OPERATION MANAGEMENT TEST BANK EXAM BEST 2023

OPERATION MANAGEMENT TEST BANK EXAM QUESTIONS & ANSWERS LATEST VERSION 2023 lOMoAR cPSD| Operations Management- Chapter 4 Forecasting done 28) What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks? A) yesterday's forecasted attendance and yesterday's actual attendance B) yesterday's actual attendance and today's forecasted attendance C) yesterday's forecasted attendance and today's forecasted attendance D) yesterday's actual attendance and last year's actual attendance E) yesterday's forecasted attendance and the year-to-date average daily forecast error Answer: A 29) Forecasts A) become more accurate with longer time horizons. B) are rarely perfect. C) are more accurate for individual items than for groups of items. D) are more accurate for new products than for existing products. E) are impossible to make. Answer: B 30) One use of short-range forecasts is to determine A) planning for new products. B) capital expenditures. C) research and development plans. D) facility location. E) job assignments. Answer: E 31) Forecasts are usually classified by time horizon into three categories A) short-range, medium-range, and long-range. B) finance/accounting, marketing, and operations. C) strategic, tactical, and operational. D) exponential smoothing, regression, and time series. E) departmental, organizational, and industrial. Answer: A 32) A forecast with a time horizon of about 3 months to 3 years is typically called a A) long-range forecast. B) medium-range forecast. C) short-range forecast. D) weather forecast. lOMoAR cPSD| E) strategic forecast. Answer: B 33) Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a A) short-range time horizon. B) medium-range time horizon. C) long-range time horizon. D) naive method, because there is no data history. E) strategic forecast. Answer: C 34) Organizations use which three major types of forecasts, including two that may fall outside the role of the operations manager? A) strategic, tactical, and operational B) economic, technological, and demand C) exponential smoothing, Delphi, and regression D) causal, time-series, and seasonal E) departmental, organizational, and territorial Answer: B 35) Which of the following is not a step in the forecasting process? A) Determine the use of the forecast. B) Eliminate any assumptions. C) Determine the time horizon. D) Select forecasting model. E) Validate and implement the results. Answer: B lOMoAR cPSD| 36) The two general approaches to forecasting are A) qualitative and quantitative. B) mathematical and statistical. C) judgmental and qualitative. D) historical and associative. E) judgmental and associative. Answer: A 37) Which of the following uses three types of participants: decision makers, staff personnel, and respondents? A) executive opinions B) sales force composites C) the Delphi method D) associative models E) time series analysis Answer: C 38) The forecasting model that pools the opinions of a group of experts or managers is known as the A) expert judgment model. B) multiple regression model. C) jury of executive opinion model. D) consumer market survey model. E) management coefficients model. Answer: C 39) Which of the following is not a type of qualitative forecasting? A) executive opinions B) consumer market surveys C) sales force composite D) the Delphi method E) moving average Answer: E lOMoAR cPSD| 40) Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand? A) associative models B) exponential smoothing C) weighted moving average D) simple moving average E) time series Answer: A 41) Which of the following statements about time-series forecasting is true? A) It is based on the assumption that future demand will be the same as past demand. B) It makes extensive use of the data collected in the qualitative approach. C) It is based on the assumption that the analysis of past demand helps predict future demand. D) Because it accounts for trends, cycles, and seasonal patterns, it is always more powerful than associative forecasting. E) All of the above are true. Answer: C 42) Time-series data may exhibit which of the following behaviors? A) trend B) random variations C) seasonality D) cycles E) They may exhibit all of the above. Answer: E 43) Gradual movement in time-series data over time is called A) seasonal variation. B) a cycle. C) a trend. D) exponential variation. E) random variation. Answer: C 44) Which of the following is not present in a time series? A) seasonality B) operational variations C) trend D) cycles E) random variations Answer: B 45) The fundamental difference between cycles and seasonality is the A) duration of the repeating patterns. B) magnitude of the variation. C) ability to attribute the pattern to a cause. lOMoAR cPSD| D) speed of the variation. E) cycles happen more often than seasonality. Answer: A 46) In time series, which of the following cannot be predicted? A) large increases in demand B) cycles C) seasonal fluctuations D) random fluctuations E) large decreases in demand Answer: D 47) What is the approximate forecast for May using a four-month moving average? Nov. Dec. Jan. Feb. Mar. April 46 A) 38 B) 42 C) 43 D) 44 E) 47 Answer: D 48) Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand? A) naive approach B) moving average approach C) weighted moving average approach D) exponential smoothing approach E) random approach Answer: A 49) John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August? A) 2400 B) 2511 C) 2067 D) 3767 E) 1622 Answer: B 50) A six-month moving average forecast is generally better than a three-month moving average forecast if demand lOMoAR cPSD| A) is rather stable. B) has been changing due to recent promotional efforts. C) follows a downward trend. D) exceeds one million units per year. E) follows an upward trend. Answer: A 51) Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of A) manager understanding. B) accuracy. C) stability. D) responsiveness to changes. E) reliability. Answer: D 52) Which of the following statements comparing the weighted moving average technique and exponential smoothing is true? A) Exponential smoothing is more easily used in combination with the Delphi method. B) More emphasis can be placed on recent values using the weighted moving average. C) Exponential smoothing is considerably more difficult to implement on a computer. D) Exponential smoothing typically requires less record keeping of past data. E) Exponential smoothing allows one to develop forecasts for multiple periods, whereas weighted moving averages does not. Answer: D 53) Which time-series model uses past forecasts and past demand data to generate a new forecast? A) naive B) moving average C) weighted moving average D) exponential smoothing E) regression analysis Answer: D 54) Which is not a characteristic of exponential smoothing? A) smooths random variations in the data B) easily altered weighting scheme C) weights each historical value equally D) has minimal data storage requirements E) None of the above; they are all characteristics of exponential smoothing. Answer: C 55) Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? A) 0 lOMoAR cPSD| B) 1 