Question 1

A demand-pull system in which each component in a production line is produced immediately as needed by the next step in the production line is referred to as ________.

Accepted Answer

Just-in-time production is a method of production in which each component in a production line is produced immediately as needed by the next step in the production line. This system is demand-pull, meaning that production only occurs when there is demand for a product, which reduces waste and inventory costs. Materials requirements planning, relevant total costs, and economic order quantity are not specifically related to demand-pull systems in which components are produced immediately as needed.

Question 2

A system that emphasizes lean production techniques, low quantities of inventory, and close coordination among production workstations is called ________.

Accepted Answer

Just-in-time production emphasizes lean production techniques, low quantities of inventory, and close coordination among production workstations. Economic order quantity production, materials requirements planning production, and push-through systems do not necessarily emphasize these characteristics.

Question 3

A company's inventory levels are dependent on a number of variables including the demand for the product, supplier relationships, and supplier relationships with their manufacturers.

Accepted Answer

Inventory levels are affected by various factors, including demand for the product, supplier relationships, and their relationships with manufacturers.

Question 4

The management accountant aids in MRP by ________.

Accepted Answer

The management accountant plays a vital role in maintaining accurate records of inventory and its costs, which is essential for effective material requirements planning (MRP). They provide cost data on raw materials and finished goods, calculate inventory carrying costs, and help determine the economic order quantity (EOQ) for materials. While preparing plant appropriation requests and contacting vendors are also important tasks, accurate record-keeping is essential for effective MRP. Doing journal entries is a basic accounting task that may not directly relate to MRP.

Question 5

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

Accepted Answer

The answer of What is a supply chain, and what...

Question 6

The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods.

Accepted Answer

The demand-pull feature of JIT production systems means that production is triggered by customer demand, which creates a close coordination among workstations and a smooth flow of goods. This is because each workstation only produces items as they are needed, based on demand, and passes them on to the next station as soon as they are completed. This helps to reduce excess inventory, minimize waste, and increase efficiency.

Question 7

Which of the following statements best defines a materials requirements planning system?

Accepted Answer

A materials requirements planning (MRP) system is a push-through system that manufactures finished goods for inventory based on demand forecasts. It plans the manufacturing process by determining the quantity of materials and components needed to meet the forecasted demand.

Question 8

Kretzinger Company makes extensive use of financial performance reports for each of its departments. Although most departments have been reporting favorable cost variances with the company's current inventory system, management is concerned about the overall performance of the purchasing department. For example, the following information is for the purchasing of materials for a product the company has been manufacturing for several years:
  
Required:
a.Compute the inventory turnover for each year. Can any conclusions be drawn for a yearly comparison of the purchase price variance and the inventory turnover?
b.Identify problems likely to be caused by evaluating purchasing only on the basis of the purchase price variance.
c.What recommendations will improve the evaluation process?

Accepted Answer

The answer of Kretzinger Company makes extensive use of financial...

Question 9

Which of the following statements best defines a just-in-time production system?

Accepted Answer

Just-in-time (JIT) production systems are demand-pull systems where components are produced only as needed by the next step in the production line, minimizing inventory levels and reducing waste.

Question 10

The manufacturing manager of New Technology Company is concerned about the company's newest plant. When the plant began operations three years ago, it had the best of everything. It had modern equipment, well-trained employees, engineered work and assembly stations, and a controlled environment. During the first two years, the evaluation results were very good with almost all cost variances being favorable. However, recently, things have turned negative.
In recent months, everything seems to be operating in a crisis management mode. Although most cost variances remain favorable, the plant's segment contribution is declining and customers are complaining about poor quality and slow delivery. Several customers have suggested that they may take their business elsewhere if things do not improve.
The shop floor is in continual turmoil. In-process inventory is everywhere, production employees have difficulty finding jobs that need to be worked on, and scheduling has requested a larger computer to keep track of work in process.
The vice president of sales does not know where to begin with solving the customers' problems. It seems that everyone is working very hard and the plant has the best facilities and trained employees in the industry.
Required:
What is the nature of the plant's problems? What recommendation would you make to help improve the situation?

Accepted Answer

The answer of The manufacturing manager of New Technology Company...

Question 11

Just-in-time purchasing describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Accepted Answer

Supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Question 12

Sharing sales information throughout the supply chain leads to which of the following?

Accepted Answer

Sharing sales information allows companies in the supply chain to better coordinate and plan their production and inventory levels. This leads to fewer manufacturing orders that need to be expedited due to unexpected demand, as well as reduced inventories held by each company since they can more accurately predict demand. It may also help prevent overproduction of products not immediately needed by retailers, leading to less waste and potentially lower costs. Large stockouts are less likely if companies can plan and adjust their production and inventory levels based on shared sales data.

Question 13

A push-through system that manufactures finished goods for inventory on the basis of demand forecasts and produces a master schedule for quantity and timing of units to be produced.

Accepted Answer

The given system is describing a Materials Requirements Planning (MRP) system which creates a production schedule based on demand forecasts and inventory requirements. MRP helps in planning production and purchasing activities to ensure that the required materials and components are available at the right time and place to support manufacturing activities.

Question 14

JIT purchasing and production systems can be used in service industries as supplies and the labor to manage those supplies can be a significant cost element in some service organizations.

Accepted Answer

Materials requirements planning system uses a master production schedule.

Question 15

Just-in-Time (JIT) production systems are also referred to as lean production.

Accepted Answer

The statement is true. Just-in-Time production systems are also known as lean production, which aims to eliminate all types of waste in the production process.

Question 16

Companies that implement JIT purchasing will emphasize developing short-term supplier relationships with many suppliers to attain flexibility.

Accepted Answer

Companies that implement JIT purchasing choose their suppliers carefully and develop long-term supplier relationships.

Question 17

A "push-through" system, often described as a materials requirement planning system, focuses first on the forecasted amount and timing of finished goods and then determines the demand for materials components and subassemblies at each of the prior stages of production.

Accepted Answer

A "push-through" system like materials requirement planning (MRP) starts with forecasting finished goods and works backward to determine the necessary materials and components.

Question 18

Just-in-time systems are similar to materials requirement planning systems as both systems are demand-pull systems.

Accepted Answer

Just-in-time systems are not similar to materials requirement planning systems as just-in-time production is a demand-pull system and materials requirements planning is a push-through approach.

Question 19

The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same company or in other companies.

Accepted Answer

This is a correct definition of the supply chain.

Question 20

Which of the following term is defined as: "the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers"?

Accepted Answer

The term "supply chain" is defined as the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers. Options A, B, and C are all related to specific business tools or strategies and are not an accurate definition of the supply chain.

Quiz 20: Inventory Management, Just-in-Time, and Simplified Costing Methods