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EXAM 1: Supply Chain Management

Terms in this set (40)

Which of the following statements is TRUE?
a. Service response logistics is the digital distribution of services
b. Six Sigma was originally created at Motorola in the 1980s
c. One of the key activities in supplier management is material requirements planning
d. The lean production system has also been referred to as the Intel production system
b. Six Sigma was originally created at Motorola in the 1980s
Examining raw supply chain data and then reaching conclusions or making predictions with the information is sometimes referred to as:
a. Electronic data interchange
b. Enterprise resource planning
c. Profit-leverage effect
d. Supply chain analytics
d. Supply chain analytics
A value-enhancing benefit from supply chain management efforts would be:
a. Increased organizational cost
b. Centralized decision making
c. Larger supply base
d. Lower purchasing and inventory carrying costs
d. Lower purchasing and inventory carrying costs
According to the textbook, which of the following conditions need NOT be present for successful supply chain management:
a. High levels of trust
b. Accurate communications
c. Collaboration
d. Adversarial relationships
d. Adversarial relationships
When did U.S. manufacturers begin to use mass production techniques to reduce costs and improve productivity?
a. 1940s
b. 1980s
c. 1950s
d. 1990s
c. 1950s
Which of the following terms describes an amplification of the variation in the demand pattern along the supply chain?
a. Benchmarking
b. Bullwhip effect
c. Process integration
d. Assignable variations
b. Bullwhip effect
Which of the following service providers can help to get goods where they need to be in a timely fashion?
a. Freight forwarders
b. Trucking/Shipping companies
c. Public warehousing firms
d. All of these choices are correct.
d. All of these choices are correct.
Which of the following strategies might help eliminate the bullwhip effect?
a. Reduction of safety stock
b. Reduction in the number of suppliers
c. Manufacturers knowing its customers' purchase plans
d. All of these choices are correct.
d. All of these choices are correct.
The term vertical integration means to:
a. Create a virtual company
b. Develop the ability to produce products that complement the original product
c. Own/buy your suppliers and/or customers
d. Create more jobs in the higher ranks of the company
c. Own/buy your suppliers and/or customers
Which of the following statements is NOT true of many large firms today?
a. They are selling-off business units to focus more on core capabilities
b. They are trying to create alliances or strategic partnerships with suppliers
c. Use of vertical integration is much more common due to the low cost and ease in managing diverse business units
d. All of these choices are correct.
c. Use of vertical integration is much more common due to the low cost and ease in managing diverse business units
According to the Six Sigma philosophy, the Six Sigma goal is to have ____ defects per million measurement opportunities.
a. 3.4
b. 9.9
c. 0
d. 1.0
a. 3.4
When a process is considered in control, this means that:
a. The data plots appear normally distributed around the desired measurement.
b. Only natural process variations are present.
c. No data plots fall outside the control limits.
d. All of these choices are correct.
d. All of these choices are correct.
Producer's Risk refers to which of the following scenarios?
a. When a buyer rejects a shipment of low quality units because the sample did not meet the acceptance standard.
b. When a buyer accepts a shipment of low quality units because the sample did meet the acceptance standard.
c. When a buyer accepts a shipment of high quality units because the sample did meet the acceptance standard.
d. When a buyer rejects a shipment of high quality units because the sample did not meet the acceptance standard.
d. When a buyer rejects a shipment of high quality units because the sample did not meet the acceptance standard.
Attribute data are shown as:
a. The mean of a sample's measures.
b. The percent defectives within a sample.
c. The number in a sample that met the acceptance standard.
d. The number of ounces in a soup can, for example.
b. The percent defectives within a sample.
Moving small production batches through a lean production facility is often accomplished using:
a. Kanbans
b. Keiretsus
c. Lean suppliers
d. Automation
a. Kanbans
In lean terminology, yokoten refers to:
a. A signal used to move items through a lean facility.
b. The number of containers in a lean facility.
c. Sharing best practices with suppliers and customers.
d. Work-in-process in lean facilities.
c. Sharing best practices with suppliers and customers.
A company that produces 8 pound bags of potting mix gathered 4 samples of 5 bags. The weights of each bag are listed below. What is R?

Sample 1 2 3 4 5
1 7.98 8.34 8.02 7.94 8.44
2 8.33 8.22 8.08 8.51 8.41
3 7.89 7.77 7.91 8.04 8
4 8.24 8.18 7.83 8.05 7.9

a. 0.55
b. 0.40
c. 0.36
d. 0.48
b. 0.40
A company that produces 8 pound bags of potting mix gathered 4 samples of 5 bags. The weights of each bag are listed below. What is X ?

Sample 1 2 3 4 5
1 7.98 8.34 8.02 7.94 8.44
2 8.33 8.22 8.08 8.51 8.41
3 7.89 7.77 7.91 8.04 8
4 8.24 8.18 7.83 8.05 7.9

a. 7.97
b. 8.10
c. 8.03
d. 7.68
b. 8.10
A company makes golf balls with painted logos in boxes of 100. The organization wants to construct a P-chart to track the percentage of golf balls with no logo in each sample. If the company used one box in each sample in the dataset, what is the sample standard deviation for the P-chart? Choose the closest answer.