divided by the number of periods C) 0.5 D) 1.0 E) cannot be determined Answer: D 56) Given an actual demand of 103, a previous forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the next period would be A) 94.6. B) 97.4. C) 100.6. D) 101.6. E) 103.0. Answer: C 57) A forecast based on the previous forecast plus a percentage of the forecast error is a(n) A) qualitative forecast. B) naive forecast. C) moving average forecast. D) weighted moving average forecast. E) exponentially smoothed forecast. Answer: E 58) Given an actual demand of 61, a previous forecast of 58, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing? A) 45.5 B) 57.1 C) 58.9 D) 61.0 E) 65.5 Answer: C 59) Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors? A) 0.10 B) 0.20 C) 0.40 D) 0.80 E) cannot be determined Answer: A 60) A forecasting method has produced the following over the past five months. What is the mean absolute deviation? Actual Forecast Error |Error| lOMoAR cPSD| 10 11 -1 1 8 10 -2 2 10 8 2 2 6 6 0 0 9 8 1 1 A) -0.2 B) -1.0 C) 0.0 D) 1.2 E) 8.6 Answer: D 61) The primary purpose of the mean absolute deviation (MAD) in forecasting is to A) estimate the trend line. B) eliminate forecast errors. C) measure forecast accuracy. D) seasonally adjust the forecast. E) all of the above. Answer: C 62) Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation? A) 2 B) 3 C) 4 D) 8 E) 16 Answer: C 63) The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is A) 2. B) -10. C) 3.5. D) 9. E) 10.5. Answer: C 64) A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7? A) 23.2 B) 25.3 C) 27.4 D) 40.0 E) cannot be determined Answer: D 65) For a given product demand, the time series trend equation is 53 - 4 X. The negative sign on the slope of the equation A) is a mathematical impossibility. lOMoAR cPSD| B) is an indication that the forecast is biased, with forecast values lower than actual values. C) is an indication that product demand is declining. D) implies that the coefficient of determination will also be negative. E) implies that the cumulative error will be negative. Answer: C 66) Yamaha manufactures which set of products with complementary demands to address seasonal fluctuations? A) golf clubs and skis B) swimming suits and winter jackets C) jet skis and snowmobiles D) pianos and guitars E) ice skates and water skis Answer: C 67) Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model? A) One constant is positive, while the other is negative. B) They are called MAD and cumulative error. C) Alpha is always smaller than beta. D) One constant smooths the regression intercept, whereas the other smooths the regression slope. E) Their values are determined independently. Answer: E 68) Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January? A) 640 units B) 798.75 units C) 801.25 units D) 1000 units E) 88.33 units Answer: D lOMoAR cPSD| 69) A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is A) 0.487. B) 0.684. C) 1.462. D) 2.053. E) cannot be calculated with the information given. Answer: B 70) A fundamental distinction between trend projection and linear regression is that A) trend projection uses least squares while linear regression does not. B) only linear regression can have a negative slope. C) in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power. D) trend projection can be a function of several variables, while linear regression can only be a function of one variable. E) trend projection uses two smoothing constants, not just one. Answer: C 71) The degree or strength of a relationship between two variables is shown by the A) alpha. B) mean. C) mean absolute deviation. D) correlation coefficient. E) cumulative error. Answer: D 72) If two variables were perfectly correlated, the correlation coefficient r would equal A) 0. B) -1. C) 1. D) 1 or -1. E) -2. Answer: D 73) The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate A) qualitative methods. B) adaptive smoothing. C) slope. D) bias. E) trend projection. Answer: D 74) The tracking signal is the lOMoAR cPSD| A) standard error of the estimate. B) absolute deviation of the last period's forecast. C) mean absolute deviation (MAD). D) ratio of cumulative error/MAD. E) mean absolute percentage error (MAPE). Answer: D 75) Computer monitoring of tracking signals and self-adjustment if a signal passes a preset limit is characteristic of A) exponential smoothing including trend. B) adaptive smoothing. C) trend projection. D) focus forecasting. E) multiple regression analysis. Answer: B 76) Many services maintain records of sales noting A) the day of the week. B) unusual events. C) weather. D) holidays. E) all of the above. Answer: E 77) Taco Bell's unique employee scheduling practices are partly the result of using A) point-of-sale computers to track food sales in 15 minute intervals and a six-week moving average forecasting technique. B) focus forecasting and multiple regression. C) a six-week moving average forecasting technique and multiple regression. D) singular regression. E) work breakdown structures. Answer: A 78) Which of the following most requires long-range forecasting (as opposed to short-range or medium-range forecasting) for its planning purposes? A) job scheduling B) production levels C) cash budgeting D) capital expenditures E) purchasing Answer: D 79) Suppose that demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.) lOMoAR cPSD| A) 9.00 B) 3.72 C) 9.48 D) 5.00 E) 6.12 Answer: E 80) ________ expresses the error as a percent of the actual values, undistorted by a single large value. A) MAD B) MSE C) MAPE D) FIT E) The smoothing constant Answer: C 81) If Brandon Edward were working to develop a forecast using a moving averages approach, but he noticed a detectable trend in the historical data, he should A) use weights to place more emphasis on recent data. B) use weights to minimize the importance of the trend. C) change to a naïve approach. D) use a simple moving average. E) change to a qualitative approach. Answer: A lOMoAR cPSD| Chapter 5 done 27) Which of these statements regarding Regal Marine is true? A) Product design is a critical decision for the firm. B) Regal uses a three-dimensional CAD system to shorten product development time. C) Regal still uses some wooden parts and hand-produces some components. D) Regal's use of CAD has resulted in a superior product. E) All of the above are true. Answer: E 28) Regal Marine A) no longer builds boats with any wooden parts. B) designs and builds boat hulls by hand. C) treats the product design decision as critical to its success. D) gets its competitive advantage by being the low-cost producer of boats designed by others. E) designs several new boats each year, but contracts other firms for their manufacture. Answer: C 29) The three major subdivisions of the product decision are A) selection, definition, and design. B) goods, services, and hybrids. C) strategy, tactics, and operations. D) cost, differentiation, and speed of response. E) legislative, judicial, and executive. Answer: A 30) Which of the following statements is not true? A) Virtually all of Honda's sales (autos, motorcycles, generators, lawn mowers) are based on