Question 1

Which of the following is a disadvantage of an enterprise resource planning (ERP)system?
A) The use of standard costing systems is not allowed in an ERP system.
B) Shifting manufacturing and distribution plans rapidly in response to changes in supply and demand is not possible in an ERP system.
C) The ERP systems must often be customized to fit the strategic needs of the user.
D) The ERP system increases lead times when purchasing material from a different supplier.

Accepted Answer

ERP systems often require customization to fit the specific needs of a business, which can be a complex and costly process.

Question 2

Traditional normal and standard costing systems use ________.
A) backflush costing
B) delayed costing
C) variable tracking
D) sequential tracking

Accepted Answer

Traditional normal and standard costing systems use sequential tracking, which involves tracking direct materials, direct labor, and overhead sequentially through the production process.

Question 3

Just-in-time production system comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities.

Accepted Answer

Just-in-time production system is a manufacturing philosophy that focuses on producing goods only when they are needed, reducing inventory costs and increasing efficiency. While it may utilize a database for information, the system itself does not comprise a single database that supports all business activities.

Question 4

The time required to get equipment,tools,and materials ready to start production is referred to as ________.
A) setup time
B) delivery time
C) manufacturing-cycle time
D) product design time

Accepted Answer

Setup time refers to the time taken to prepare the equipment, tools, and materials before the production process can begin. Delivery time is the time taken for goods to be transported from one location to another. Manufacturing-cycle time refers to the time taken to complete one manufacturing cycle, from the beginning of production to the delivery of finished products. Product design time refers to the time taken to create and develop a new product design.

Question 5

Which of the following statements is true of the financial and nonfinancial measures in just-in-time production systems?
A) The inventory turnover ratio is expected to decrease.
B) Units produced per hour are expected to increase.
C) Manufacturing cycle time is expected to increase.
D) Total setup time for machines with respect to total manufacturing time is expected to increase.

Accepted Answer

In just-in-time production systems, the focus is on reducing waste and improving efficiency. Therefore, units produced per hour are expected to increase, while inventory levels are minimized. Manufacturing cycle time and setup time are also expected to decrease in a just-in-time system.

Question 6

In a just-in-time production system,inventory carrying costs would be high.

Accepted Answer

In a just-in-time production system, inventory levels are kept low as materials and products are only ordered when they are needed. This means that inventory carrying costs are also low, as there is less inventory to store and manage.

Question 7

Which of the following statements is true of just-in-time production systems?
A) In a just-in-time production system, a master production schedule specifies the quantity and timing of each item to be produced.
B) Sales budget triggers each step of the production process in a just in time production system.
C) Defects arising at one workstation affect other workstations in the line quickly because of the tight links between workstations.
D) Production is organized in manufacturing cells in a just in time production system, which are production centers that use a "push-through" approach whereby finished goods are manufactured on the basis of demand forecasts.

Accepted Answer

Defects in one workstation can quickly affect other workstations in a just-in-time production system because of the tight links between workstations. In contrast, option A is incorrect because a just-in-time production system focuses on producing items only in the quantities and at the times needed to meet actual customer demand, not to a master production schedule. Option B is incorrect because a sales forecast or demand forecast triggers each step of the production process, not a sales budget. Option D is incorrect because a just-in-time production system typically organizes production in manufacturing cells that use a "pull-through" approach, whereby customer demand for finished goods drives the production process.

Question 8

In a just-in-time system,suppliers are selected primarily on the basis of their ability to provide materials and products at the lowest possible price.

Accepted Answer

In a just-in-time system, suppliers are selected based on their reliability, quality, delivery time, and flexibility, as these factors are crucial to maintaining a smooth and efficient production process. Price is one consideration, but it is not the primary factor.

Question 9

What are five features of a just-in-time manufacturing system?

Accepted Answer

The answer of What are five features of a just-in-time...

