Deck 11: Transaction Cycle The Production Cycle

Question 1

The purchase order:

A)is an evidence of purchases
B)is a binding contract between the firm and the vendor
C)is prepared by the purchasing department
D)All of the options are correct.

Answer 1

D

Question 2

The document that allows the store to release the raw materials and work-in-process so that the production process can start is:

A)Bill of material
B)Work order
C)Material requisition
D)Production schedule

Answer 2

B

Question 3

Which of the following is an unlikely task overseen by the director of logistics?

A)Inventory control
B)Purchasing
C)Billing
D)Shipping

Answer 3

C

Question 4

Staff involved in the production planning phase need to understand: (i)the individual product-level requirements necessary to produce each product (ii)the overall goals relating to future production scheduling (iii)the overall constraints relating to future production scheduling

A)(i)only
B)(i)(ii)only
C)(i)(iii)only
D)(i)(ii)(iii)

Question 5

The objective of the execution phase in the production cycle does NOT contain:

A)Ensure that the planned production activities are carried out accurately.
B)Ensure that the planned production activities are carried out effectively.
C)Ensure that all production records are reconciled regularly.
D)Ensure that all production records are correctly updated

Question 6

The objective of the planning phase in the production cycle is to:

A)effectively plan production at both the management and floor level
B)effectively plan production at both the internal and external level
C)effectively plan production at both the product and schedule level
D)Consult with the senior management group regarding company production performances.

Question 7

The document that details the raw material and work-in-process that is required to produce the finished good is:

A)Bill of material
B)Work order
C)Material requisition
D)Production schedule

Question 8

The document that details the machines and employees who will be involved in each stage of production is:

A)Bill of material
B)Work order
C)Material requisition
D)Production schedule

Question 9

The document that serves to authorise the store to release the raw materials and work-in-process inventory to the production department is:

A)Bill of material
B)Work order
C)Material requisition
D)Production schedule

Question 10

A sound,well-controlled production cycle can provide a competitive advantage by:

A)providing high-quality,lower cost products
B)manufacturing a unique product range in-house
C)providing price leadership
D)All of the options are correct.

Question 11

Failing to accurately execute production plans can lead to: (i)undersupply issue for finished goods (ii)undersupply issues for raw materials inventories (iii)oversupply issue for finished goods (iv)oversupply issues for raw materials inventories.

A)(i)(ii)only
B)(iii)(iv)only
C)(i)(iv)only
D)(i)(ii)(iii)(iv)

Question 12

A company does a forecast of which products will be sold over the next 12 months.The forecast is used to produce a plan that will ensure that there are sufficient finished goods to meet demand.What is this plan called?

A)Production plan
B)Work order
C)Strategic plan
D)Production schedule

Question 13

The primary responsibility of the production cycle is to ensure that:

A)goods produced are of good quality
B)production costs are brought to the minimum
C)sufficient goods are manufactured in time to meet the demand
D)All of the options are correct.

Question 14

Which of the following is an unlikely task overseen by the director of finance and accounting?

A)Funds disbursement
B)Tax planning
C)Budgeting
D)Remuneration processing

Question 15

Staff involved in execution phase in the production cycle need to: (i)understand the requirements and the nature of the execution plans devised (ii)have the ability to manage the execution plans (iii)the overall goals relating to future production scheduling (iv)the overall constraints relating to future production scheduling

A)(i)(ii)only
B)(i)(ii)(iii)only
C)(i)(ii)(iv)only
D)(i)(ii)(iii)(iv)

Question 16

Which of the following best describes the execution phase of the production cycle?