its outstanding engine technology. B) Intel focuses on microprocessors. C) Michelin focuses on tires. D) Firms such as 3M establish goals for profitability from new products. E) Dell Computers provides fast delivery to customers, but, in return, customers may only select from a limited choice of hardware configurations. Answer: E lOMoAR cPSD| 31) Operations managers must be able to anticipate changes in which of the following? A) product mix B) product opportunities C) the products themselves D) product volume E) all of the above Answer: E 32) In which stage of the product life cycle should product strategy focus on process modifications as the product is being "fine-tuned" for the market? A) introduction B) growth C) maturity D) decline E) incubation Answer: A 33) Which of the following would likely cause a change in market opportunities based upon levels of income and wealth? A) economic change B) sociological and demographic change C) technological change D) political change E) legal change Answer: A 34) A product's life cycle is divided into four stages, which are A) introduction, growth, saturation, and maturity. B) introduction, growth, stability, and decline. C) introduction, maturity, saturation, and decline. D) introduction, growth, maturity, and decline. E) incubation, introduction, maturity, and decline. Answer: D 35) When should product strategy focus on forecasting capacity requirements? A) at the introduction stage of the product life cycle B) at the growth stage of the product life cycle C) at the maturity stage of the product life cycle D) at the decline stage of the product life cycle E) at the saturation stage of the product life cycle Answer: B 36) What information is contained in the roof of the House of Quality? A) what the customer wants lOMoAR cPSD| B) what we can do C) competitive assessment D) how well what we do meets the customer's wants E) relationship between the things we can do Answer: E 37) The analysis tool that helps determine what products to develop, and by what strategy, by listing products in descending order of their individual dollar contribution to the firm is A) decision tree analysis. B) Pareto analysis. C) breakeven analysis. D) product-by-value analysis. E) product life cycle analysis. Answer: D 38) In which stage of the product life cycle should product strategy focus on improved cost control? A) introduction B) growth C) maturity D) saturation E) inflation Answer: C 39) ________ is used to rank a company's products to determine which products represent the best use of the firm's resources, or, perhaps, to determine which products are to be eliminated. A) Value analysis B) Value engineering C) Financial analysis D) Product-by-value analysis E) Product cost justification Answer: D 40) Which of the following represents an opportunity for generating a new product? A) understanding the customer B) demographic change, such as decreasing family size C) changes in professional standards D) economic change, such as rising household incomes E) All of the above are such opportunities. Answer: E 41) What % of sales from new products is indicative of industry leaders? A) 50% B) below 25% lOMoAR cPSD| C) 25 to 35% D) above 60% E) 35 to 45% Answer: A 42) Which of the following is true regarding value engineering? A) Value engineering occurs only after the product is selected and designed. B) Value engineering is the same as value analysis. C) Value engineering is oriented toward improvement of design. D) Value engineering occurs during production when it is clear the product is a success. E) Value engineering can save substantial amounts of product cost, but quality suffers. Answer: C 43) Reducing the complexity of a product and improving a product's maintainability for use are activities of A) Product Lifecycle Management (PLM). B) product-by-value-analysis. C) manufacturability and value engineering. D) organizing for product development. E) design for destruction (DFD). Answer: C 44) Quality function deployment (QFD) does all of the following except A) determines what will satisfy the customer. B) translates customer desires into the target design. C) is used early in the design process. D) is used to determine where to deploy quality efforts. E) determines a profitable markup. Answer: E 45) A graphic technique for defining the relationship between customer desires and product/service is A) Product Lifecycle Management. B) the House of Quality. C) the moment of truth. D) the assembly drawing. E) the product development team. Answer: B 46) One result of concurrent engineering in product design is A) speedier product development. B) lower quality. C) less customer demand. D) higher costs. E) more defects. Answer: A lOMoAR cPSD| 47) The use of product development teams in design and engineering activities is also known as A) the Japanese approach. B) concurrent engineering. C) QFD. D) the traditional U.S. approach. E) the House of Quality approach. Answer: B 48) When developing the Trident Splash, Cadbury faced design problems overcome by A) manufacturability and value engineering. B) QFD. C) the House of Quality. D) CAD. E) decision trees. Answer: A 49) The Japanese method of organizing for product design features A) teams. B) product managers (champions). C) distinct departments with assigned tasks. D) a single organization without subdivision or individual teams. E) a clear hierarchy. Answer: D 50) Manufacturability and Value Engineering has all of the following benefits except A) reduced complexity of the product. B) reduction of environmental impact. C) less standardization of components. D) robust design. E) improved job design and safety. Answer: C 51) Which of the following is true regarding computer-aided design? A) It is too expensive to use in most manufacturing and design settings. B) It is an old technology C) It results in longer development cycles for virtually all products. D) It is the use of computers to interactively design products and prepare engineering documentation. E) It negatively impacts quality. Answer: D 52) Which of the following is not true concerning CAD? A) Accurate information flows to other departments. B) Most product costs are determined at the design stage. C) Design options are easier to review before final commitments are made. lOMoAR cPSD| D) Virtually all products have their development cycle shortened. E) Defects occur more frequently and are more difficult to detect. Answer: E 53) A manufacturing plant uses a computerized scanner to measure the inner diameters of the belts it produces to ensure they are within the specifications. This is referred to as A) CAM. B) CAD. C) QFD. D) DFMA. E) STEP. Answer: A 54) Black & Decker's hand-powered tools and Hewlett-Packard's printer business are examples of using enhancements and migrations of existing products to build on a A) product template. B) product pulpit. C) product platform. D) product dais. E) product foundation. Answer: C 55) When constructing a House of Quality, what value is assigned to a "Medium" relationship between the things that we can do? A) 3 B) 2 C) 50 D) 5 E) 10 Answer: A 56) Bridget's Hamburger Stand uses