Question 10

Which of the following statements best defines backflush costing system?
A) an integrated costing system covering a company's accounting, distribution, manufacturing, purchasing, human resources, and other functions
B) a costing system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
C) a push-through system in which each component in a production line is produced immediately as needed by the next step in the production line
D) a costing system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities

Accepted Answer

Backflush costing system is a costing system used in manufacturing that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods. Instead, it uses predetermined standard costs to assign costs to products based on the quantity of units produced. It is also referred to as a post-determined costing system.

Question 11

A grouping of all the different types of equipment used to make a given product is referred to as ________.
A) total quality management
B) materials requirements planning
C) manufacturing cells
D) economic order quantity

Accepted Answer

A manufacturing cell is a grouping of different machines and equipment used to make a specific product or product family. Total Quality Management (A) is a management philosophy aimed at improving quality throughout the organization. Materials Requirements Planning (B) is a system for determining the materials and components needed to produce a product based on its production schedule. Economic Order Quantity (D) is a formula used to determine the optimal quantity of a product to order in order to minimize inventory costs.

Question 12

The time from when an order is received until it becomes a finished good is referred to as ________.
A) work-in-process time
B) manufacturing cycle time
C) pass-through time
D) product design time

Accepted Answer

Manufacturing cycle time is the total time required to produce a finished product, starting from the receipt of the order until the product is ready for delivery. Work-in-process time is the amount of time that a product spends in the production process before it is completed. Pass-through time is the time it takes for a product to move through a system or process, including waiting time and processing time. Product design time is the time taken to design a product before it can be manufactured. Therefore, the best choice is manufacturing cycle time.

Question 13

The Jarvis Corporation produces bucket loader assemblies for the tractor industry.The product has a long term life expectancy.Jarvis has a traditional manufacturing and inventory system.Jarvis is considering the installation of a just-in-time inventory system to improve its cost structure.In doing a full study using its manufacturing engineering team as well as consulting with industry JIT experts and the main vendors and suppliers of the components Jarvis uses to manufacture the bucket loader assemblies,the following incremental cost-benefit relevant information is available for analysis:
The Jarvis cost of investment capital hurdle rate is 15%.
One time cost to rearrange the shop floor to create the manufacturing cell workstations is $275,000.
One time cost to retrain the existing workforce for the JIT required skills is $60,000.
Anticipated defect reduction is 40%.Currently there is a cost of quality defect assessment listed as $150,000 per year.
The setup time for each of the existing functions will be reduced by 67%.Currently the forecast for setup costs are $225,000 per year.
Jarvis will expect to save $200,000 per year in carrying costs as a result of having a lower inventory.
The suppliers will require a 15% premium over the current level of prices in order to position themselves to supply the material on a smaller and more frequent schedule.Currently the materials purchases are $1,500,000 per year.
Required:
Determine whether it is in the best interest of Jarvis Corporation to install a JIT system.

Accepted Answer

The answer of The Jarvis Corporation produces bucket loader assemblies...

Question 14

A costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct materials to the sale of finished goods is called ________.
A) dependent costing
B) synchronous costing
C) sequential costing
D) backflush costing

Accepted Answer

Backflush costing is a costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct materials to the sale of finished goods. Instead, it waits until the end of the period and then "flushes back" all of the costs associated with a product through the system to assign costs to the inventory that was produced. The backflush method assumes that all raw materials are consumed and that all production costs are incurred at the point of sale, simplifying the tracking of inventory costs.

Question 15

Which of the following statements best defines manufacturing cells?
A) They are manufacturing areas that use a "push-through"approach whereby finished goods are manufactured on the basis of demand forecasts.
B) They are manufacturing centers which focuses on production of a single product.
C) They are work areas with different types of equipment grouped together to make related products.
D) They are production centers in which goods are manufactured only after receiving customer orders.

Accepted Answer

Manufacturing cells are work areas that are designed to group together different types of equipment necessary for the production of related products. This approach enables the efficient production of small batches of products while reducing material handling costs, setup times, and manufacturing lead times. The emphasis is on producing a variety of products in small volumes, rather than focusing on a single product or producing goods based on demand forecasts or customer orders.

