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SCM Exam 2

Terms in this set (37)

Process thinking causes managers to address critical process elements, including:
if you dont like the outcome, change the process
You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following basic activity types in a process?
delay
Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's:
Maximum capacity
Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true?
Utilization was 133% of effective capacity
A bottleneck activity in a process is generally the activity with:
the least capacity
Little's Law suggests that the key to increased throughput is:
shorter flow times
Which of the following statements about economies of scale is NOT true?
economies of scale refers to the fact that as volume increases, total cost of production decreases
Floor space used to store items to be inspected belongs to which of the following elements of a process?
inputs/outputs/flows
Which two of the following effects directly result from bottlenecks?
decrease in output and increase in lead-times
A process having the same activity being performed by two or more resources simultaneously is said to have what kind of structure?
parallel
The total time that it takes to get one unit through a process is called:
flow time
Continual improvement of processes is important because:
Competitors are improving their processes, customer preferences change over time, technology is constantly changing
Littles Law: I/TH
inventory/ throughput
Which of the following process structures can produce the widest variety of products?
Job shop
Zanda Corp. wants to have a process structure that has cost advantages similar to continuous or repetitive processes, but wants to produce greater variety than those processes normally allow. Zanda should consider:
mass customization
Companies with a make to stock orientation are most likely to use which of the following process structures?
repetitive process
Which of the following products is most likely to require an assemble to order market orientation?
an upholstered sofa
Service factory
facilities and equiptment represent a large portion of costs
Using technology such as self-checkouts in grocery stores to enable customers to complete the service delivery and transaction themselves is most commonly used for:
mass services
Zanadu Corp. has dedicated equipment and workers in a regularly occurring sequence of activities. Zanadu has which type of operations layout?
product layout
when a process is automated:
fixed costs increase
Which is false with respect to a process structure?
its same across the entire supply chain
Which of the following products would be most likely "make to stock"?
a car
Which of the following is the best example of a service shop?
a computer repair shop
Which product is likely to use a fixed-position layout in its production process?
a commercial plane
mass customization
attempts to maintain cost advantages similar to continuous or repetitive processes, but allows a firm to produce greater variety than those processes normally allow
Taxes and insurance costs are an example of which of the following costs?
carrying (or holding) costs
Johnson Company had beginning inventory of $1,000,000 and ending inventory of $1,200,000. Johnson has determined inventory carrying cost to be 25 percent. Johnson's inventory carrying cost was:
$275,000
Suppose demand is 45 units a month, average inventory is 60 units, and unit cost is $20. What is the annual inventory turnover?
9
Natalie's Cabinets makes cabinets at an average cost of $2,000. Last year, Natalie sold 5,000 units of the cabinets and had an annual turnover rate of four times. Natalie has estimated her inventory carrying cost to be 25 percent. What was Natalie's annual inventory carrying cost?
$625,000
When calculating a reorder point (ROP), which of the following factors WOULD NOT affect the calculation?
Items EOQ
What might a company do to reduce the amount of cycle stock it holds?
attempt to reduce order costs
Which of the following might a company try to do to reduce the total amount of safety stock it holds?
Implement and use of ABC analysis of inventory items, attempt to reduce variation in supplier lead times, implement demand management approaches
___________ inventory is the costliest form of inventory one can hold.
Finished goods
When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as:
bullwhip effect
A difference between periodic review and continuous review inventory systems is:
in one system time triggers orders, in the other quantity triggers orders
Texas Manufacturing has decided to triple the number of distribution centers it operates around North America in order to locate inventories within 500 miles of each major city. What effects should they expect?
required safety stock will increase
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