only 7 ingredients but offers 15 different burgers. This process is known as A) Robust Design. B) QFD. C) Modular Design. D) CAD. E) Value analysis. Answer: C 57) Value analysis takes place A) when the product is selected and designed. B) during the initial stages of production when something needs to be done to assure product success. C) when the product is first conceived. lOMoAR cPSD| D) during the production process when it is clear the new product is a success. E) when the product cost is very low. Answer: D 58) Which of the following makes products that are less friendly to the environment? A) using less materials B) more recycled materials C) using less energy D) using less harmful ingredients E) using more disposable packaging Answer: E 65) An engineering drawing shows the A) dimensions, tolerances, materials, and finishes of a component. B) dimensions, tolerances, cost, and sales or use volume of a component. C) materials, finishes, machining operations, and dimensions of a component. D) cost, materials, tolerances, and lead-time for a component. E) cost, dimensions, and machining operations for a component. Answer: A 66) The dimensions, tolerances, materials, and finishes of a component are typically shown on a(n) A) assembly chart. B) engineering drawing. C) bill of material. D) assembly drawing. E) route sheet. Answer: B 67) Which of the following does not result from the effective use of group technology? A) reduced tooling setup time B) better electronic communication between team members C) reduced raw materials and purchases D) simplified production planning and control E) improved layout, routing, and machine loading Answer: B 68) Which of the following typically shows the components, their description, and the quantity of each required to make one unit of a product? A) an engineering drawing B) an assembly drawing lOMoAR cPSD| C) a bill of material D) an assembly chart E) a route sheet Answer: C 69) Which of the following shows in schematic form how a product is assembled? A) an engineering drawing B) an assembly routing C) an assembly chart D) a route sheet E) a process sheet Answer: C 70) The components, their description, and the quantity of each required to make one unit of a product are documented on A) a group technology listing. B) a route sheet. C) a bill of material. D) an engineering drawing. E) a product menu. Answer: C 71) A route sheet provides a(n) A) exploded view of the product. B) instruction to make a given quantity of a particular item. C) schematic showing how the product is assembled. D) sequence of operations necessary to produce the component. E) set of detailed instructions about how to perform a task. Answer: D 72) Group technology requires that A) each component be identified by a coding scheme that specifies the type of processing and the parameters of the processing. B) a specific series of engineering drawings be prepared. C) all bills of material be prepared using the same format. D) engineering change notices be linked to each of the bills of material and engineering notices. E) the final products be standardized. Answer: A 73) An assembly drawing A) shows, in schematic form, how the product is assembled. B) shows an exploded view of the product. C) lists the operations, including assembly and inspection, necessary to produce the component with the material specified in the bill of material. D) provides detailed instructions on how to perform a given task. E) describes the dimensions and finish of each component. Answer: B lOMoAR cPSD| 74) An assembly chart A) shows graphically how the product is assembled. B) shows an exploded view of the product. C) lists the operations, including assembly and inspection, necessary to produce the component with the material specified in the bill of material. D) provides detailed instructions on how to perform a given task. E) describes the dimensions and finish of each component. Answer: A 75) A process sheet is a type of A) assembly drawing. B) assembly chart. C) route sheet. D) work order. E) bill of material. Answer: C 76) Which of the following documents lists the operations (including assembly and inspection) necessary to produce the component with the material specified in the bill of material? A) an engineering drawing B) an assembly drawing C) a route sheet D) an assembly chart E) an operations chart Answer: C 77) A restaurant kitchen contains a wall poster that shows, for each sandwich on the menu, a sketch of the ingredients and how they are arranged to make the sandwich. This is an example of a(n) A) assembly drawing. B) route sheet. C) bill of material. D) work order. E) virtual technology. Answer: A 78) The document for production that gives the instruction to make a given quantity of a particular item, usually to a given schedule, is A) the work order. B) the route sheet. C) the bill of information. D) the assembly chart. E) the value analysis. Answer: A 79) Which of the following is not a service design technique used to reduce cost? lOMoAR cPSD| A) increasing customer interaction B) delaying customization C) automation D) modularizing the product E) reducing customer interaction Answer: A 80) Which of the following examples involves customer participation in the design of the service? A) investing in a mutual fund B) getting a chest x-ray at the hospital C) providing the stockbroker with the desired distribution of the portfolio D) seeing a movie at the theater E) eating at a fast-food restaurant Answer: C 81) Modern ATM machines are an automated example of a service design that A) reduces customer interaction. B) modularizes the service. C) delays service customization. D) has no moment of truth. E) has insufficient quality function deployment. Answer: A 82) For a full-time college student, which of the following moments of truth exemplifies the customer's standard expectations? A) Your advisor made you wait, even though you had an appointment. B) You had to visit more than once to reach your academic advisor. C) Your advisor was competent, helpful, and understanding. D) Your advisor failed to keep her appointment with you. E) Your advisor offered to work with you after regular work hours. Answer: C Chapter 6done lOMoAR cPSD| 27) Which of the following statements regarding Arnold Palmer Hospital is false? A) The hospital uses a wide range of quality management techniques. B) The culture of quality at the hospital includes employees at all levels. C) The hospital scores very highly in national studies of patient satisfaction. D) The hospital's high quality is measured by low readmission rates, not patient satisfaction. E) The design of patient rooms, even wall colours, reflects the hospital's culture of quality. Answer: D 28) Arnold Palmer Hospital uses all of the following quality management techniques except A) Pareto charts. B) flowcharts. C) benchmarking. D) just-in-time. E) Gantt charts. Answer: E 29) A successful quality strategy features all of the following steps except A) an organization environment that fosters quality. B) understanding the principles of quality. C) engaging employees in the necessary activities for quality