Deck 2: CPIM - Basics of Supply Chain Management

Question 1

Which of the following manufacturing systems involves the creation of one unit or a small number of units?

A) Flow manufacturing
B) Intermittent manufacturing
C) Project manufacturing
D) Continuous manufacturing

Answer 1

C

Question 2

After a quality improvement program has been successfully implemented, the greatest cost of controlling quality typically is the cost of:

A) failure.
B) appraisal.
C) prevention.
D) inspection.

Answer 2

C

Question 3

Which of the following production environment strategies requires unique design or significant customization?

A) Make-to-order
B) Assemble-to-order
C) Make-to-stock
D) Engineer-to-order

Answer 3

D

Question 4

Which of the following concepts could a firm implement to reduce defects?

A) Hansei
B) Jidoka
C) Muri
D) Heijunka

Question 5

Which practice focuses on root cause analysis?

A) Statistical process control
B) Five whys
C) Scatter diagram
D) Pareto chart

Question 6

The overall objective of an integrated supply chain can best be described as the achievement of:

A) decreased lead time.
B) increased supplier partnerships.
C) an efficient flow of materials and information.
D) an efficient flow of production.

Question 7

The question below is based on the following cost information: What is the carrying cost?

A) 14%
B) 16%
C) 20%
D) 25%

Question 8

The primary purpose of enterprise resources planning is to:

A) focus on the manufacturing function within an organization.
B) integrate an approach to business management.
C) use external knowledge to seek an internal advantage.
D) provide data protection along the supply chain.

Question 9

A company's cost of goods sold would be found on which of the following financial documents?

A) Balance sheet
B) Income statement
C) Cash flow statement
D) Performance statement

Question 10

Which of the following techniques typically eliminates common errors?

A) Practical kaizen training
B) Kaizen
C) Poka-yoke
D) Kanban

Question 11

The theory of constraints is most effective when:

A) demand environments are unstable.
B) demand environments are stable.
C) the constraint cannot be managed easily.
D) the constraint cannot be identified easily.

Question 12

The principal objective of total quality management in manufacturing is to:

A) implement statistical process control.
B) meet the expectations of the customer.
C) reduce the costs of failure.
D) eliminate inspections.

Question 13

The lean production concept works best in which of the following manufacturing environments?

A) Make-to-order
B) Intermittent
C) Project
D) Flow

Question 14

Which of the following characteristics is most distinctive of lean manufacturing?

A) Teamwork
B) Continuous improvement
C) Qualitative measurements
D) Bottom-line results

Question 15

Which of the following manufacturing environments presents the greatest complexity in promising completion dates for customer orders?

A) Flow
B) Repetitive
C) Continuous
D) Intermittent

Question 16

In an assemble-to-order production environment, the master production schedule contains:

A) standard items.
B) finished items.
C) raw materials.
D) subassemblies.

Question 17

Manufacturing overhead includes which of the following types of costs?

A) Interest expense
B) Supervision
C) Direct labor
D) Direct material

Question 18

Inventory turns is an appropriate performance measure for which of the following functions?

A) Material control
B) Activity-based costing control
C) Total quality management
D) Flexible manufacturing

Question 19

In the income statement, the cost of goods sold is related to the:

A) sales dollars.
B) total inventory dollars.
C) marketing expenses.
D) manufacturing expenses.

Question 20

Which of the following types of layouts is most efficient in a lean production environment?

A) Islands
B) Connected islands
C) Functional layout
D) Cells

Question 21

Which of the following terms refers to the practice of stopping the production line when a defect occurs?

A) Haiku
B) Arigato
C) Poka-yoke
D) Jidoka

Question 22

Which of the following tools is considered to be one of the seven quality tools?

A) Gantt chart
B) Input/output chart
C) Control chart
D) Capacity chart

Question 23

Which plant type describes a product at one stage that can be transformed into several distinct products at the next stage (divergent points)?

A) A-Plant
B) I-Plant
C) T-Plant
D) V-Plant

Question 24

Having the needed materials within easy reach of a subassembly process eliminates waste of:

A) motion.
B) transportation.
C) making defects.
D) stocks.

Question 25

A production rate based on customer demand is called:

A) cycle time.
B) tact time.
C) lead time.
D) queue time.

Question 26

Which of the following types of manufacturing processes would tend to have the lowest work in process (WIP) inventory?

A) Project
B) Intermittent
C) Batch
D) Flow

Question 27

Which of the following factors is included in cost of goods sold?

A) Revenue
B) General and administrative expenses
C) Overhead
D) Standard cost

Question 28

The heijunka philosophy can best be described as:

A) level production.
B) make-to-stock production.
C) a chase production strategy.
D) produce to stock production.

Question 29

Having bolts and tools at the point of use on the automobile assembly line eliminates the waste of:

A) waiting.
B) overproduction.
C) making defects.
D) stocks.