Sample defects Sample defects Sample defects
1 3 8 6 15 5
2 5 9 4 16 0
3 3 10 9 17 2
4 4 11 2 18 6
5 2 12 6 19 2
6 4 13 5 20 1
7 2 14 1 TOTAL 72

a. 0.072
b. 0.033
c. 0.166
d. 0.019
d. 0.019
The Toyota Production System was initially designed based on:
a. Deming's poka-yoke concept.
b. The idea of reduction of waste found at General Electric
c. Several trips by the Toyoda family to the Ford manufacturing plant.
d. The continuous improvement system at General Motors.
c. Several trips by the Toyoda family to the Ford manufacturing plant.
Which tool is useful for determining the frequencies of specific problems?
a. Pareto Charts
b. Cause-and-Effect Diagrams
c. Fishbone Diagrams
d. Check Sheets
d. Check Sheets
C charts are useful when:
a. You wish to determine the average percent defective for a number of samples.
b. The samples are not randomly drawn from the population.
c. The sample means are known but the sample ranges are not.
d. A number of mistakes or errors can occur per unit of output, but they occur infrequently.
d. A number of mistakes or errors can occur per unit of output, but they occur infrequently.
How do lean systems impact the environment?
a. It means fewer kanbans, which is better for the environment.
b. New products are moved to the market more quickly, which is better for the environment.
c. It reduces waste, which improves the environment.
d. It's use of enterprise resource planning means closer ties to the environment.
c. It reduces waste, which improves the environment.
Variations in process measurements can be classified as either natural or:
a. Assignable
b. Unnatural
c. Specific
d. Measurable
a. Assignable
Bill owns Speedy Deliveries and keeps track of customer complaints. For each delivery, there are two possible complaints: a late delivery and a wrong delivery. Bill tracks the delivery "defects" and then uses this information to determine his company's Six Sigma quality level. During the past week, his company made 322 deliveries. His drivers received 8 late delivery complaints and 4 incorrect delivery complaints. What is Bill's defects per million opportunities (DPMO)?
a. 4295
b. 9377
c. 644
d. 18634
d. 18634
Use of Six Sigma helps supply chains become lean, due to:
a. The improved use of Kanbans in production facilities
b. The impact that improved quality has on reducing safety stocks
c. The cross-training of employees to increase processing flexibility
d. The increased batch sizes to take advantage of economies of scale
b. The impact that improved quality has on reducing safety stocks
Poka-yoke refers to:
a. Productivity improvement
b. Reduction of human resources
c. Error- or mistake-proofing
d. None of these choices are correct.
c. Error- or mistake-proofing
Calculate the number of inventory containers (round up) required given the following:

Demand rate = 12 parts per hour, Safety stock required = 10%
Size of containers = 8 parts, Time to cycle through entire system = 4 hours
a. 4 containers
b. 6 containers
c. 5 containers
d. 7 containers
d. 7 containers
Which of the following is one of the MOST important elements of the lean production philosophy?
a. Inventory reduction and continuous improvement
b. Fully automated assembly lines and a large supplier base
c. Labor reduction and increased lot sizes
d. Quality inspections and a standardized product line
a. Inventory reduction and continuous improvement
When purchase order quantities are cut in half, which of the following will be true?
a. Average inventory levels will double.
b. Average inventory levels will also be cut in half.
c. Average inventory levels will not be impacted.
d. Average inventory levels will be zero.
b. Average inventory levels will also be cut in half.
The one true source of income for all supply chain organizations is
a. The supply chain's end customer
b. Retailers
c. The service provider
d. The second tier suppliers
a. The supply chain's end customer
Which of the following is a reverse logistics activity?
a. Sharing information with supply chain partners through the Internet
b. Customer returning a car to the dealer for warranty repair
c. Inspecting raw materials when they arrive at factory
d. UPS delivering the product to the end customer
b. Customer returning a car to the dealer for warranty repair
Which of the following can happen because of the bullwhip effect?
a. Smooth production planning and static requirements
b. Oversupply of goods leading to increased inventory costs
c. Increased profit in the long term
d. Effective purchasing methods resulting in decreased inventory costs
b. Oversupply of goods leading to increased inventory costs
The following is an example of the bullwhip effect:
a. IGT's products are so successful that it adds a new retailer for distribution
b. IGT produces a defective product and thus realizes an excessive increase in consumer returns
c. IGT incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
d. IGT is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain
c. IGT incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
Which of the following terms is described as rethinking and redesigning of business processes to reduce waste and increase performance?
a. Vertical integration
b. Benchmarking
c. Process integration
d. Business process reengineering
d. Business process reengineering
One of the more crucial issues within supply management involves encouraging or helping the firm's suppliers to perform in some desired fashion. The term for this is _______________.
a. Supplier Management
b. Inventory Management
c. Co-sourcing
d. Supply base rationalization
a. Supplier Management
Which of the following is a software system that can be used for managing inventory, purchases, and production schedules?
a. Demand capacity tracking (DCT)
b. Material requirements planning (MRP)
c. Inventory sourcing (IS)
d. Demand process reengineering (DPR)
b. Material requirements planning (MRP)
A form of inventory management (also referred to just-in-time) is accomplished through use of a:
a. Third-party logistics service
b. Distribution network
c. Strategic partnership
d. Lean production system
d. Lean production system
Designing and building a distribution network to ensure successful product delivery is part of which foundation element?
a. Supply
b. Integration
c. Logistics
d. Operations
c. Logistics
Meeting the needs of current supply chain members without hindering the ability to meet the needs of future generations refers to:
a. Supply chain analytics
b. Supply chain performance measurement
c. Supply chain sustainability
d. Supply chain visibility
c. Supply chain sustainability
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