implementation. D) finding the lowest cost supplier. E) empowering employees. Answer: D 30) Which of the following statements best describes the relationship between quality management and product strategy? A) Product strategy is set by top management; quality management is an independent activity. B) Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies. C) High quality is important to all three strategies, but it is not a critical success factor. D) Managing quality helps build successful product strategies. E) Companies with the highest measures of quality are no more productive than other firms. Answer: D 31) Quality "lies in the eyes of the beholder" is A) an unrealistic definition of quality. B) a user-based definition of quality. C) a manufacturing-based definition of quality. D) a product-based definition of quality. E) the definition proposed by the American Society for Quality. lOMoAR cPSD| Answer: B 32) "Making it right the first time" is A) an unrealistic definition of quality. B) a user-based definition of quality. C) a manufacturing-based definition of quality. D) a product-based definition of quality. E) the definition proposed by the American Society for Quality. Answer: C 33) Three broad categories of definitions of quality are A) product quality, service quality, and organizational quality. B) user-based, manufacturing-based, and product-based. C) internal, external, and prevention. D) low-cost, response, and differentiation. E) Pareto, Shewhart, and Deming. Answer: B 34) According to the manufacturing-based definition of quality A) quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost. B) quality depends on how well the product fits patterns of consumer preferences. C) even though quality cannot be defined, you know what it is. D) quality is the degree to which a specific product conforms to standards. E) quality lies in the eyes of the beholder. Answer: D 35) The role of quality in limiting a firm's product liability is illustrated by all of the following except A) ensuring that contaminated products such as impure foods do not reach customers. B) ensuring that products meet standards such as those of the Consumer Product Safety Act. C) designing safe products to limit possible harm to consumers. D) using processes that make products as safe or as durable as their design specifications call for. E) making it easy for customers to complain about defective products. Answer: E 36) Which of the following is not one of the major categories of costs associated with quality? A) prevention costs B) appraisal costs C) internal failures D) external failures E) environmental costs Answer: E Diff: 2 lOMoAR cPSD| Skill: knowledge Objective: LO1 Define quality and TQM 37) All of the following costs are likely to decrease as a result of better quality except A) customer dissatisfaction costs. B) inspection costs. C) scrap costs. D) warranty and service costs. E) maintenance costs. Answer: E Diff: 2 38) Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements? A) flexible pricing B) increased productivity C) lower rework D) lower warranty costs E) lower scrap costs Answer: A 39) Which of the four major categories of quality costs is particularly hard to quantify? A) prevention costs B) appraisal costs C) internal failure costs D) external failure costs E) None are hard to quantify. Answer: D 40) Which of the following statements is false? A) Self-promotion is not a substitute for quality products. B) Inferior products harm a firm's profitability and a nation's balance of payments. C) Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product. D) Quality–be it good or bad–will show up in perceptions about a firm's new products, employment practices, and supplier relations. E) Legislation, such as the Consumer Product Safety Act, sets and enforces product standards by banning products that do not meet those standards. Answer: C 41) "Employees cannot produce goods that on average exceed the quality of what the process is capable of producing" expresses a basic element in the writings of A) Vilfredo Pareto. B) Armand Feigenbaum. C) Joseph M. Juran. D) W. Edwards Deming. E) Philip B. Crosby. Answer: D lOMoAR cPSD| 42) Quality Is Free, meaning that the costs of poor quality have been understated, is the work of A) W. Edwards Deming. B) Joseph M. Juran. C) Philip B. Crosby. D) Crosby, Stills, and Nash. E) Armand Feigenbaum. Answer: C 43) Canada's military training centre in Goose Bay is an example of the application of A) ISO 9000. B) ISO 14001. C) TQM. D) ISO 24700. E) SPC. Answer: B 44) The philosophy of zero defects is A) the result of Deming's research. B) unrealistic. C) prohibitively costly. D) an ultimate goal; in practice, 1 to 2% defects is acceptable. E) consistent with the commitment to continuous improvement. Answer: E 45) Based on his 14 points, Deming is a strong proponent of A) inspection at the end of the production process. B) an increase in numerical quotas to boost productivity. C) looking for the cheapest supplier. D) training and knowledge. E) short-term thinking. Answer: D 46) Stakeholders who are affected by the production and marketing of poor quality products include A) stockholders, employees, and customers. B) suppliers and creditors, but not distributors. C) only stockholders, creditors, and owners. D) suppliers and distributors, but not customers. E) only stockholders and organizational executives and managers. Answer: A 47) PDCA, developed by Shewhart, stands for which of the following? A) Plan-Do-Check-Act B) Plan-Develop-Check-Accept lOMoAR cPSD| C) Problem-Develop Solution-Check-Act D) Problem-Do-Continue-Act E) Prevent-Detect-Contain-Act Answer: A 48) PDCA is most often applied in regard to which aspect of TQM? A) Six Sigma B) employee empowerment C) continuous improvement D) benchmarking E) JIT Answer: C 49) A Three Sigma program has how many defects per million? A) 34 B) 3 C) 3 times the standard deviation D) 2700 E) 1500 Answer: D 50) A Six Sigma program has how many defects per million? A) 3.4 B) 34 C) 1000 D) 6 times the standard deviation E) 2700 Answer: A 51) A hospital benchmarked against Ferrari Racing in an effort to A) improve patient handoff quality. B) increase surgery prep time. C) lengthen surgery duration. D) reduce the number of doctors. E) increase patient recovery time. Answer: A 52) One of Britain's largest children's hospitals working with Ferrari Racing is an example of A) internal benchmarking. B) external benchmarking. C) Taguchi concepts. D) employee empowerment. E) corporate responsibility. Answer: B lOMoAR cPSD| 53) Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to A) determine whether any of the organization's stakeholders are violated by poor quality products. B) gain ISO 14000 certification for the organization. C) obtain a product safety certificate from the Consumer Product Safety Commission. D) have the organization's legal staff write disclaimers in the product instruction booklets. E) compare the cost of product liability to the external failure cost. Answer: A 54) If one million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage? A) 3.4 B) 6.0 C) 34 D) 2700 E) 6 times