Which Manufacturing Process Can Produce Many Different Product Varieties But has a Long Customer Experienced Lead Time?


What is the Mean Absolute Deviation (MAD)?


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Answers to the following multiple choice questions directly into CANVAS.

1. A Supply Chain is best described by which of the following:

a) A group of cooperative carriers

b)  A group of collaborative companies

c) A formal association of competitive companies

d) Two firms who create a strategic alliance


2. Which of the following best describes an integrative supply chain process?

a) Something that links together independent parts

b) A concept that identifies independent parts

c) A conglomeration of functions

d) The fusion of critical components of a supply chain


3. The Supply Chain Concept

a) Is very new and considered cutting edge technology.

b) Is highly dependent of computerization.

c) Is not always well understood by senior managers.

d) Developed from the previous Physical Distribution concept.


4. Which of the following is not part of the Supply Chain network?

a) Plants

b) Retail Stores

c) Terminals

d) Cross-Docking operations


5. Collaboration is the act of:

a)– Sharing secret information

b) Working with competitors

c)Integrating a supply chain

d)Legal in selected supply chain arrangements


6. What is dwell time?

a) A key component of system design

b) The ratio of asset idle time to total time required to complete a mission**

c) The total time inventory is waiting to be processed.

d) A key concept in manufacturing efficiency


7. A logistics performance cycle is:

a) A format for improved measurement of cost and service.
b) The basic unit of supply chain design and operational control
c) Is an important form of transportation measurement
d) Is typically echeloned


8. Cross-dock facility is:

a) Flow of goods through a facility
b) Typically found in the beverage industry facilities
c) Is a specialized warehouse facility that performs value-added services
d)Dedicated to the support of an integrated service provider. facility


9. Service reliability is best described as:

a)The measure of availability that is most critical in system design
b)Deals with speed and consistency of order cycle performance.
c) The quality dimension of logistics performance
d) The key attribute of transportation integration


10. The work of logistics involves:
a)Order processing, inventory, and manufacturing
b) Inventory, transportation, manufacturing and procurement
c)Manufacturing, customer accommodation, and purchasing
d)Transportation, inventory, order processing, warehousing, and facility network design


11. In general, offering consumers higher levels of service output in terms of greater spatial convenience or product variety:

a) has little impact on logistics and distribution cost
b)results in lower logistics and distribution cost
c). results in higher logistics and distribution cost
d) does not impact configuration of a supply chain


12. The most exacting measure of logistics performance regarding availability is:
a). Stock out frequency
b). orders shipped complete
c). fill rate
d). average number of items on hand


13. Providing perfect orders to a customer would be a key aspect of which customer accommodation focus?
a) customer service
b) customer satisfaction
c) customer success
d). customer happiness


14. Jones Company makes every effort to consistently meet the expectations of all of its customers. It is clear that Jones company is focused on:
a) customer service
b) customer satisfaction
c)customer happiness
d) customer success


15. Generally speaking, procurement can have a greater impact on the net income of a company than most other departments. This is due to the fact that:
a) manufacturing relies on purchasing to identify high-quality suppliers
b) suppliers want to reduce their prices to their customers
c) marketers don’t care about net income
d)purchased materials and supplies frequently represent the largest costs in a Company


16. In procurement, Total Cost of Ownership includes all of the following except:

a) field failures of purchased items
b) consideration of the impact of supplier quantity discounts
c) cost of order placement
d). In fact, total cost of ownership includes all of the above.


17. A plant needs to purchase an equipment to produce hydrogen for its operations. Purchase of the equipment cost $100,000. An additional in-house variable cost of $50 will be incurred per ton of hydrogen. The plant can purchase the hydrogen from an outside source (outsource) for a cost of $ 100 per ton. The plant should outsource the production of hydrogen if:

a) The demand for hydrogen is more than 2,000 tons.
b) The demand for hydrogen is more than 1,000 tons.
c)The demand for hydrogen is less than 1,000 tons.
d)The demand for hydrogen is less than 2,000 tons.


18. Supply base reduction (volume consolidation)

a). has potential benefits for suppliers as well as for buyers.
b). involves early supplier involvement in product design.
c). puts the buyer at a negotiating disadvantage.
d). has little potential for savings for buyers.


19. John Jones told his friend that his VCR is over 20 years old while most VCRs only last about 10 years. He is focusing on which aspect of quality?

a) features
b) reliability
c) performance
d) durability


20. Which of the following manufacturing approaches would describe most consumer products, such as food, razor blades, over the counter drug, etc.?

a) PTO (Procure to order)
b). MTO (Make to order)
c). ATO (Assemble to order)
d). MTS (Make to stock)


21. Which manufacturing process can produce many different product varieties but has a long customer experienced lead time?

a) Line flow
b) Repetitive flow
c) Continuous flow
d) Batch operation


22. Which of the following series of ISO quality standard is primarily concerned with environmental management?

a) ISO 9,000

b) ISO 14,000.

c) ISO 22,000.

d) ISO 2701


23. Which of the following is NOT a benefit of S&OP?

a) the S&OP process eliminates the need to have finished goods inventory.
b) the S&OP process results in better customer service
c)the S&OP process provides better visibility into future capacity problems
d)the S&OP process provides a single set of numbers to run the business.


