Productions 315 Final Exam

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The total cost for a continuous review system with uncertain demand excludes consideration of _____.

product cost

Which of these statements is NOT required in order for the EOQ model to be a reasonable approach?

The setup/ordering cost must exceed the annual holding cost of one unit.

Which on of the following is not an assumption of the EOQ model?

Quantity discounts can be taken advantage of for a long time.

Which one of the following statements regarding the economic order quantity (EOQ) is TRUE?

If an order quantity is larger than the EOQ, the annual holding cost for the cycle inventory exceeds the annual ordering cost.

A neighborhood sportswear store sells a pair of Victoria sneakers for $40. Due to the recent fitness craze, these shoes are in high demand. 50 pairs of shoes are sold per week. The ordering cost is $20 per order, and the annual holding cost is 20% of selling price. If the store operates 52 weeks a year, what can you say about the current lot size of 235?

too large

Which one of the following statements concerning the economic order quantity (EOQ) model is TRUE?

A decrease in holding cost will increase the EOQ.

Which one of the following statements concerning the economic order quantity (EOQ) is TRUE?

An increase in demand will increase the EOQ.

A company operating under an EOQ policy enjoys rising annual demand for their products for three consecutive years. During this time their holding cost and ordering cost remain constant. Which statement is best?

Their order quantity will rise but the time between orders will fail.

An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review sys tem or a P system (periodic review system) answers these questions.

Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods.

Which one of the following descriptions best defines the cycle-service level asa measure of customer service?

The desired probability of not running out of stock in any one inventory cycle.

For what percentage of the time will the condition of "not safety stock" adequately cover the demand for an item (assume demand during lead time is normally distributed)?

50%

Which one of the following statements regarding stockouts is best?

When no safety stock is maintained, stockouts will occur during approximately 50% of the cycles.

A P system has an advantage over the Q system _____.

because orders from multiple items from one supplier can be combined into a single purchase order.

Which one of the following statements represents an advantage of the P system over the Q system?

Orders can be more easily combined to the same supplier.

Which one of the following statements represents an advantage of the Q system over the P system?

The Q system is more suited for quantity discounts and physical limitations.

What is generally true about the class A SKUs in ABC analysis? They represent:

about 20% of all SKUs.

What is generally true about the class A SKUs in ABC analysis? They represent:

about 80% of the dollar usage.

What is generally true about the class B SKUs in ABC analysis? They represent:

about 30% of all SKUs and about 15% of the dollar usage.

What is generally true about the class C SKUs in ABC analysis? They represent:

about 50% of all SKUs.

What is generally true about the class C SKUs in ABC analysis? They represent:

about 5% of the dollar usage.

Lisa's Card Cache uses ABC analysis. Which of the following statements is NOT true of ABC analysis?

ABC analysis allows the company to control inventory shrinkage.

A companywide process that cuts across traditional functional areas, business units, geographic regions, and product lines is a(n):

enterprise process

Which of the following is NOT an example of dependent demand items?

Ice skates, roller skates

Any item manufactured from one or more components is a(n):

parent.

Which best defines the gross requirements for a component item?

The total demand for the component derived from all immediate parents

Wich of the following statements about MRP is TRUE?

MRP gross requirements for a component depend on the planned order releases of its immediate parents.

MRP can be used to best advantage under which one of the following circumstances?

When the item's demand depends on the production plans of its parent(s).

Which statement on MRP explosion is best?

It calculates the total number or subassemblies, components, and raw materials needed for each parent item.

If a planned receipt for an item is due in week 6 and the item's lead time is two weeks, in which week will the corresponding planned order release occur?

week 4

Which one of the following statements about lot-sizing rules is TRUE?

If the POQ rule is used, an item's lot size can vary each time each order is placed.

Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average inventory?

Lot for Lot (L4L)

Sunshine Manufacturing produces three products: X, Y, Z. The production of these end items is controlled by an MRP system. Each end item X is assembled with two components of A and one component of B. Each end item of Y is assembled with two components of C and one component of A. End item Z is assembled from one unit of D and one unit of C; D is manufactured from one unit of A; and C is manufactured from one unit of B. Which of the following sequences is an acceptable way to process the inventory records for components A, B, C, and D?

CBDA

A computer-generated memo used by inventory planners to make decisions about releasing new orders and adjusting due dates of scheduled receipts is a(n):

actions notice.

Which one of the following statements concerning MRP is TRUE?

Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order releases to estimate capacity requirements for critical workstations.

A technique used for projecting time-phased capacity requirements for workstations is called:

Capacity requirements planning.

There are four major phases in a project life cycle. Which of the following is not included?

Maturity

The project's objective statement should contain:

scope, time frame, and allocated resources

Which is the best statement regarding work breakdown structure?

Each activity in the WBS must have an "owner" who is responsible for doing the work.

The Project Manager for the installation of new equipment in a plant is likely to do all of the following EXCEPT:

delegate the responsibility for making tough decisions to the members of the project team.

A member of a project team that is implementing a new credit card payment process at a bank has direct responsibility to do all of the following except:

ensure that the project has appropriate resources for the job to be completed.

In an activity-on-node (AON) network, the nodes represent _____, whereas the arcs represent _____.

activities; precedence relationships

Which one of the following conditions violates the assumptions of PERT/CPM networks?

Two activities tied together by an arc are overlapping and can be worked on simultaneously.

Which one of the following best describes the critical path of a PERT/CPM network?

The sequence of activities between a project's start and finish that takes the longest time to complete.

To calculate the probability of completing a project by a certain date:

we assume that the activity durations are independent of each other so that the normal distribution can be used.

Assuming beta distribution is being used, it the most pessimistic time for an activity increases by six weeks, what will happen to the expected time for that activity?

It will increase by one week.

The probability that a project will be completed by its earliest expected completion date is:

50%

If a project has exactly one critical path, which one of the following statements is TRUE?

Crashing an activity on the critical path will always result in a reduced total project completion time.

A good risk management plan will contain which of these elements?

A prediction of the impact of each risk on the project.

A plan that identifies key threats to a project and prescribes ways to circumvent them is called a:

Risk Management Plan

Which of these is NOT one of the four categories of project risk?

Cost/Benefit

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