Question 1

Stockout is the situation when a company runs out of finished products.

Accepted Answer

Stockout is a commonly used term in inventory management and it refers to the situation when a company runs out of finished products. This can happen due to various reasons such as unexpected surge in demand, supply chain disruptions, delays in manufacturing and delivery, poor inventory management, and so on. The consequences of stockouts can be severe, resulting in lost sales, dissatisfied customers, reduced profitability, and damage to brand reputation. Therefore, it is important for companies to monitor their inventory levels and demand patterns, establish safety stock levels, and implement effective supply chain strategies to avoid or minimize stockouts.

Question 2

In general,the lower the number of inventory turns,the more efficiently the marketing department is operating.

Accepted Answer

The lower the number of inventory turns, the slower the rate at which inventory is sold, which could indicate that the marketing department is not operating efficiently in terms of promoting and selling products. A higher number of inventory turns usually indicates that products are selling quickly, which could be a sign of effective marketing strategies. Therefore, a higher number of inventory turns usually indicates more efficient marketing operations.

Question 3

What types of public recognition are given to companies that demonstrate the highest probability that they are consistent producers of high-quality goods or services,and what is the process of receiving and maintaining that recognition?

Accepted Answer

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Question 4

The four kinds of costs incurred with inventory maintenance are ordering costs,setup costs,transaction costs,and stockout costs.

Accepted Answer

The four kinds of costs incurred with inventory maintenance are ordering costs, holding costs, setup costs, and shortage costs (or stockout costs). Transaction costs are not typically categorized separately in the context of inventory maintenance costs.

Question 5

Briefly describe total quality management (TQM).

Accepted Answer

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Question 6

Define the two common measures of productivity used by managers. Specify the circumstances under which each should be used.

Accepted Answer

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Question 7

Briefly identify the three different methods of inventory management. Specify the circumstances under which each should be used.

Accepted Answer

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Question 8

Briefly explain the difference between ISO 9000 certification and the ISO 14000 certification.

Accepted Answer

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Question 9

A job shop production process is well-suited to a business that has many unique customers.

Accepted Answer

Job shops focus on producing custom or specialized products/part for each individual customer's unique specifications, making them a good fit for businesses with many unique customers.

Question 10

A restaurant chain's commissary kitchen is most likely to follow a job shop production process.

Accepted Answer

A commissary kitchen for a restaurant chain is more likely to follow a batch production process or a flow/mass production process, as it prepares large quantities of food in a standardized manner for multiple locations, rather than customizing each order individually like in a job shop production process.

Question 11

The three basic measures of inventory are average aggregate inventory,weeks of supply,and inventory turnover.

Accepted Answer

These are indeed the three basic measures of inventory. Average aggregate inventory is the average amount of inventory held over a period of time, weeks of supply is the number of weeks of sales that can be supported by the current inventory level, and inventory turnover is the number of times inventory is sold and replaced in a given period of time.

Question 12

To effectively manage inventory,a manager should use EOQ formulas when inventory levels are independent,and JIT and MRP when inventory levels are dependent on the number of products to be produced.

Accepted Answer

EOQ formulas are useful when inventory levels are independent and involve calculating the optimal quantity to order at a time. JIT (Just-In-Time) and MRP (Material Requirements Planning) are used when inventory levels are dependent on the number of products to be produced, as they involve coordinating production schedules and delivery times to minimize inventory waste and carrying costs.

Question 13

Manufacturing processes are classified according to the amount of processing or assembly that occurs after receiving an order from a customer. Briefly describe the three types of manufacturing processes.

Accepted Answer

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Question 14

Economic order quantity is intended for use with independent demand systems.

Accepted Answer

Economic order quantity (EOQ) is a commonly used inventory management technique for determining the optimal order quantity that minimizes total inventory costs. It is specifically designed for independent demand systems, where demand is not influenced by other factors such as the level of inventory on hand. Therefore, this statement is true.

Question 15

Make a list of the characteristics that define quality for goods. Then,make a second list of characteristics that define quality for services. Why do these lists differ? Why does one characteristic appear on both lists?

Accepted Answer

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Question 16

In a manufacturing operation,cost per unit produced tends to decline as flexibility increases.

Accepted Answer

Increased flexibility in manufacturing often involves higher costs due to the need for more sophisticated equipment, training, and potentially lower economies of scale, which can lead to an increase in the cost per unit produced rather than a decline.

Question 17

There are two ways to define quality. Describe both of them.

Accepted Answer

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Question 18

Define productivity. Provide an everyday example of a measure of productivity that consumers sometimes use in deciding which car to purchase.

Accepted Answer

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Question 19

Assuming the optimal order quantity of integrated circuits for a manufacturer of security timers is 1,000,and the company uses 55 circuits daily,the manufacturer should place an order approximately every 10 days.

Accepted Answer

Given the daily usage of 55 circuits, the manufacturer would use 1,000 circuits in approximately 18.18 days (1000 / 55), not every 10 days.

Question 20

List and briefly identify the three basic measures of inventory that managers use to keep inventory costs from becoming too large.

Accepted Answer

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Quiz 17: Managing Service and Manufacturing Operations