A)Raw material usage is recorded
B)Customer orders are produced
C)Planned production activities are carried out and all records maintained accurately.
D)A production schedule is planned and executed

Question 17

The typical production cycle commences when:

A)the organisation is low in finished goods inventory
B)a new product has been designed
C)all production costs have been recorded
D)needed raw materials have arrived

Question 18

The typical production cycle ends when:

A)the organisation has a large volume of finished goods inventory
B)all products in the finished goods inventory are sold
C)all production costs have been recorded
D)all raw materials are consumed in the production process

Question 19

In the production cycle,there is a document that details the manufacturing costs related to the manufacture of a finished good.This document is:

A)the production schedule file
B)the work-in-progress file
C)the bill of material file
D)the work order file

Question 20

The document that details when the raw materials will be used,when the work-in-process goods will be stored and finally when the finished goods will be available at the end of the production process is:

A)Bill of material
B)Work order
C)Material requisition
D)Production schedule

Question 21

Planning production schedule does not involve:

A)creating production schedule
B)calculating production requirements
C)identify material requirements
D)None of the options are correct.

Question 22

Flexible manufacturing systems are used:

A)during raw material acquisition and they are designed to respond to any changes detected in raw material costs
B)during production execution and they are designed to respond to any changes detected during production
C)during production and they are designed to respond to any changes detected in market demand
D)None of the options are correct.

Question 23

A specialised software that is used to calculate demand for products,and identify the raw materials required to produce those products is:

A)MRP
B)CAM
C)RFID
D)JIT

Question 24

When checking and assembling required resources prior to starting production,________ are needed.

A)production schedule,bill of materials,and work-in-progress data
B)production schedule,bill of materials,and inventory and labour data
C)bill of materials,work-in-progress data,and inventory and labour data
D)None of the options are correct.

Question 25

What are the two systems that are closely associated with product design?

A)ABC and FMS
B)CAM and CAD
C)CAM and ABC
D)FMS and CAD

Question 26

The report that identifies all new designs created but not actioned within a reasonable period of time in the production cycle is:

A)a production planning and control report
B)an exception report
C)a product costing report
D)a production requirement report

Question 27

The most important data created during the production planning process is:

A)The data in the bill of materials
B)The production schedule data
C)Work-in-progress data
D)None of the options are correct.

Question 28

During the production cycle,a bill of materials must be created for each product based on data obtained from:

A)the raw material inventory and the production schedule
B)production sequence and the product specification
C)the raw material inventory and the product specification
D)production sequence and the production schedule

Question 29

What are the two main factors that need to be considered when automatic reorder points are being set?

A)Production capabilities and lead times.
B)Inventory storage capacity and cash flow.
C)Product availability and price.
D)None of the options are correct.

Question 30

Production scheduling decisions do not include:

A)Determining what types of products to produce.
B)Determining how many of each product to produce.
C)Determining the costing methods for products produced.
D)Scheduling production to align with demand.

Question 31

Forecasted demand for products can be received from the revenue cycle,where it is calculated based on previous sales history.This document is called:

A)production forecast report
B)demand forecast report
C)work order
D)None of the options are correct.

Question 32

The production cycle starts with:

A)production schedule planning
B)product costing
C)product production requirement determination
D)product production

Question 33

Which of the following does not concern inventory management?

A)FMS
B)Agile manufacturing
C)JIT
D)CAD

Question 34

Which of the following is less likely to be a product level decision during the production cycle?

A)Material requirements.
B)Labour requirements.
C)Equipment requirements.
D)Customer specification requirements.

Question 35

The production cycle describes the stage when physical products are manufactured.Which of the following technologies automates control of the manufacturing process?

A)CRM
B)ERP
C)SCM
D)CAM

Question 36

Product planning staff use data from ________ to create a bill of materials.

A)customer order and sales order
B)product specification and raw materials inventory data
C)production schedule and product costing data
D)None of the options are correct.

Question 37

Which of the following factors is not relevant to the decision about which inventory management technique to employ?

A)The nature of the inventory item.
B)The demand for the inventory item.
C)The extent of computerisation in the warehouse.
D)The availability of raw materials.

Question 38

The following process business decisions must be made during the production cycle EXCEPT:

A)Which market strategy to adopt?
B)What materials are required?
C)How much labour is required?
D)Is there sufficient equipment time?