the monthly standard deviation of passengers Answer: A 55) Which of the following is not true about ISO 14000 certification? A) It is not a prerequisite for ISO 9000 certification. B) It deals with environmental management. C) It offers a good systematic approach to pollution prevention. D) One of its core elements is life-cycle assessment. E) It eliminates the need for future audits. Answer: E 56) Suppose that a firm has historically been achieving "three-sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "six-sigma" quality, which of the following phenomena will result? A) The average number of defects will be cut in half. B) The specification limits will be moved twice as far from the mean. C) The average number of defects will be cut by 99.9997%. D) The average number of defects will be cut by 99.87%. E) The average number of defects will be cut by 99.73%. Answer: D 57) To become ISO 9000 certified, organizations must A) document quality procedures. B) have an onsite assessment. C) have an ongoing series of audits of their products or service. D) do all of the above. E) do none of the above. Answer: D lOMoAR cPSD| 58) Total quality management emphasizes A) the responsibility of the quality control staff to identify and solve all quality-related problems. B) a commitment to quality that goes beyond internal company issues to suppliers and customers. C) a system where strong managers are the only decision makers. D) a process where mostly statisticians get involved. E) ISO 14000 certification. Answer: B 59) A successful TQM program incorporates all of the following except A) continuous improvement. B) employee involvement. C) benchmarking. D) centralized decision-making authority. E) just-in-time. Answer: D 60) Kaizen is a Japanese term meaning A) a foolproof mechanism. B) just-in-time (JIT). C) a fishbone diagram. D) setting standards. E) continuous improvement. Answer: E 61) Which of the following statements regarding Six Sigma is true? A) The term has two distinct meanings–one is statistical; the other is a comprehensive quality system. B) Six Sigma means that about 94% of a firm's output is free of defects. C) The Six Sigma program was developed by Toyota in the 1970s. D) The Six Sigma program is for manufacturing firms, and is not applicable to services. E) Six Sigma certification is granted by the International Standards Organization (ISO). Answer: A 62) Members of quality circles are A) paid according to their contribution to quality. B) external consultants designed to provide training in the use of quality tools. C) always machine operators. D) management only. lOMoAR cPSD| E) trained in group planning, problem solving, and statistical process control. Answer: E Diff: 3 Skill: knowledge Objective: LO5 Explain quality robust products and Taguchi concepts 63) Techniques for building employee empowerment include A) building communication networks that include employees. B) developing open, supportive supervisors. C) moving responsibility from both managers and staff to production employees. D) building high-morale organizations. E) all of the above. Answer: E 64) Building high-morale organizations and building communication networks that include employees are both elements of A) ISO 9000 certification. B) Six Sigma certification. C) employee empowerment. D) Taguchi methods. E) the tools of TQM. Answer: C 65) The process of identifying other organizations that are best at some facet of your operations and then modelling your organization after them is known as A) continuous improvement. B) employee empowerment. C) benchmarking. D) copycatting. E) patent infringement. Answer: C 66) ISO 9000 seeks standardization in terms of A) products. B) production procedures. C) suppliers' specifications. D) procedures to manage quality. E) all of the above. Answer: D 67) Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the A) Taguchi Loss Function. B) Pareto chart. C) ISO 9000 Quality Cost Calculator. D) process chart. E) prevention costs. lOMoAR cPSD| Answer: A Diff: 2 Skill: comprehension Objective: LO5 Explain quality robust products and Taguchi concepts 68) A quality loss function includes all of the following costs except A) the cost of scrap and repair. B) the cost of customer dissatisfaction. C) inspection, warranty, and service costs. D) sales costs. E) costs to society. Answer: D 69) Pareto charts are used to A) identify inspection points in a process. B) outline production schedules. C) organize errors, problems, or defects. D) show material flow. E) do all of the above. Answer: C 70) The "four Ms" of cause-and-effect diagrams are A) material, machinery/equipment, manpower, and methods. B) material, methods, men, and mental attitude. C) named after four quality experts. D) material, management, manpower, and motivation. E) material, movement, motion, and methods. Answer: A Diff: 3 Skill: knowledge Objective: LO6 Use the seven tools of TQM 71) Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a A) Pareto chart. B) flowchart. C) check sheet. D) Taguchi map. E) poka-yoke. Answer: B Diff: 2 Skill: comprehension Objective: LO6 Use the seven tools of TQM 72) The process improvement technique that sorts the "vital few" from the "trivial many" is A) Taguchi analysis. B) Pareto analysis. lOMoAR cPSD| C) benchmarking. D) Deming analysis. E) Yamaguchi analysis. Answer: B 73) A production manager at a pottery factory has noticed that about 70% of defects result from impurities in raw materials, 15% result from human error, 10% from machine malfunctions, and 5% from a variety of other causes. This manager is most likely using a A) Pareto chart. B) scatter diagram. C) Taguchi loss function. D) cause-and-effect diagram. E) flowchart. Answer: A 74) A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the ________ tool of TQM. A) Taguchi loss function B) cause-and-effect diagram C) scatter diagram D) histogram E) process control chart Answer: B 75) A manager tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of A) internal benchmarking. B) Six Sigma. C) ISO 9000. D) Taguchi concepts. E) process control charts. Answer: D 76) A fishbone diagram is also known as a A) cause-and-effect diagram. B) poka-yoke diagram. C) Kaizen diagram. D) Kanban diagram. E) Taguchi diagram. Answer: A 77) If a sample of parts is measured and the mean of the measurements is outside the control lOMoAR cPSD| limits, the process is A) in control, but not capable of producing within the established control limits. B) out of control and the process should be investigated for assignable variation. C) within the established control limits with only natural causes of variation. D) monitored closely to see if the next sample mean will also fall outside the control limits. E) within the acceptable range. Answer: B 78) A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings? A) Ishikawa diagram B) Pareto chart C) process chart D) control charts E) activity chart Answer: A 79) When a sample measurement falls inside the control limits, it means that A) each unit manufactured is good enough to sell. B) the process limits cannot be determined statistically. C) the process output