. demand can be made known with close to absolute certainty. Possible Choices: True False 236 Notes: .

64 “GLOBAL LOGISTICS 237 Notes: . 2006 .Answer: False Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

Question 23: Logistics outsourcing is ONLY common in manufacturing businesses. Possible Choices: True False 238 Notes: .

219 “GLOBAL LOGISTICS 239 Notes: .Answer: False Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .

240 Notes: .Question 24: Foreign trade zones can ease impact of: Possible Choices: market fluctuations demand uncertainty customs regulations None of the choices.

2006 .Answer: customs regulations Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.214 “GLOBAL LOGISTICS 241 Notes: .

None of the choices.Question 25: Which of the following correctly describe Center Led Procurement? Possible Choices: it covers different purchasing models it is a US only model it is a EU only model it emphasizes decentralization. 242 Notes: .

Answer: it covers different purchasing models Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .198 “GLOBAL LOGISTICS 243 Notes: .

180 “GLOBAL LOGISTICS 244 Notes: . requires legal approval prior to use. None of the choices.Question 26: Multidimensional barcode: Possible Choices: is replaced by RFID. 2006 . Answer: offers additional capacity Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. is never popular in the US offers additional capacity.

245 Notes: .Question 27: Which of the following is a standard EDI language? Possible Choices: EDIFACT EDICODE EDIXML None of the choices.

Answer: EDIFACT Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.178 “GLOBAL LOGISTICS 246 Notes: . 2006 .

247 Notes: .Question 28: The biggest constraint affecting EDI use is: Possible Choices: lack of standard lack of security lack of support None of the choices.

Answer: lack of standard Reference page number: GOURDIN’S MANAGEMENT (2 ED)”. 2006 .175 “GLOBAL LOGISTICS 248 Notes: .

Possible Choices: True False 249 Notes: .Question 29: Centralization of warehouse may not work for country specific products.

Answer: True Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.136 “GLOBAL LOGISTICS 250 Notes: . 2006 .

Question 30: In terms of transportation pricing. value-of-service aims at setting: Possible Choices: upper limit minimum charges fair pricing average pricing None of the choices. 251 Notes: .

115 “GLOBAL LOGISTICS 252 Notes: . 2006 .Answer: upper limit Reference page number: GOURDIN’S MANAGEMENT (2 ED)”.

tradeoffs that need to be dealt with would include (choose all that apply): Possible Choices: capacity inventory backlog lost sales None of the choices.Additional Review Questions Module 2: Question 1: When conducting aggregate planning. 253 Notes: .

221 254 Notes: . PLANNING & OPERATION (3 RD)”. backlog. inventory. 2007 . lost sales Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.Answer: capacity.

255 Notes: . a chase strategy would mean: Possible Choices: using utilization as the lever using capacity as the lever using demand as the lever using product characteristics as the lever None of the choices.Question 2: When conducting aggregate planning.

Answer: using capacity as the lever Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”.221 256 Notes: . 2007 .

257 Notes: .Question 3: When conducting aggregate planning. a capacity strategy would mean: Possible Choices: using utilization as the lever using capacity as the lever using inventory as the lever using product characteristics as the lever None of the choices.

222 258 Notes: . PLANNING & OPERATION (3 RD)”. 2007 .Answer: using utilization as the lever Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

a level strategy would mean: Possible Choices: using utilization as the lever using capacity as the lever using inventory as the lever using demand characteristics as the lever None of the choices.Question 4: When conducting aggregate planning. 259 Notes: .

Answer: using inventory as the lever Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 .222 260 Notes: . PLANNING & OPERATION (3 RD)”.

Question 5: Which of the following are the valid goals of aggregate planning (choose all that apply): Possible Choices: maximizing profits meeting demand maintaining customer loyalty maintaining supplier loyalty None of the choices. 261 Notes: .

222 262 Notes: .Answer: maximizing profits. meeting demand Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”. 2007 .