Question 16

Minnesota Ore Company mines iron ore for production into various metal products.During recent years,the company has had large fluctuations in its inventories of metal ingots.Much of the volatility of the inventory levels is due to the variability of demand by the company's largest customers,automobile manufacturers.For large orders,the company has the technology to quickly shift production from one product to another.
Required:
Explain how the company can improve its inventory control system and give the advantages of whatever you recommend.

Accepted Answer

The answer of Minnesota Ore Company mines iron ore for...

Question 17

Which of the following statements best defines setup time?
A) It is the time required to manufacture an item, including order preparation time, inspection time, and customer delivery time.
B) It is the time required to get equipment, tools, and materials ready to start the production of a component or product.
C) It is a time or period ranging from the time when a customer orders goods to the time when they are delivered to the customer.
D) It is the time required to create a new product to be sold by a business to its customers.

Accepted Answer

Setup time refers to the time required to prepare equipment, tools, and materials for the production of a new component or product. It is the time needed to transition from producing one item to producing another, and can involve tasks such as changing machine settings or tooling, cleaning machinery, and loading raw materials.

Question 18

Which of the following statements best defines an enterprise resource planning (ERP)system?
A) 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 as planned by enterprise resource management
B) a system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities
C) a planning system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
D) a system that is made up of work areas with different types of equipment grouped together to make related products

Accepted Answer

An enterprise resource planning (ERP) system is a system that uses a single database to collect data and feed it into software applications supporting all of a company's business activities, including manufacturing, sales, finance, and human resources. It is designed to streamline processes, improve efficiency, and provide real-time visibility into an organization's operations. Options A, C, and D describe other manufacturing systems but do not define an ERP system.

Question 19

Which of the following statements best defines manufacturing cycle time in a JIT production system?
A) the time from when raw materials is received until it becomes a finished good
B) the time from when an order is received until it becomes a finished good
C) the time from when raw materials is received until it is delivered to the customers
D) the time from when an order is received until it is delivered to the customers

Accepted Answer

Manufacturing cycle time in a JIT production system is the time it takes for a product to be produced from the point when an order is received until it becomes a finished good. This includes all stages of the production process, from raw materials to shipping the finished product. Therefore, option B is the correct definition of manufacturing cycle time in a JIT production system.

Question 20

A system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities is known as a(n)________.
A) economic order quantity (EOQ) system
B) enterprise resource planning (ERP) system
C) just-in-time (JIT) system
D) material requirements planning (MRP) system

Accepted Answer

An enterprise resource planning (ERP) system is a single database that collects data and feeds it into software applications supporting all of a company's business activities. Economic order quantity (EOQ), just-in-time (JIT), and material requirements planning (MRP) systems are all specific inventory management systems, but do not cover all aspects of a company's operations like an ERP system does.

Quiz 20: Inventory Management, just-In-Time, and Simplified Costing Methods

Which of the following is a disadvantage of an enterprise resource planning (ERP) system?

Traditional normal and standard costing systems use ________.

Just-in-time production system comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities.

The time required to get equipment,tools,and materials ready to start production is referred to as ________.

Which of the following statements is true of the financial and nonfinancial measures in just-in-time production systems?

In a just-in-time production system,inventory carrying costs would be high.

Which of the following statements is true of just-in-time production systems?

In a just-in-time system,suppliers are selected primarily on the basis of their ability to provide materials and products at the lowest possible price.

What are five features of a just-in-time manufacturing system?

Which of the following statements best defines backflush costing system?

A grouping of all the different types of equipment used to make a given product is referred to as ________.

The time from when an order is received until it becomes a finished good is referred to as ________.

A costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct materials to the sale of finished goods is called ________.

Which of the following statements best defines manufacturing cells?

Which of the following statements best defines setup time?

Which of the following statements best defines an enterprise resource planning (ERP) system?

Which of the following statements best defines manufacturing cycle time in a JIT production system?

A system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities is known as a(n) ________.