Deck 12: Materials Management Impacts All Supply Chain Participants

Question 1

Materials management involves organizing and coordinating all management functions that are responsible for every aspect of materials movements and transformations.

Answer 1

True

Question 2

Thailand has not become a large source of labor-intensive production for the U.S.A.

Answer 2

False

Question 3

Order errors include materials that do not meet blueprint (and other) specifications.To correct these problems requires surcharges which result in overpriced materials.

Answer 3

False

Question 4

Materials management information systems (MMIS) provide online information about stock levels for work-in-process and on-time deliveries.

Question 5

Good turnover brings large rewards and a reputation for purchasing success.

Question 6

DOI (days of inventory) is a measure that is equivalent to dividing total stock on-hand by the average demand per day.

Question 7

Logistics which are the tactics of MM production and distribution should always be in harmony with the company's strategies.

Question 8

The 2002 longshoremen's port strike in Los Angeles epitomized the problem of (port) management not knowing how to convince unions that the use of technology for very labor-intensive work could be in everyone's best interest.

Question 9

The performance of purchasing agents in the supply chain is related to the speed with which goods move out of the warehouse and off the shelves in relation to the amount of inventory that is on hand to be drawn down.

Question 10

Purchasing departments in the twentieth century were best described as information-gathering agencies.

Question 11

Flow shops require continuous supply of specific sets of unchanging materials.

Question 12

One widely-used information planning system is called material requirements planning (MRP).

Question 13

Some years ago,Brazil's annual inflation rate had been officially estimated at 6,000 percent and unofficially at 12,000 percent.This situation has been corrected.The rate was about 11.5 percent in March 2008.

Question 14

The price-tag approach has been thrown out in favor of long-term relationships with special,trusted suppliers.

Question 15

Purchasing agents and their buying organizations,have the traditional role of bringing needed supplies into the organization.

Question 16

Quality standards for components and subassemblies do not have to be clearly set by the materials manager for the producer.

Question 17

Flow shops,like job shops,have a varied and changing set of materials requirements.

Question 18

Companies that can compete globally have been achieved an organizational integration of the information required for materials control on a global basis.

Question 19

Raw materials have value added by the operations.Mining,growing,refining,cleaning,packing and shipping add value.

Question 20

Internal MM systems do not require control of production materials.

Question 21

A possible description of critical parts relates to the probability of total process or product failure when that critical part fails.

Question 22

In bidding,steps must be taken to ensure that quality is not compromised by price considerations.

Question 23

Value analysis has been part of materials management for only five years.

Question 24

Wal-Mart uses cross-docking to transfer goods from incoming trucks at the receiving dock to outgoing trucks at the shipping docks.

Question 25

A variant of the dollar volume ABC classification is based on the criticality of SKUs.The most critical are called A-critical items.

Question 26

Purchasing records provide a history of what has been done in the past.

Question 27

Often,the most important materials used in the product and process are labeled secondary class materials.The least important materials are relegated to a primary class label.

Question 28

Certification of suppliers is not expensive or time-consuming.

Question 29

Bidding is a process by which the seller requests competing companies to specify how much they will charge for their products.

Question 30

ABC classification of materials is most often done in terms of annual dollar volume.This identifies the most important SKUs as A-class.Increasing numbers of organizations try to prepare for shortage situations by overstocking the C-class of items.

Question 31

The purchasing mission includes achieving deliveries are on time,receiving inventories,inspecting all incoming goods,certifying suppliers,and making sure the relationship with trusted suppliers is stable.

Question 32

Value adding occurs when purchased components are further transformed by the company's production process.

Question 33

A trade-off model can be constructed to determine how many extra tires (spares) should be obtained at the time of the initial order for a tractor.Note that rubber deteriorates and that spare tires can be obtained at any time,at about the same price.

Question 34

In the business environment of the United States,personal relationships are not considered to be a reasonable basis for enterprise decisions.They exist nevertheless in less blatant forms than in other cultures.

Question 35

Certification of suppliers is a process for grading suppliers to ensure that suppliers' organizations conform to standards that are essential for meeting the buyer's needs.

Question 36

Strategies can be tweaked or changed significantly if they are not delivering according to plans.

