MGSC 395 Final Exam Questions With Verified Correct Answers

inventory management - correct answers the planning and controlling of inventories in order to meet the competitive priorities of the organization inventory - correct answers a stock of materials used to satisfy customer demand or to support the production of services or goods pressures for small inventories - correct answers-inventory holding cost -cost of capital -storage and handling costs -taxes -insurances -shrinkage pressure for large inventories - correct answers- customer service -ordering cost -setup cost -labor and equipment ultilization -transportation cost -payment to suppliers types of inventory - correct answers1. raw materials 2. work in progress 3. finished goods 4. cycle inventory 5. safety stock 6. anticipation 7. pipeline lot sizing principles - correct answers1. the lot size, Q, varies directly with the elapsed time between orders (cycle) 2. the longer the time between orders, the greater cycle inventory must be cycle inventory - correct answers-reduce the lot size -reduce ordering and setup costs and allow Q to be reduced -increase repeatability to eliminate the need for changeover safety stock inventory - correct answers-place orders closer to the time when they must be received -improve demand forecasts -cut lead times -reduce supply chain uncertainty -rely more on equipment and labor buffers anticipation inventory - correct answers-match demand with production rates -add new products w/ different demand cycles -provide off-season promotional campaigns -offer seasonal pricing plans pipleine inventory - correct answers-reduce lead time -find more responsive suppliers and select new carriers -change Q in thoses cases where the lead time depends on the lot size ABC analysis - correct answersthe planning and controlling of inventories in order to meet the competitive priorities of the organization economic order quantity - correct answersthe lot size Q that minimizes total annual inventory holding and ordering costs five assumptions of economic order quantity - correct answers1. demand rate is constant and known 2. no constraints are placed on the size of each lot 3. the only 2 relevant costs are holding and fixed cost per lot for orderings or setup 4. decision for one item can be made independently of the other 5. the lead time is constant and known don't use economic order quantity - correct answers-make to order strategy -order size is constrained modify the economic order quantity - correct answers-quantity discounts -replenishments not instantaneous use the economic order quantity - correct answers-make-to-stock -carrying and setup costs are known and relatively stable continuous review (Q) system - correct answers-reorder point system and fixed order quantity system -for independent demand items -track inventory position -includes scheduled reciepts, on hand inventory, and back orders reorder point - correct answers-choose an appropriate service-level policy -determine the demand during lead time probability distribution -determine the safety stock and reorder point levels two bin system - correct answersvisual system an empty 1st bin signals the need to place an order supply chain design - correct answersdesigning a firm's supply chain to meet the competitive priorities of the firm's operations strategy supply chain design pressures - correct answers-dynamic sales volumes -customer service levels -service/product proliferation measures of supply chain financial performance - correct answers-total revenue -cogs -operating expenses -cash flow -working capital -roa strategic implications - correct answersefficient supply chains- build to stock responsive supply chains -assemble to order -make to order -design to order supply chain integration - correct answersthe effective coordination of supply chain processes though the seamless flow of information up and down the supply chain external disruptions - correct answers-volume changes -service and product mix changes -late deliveries -underfilled shipments internal disruptions - correct answers-internally generated shortages -engineering changes -order batching -new service/product introductions -service or product promotions -information errors supplier relationship process - correct answers-supplier selection (material costs) -freight cost -inventory cost -administrative cost green purchasing - correct answersthe process of identifying, assessing, and managing the flow of environmental waste and finding ways to reduce it and minimize its impact on the environment design collaboration - correct answers-early supplier involvement -pre-sourcing -value analysis negotiation - correct answers-competitive orientation -cooperative orientation buying - correct answers-electronic data interchange -catalog hubs -exchanges -auctions -locus of control information exchange - correct answers-radio frequency identification -vendor managed inventory order fulfillment process - correct answers-customer demand planning -supply planning -production -logistics customer relationship process - correct answers-marketing -order placement -customer service levers for improved supply chain performance - correct answers-sharing data -collaborative activities -reduce replinshment lead times -reduce order lot sizes -ration short supplies -use every day low pricing -be cooperative and trustworthy levers for improved supply chain performance measures - correct answers-costs -time -quality -environmental impact forecast - correct answersa prediction of future events used for planning purposes forecasting - correct answers-critical inputs to business plans and budgets -used in all facets of work place-- HR, marketing, operations, finance -made on many different variables -important to managing both processes and managing supply chains time series - correct answersthe repeated observations of demand for a services or product in their order of occurence five basic time series patterns - correct answers-horizontal -trend -seasonal -cyclical -random forecasting error - correct answersimportant to measure the accuracy of forecasts-- simply the difference between the demand and the forecast naive forecast - correct answersthe forecast for the next period equals the demand for the current period simple moving averages - correct answersspecifically, the forecast for period can be calculated at the end of period t capacity - correct answersthe maximum rate of output of a process or a system capacity planning - correct answerslong term economies and diseconomies of scale capacity timing and sizing strategies systematic approach to capacity discussion constraint management - correct answersshort term theory of constraints identificantion and management of bottlenecks product mix decision using bottlenecks managing constrains in a line process measures of capacity and utilization - correct answers-output measures -input measures -utilization using output measures of capacity - correct answersprocess has high volume and the firm makes a small number of standardized products using input measures of capacity - correct answersproduct variety and process divergence is high product or service mix is changing productivity rates are expected to change significant learning effects are expected economies of scale - correct answers-spreading fixed costs -reducing construction costs -cutting costs of purchased materials -finding process of advantages diseconomies of scale - correct answers-complexity -loss of focus -inefficiencies capacity cushions - correct answersthe amount of reserve capacity a process uses to handle sudden changes systematic approach to long-term capacity decisions - correct answers1. estimate future capacity requirements 2. identify gaps 3. develop alternative plans 4 evaluate each alternative