Question 6: Aggregate planning is particularly important when (choose all that apply): Possible Choices: capacity is limited lead times are long capacity is not limited lead times are short None of the choices. 263 Notes: .

2007 . lead times are long Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”.Answer: capacity is limited.234 264 Notes: .

Question 7: You may conclude that demand forecasts form the basis of all supply chain planning. Possible Choices: True False 265 Notes: .

2007 . PLANNING & OPERATION (3 RD)”.187 266 Notes: .Answer: True Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

267 Notes: . Possible Choices: True True only for tangible goods True only for consumer goods False None of the choices.Question 8: Long term forecasts are usually less accurate than short term forecasts.

2007 .188 268 Notes: .Answer: True Reference page number: Chopra & Meindl’s “Supply Chain Management: Strategy. Planning & Operation (3 rd)”.

Question 9: Aggregate forecasts are usually less accurate than disaggregate forecasts. Possible Choices: True True only for tangible goods True only for consumer goods False None of the choices. 269 Notes: .

Answer: False Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.188 270 Notes: . 2007 . PLANNING & OPERATION (3 RD)”.

Possible Choices: True True only for tangible goods True only for consumer goods False None of the choices.Question 10: Qualitative forecasts are usually less subjective than quantitative forecasts. 271 Notes: .

Answer: False Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 . PLANNING & OPERATION (3 RD)”.190 272 Notes: .

273 Notes: .Question 11: Causal forecast assumes the existence of: Possible Choices: correlations. product maturity. supply leak None of the choices.

PLANNING & OPERATION (3 RD)”. Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.Answer: correlations. 2007 .190 274 Notes: .

275 Notes: .Question 12: Qualitative forecast would be appropriate when: Possible Choices: you have sufficient historical data you do not have much historical data you have very tight budget None of the choices.

Answer: you do not have much historical data Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 . PLANNING & OPERATION (3 RD)”.190 276 Notes: .

277 Notes: .Question 13: Demand forecasting focuses on predicting: Possible Choices: the systematic component of demand the non-systematic component of demand the systematic component of supply the non-systematic component of supply None of the choices.

193 278 Notes: . PLANNING & OPERATION (3 RD)”. 2007 .Answer: the systematic component of demand Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

Question 14: Deseasonalized demand represents: Possible Choices: demand with seasonal fluctuations biased demand. demand without seasonal fluctuations None of the choices. 279 Notes: .

195 280 Notes: . 2007 . PLANNING & OPERATION (3 RD)”.Answer: demand without seasonal fluctuations Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

281 Notes: .Question 15: Adaptive forecasting would require: Possible Choices: computer modeling seasonalized demand visual demand representation updates after each observation None of the choices.

2007 .198 282 Notes: .Answer: updates after each observation Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”.

283 Notes: .Question 16: The Holt’s model assumes: Possible Choices: seasonality no seasonality no trend pure randomness None of the choices.

200 284 Notes: . PLANNING & OPERATION (3 RD)”. 2007 .Answer: no seasonality Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

285 Notes: .Question 17: Forecast errors could increase when product life cycles are: Possible Choices: known short long None of the choices.

Answer: short Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”. 2007 .212 286 Notes: .

Question 18: Demand pooling may mitigate forecast risk. Possible Choices: True False 287 Notes: .

2007 .Answer: True Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.212 288 Notes: . PLANNING & OPERATION (3 RD)”.

289 Notes: .Question 19: Time series methods are either: Possible Choices: static or adaptive static or dynamic static or random None of the choices.

PLANNING & OPERATION (3 RD)”.213 290 Notes: .Answer: static or adaptive Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 .

Question 20: The Winter’s model for forecasting is: Possible Choices: largely obsolete seasonality corrected pure random never reliable None of the choices. 291 Notes: .

PLANNING & OPERATION (3 RD)”.Answer: seasonality corrected Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 .208 292 Notes: .

Question 21: Supply chain network design should cover (choose all that apply): Possible Choices: facility role facility location capacity location market and supply allocation None of the choices. 293 Notes: .