exceeds the requirements. D) if there is no other pattern in the samples, the process is in control. E) the process output does not fulfil the requirements. Answer: D Diff: 2 Skill: comprehension Objective: LO6 Use the seven tools of TQM 80) Which of the following is false regarding control charts? A) Values above the upper control limits always imply that the product's quality is exceeding expectations. B) Control charts are built so that new data can be quickly compared to past performance data. C) Control charts graphically present data. D) Control charts plot data over time. E) None of the above are false. Answer: A 81) The goal of inspection is to A) detect a bad process immediately. B) add value to a product or service. C) correct deficiencies in products. D) correct system deficiencies. E) reduce appraisal costs. Answer: A lOMoAR cPSD| 82) Which of the following is not a typical inspection point? A) upon receipt of goods from your supplier B) when production or service is complete C) before the product is shipped to the customer D) at the supplier's plant while the supplier is producing E) after a costly process Answer: E 83) A good description of "source inspection" is inspecting A) materials upon delivery by the supplier. B) the goods at the production facility before they reach the customer. C) the design specifications. D) goods at the supplier's plant. E) one's own work. Answer: E 84) Poka-yoke is the Japanese term for A) card. B) foolproof. C) continuous improvement. D) fishbone diagram. E) just-in-time production. Answer: B 85) What refers to training and empowering frontline workers to solve a problem immediately? A) just-in-time B) poka-yoke C) benchmarking D) kaizen E) service recovery Answer: E 86) A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality? A) communication, courtesy, and credibility B) competence, courtesy, and security C) competence, responsiveness, and reliability D) communication, responsiveness, and reliability E) understanding/knowing customer, responsiveness, and reliability Answer: A 87) Marketing issues such as advertising, image, and promotion are important to quality because A) they define for consumers the tangible elements of a service. B) the intangible attributes of a product (including any accompanying service) may not be lOMoAR cPSD| defined by the consumer. C) they educate consumers on how to use the product. D) they make the product seem more valuable than it really is. E) they raise expenses and therefore decrease profitability. Answer: B 88) Which of the determinants of service quality involves having the customer's best interests at heart? A) access B) courtesy C) credibility D) responsiveness E) tangibles Answer: C 89) Which of the determinants of service quality involves performing the service right the first time? A) access B) courtesy C) credibility D) reliability E) responsiveness Answer: D Chapter 11done 37) Visibility throughout the supply chain is a requirement among supply-chain members for A) mutual agreement on goals. B) mutual trust. C) compatible organizational cultures. D) local optimization. E) the bullwhip effect. Answer: B Diff: 2 Skill: comprehension Objective: LO3 Explain issues and opportunities in the supply chain 38) Which of the following is not a concern of the supply chain? A) warehousing and inventory levels B) credit and cash transfers C) suppliers D) distributors and banks E) maintenance scheduling Answer: E Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain lOMoAR cPSD| 39) Which of the following is an aspect of environmental risk in supply-chain management? A) political issues B) management metrics C) secure financial transactions D) raw material availability E) logistics planning Answer: A Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 40) Toyota's policy of having two suppliers per component after its experience with fire and earthquakes is similar to Hark Rock Café's franchising in societies that have significant cultural or environmental barriers because A) both companies are coping with environmental supply-chain risks. B) both companies are coping with process supply-chain risks. C) both companies are coping with control supply-chain risks. D) both companies are addressing outsourcing. E) both companies are addressing inventory level optimization. Answer: A Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 41) McDonald's Russian "food town" is to ________ risk as Hard Rock Café's franchising in diverse political and cultural environments to overcome barriers is to ________ risk. A) process; environmental B) control; environmental C) control; process D) process; control E) environmental; control Answer: A Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 42) What type of negotiating strategy requires the supplier to open its books to the purchasers? A) cost-based price model B) market-based price model C) competitive bidding D) price-based model E) fair value price model Answer: A Diff: 2 Skill: comprehension Objective: LO4 Describe the steps in vendor selection lOMoAR cPSD| 43) Which of the following statements is true regarding the leverage of supply-chain savings? A) Supply chain leverage is about the same for all industries. B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. C) Supply chain savings exert more leverage as the firm has a lower net profit margin. D) Supply chain leverage depends only upon the percent of sales spent in the supply chain. E) Supply chain savings have no impact on net margin. Answer: C Diff: 3 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 44) One dollar saved in purchasing is A) equivalent to a dollar earned in sales revenue. B) worth even more than a dollar earned in sales revenue. C) worth slightly more than a dollar earned because of taxes. D) worth from 35% in the technical instrument industry to 70% in the food products industry. E) only worthwhile if you are in the 50% tax bracket and still have a low profit margin. Answer: B Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 45) Which one of the following statements about purchasing is true? A) The cost of purchases as a percent of sales is often small. B) Purchasing provides a major opportunity for price increases. C) Purchasing is always more efficient than making an item. D) Purchasing has an impact on the quality of the goods and services sold. E) Competitive bidding is a major factor in long-term cost reductions. Answer: D Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 46) Outsourcing A) transfers traditional internal activities to outside vendors. B) utilizes the efficiency which comes with specialization. C) lets the outsourcing firm focus on its key success factors. D) None of the above are true of outsourcing. E) All of the above are true of outsourcing. Answer: E Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 47) The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is A) a standard use of the make or buy decision. lOMoAR cPSD| B) not allowed by the ethics code of the Supply Management Institute. C) offshoring. D) outsourcing. E) keiretsu. Answer: D Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 48) The