Question 30

Which of the following is a graphical representation of a frequency distribution?

A) Cause-and-effect diagram
B) Pareto analysis
C) Scatter diagram
D) Histogram

Question 31

Which of the following items is considered an external failure cost?

A) Warranty cost
B) Incoming inspection
C) Prevention cost
D) Appraisal cost

Question 32

An electronic board that provides visibility on the production floor is:

A) andon.
B) anova.
C) ANSI.
D) alpha factor.

Question 33

Gemba is a Japanese word meaning:

A) shop floor.
B) shop order.
C) shop packet.
D) shop traveler.

Question 34

Reducing set up time will affect item lead time and throughput in which of the following ways?

A) Lead time will increase, throughput will decrease
B) Lead time will increase, throughput will increase
C) Lead time will decrease, throughput will increase
D) Lead time will decrease, throughput will decrease

Question 35

Which of the following situations is characteristic of a make-to-stock environment?

A) Work in process (WIP) represents the largest cost of inventory.
B) The impact of technology on the production process will be large.
C) The master schedule is stated at the finished product level.
D) Customer involvement is typically very high.

Question 36

Which of the following statements characterizes an intermittent manufacturing environment?

A) Work center load is predictable.
B) Routings for all products are the same.
C) Work centers are organized by function.
D) Kanban is the most appropriate scheduling method.

Question 37

Which of the following issues would be of greatest concern for a company choosing to reduce its finished goods inventory?

A) Long production changeover time
B) Customer service expectations
C) Product quality requirements
D) Product shelf life constraints

Question 38

A firm offers products configured from a large number of stocked options. Which of the following production environments is the firm most likely to use?

A) Engineer-to-order
B) Make-to-order
C) Assemble-to-order
D) Make-to-stock

Question 39

Which of the following manufacturing processes would be characterized by a narrow range of standard products, low direct labor costs, and a high level of technical support for manufacturing?

A) Jobbing
B) Intermittent
C) Flow
D) Project

Question 40

Which of the following factors is most likely to affect the demand for a company's services or products?

A) The sales and operations plan
B) Demand forecasting
C) Resource availability
D) Economic conditions

Question 41

Characteristics that cause customers to consider a company's products or services are called:

A) order qualifiers.
B) order winners.
C) product configurations.
D) product specifications.

Question 42

The question below is based on the following information: What is the forecast for period 34 if a simple three-period moving average is used?

A) 312
B) 313
C) 318
D) 325

Question 43

Which of the following calculations is a major component that is used with extrinsic forecasting?

A) Moving average
B) Exponential smoothing
C) A seasonal index
D) An economic indicator

Question 44

Which of the following statements is true regarding the concept of independent demand?

A) These items are usually raw materials.
B) The requirements for these items are usually forecasted.
C) The demand for these items must be calculated.
D) The demand for these items is related to demand for other items.

Question 45

The contribution made by an operation to the final usefulness of a product is known as:

A) the customer service level.
B) value-added.
C) the cost of quality.
D) an order winner.

Question 46

Which of the following forecast inputs is considered to be intrinsic data?

A) Demographic
B) Econometric
C) Historical sales
D) Market survey

Question 47

Service parts needs are most often determined by:

A) bills of material explosion.
B) forecasts based on prior demand.
C) material requirements planning (MRP) logic calculations.
D) analysis of lead-time requirements.

Question 48

An order winner is a competitive characteristic that:

A) is universal between customers and markets.
B) differentiates among potential customers.
C) a company must exhibit to be considered a potential supplier.
D) a company must exhibit to gain new sales.

Question 49

When demand is uncertain, what is the most appropriate action to take?

A) Recalculate safety stock
B) Increase order quantity
C) Change method of transportation
D) Increase number of warehouses for distribution

Question 50

A 5-year decline in demand for diapers most closely represents which of the following types of forecast patterns?

A) Irregular
B) Cyclic
C) Trend
D) Seasonal

Question 51

The question below is based on the following information: What is the mean absolute deviation of demand for the data?

A) 1
B) 3
C) 5
D) 101

Question 52

A primary purpose of Quality Function Deployment is to:

A) calculate performance limits.
B) determine marketing strategies.
C) direct product design.
D) set pass/fail criteria.

Question 53

Which of the following items is a source of independent demand?

A) Customer orders for finished products
B) Subassembly requirements from material requirements planning
C) Raw material requirements from material requirements planning
D) Protective packaging for shipping customer orders

Question 54

Which of the following smoothing constants places the most weight on the old forecast?

A) 0.4
B) 0.3
C) 0.2
D) 0.1

Question 55

Which demand management activity includes processing a customer request and making material available for production or shipping?

A) Forecasting
B) Order processing
C) Providing available-to-promise dates
D) Communicating with the marketplace

Question 56

Which of the following functional areas decides the product to be supplied and the customers to be served?