114 294 Notes: . 2007 . PLANNING & OPERATION (3 RD)”.Answer: facility role. facility location. capacity location. market and supply allocation Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

295 Notes: .Question 22: Market and supply allocation may affect (choose all that apply): Possible Choices: production inventory transportation customer demand None of the choices.

115 296 Notes: . transportation Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 . PLANNING & OPERATION (3 RD)”. inventory.Answer: production.

297 Notes: .Question 23: Supply chain network design should consider which of the following macroeconomic factors (choose all that apply): Possible Choices: company culture tax tariff exchange rate None of the choices.

exchange rate Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 . tariff.Answer: tax.117 298 Notes: . PLANNING & OPERATION (3 RD)”.

Question 24: Exchange rate risks may be best handled through: Possible Choices: varying demand varying production schedule varying capacity using financial instruments None of the choices. 299 Notes: .

118 300 Notes: . PLANNING & OPERATION (3 RD)”. 2007 .Answer: using financial instruments Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

301 Notes: .Question 25: Which of the following would lead to competitors locating close to each other? Possible Choices: negative externalities positive externalities negative internalities positive internalities None of the choices.

PLANNING & OPERATION (3 RD)”.Answer: positive externalities Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.119 302 Notes: . 2007 .

Possible Choices: True False 303 Notes: .Question 26: Inventory costs would increase when the number of facilities increases.

PLANNING & OPERATION (3 RD)”.Answer: True Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. 2007 .121 304 Notes: .

Question 27: Quality of life could be an important issue related to productivity in a facility location. Possible Choices: True False True only for centralized SCM True only for decentralized SCM 305 Notes: .

142 306 Notes: . PLANNING & OPERATION (3 RD)”. 2007 .Answer: True Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.

Possible Choices: True False 307 Notes: .Question 28: Tax incentive should NOT be a major factor to consider when choosing facility location.

Answer: False Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY.142 308 Notes: . 2007 . PLANNING & OPERATION (3 RD)”.

Question 29: Gravity location models emphasize: Possible Choices: control cost minimization transport cost minimization setup cost minimization admin cost minimization 309 Notes: .

143 310 Notes: .Answer: transport cost minimization Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. PLANNING & OPERATION (3 RD)”. 2007 .

Answer: rail service. PLANNING & OPERATION (3 RD)”. road access Reference page number: CHOPRA & MEINDL’S “SUPPLY CHAIN MANAGEMENT: STRATEGY. utilities. congestion.Question 30: Relevant infrastructure elements to consider when locating a facility may include (choose all that apply): Possible Choices: rail service congestion utilities road access None of the choices.119 311 Notes: . 2007 .

Additional Review Questions Module 3: Question 1: Materials Management duties include (choose all that apply): Possible Choices: procurement inventory control receiving warehousing None of the choices. 312 Notes: .

174 OF LOGISTICS 313 Notes: . warehousing Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .Answer: procurement. inventory control. receiving.

Question 2: With JIT delivery you may greatly reduce the need for: Possible Choices: scheduling master scheduling BOM development inbound warehousing None of the choices. 314 Notes: .

176 OF LOGISTICS 315 Notes: . 2006 .Answer: inbound warehousing Reference page number: “FUNDAMENTALS MANAGEMENT”.

316 Notes: .Question 3: Which of the following is a primary duty of the material disposal function? Possible Choices: disposal classification inbound logistics master scheduling disposal forecasting None of the choices.

Answer: disposal classification Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .179 OF LOGISTICS 317 Notes: .

318 Notes: .Question 4: 5-S is a concept for: Possible Choices: TQM JIT Lean SCM None of the choices.

2006 .Answer: TQM Reference page number: “FUNDAMENTALS MANAGEMENT”.181 OF LOGISTICS 319 Notes: .

Question 5: Service levels of the materials management function may be measured by (choose all that apply): Possible Choices: order cycle time order fill rate production delay stock out None of the choices. 320 Notes: .