Question 37

A classical inventory problem with some special characteristics,namely,how much to buy when there is only one purchase occasion allowed.This is called a static inventory problem.

Question 38

Value analysis is a systematic examination of all operations in any process in search of a better way of doing things.

Question 39

The strategic component came into play during start-up,when deciding what goods were to be made and what services were to be offered.

Question 40

Dollar volume is the surrogate for potential savings that can be made by improving the inventory management of specific materials.

Question 41

Penalties for mistakes made in ordering materials (generally) do not depend on

A)the kind of product,
B)the life-cycle stage of the product.
C)the process configuration being used.
D)the software order-placing system.
E)g.,freshness dating.

Question 42

It is to be expected that analysis will continue to indicate that materials have the _____ leverage for making cost savings.

A)greatest
B)most variable
C)least
D)more flexible

Question 43

Average daily demand velocity is often called

A)days of inventory.
B)inventory turns.
C)average demand per day.
D)average supply to meet demand per day.

Question 44

The cost of materials is often less crucial than _____

A)on-time delivery.
B)project completion date.
C)carrying costs.
D)TQM.

Question 45

Which function is part of the responsibilities of the materials control department?

A)inspecting incoming materials
B)expediting flows
C)arranging for and regulating shipments
D)international accounts payable department
E)all of the above

Question 46

Our company makes an extensive line of products.Marketing lands a big contract for one particular item that normally sells hundreds per year.The new contract is for thousands per year.What is triggered by these marketplace demands?

A)hoarding of such materials
B)internal MM information system
C)materials management system
D)order to complete old work in process

Question 47

Critical can mean that when a part fails,it causes product or process failure.

Question 48

What purchased materials have greater value-added than raw materials?

A)components and subassemblies
B)finished goods
C)work-in-process
D)office supplies

Question 49

What captures the essence of supply chain objectives regarding throughput and value added?

A)turnover
B)inventory turns
C)number of links in the chain
D)both b and c
E)both a and b

Question 50

It is estimated that _____ percent of the workforce is currently engaged in _____.

A)more than 3;farming
B)more than 5;agricultural trade
C)less than 5;agricultural trade
D)less than 3;farming

Question 51

Management issues such as what items to buy,when to buy them,from whom to buy,how much to buy at one time,and how much to pay,are captured by what systems?

A)expediting systems
B)intelligent information systems
C)linear programming systems
D)purchasing discount systems

Question 52

Failing to achieve high turnover rates can be caused by

A)carrying excessive inventories.
B)overestimating demand.
C)prices being too high for customers.
D)smart competitive moves.
E)all of the above

Question 53

For a manufacturing firm,which class of materials does not have to be purchased from an outside source?

A)raw materials
B)finished goods
C)components
D)subassemblies

Question 54

_____ involve smaller order quantities of far more kinds of materials than _____.

A)Job shops;flow shops
B)Flexible shops;flow shops
C)Flow shops;job shops
D)Job shops;intermittent flow shops

Question 55

Co-produced products have much of their additional value-added supplied by the

A)original producer.
B)original employees.
C)suppliers.
D)game-playing teammates.

Question 56

_____ provide a useful history of _____.

A)Purchasing records;discounts obtained
B)Suppliers records;days of inventory (DOI)
C)Accounting records;inventory turns
D)Quality control records;purchase prices
E)Legal records;ethical issues

Question 57

The materials management system must be synchronized and coordinated to be

A)effective.
B)interlinked.
C)tolerated.
D)computerized.

Question 58

_____ has become a global system.

A)Freshness dating
B)EDI use
C)Out-sourcing
D)Invoicing

Question 59

_____ are needed to evaluate and balance the disadvantages of having large amounts of stock on-hand (SOH) against the benefits of large order quantities placed long in advance of delivery so that substantial quantity discounts can be obtained.

A)Life-cycle models
B)Trade-off models
C)Order size models
D)all of the above

Question 60

Coordinating the goals of materials management with those of process management is one of the greatest responsibilities of the _____

A)CEO.
B)P/OM department.
C)CFO.
D)legal department.
E)marketing department.

Question 61

The Integrator that orchestrates the materials management system is the _____.