Institute for Supply Management A) establishes laws and regulations for supply management. B) is an agency of the United Nations charged with promoting ethical conduct globally. C) publishes the principles and standards for ethical supply management conduct. D) prohibits backward integration into developing economies. E) is an agency of NAFTA's Ethics Bureau. Answer: C Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 49) In supply-chain management, ethical issues A) are particularly important because of the enormous opportunities for abuse. B) may be guided by company rules and codes of conduct. C) become more complex the more global is the supply chain. D) may be guided by the principles and standards of the Institute for Supply Management. E) All of the above are true. Answer: E Diff: 2 Skill: comprehension Objective: LO1 Explain the strategic importance of the supply chain 52) A disadvantage of the "few suppliers" strategy is A) the risk of not being ready for technological change. B) the lack of cost savings for customers and suppliers. C) possible violations of the Sherman Antitrust Act. D) the high cost of changing partners. E) allowing suppliers to have economies of scale. Answer: D Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 53) The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is A) few suppliers. B) many suppliers. C) Keiretsu. lOMoAR cPSD| D) vertical integration. E) virtual companies. Answer: B Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 54) Which of the following is not an advantage of the "few suppliers" concept? A) suppliers' willingness to participate in JIT systems B) trust C) vulnerability of trade secrets D) creation of value by allowing suppliers to have economies of scale E) suppliers' willingness to provide technological expertise Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 55) Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? A) suppliers becoming part of a company coalition B) vertical integration C) long-term partnering with a few suppliers D) negotiating with many suppliers E) developing virtual companies Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 56) Which of the following is not a condition that favours the success of vertical integration? A) availability of capital B) availability of managerial talent C) required demand D) small market share E) the ability to operate an acquired vendor Answer: D Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 57) Which of the following best describes vertical integration? A) to sell products to a supplier or a distributor B) to develop the ability to produce products which complement the original product C) to produce goods or services previously purchased D) to develop the ability to produce the specified good more efficiently than before E) to build long-term partnerships with a few suppliers lOMoAR cPSD| Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 58) A fried chicken fast-food chain that acquired feed mills and poultry farms has performed A) horizontal integration. B) forward integration. C) backward integration. D) current transformation. E) job expansion. Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies lOMoAR cPSD| 59) Vertical integration appears particularly advantageous when the organization has A) a very specialized product. B) a large market share. C) a very common, undifferentiated product. D) little experience operating an acquired vendor. E) purchases that are a relatively small percent of sales. Answer: B Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 60) A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of A) horizontal integration. B) forward integration. C) backward integration. D) current transformation. E) keiretsu. Answer: B Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 61) Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is A) kanban. B) keiretsu. C) samurai. D) poka-yoke. E) kaizen. Answer: B Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 62) The Japanese concept of a company coalition of suppliers is A) poka-yoke. B) kaizen. C) keiretsu. D) dim sum. E) illegal. Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies lOMoAR cPSD| 63) Which of the following is not an advantage of a virtual company? A) speed B) total control over every aspect of the organization C) specialized management expertise D) low capital investment E) flexibility Answer: B Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 64) An advantage of a joint venture over vertical integration is A) reduced risk. B) reduced costs. C) compromised competitive advantages. D) globalization. E) flexibility. Answer: A Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 65) When Daimler and BMW pooled resources to develop standardized auto components the supply-chain strategy could best be described by A) keiretsu. B) virtual companies. C) joint venture. D) vertical integration. E) few suppliers. Answer: C Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies 66) Which of the following best describes Vizio's supply chain A) few suppliers. B) keiretsu. C) joint venture. D) vertical integration. E) virtual company. Answer: E Diff: 2 Skill: comprehension Objective: LO2 Identify six supply-chain strategies lOMoAR cPSD| 67) Local optimization is a supply-chain complication best described as A) optimizing one's local area without full knowledge of organizational needs. B) obtaining very high production efficiency in a decentralized supply chain. C) the prerequisite of global optimization. D) the result of supply chains built on suppliers with compatible corporate cultures. E) the opposite of the bullwhip effect. Answer: A Diff: 2 Skill: comprehension Objective: LO3 Explain issues and opportunities in the supply chain 79) TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney is an example of A) blanket orders. B) standardization. C) postponement. D) lot size reduction. E) single stage control of replenishment. Answer: E Diff: 2 Skill: comprehension Objective: LO3 Explain issues and opportunities in the supply chain 80) A grocery store is trying to find a new vendor for carrots. Its three criteria are 1. Freshness, 2. Lot Size, and 3. Cost with factor weights of .6, .1, and .3 respectively. What would a vendor with ratings of 6, 8, and 10 in the three respective categories score as a weighted total? A) 24 B) 1 C) 7.4 D) 9.8 E) none of the above Answer: C Diff: 3 Skill: application Objective: LO4 Describe the steps in vendor selection 81) What is the average capacity utilization in the motor carrier (trucking) industry? A) 25% B) 50% C) 75% D) 95% E) 99% Answer: B Diff: 2 Skill: comprehension Objective: LO5 Explain major issues in logistics management lOMoAR cPSD| 84) The three classic types of negotiation strategies are A) vendor evaluation, vendor development, and vendor selection. B) Theory X, Theory Y, and Theory Z. C) many suppliers, few suppliers, and keiretsu. D) cost-based price model, market-based price model, and competitive bidding. E) vendor-managed inventory, channel assembly, blanket orders. Answer: D Diff: 1 Skill: knowledge Objective: LO4 Describe the steps in vendor selection 85) Consider a