Deck 6: Managing Inventory, MRP, ERP, and JIT

Question 1

Strategic decisions will determine the very core of the business.

Answer 1

True
Explanation:Strategic decisions will determine the very core of the business that an organization is in. For example, investment decisions, outsourcing and reshoring all change the basic business model of an organization.

Question 2

Managing inventory is just about handling physical goods.

Answer 2

True

Question 3

Managing inventory issues has caused some companies to revert from outsourcing to insourcing.

Answer 3

True

Question 4

Managing inventory successfully has more to do with supplier relationship management than with the technical issues associated with holding inventory.

Question 5

Frequently inventory management is viewed as a technical activity

Question 6

There are only ten ways of reducing inventory.

Question 7

RFID is not a viable inventory management technology.

Question 8

The need to control is not a driver of Vertical integration strategies.

Question 9

The possibility of diversification is a driver of vertical integration strategies.

Question 10

Inventory is no longer considered an asset.

Question 11

Poorly managed inventory can result in weakened competitive capabilities.

Question 12

The need to buffer operations in the production systems is a reason for holding inventory.

Question 13

The need to buffer your delivery system from delays is not a reason for holding inventory.

Question 14

The need to avoid or reduce transportation costs is not a reason for holding inventory.

Question 15

Stock-outs will drive higher replenishment costs.

Question 16

Cycle counting is accurate and relatively simple method of managing inventory.

Question 17

In the Supply Chain, what is not one of the steps in the materials process?

A) Retrieval
B) Transport
C) Customer
D) Supplier
E) All of the above

Question 18

Which of the following is a type of trust needed for strong buyer-supplier relationships?

A) Goodwill trust.
B) Implied trust.
C) Short-term trust.
D) Long-term trust.

Question 19

Why has outsourcing operations traditionally failed companies?

A) Partners encounter difficulties that result in contract renegotiation.
B) Partners change their initial objectives.
C) Partners part without having achieved their objectives.
D) Partners prematurely end their arrangements.
E) All of the above.

Question 20

Which of the following can be done to reduce inventory?

A) Increase demand variability.
B) Improve forecast accuracy.
C) Increase the number of produced items.
D) Increase order sizes.

Question 21

Which of the following is considered a potential problem with holding inventory?

A) Stock-outs.
B) Lower need to forecast accurately.
C) Obsolete stock.
D) Economies of scale are achieved.

Question 22

Which of the following is considered a potential problem with stock-outs?

A) Failure to satisfy customer demands.
B) Decreased storage costs.
C) Working capital is tied up.
D) Deterioration, theft, and damage to stock.

Question 23

Which of the following inventory solutions states that roughly 20% of the number of components account for 80% of the product's cost?

A) Economic Order Quantity (EOQ).
B) Enterprise Resource Planning (ERP).
C) Material Requirements Planning (MRP).
D) ABC Analysis.

Question 24

One of the biggest dilemmas involved in an outsourcing initiative is

A) how to mitigate the risk of failure
B) how to meet demand
C) which country to move operations to
D) how to handle HR in a new country

Question 25

Many Western firms have tended to view inventory management as

A) a tactical activity
B) strictly operational
C) easily outsourced
D) none of the above

Question 26

Which of the following are ways to reduce inventory

A) reduce the number of items
B) improve supply reliability
C) reduce supplier lead times
D) all of the above

Question 27

The perceived management wisdom between the 1950s and 1980s was that a firm should try to _________ integrate.

A) vertically
B) horizontally
C) globally
D) regionally

Question 28

What is unacceptable to customers?

A) stock outs / zero inventory
B) excess stock
C) short lead time
D) shipping fees

Question 29

Which of the following are potential problems with holding inventories?

A) storage costs
B) deterioration / theft / damage
C) prices fall on held items
D) all of the above

Question 30

EOQ identifies:

A) how much to order
B) when to place the order
C) where to order from
D) who should be in charge of ordering

Question 31

EOQ is based upon all of the following, except;:

A) demand is constant
B) costs are known
C) little uncertainty
D) multiple items are ordered
E) all items are delivered once

Question 32

Which of the following is true about ABC Analysis;

A) it focuses on particular products
B) it can be applied to the full range of products in the firm
C) it is a continuous management system
D) the system is not based upon costs
E) all are true

Question 33

JIT techniques are used to _______ materials only when needed.

A) pull
B) push
C) consolidate
D) manage

Question 34

JIT is a holistic system that enables improvements to.

A) costs
B) cycle times
C) delivery times
D) quality
E) all of the above

Question 35

MRP is derived from all of the following except:

A) master production schedule
B) inventory records
C) product structure
D) lead times
E) all of the above are used

Question 36

The downsides to ERP can include:

A) it's expensive
B) poses major organizational changes
C) difficult to customize
D) it's process based
E) all of the above except d.

Question 37

The essence of Lean is to

A) Integrate production
B) Emphases on prevention
C) push and pull techniques
D) low inventories
E) all of the above

Question 38

Managing inventory can be a huge task including the following:

A) Areas of logistics
B) Developing and nurturing buyer-supplier relationships
C) Purchasing and supply
D) None of the above
E) All of the above

Question 39

Each of the following are ways to reduce inventory except:

A) Address capacity issues
B) Increase order sizes
C) Reduce demand variability
D) Reduce supplier lead times
E) None of the above

Question 40

If inventory is managed poorly this will weaken competitive capabilities in terms of:

A) Reduced output
B) Delays
C) Poor responsiveness
D) Increased costs
E) All of the above

Question 41

Problems associated with stock-outs include:

A) Higher replenishment costs
B) Costly emergency procedures
C) A & B only
D) All of the above
E) Satisfied customer demands

Question 42

MRP operates best under these conditions:

A) Limited variability
B) Production is carried out in small batch sizes
C) High-volume line processes
D) All of the above
E) A & C only

Question 43

Lean production includes all of the following except:

A) Close vertical relationships
B) Emphasis on prevention
C) Production is pushed to suit machine loading
D) Integrated productions
E) Work organized in teams

Question 44

Why is inventory a strategic issue?

Question 45

Explain the drivers affecting outsourcing decisions.

Question 46

Explain the drivers affecting the outsourcing decision.

Question 47

Explain the key factors affecting the inventory decision.

Question 48

Identify the ways of reducing inventory.

Question 49

What is RFID and how can it be used in managing inventory?

Question 50

Identify and explain a reason for a vertical integration strategy.

Question 51

Identify the ways of reducing inventory.

Question 52

Discuss 2 key strategic question in managing inventory in the supply chain.

Question 53

Discuss 2 reasons for holding inventory.

Question 54

Discuss 2 potential problems with holding inventory.

Question 55

Identify and discuss 2 potential problems associated with stock-outs.

Question 56

Identify and discuss the problems with the EOQ formula.

Question 57

Explain how ABC analysis works.

Question 58

Explain the scope of management activities in MRP.

Question 59

How does JIT work?

Question 60

Identify and discuss the seven categories of waste.