APICS Exam 1 Questions With Complete Solutions. Inventory is the of Supply Chain - CORRECT ANSWER-life blood AInventory Turns equation - CORRECT ANSWER-Annual COGS/ Avrg inventory $ Matrix structure - CORRECT ANSWER-you can have more than one boss,

APICS Exam 1 Questions With Complete Solutions. Inventory is the of Supply Chain - CORRECT ANSWER-life blood AInventory Turns equation - CORRECT ANSWER-Annual COGS/ Avrg inventory $ Matrix structure - CORRECT ANSWER-you can have more than one boss, one product group, Team members come from different teams are also members of the product management office Centralized corp structure - CORRECT ANSWER-decisions are made at the top Appropriate response to risk (4 Parts) - CORRECT ANSWER-1. Try to avoid risk 2. Risk acceptance 3. Risk transfer 4. Risk mitigation Implement and monitor plan Job enlargement - CORRECT ANSWER-giving people more work to do Job enrichment - CORRECT ANSWER-giving workers more authority Job Rotation - CORRECT ANSWER-changing positions to provide broader perspective (ex LDP Program) Business planning - CORRECT ANSWER-Done by product families and translated into synchronized functional plans Current assets - CORRECT ANSWER-assets that can be spent/ used in less than one year Inventory ratio (aka activity ratio) - CORRECT ANSWER-COGS/ Avrg Inventory Fixed assets examples - CORRECT ANSWER-gross property, plant and equipment Payback period - CORRECT ANSWER-cost of investment/ annual cash savings Manufacturing costs (aka direct costs) - CORRECT ANSWER-DM, DL, MOH Product cost is recognized when - CORRECT ANSWER-products are sold Period costs - CORRECT ANSWER-accrued at time of purchase, not included in COGS Variable costing is what kind of tool - Job-Order costing - CORRECT ANSWER-lean.. shows fixed OH on your income statement CORRECT ANSWER-this is made to order environment Process costing - CORRECT ANSWER-costs are collected for the period and averaged Strategy - CORRECT ANSWER-A plan to use the organizations resources to achieve a sustainable competitive advantage vision - CORRECT ANSWER-shared perception of the future, what the organization wants to become Mission - CORRECT ANSWER-overall goals within business scope Values - CORRECT ANSWER-organizational guideposts for all business and ethical decisions Generic Business strategies (5) - CORRECT ANSWER-1. low-cost provider 2. Differentiation 3. Focused low-cost provider 4. Focused differentiation 5. Best-cost provider Differentiation Strategy - CORRECT ANSWER--made to order environment -profits margins will contribute to the bottom line - extra capacity to get things done on time - customer due dates are NON NEGOTIABLE 3 Objectives of MPR - CORRECT ANSWER-1. customer service levels 2. cost of production 3. inventory investment Sales and operations planning - CORRECT ANSWER-aggregation level- product family units happens monthly/ quarterly forecast length should be several months out Sales and operations (<->) - CORRECT ANSWER-resource planning Master scheduling (<->) - CORRECT ANSWER-rough- cut capacity planning Demand management (<->) - CORRECT ANSWER-distribution planning Moving Average - CORRECT ANSWER-Sum of demand of most recent periods/ # of periods engineer to order - CORRECT ANSWER-material is at the supplier's supplier (can be special ordered) make- to - order - CORRECT ANSWER-material at supplier assemble- to -on hand - CORRECT ANSWER-lead time is an hour/shift/day make- to stock - CORRECT ANSWER-finished goods What increases rivalry among sellers in the same industry? - CORRECT ANSWER-buyer demand grows slowly/ is flat and both strong and weak rivalries exist What is the primary use of environmental scanning? - CORRECT ANSWER-To identify threats and opportunities What factors are considered in determining industry attractiveness? - CORRECT ANSWER-profitability and cumulative competitive pressure Deterrents to new market entry - CORRECT ANSWER-1. when existing competitors have resources o compete aggressively against the new entry or proprietary knowledge or patents 2. when they are protected by government policies 3. when the competitors have well established distribution channels and market locations 4. when entry requires significant capital investment In the maturing age of the product life cycle how is the organization likely to compete? - CORRECT ANSWER-By emphasizing competitive price and reaching new costumer groups What is the purpose of the VRIM test? - CORRECT ANSWER-to asses the strength of an organizations competitive advantage A manufacturer of building supplied decides to improve its competitive advantage by buying sand and gravel suppliers near its factories. What type of strategy is this? - CORRECT ANSWER-Backward Integration What generalization about vertical integration is often true? - CORRECT ANSWER-It aims at lowering both costs and risks of production Which situation is the best candidate for outsourcing? - CORRECT ANSWER-The process is not used by the customer often but requires costly equipment Scipa Automative is a reputable automotive parts supplier with declining profit margins in its home market because of declining automobile sales and high labor costs. Scipa is considering acquiring a midsize parts manufacturer in another country, where a large automative parts market is emerging. Scipa would transfer all manufacturing to this country. The business being considered for acquisition has weak management and technical competencies compared with Scipa's home country levels. Which factor will likely be most influential in Scipa's decision? - CORRECT ANSWER-Access to a growing market Which organization is pursuing a multi domestic strategy? - CORRECT ANSWER-A manufacturer makes multiple foreign acquisitions and produces components in different countries with standard processes, but products are assembled locally to appeal to local market preferences. What is key to Toyota's strategy in this initiative? How does this strategy measure up against the Triple Bottom Line? - CORRECT ANSWER- Aligning competencies with social benefit for competitive advantage. It delivers benefits in all threes ares of the TBL If an organization has implemented a sustainability initiative but it has not produced the desired results, what step should the organization take next? - CORRECT ANSWER-Implement an Audit Which option is the most sustainable long term approach to waste in manufacturing? - CORRECT ANSWER-Redesign products to minimize use of materials What are the three sources of cash flows in the cash flow statement? - CORRECT ANSWER-Operating activities, asset growth, investment interest In which costing method is fixed manufacturing overhead cost included in the cost of goods sold? - CORRECT ANSWER-Absorption Costing What ratio can be used to determine a company's ability to pay its liabilities by converting assets in the near term? - CORRECT ANSWER-Current Ratio Which investment analysis tool accounts for the time value of money? - CORRECT ANSWER-Net present Value Which statement about process costing is true? - CORRECT ANSWER- Process costing focuses on processing department costs Which are components of product cost? - CORRECT ANSWER-Overhead, labor, and material costs How does activity based costing differ from absorption product costing? - CORRECT ANSWER-Activity based costing assigns some non manufacturing costs to produce costs When are job-order and process costing methods used? - CORRECT ANSWER-When direct labor, materials, and factory overhead costs must be accumulated Which statement about information and process technology is true? - CORRECT ANSWER-Technology should be selected on the basis of the competitive advantage it conveys Which factor has the least impact on the choice of process technology? - CORRECT ANSWER-Worker Skills Quality - CORRECT ANSWER-Conformance of specifications Dependability - CORRECT ANSWER-Scheduling conformance Speed - CORRECT ANSWER-Throughput time Flexibility - CORRECT ANSWER-Rate of new product introduction Cost - CORRECT ANSWER-Working capital requirments What is the accurate description of order winning and order qualifying factors? - CORRECT ANSWER-Order qualifying factors represent minimal requirements, while order winning factors exceed expectations Which is the most practical way to reduce the bullwhip effect? - CORRECT ANSWER-Use point of sale information What is an advantage of the lead capacity strategy? - CORRECT ANSWER-Maximizing of revenue potential What is an advantage of small scale operations and facilities? - CORRECT ANSWER-Less overcapacity during scale-up