Answer: order cycle time.183 OF LOGISTICS 321 Notes: . order fill rate. production delay. 2006 . stock out Reference page number: “FUNDAMENTALS MANAGEMENT”.

Possible Choices: True False 322 Notes: .Question 6: A high level of inventory with a uniform production schedule would be better than a fluctuating schedule with less inventory.

2006 .187 OF LOGISTICS 323 Notes: .Answer: True Reference page number: “FUNDAMENTALS MANAGEMENT”.

324 Notes: .Question 7: Uneven demand may be coped with through: Possible Choices: leveling the production schedule leveling the production facilities leveling the production capacities None of the choices.

Answer: leveling the production schedule Reference page number: “FUNDAMENTALS MANAGEMENT”.187 OF LOGISTICS 325 Notes: . 2006 .

Question 8: Which of the following is a drawback of MRP I in terms of material cost? Possible Choices: it cannot really optimize material acquisition cost it can double or triple the material acquisition cost there is no drawback in this regard None of the choices. 326 Notes: .

189 OF LOGISTICS 327 Notes: .Answer: it cannot really optimize material acquisition cost Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .

Question 9: Which of the following is a drawback of MRP I in terms of transportation cost?

Possible Choices:
it cannot really optimize material transportation cost it can double or triple the material transportation cost there is no drawback in this regard None of the choices.

328

Notes:

Answer: it cannot really optimize material transportation cost Reference page number: “FUNDAMENTALS MANAGEMENT”, 2006 - 189 OF LOGISTICS

329

Notes:

Question 10: MRP II would allow for:

Possible Choices:
lower inventory turnover even inventory turnover uneven inventory turnover higher inventory turnover None of the choices.

330

Notes:

Answer: higher inventory turnover Reference page number: “FUNDAMENTALS MANAGEMENT”, 2006 - 190 OF LOGISTICS

331

Notes:

Question 11: MRP II can reduce the need of expediting shipments.

Possible Choices:
True False True only when lead time is real long True only when lead time is real short None of the choices.

332

Notes:

Answer: True Reference page number: “FUNDAMENTALS MANAGEMENT”, 2006 - 191 OF LOGISTICS

333

Notes:

Question 12: Gravity flow storage racks are often used for storing:

Possible Choices:
high demand items low demand items custom made items small parts large parts

334

Notes:

Answer: high demand items Reference page number: “FUNDAMENTALS MANAGEMENT”, 2006 - 263 OF LOGISTICS

335

Notes:

Question 13: Modular storage drawers are often used for storing: Possible Choices: high demand items low demand items custom made items small parts large parts 336 Notes: .

Answer: small parts Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .263 OF LOGISTICS 337 Notes: .

338 Notes: .Question 14: Using AS/RS can have which of the following benefits (choose all that apply): Possible Choices: reduced labor cost reduced floor space increased inventory accuracy reduced material cost None of the choices.

reduced floor space. increased inventory accuracy Reference page number: “FUNDAMENTALS MANAGEMENT”.Answer: reduced labor cost. 2006 .269 OF LOGISTICS 339 Notes: .

Question 15: A carousel is a form of: Possible Choices: AS/RS RFID Bluetooth ERP DRP-II None of the choices. 340 Notes: .

272 OF LOGISTICS 341 Notes: . 2006 .Answer: AS/RS Reference page number: “FUNDAMENTALS MANAGEMENT”.

Possible Choices: True False 342 Notes: .Question 16: AGVSs are typically driverless.

Answer: True Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .274 OF LOGISTICS 343 Notes: .

Question 17: Reverse logistics is sometimes being referred to as: Possible Choices: red logistics green logistics blue logistics None of the choices. 344 Notes: .

Answer: green logistics Reference page number: “FUNDAMENTALS MANAGEMENT”. 2006 .283 OF LOGISTICS 345 Notes: .

End of Module 346 Notes: .

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