A) Engineering
B) Finance
C) Manufacturing
D) Marketing

Question 57

Which of the following forecasting techniques eliminates the need to keep months of historical data?

A) Exponential smoothing
B) Seasonal index
C) Delphi
D) Trend

Question 58

Which of the following factors most likely will impact the demand for a firm's products or services?

A) Forecast accuracy
B) Order processing system
C) Competition
D) Planning horizon

Question 59

Which of the following forecasting techniques reviews a company's sales history?

A) Qualitative
B) Delphi
C) Extrinsic
D) Intrinsic

Question 60

Which of the following describes a competitive characteristic that a firm must exhibit to be considered as a supplier in a market?

A) Marketing research
B) Manufacturing automation
C) Order qualifier
D) Order winner

Question 61

A distributor provides customer service by improving which of the following market driven factors?

A) Availability
B) Design
C) Shelf life
D) Quality

Question 62

Which of the following statements about strategic planning is true?

A) It is focused on the master production schedule (MPS) and the material requirements plan.
B) It helps integrate the plans of marketing and production.
C) It involves primarily personnel development and acquisition of long-lead-time materials.
D) It is top-level planning that is not tied to other planning activities.

Question 63

Which of the following capacity management techniques is used to support the production plan?

A) Resource planning
B) Capacity requirements planning
C) Rough-cut capacity planning
D) Input/output control

Question 64

Which of the following phrases best defines a production plan?

A) The plan for the production and purchase of the components used in making the items in the master production schedule
B) The broad direction of the firm, the kind of business-product lines, and markets the firm wants in the future
C) The quantities of each product group that must be produced in each period, desired inventory levels, resources required in each period, and the availability of resources needed
D) The flow of work through the factory through input/output analysis

Question 65

Which of the following situations requires the largest amount of safety stock based on demand variability and replenishment lead time?

A) Low variability, short replenishment lead time.
B) Low variability, long replenishment lead time.
C) High variability, short replenishment lead time.
D) High variability, long replenishment lead time.

Question 66

Which of the following techniques is best for monitoring loads and capacities?

A) Exponential smoothing
B) Discrete lot sizing
C) Input/output control
D) Rough-cut capacity planning

Question 67

A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225. Which of the following values reflects the mean absolute deviation for this data?

A) 7.5
B) 12.5
C) 45
D) 75

Question 68

In Quality Function Deployment, "competitive evaluation" refers to:

A) analyzing current financial health.
B) considering global market potential.
C) ranking industry rivals' position.
D) comparing perceived product quality.

Question 69

An extreme change in demand in the supply position upstream generated by a small change in demand downstream in the supply chain is called the:

A) efficiency variance.
B) bullwhip effect.
C) estimate of error.
D) stockout probability.

Question 70

The primary advantage of process flexibility is the:

A) ease of implementing engineering changes.
B) responsiveness to volume or mix changes.
C) decrease in labor costs.
D) reduced need for skills.

Question 71

Firm planned orders in a material requirements planning (MRP) system are used to:

A) protect against computer rescheduling.
B) reduce the use of forecasts.
C) increase accuracy in the MRP system.
D) validate capacity available.

Question 72

A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225. Calculate the tracking signal for this product's forecast.

A) 6
B) 7.5
C) 45
D) 75

Question 73

A manufacturer's market is highly dependent upon customers selecting standard options at the time of placing an order. Which of the following manufacturing strategies is best suited to compete in this market?

A) Engineer-to-order
B) Make-to-order
C) Assemble-to-order
D) Make-to-stock

Question 74

Which of the following documents specifies how an item is to be manufactured?

A) Routing
B) Bill of labor
C) Dispatch list
D) Item master

Question 75

Which of the following processes converts the master production schedule into resource requirements that are then compared to the available resources?

A) Capacity requirements planning
B) Rough-cut capacity planning
C) Material requirements planning
D) Resource planning

Question 76

The portion of a firm's inventory and planned production that is not already committed is referred to as:

A) planned order receipts.
B) projected inventory balance.
C) master production schedule due date.
D) available -to-promise.

Question 77

The question below is based on the following illustration of product parts: Which of the following items are components?

A) Y and Z only
B) 1, 2, and 3 only
C) Y, Z, 1, 2, and 3 only
D) X, Y, Z, 1, 2, and 3

Question 78

What is the output of sales and operations planning?

A) Production plan
B) Master production schedule
C) Sales plan
D) Production order

Question 79

If the quantity ordered equals the quantity required in a time bucket, which of the following lot-sizing rules has been used?

A) Lot-for-lot
B) Fixed order quantity
C) Order "N" periods supply
D) Economic order quantity (EOQ)

Question 80

Material requirements planning requires which of the following files to plan requirements?

A) Standard cost
B) Bill of materials
C) Routing
D) Work center