Question 39

What is the role of a bar code scanner or RFID tags in the production cycle?

A)Production workers use this to tag-on/ tag-off the job for their timesheets
B)Boxes of finished goods have RFID tags added before despatch as part of the stock control systems for large customers like Target or Woolworths.
C)These tracking devices are used to record the movement of raw material,WIP and finished goods so that inventories of these remain accurate.
D)These tags are used with the picking slips to locate the goods in the warehouse.

Question 40

What are the two systems that are closely associated with inventory maintenance?

A)FMS and JIT
B)CAD and CAM
C)ABC and JIT
D)ABC and CAM

Question 41

Which of the following is unlikely to be a KPI used to measure the objective "To ensure all production runs are accurately scheduled,conducted,recorded and costed"?

A)Production cycle times
B)Inventory costs per product
C)Production cost budget overruns
D)Variations in manufacturing variances

Question 42

List at least six KPI that can be used to measure the objective "To ensure all production runs are accurately scheduled,conducted,recorded and costed".

Question 43

Explain why the production cycle is strategically important to a manufacturing organisation.

Question 44

A company estimates that its overhead costs are $2 000 000.It decides that the best way of apportioning this is according to the amount of time spent on a specialist machine in production.Total machine time is 2000 hours.How much overhead should a product carry if it spends 3 hours on the machine?

A)$1000
B)$2000
C)$3000
D)$300

Question 45

To identify material requirements,information needs to be read from:

A)the production schedule database and the finished goods inventory database
B)the production schedule database and the bill of materials database
C)the raw materials inventory database and the production schedule database
D)the bill of materials database and the raw materials inventory database

Question 46

Which of the following is not counted as manufacturing overheads?

A)costs for electricity used to operate the production equipment
B)depreciation on the production equipment and buildings
C)miscellaneous factory supplies such as oil or cleaning products
D)payment made to production staff for overtime work

Question 47

Give at least three examples of product level decisions in the production cycle.

Question 48

The risk of having to shut down production because of manufacturing machine failure can be minimised using which of the following:

A)Installing an uninterrupted power supply (UPS)
B)Performing regular planned maintenance and replacement
C)Reducing the number of items produced in a production cycle
D)Restricting access to the production area

Question 49

How does the flexible manufacturing system (FMS)help in reducing the risk of under or overestimated product demand?

Question 50

How often should production-related decisions be made? Give at least two examples.

Question 51

To create a production schedule,information needs to be extracted from:

A)the production schedule database and the finished goods inventory database
B)the production schedule database and the bill of materials database
C)the raw materials inventory database and the production schedule database
D)the bill of materials database and the raw materials inventory database

Question 52

Typical risks encountered in planning the production schedule include

A)under/overestimating product demand
B)underutilisation of available resource
C)under/overestimating materials requirements
D)All of the options are correct.

Question 53

What is the objective of the planning phase in the production cycle?

Question 54

Explain how a sound,well control production cycle can provide an organisation with competitive advantages.

Question 55

What is the objective of the execution phase in the production cycle? What happens if errors occur in the execution phase?

Question 56

Describe in details how product specification is used by product planning staff to determine raw material needs.

Question 57

A bike company has a pile of bicycle frames that it purchased from a supplier.These frames would best be classified as:

A)raw materials
B)work in process
C)finished goods
D)inventory

Question 58

Which of the following is not helpful to reduce risks around incorrect cost allocations?

A)Use appropriate overhead allocation algorithms.
B)Independent review and approval of overhead cost allocations.
C)Use technologies such as bar code or RFID to support accurate and timely tracking and recording of inventor movements.
D)Insist on using activity-based costing.

Question 59

What could happen if the planning phase and the costing phase in the production cycle are poorly managed and executed?

Question 60

An example of a suitable key performance indicator (KPI)for the objective of ensuring that production runs are efficiently conducted is:

A)Inventory costs per product
B)Production cycle times
C)Level of inspection and testing costs incurred
D)Number of quality complaints