24. Naïve forecast for any period is equal to the

a) previous period’s forecast
b) average actual demand of all available previous periods
c) previous period’s actual demand
d) average forecast of all available previous periods


25. For the data (1,200), (2,220), (3,220), (4,266), (5,318), where the first number in parenthesis is period and the second number is the actual demand. Determine, the exponentially smoothed forecast for period 6 (F6). Assume the forecast for period 5 (F5) = 200 and α=0.2.

a) 206.5
b) 306.3
c) 223.6
d) 305.7

Use the following table to answer questions 26 :

Period Actual Demand Forecast Demand Error Absolute Value
1 800 1100 -300 300
2 1200 1000 200 200
3 1400 1500 -100 100


26. What is the Mean Absolute Deviation (MAD)?

b) 225
c) -66.67
d) 1200

Answer questions 27 to 31 based on the following problem:

The table below shows the number of tourist annually visiting a city during the summer month along with bus transit ridership. (USE THE EXCEL TO SOLVE THIS PROBLEM)


27. Plot the graph for X & Y. What is the relationship between X and Y.

a) There appears to be no relationship between X and Y
b) There appears to be a positive relationship between X and Y
c) There appears to be negative relationship between X and Y.
d) Cannot infer any pattern from the data.


28. Using the regression model Y = a + bX developed from Excel, which of the following will be the forecasted ridership (Y) if 10 million tourists (X) are expected in a month (choose the nearest value after rounding to two decimal places.

a) 5.06 million

b) 15.90 million.

c) 2.10 million.

d) 5.22 million.


29. The standard error of the estimate is:
a) 0.269

b) 0.022

c) 2.75E-30

d) 0.407


30. The coefficient of correlation (R) is given by:

a) 0.917

b) 0.407

c) 0.650

d) 0.840


31. The coefficient of determination (R2) is given by:

a) 0.050

b) 0.022

c) 0.950

d) 0.840


32. Jones Company has calculated that the EOQ for a particular item is 1,000 units. However, Jones does not have enough capital to order that many units each time, so it only orders 250 units at a time. This will result in:

a. Higher annual inventory carrying cost than ordering the EOQ quantity
b. Lower annual inventory carrying cost than ordering the EOQ quantity
c. Lower annual ordering cost than ordering the EOQ quantity
d. Cannot be determined


33. Safety stock exists for which of the following reasons?

a. To allow less expensive purchases by buying more

b. To allow for transportation time

c. To provide protection against the uncertainties of supply and demand

d. None of the above


34. Cost of capital or opportunity cost is one of the major “Carrying Costs.” Another example of carrying cost is?

a. Cost of obsolescence and loss
b. Taxes
c. Insurance
d. All of the above.


35. What happens to the EOQ when the unit cost increases (assuming all other variables remain the same)?

a. EOQ increases
b. EOQ decreases
c. EOQ remains the same
d. None of the above (need more information)

Answer questions 36 and 39 based on the following problem:

Cooper Retail Company has an annual demand of 12,000 for one of its product. The lead time for the supplier averages 5 days. The daily demands and lead times are normally distributed with a combined standard deviation (σc) of demand during lead time of 10 units. The cost of each product is $50 and inventory carrying cost is 20%. The Company operates 300 days each year (please round your answers to the nearest whole number).

36. If the cost for placing an order is $75. What is the EOQ for this product?

a. 283.

b. 425.

c. 190.

d. 600.


37. The management decides it wants to offer a 97.5% service level (SL) to its customers (allowing only 2.5% stock outs). How much safety stock of the product should Cooper carry?

a. 20.

b. 17.

c. 30.

d. 25.


38. The Materials Manager wants to determine a reorder point (R) for this product. Due to the variability in demand and lead time, she wants to build a safety stock into R. Which of the following is the desired value of R for 97.5% SL?

a. 200.
b. 220.
c. 217.
d. 230.


39.Suppose you tell management at Cooper Retail Company to maintain the same EOQ but it should raise safety stock to the six sigma (σ) SL. If Cooper decides to do this, what is the additional inventory carrying cost of only the safety stock over the current SL of 97.5%?

a. $2,125.
b. $600.
c. $400.
d. $1,566


40. Which of the following statements about the difference between MRP and DRP is incorrect?

a. MRP is generally used for dependent demands while DRP is applied to independent demands.
b. MRP is driven by supply chain demand while DRP is driven by a master production schedule.
c. MRP assumes responsibility for incoming and WIP inventory while DRP responsibilities begin when the finished goods reach the warehouse.
d. All the above statements are correct.


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