A)Information System
B)MRP
C)Management System
D)none of the above

Question 62

To make sure that everyone was reading (even the fine print),in 2006 what was the most popular girl's name in the USA?

A)Jessica
B)Elizabeth
C)Ashley
D)Emily
E)Mary

Question 63

Organizations that are in the business of supplying raw materials at the very start of the upstream acquisition process are themselves dependent on

A)purchasing.
B)forecast.
C)acquisition.
D)both a and c

Question 64

The decision model for ordering spare parts at the time of the initial order is known as the _____ problem.

A)value analysis
B)traveling salesman
C)static inventory
D)dynamic inventory

Question 65

Who developed the ABC concept in the 1940s,and in which country or company?

A)Del Harder from Ford Motor Company
B)General MacArthur of the U.S.A.
C)Dr.Taguchi from Japan
D)Ms.Lockheed of Lockheed-Martin

Question 66

Bidding is most applicable for project procurement policies as well as for start-up purchase arrangements for

A)job shops without costly components.
B)intermittent flow shops without costly components.
C)none of the choices.
D)flow shops.

Question 67

The receiving facility is often called the _____,and another location for shipping is called a _____.

A)shipping dock;receiving dock
B)receiving dock;shipping dock
C)cross-docking block;dock-crossing block
D)receiving distribution center;shipping floor

Question 68

Cross-docking is the transfer of goods from _____

A)incoming trucks at receiving docks to outgoing trucks at shipping docks.
B)incoming trucks at receiving floors to forklift trucks on the shipping floors.
C)incoming trucks at shipping docks to outgoing trucks at receiving docks.
D)outgoing trucks at shipping docks to incoming trucks at receiving docks.

Question 69

MM connects the _____ sourcing of supplies to the _____ scheduling of product to be delivered to the customer.

A)external;internal
B)internal;external
C)efficient;inefficient
D)none of the above

Question 70

Critical parts refers to

A)parts that shut down the line or seriously delay project completion.
B)parts that combine in many critical ways to form modular systems.
C)products that impact the bottom line in such a way as to cause bankruptcy if projections are not achieved.
D)products that require special coordination between marketing and P/OM for their successful introduction.

Question 71

The step-by-step procedure for dealing with criticality relationships is:

A)Systematically rank order parts by their cost;list the most expensive parts-costly spare parts must be shared between depots;inspect spare parts regularly.
B)Make sure to list all critical parts;rank order all critical parts according to their level of criticality;provide spare parts and backup materials for the most critical parts;regularly inspect spare parts.
C)Regularly inspect spare parts;list the most critical parts;rank order parts according to their criticality;provide spare parts and backup materials.
D)Rank order parts according to their criticality;list the most critical parts;provide spare parts and backup materials;regularly inspect spare parts.

Question 72

Bidding models show that as the number of bidders competing _____,the size of the winning bid decreases.

A)decreases
B)changes
C)increases
D)is unknown

Question 73

The ABC classification for materials is best described by the _____.

A)probability of parts failing in rank order from highest to lowest
B)dollar volume of inventory items in rank order from highest to lowest
C)important many and the trivial few
D)trivial many versus the even more trivial few

Question 74

Value analysis and _____ are often seen as close relatives.

A)inventory studies
B)the ABC classification
C)decision modeling
D)failure analysis
E)methods analysis

Question 75

It is neither ethical nor legal for vendors to use bribes to influence purchasing decisions in _____

A)Japan.
B)Argentina.
C)the U.S.A.
D)Egypt.

Question 76

In what way can suppliers be monitored for their compliance with total quality management programs?

A)ISO 9000 standards
B)Baldrige Awards-award criteria
C)Lead time management programs.
D)all of the above
E)none of the above

Question 77

_____ occurs when purchased components are further transformed by the company's production process.

A)Acquisition
B)RM
C)Value Adding
D)Extraction

Question 78

Material shortages hit particularly hard at the _____,because it has the least flexibility in adapting to changes in the use of materials.

A)flow shop
B)job shop
C)custom shop
D)general-purpose equipment shop

Question 79

For complex machines,the probability of i failures is represented as:

A)pi
B)ipi
C)kc
D)k

Question 80

MMS is a system triggered by

A)forecast.
B)demand.
C)MM.
D)both a and b