Question

21.     Which of the following statements regarding capacity is correct?

A) Capacity is the maximum output that could be produced per time period
B) The bottleneck station determines the capacity of the system

C)  Capacity can only be measured in manufacturing

            D)  All of the above

            E)  Only (A) and (B) above.

22.       Which of the following most closely describes dependent demand?

A)     Demand generated by suppliers.

B)      Estimates of demand using regression analysis of independent variables.

C)      Demand of components derived from the demand of finished products.

D)     Demand for finished products by external customers.

23. In capacity planning, strategies used to influence the supply of goods or services include:
            A) Sales promotion
            B) Reservations and appointments
            C) Use of overtime
            D) All of the above.

            
24.  Which of the following statements is true?

I.  When periodic review inventory (P) control system is used, the reorder quantity is fixed.
II. When the continuous review inventory (Q) control system is used, the time interval for checking inventory is fixed.

            A) Only Statement I is true                
B)  Only Statement II is true

            C) Both statements are true

            D) Both statements are false

25.  A company’s policy is to meet its quarterly demand requirements by changing production levels to match the projected demand for each period.  

            This aggregate planning strategy is called:
A)  Level strategy                                 
B)  Chase strategy
C)  Mixed strategy

            E). None of the above.

26.  31. Under exponential smoothing, if we want the forecast for the next period to be closer to current period forecast, the value of alpha (a) should be:

A) Large
B) Small
C) Moderate
D) -0
E)  The value of alpha does not matter.

27.  ______ is a system used to coordinate decisions along the supply chain by integrating all organizational functions including operations,

         marketing and sales, accounting, finance and human resource management.

         A) Materials Requirements Planning
         B) Independent Demand Inventory Management
         C) Enterprise Resource Management

         D) Dependent Demand Inventory Management
         D) None of the above.

         

28.  An inventory management system where the same quantity is ordered whenever the

      reorder point is reached is called:  

            A)  JIT system.

B)  Aggregate production planning system

C)  Continuous review system or Q-system
D)  Kanban system
E)  Periodic review system or P-system

29.  The main purpose of ABC inventory management system is:

A)  to determine the share of low value items in the total inventory.

B) to enable proper inventory control using the 80/20 rule.  

C)  to determine the share of high value items in the total inventory.

            D)  none of the above.

30. Under a level strategy of aggregate planning, variations in demand are met by:
            A) Varying regular production level each period as needed
            B) Accumulating inventory or using existing inventory as needed
             C)  Using overtime
            D) A, B and C above.
            E) Only A and B

31.  Facilities planning and facilities decisions:

A). Are for capacity decisions for the medium-range period.
B) Have no impact on other capacity decisions.
C) Are long-term capacity decisions.
D)  Usually cover one year or less

32.  Subcontracting and hiring are approaches used to influence ____________   in developing aggregate production plans.   

A) demand
B) supply
C) supply chain
D) None of the above.

33. A major difference between scheduling and facilities planning is that:

A) The former (i.e., scheduling) refers to long-range capacity while the latter (facilities planning) refers to short-range capacity.
B) The former is concerned with allocating available resources in contrast to the latter which is concerned with resource acquisition.

C) The former refers to short range and the latter refers to medium range capacity planning.  
D) The former refers to short-range and the latter refers to long range capacity planning.  
E) None of the above.

34. Suppose the cost of adding capacity is very high.  What type of capacity cushion strategy is a company likely to use in this situation?  

A) Small cushion
B)  Large cushion
C) Moderate cushion
D) None of the above

35.  To plan for its production requirements, Company A uses level strategy and Company B uses Chase strategy. Which of the following is likely to be true in Company B compared to Company A?

A)  Employee turnover will be lower in Company B.
B) Employee hiring and firing costs will be higher in Company B.
C)  Production quantity for each period will be constant in Company B.
D)  All of the above are true.
E)  Both (B) and (C) are true.  

36. Dependent demand inventory consists of:
           A) Inventory whose demand is derived from independent demand items
           B) Inventory that is independent of any known rules of demand and supply
           C) Inventory whose demand is determined by the marketplace

    D) Inventory demanded by end users of a firm’s finished products

37.  Which of the following statements is true about independent demand control system?

            I.  When periodic review inventory control system is used, the reorder quantity is fixed.

            II. When the continuous review inventory control system is used, the time interval for checking inventory is fixed.

            A. Only Statement I is true        C. Both statements are true
B. Only Statement II is true       D. Both statements are false

38. Materials handling, transportation, and warehousing decisions fall under:

A. Purchasing management
B. Logistics management
C. Demand chain management
D. QFD
E. None of the above

39.  Suppose we are using cash-to-cash cycle time to evaluate the supply chain performance of two companies, A and B.  Suppose the cash-to-cash cycle time for A is 32 days and the cash-to-cash cycle time for B is 24 days.  Which company is performing better based on cash-to-cash cycle time measure?

A.  Company A
B.  Company B
C.  Both are underperforming
D.  Cannot be determined.

40. A company used to purchase a particular component that it needs for the final assembly of its product from a supplier.  It has now started producing the component in its own facilities.  This is an example of:

1. Forward vertical integration.
2. Outsourcing

C. Backward vertical integration

4. Increasing organizational flexibility.
5. None of the above

41.  In using the exponential method to forecast demand, the value of alpha (a) can be any of the following EXCEPT ____.

1.    0.2                                   D.   0

B.     0.5                                   E.  -0.2                         

            C.     1.0
  

42.  An Operations Analyst for Toledo Inc. uses cash-to-cash cycle method to track how quickly it collects its accounts receivable from its customers compared to the time the company takes to pay its suppliers.  Suppose customers take 25 days on average to pay their outstanding bills to Toledo.  Also suppose Toledo Inc. takes 80 days on average to pay its suppliers.  Further, suppose the company carries 40 days of inventory on average.  What is the company’s average cash-to-cash cycle time?

A) 65
B) 145

C)  -105

D) -15

D)  None of the above

Answer 1

Q(21)

So capacity is mainly defined as the maximum output that something can produce in a specific period of time, however, the bottleneck station mainly decides about the capacity of a system.

Answer - Only (A) and (B) above.

Q(22)

Dependent demand is mainly defined as the demand that has been generated because of the demand of some other product thus it can be either positive or negative demand, depending on whether it act as substitute or complement with respect to other product. thus demand for both the products can either move in either direction

Answer - Demand of components derived from the demand of finished products.

Q(23)

So a Capacity planning is mainly define as the process of determining about the production capacity that is needed by an organization to meet the changing demands for its products in the market, thus while designing the capacity for an organization we mainly look on the availilability of the overtime resources in the form of worker we have

Answer - Use of overtime

Q(24)

So by looking at both the statement, we can say both are true because in fixed periodic review inventory control system we always order a predetermined quantity of same products every month whatever the amount of demand we have while in the case of continuous review system we always look on the inventory after a certain period of time

Answer - Both statements are true

Q(25)

So in the case of chase strategy, its a lean production process in which firms always have a chasing strategy to meet the demand set by the market. in this Production process supply by the firm is set to match demand and thus the firm doesn't have any carry leftover products for the next period.

Answer - Chase strategy

Q(26)

Exponential smoothing mainly defined as the rule of thumb, as its a technique which is mainly used for smoothing the time series data of the past production by using the exponential window function

Answer - Moderate

Q(27)

So ERM mainly consists of a software that can be used by an enterprise to manage their resources access around all of its network resources efficiently. Thus ERM software generally provides user to look into how to manage the enterprises' resources effectively.

Answer - Enterprise Resource Management