MGSC 492 Actual Questions and Correct Answers
Q1
For a transport company fuel may represent as much as % of the total operating budget.
Answer: 35%
Q2
Vendor Managed Inventory
Answer: The supplier takes responsibility for the inventory held at the client's
premises. Ownership of the inventory passes to the client when the inventory is
utilized. The overall level of inventory in the client's warehouse can be reduced.
Q3
The quality of supplies
Answer: Substandard goods will need to be stored awaiting collection by the supplier.
When good are received or noticed that they are substandard, the supplier is
contacted and an RMA (return material authorization) number is obtained from the
supplier. This number is attached to all paperwork and the outside of the packaging so
the supplier can process the return effectively. Supplier must have quality
management systems in place.
Q4
The hierarchy of importance The four categories used are:
Answer: Routine purchases -- use online catalogs Commodities -- quote frequently to
get the best price --multiple suppliers Critical items -- work with approved suppliers to
ensure the flow of supply never stops -- bottle-neck parts -- a specially designed screw
that only one supplier can make may only cost $1.49 but can stop shipment of a
$20,000 piece of equipment Strategic items -- develop strategic partnerships with
suppliers like Pillsbury developing a contract with Sonoco to produce the cans that
they put their product into.
Q5
Method of Supply The speed of processing goods received in a warehouse can be significantly
improved if suppliers provide the goods in ...
Answer: the right quantities, at the allotted time, correctly labeled and bar coded.
,Q6
Different Inventory Requirements
Answer: Dependent demand verses Independent demand Push verses pull systems
Q7
Dependent demand verses Independent demand
Answer: Independent demand has to be forecasted or knowledge gained from outside
the supply chain. It is addressed in MRP II by Sales and Operations Planning and
Master Scheduling. Finished goods, Service parts, and MRO parts have independent
demand. The lead time for the independent demand items will be the manufacturing
lead time if manufactured. (does not include lead time for components and raw
materials) Dependent Demand can be calculated on a bills of material --components
and raw materials are dependent demand. Safety stock is not usually carried at these
levels unless the lead times are long.
Q8
Push verses pull systems
Answer: Push -- the more traditional approach -- where inventory requirement is used
to ANTICIPATE future demand requirements (build to stock) Pull -- where the actual
demand for a product is used TO PULL the product through the system (build to
order). The pull system can react quickly to sudden changes in the demand.
Q9
The Decoupling point
Answer: Finished Goods -- Make-to-stock -- customers are served from finished goods
inventory Semi-finished -- Assemble-to-order -- a number of pre-assembled modules
and different products are combined to satisfy a customer order requirement
Components -- Make-to-order -- product ordered are made specifically for the
customer from raw material. Raw Materials -- Engineer-to-order -- product designed by
the customers then raw material orders are placed --important point -- some
engineer-to-order parts may be at the supplier's supplier
Q10
Logistics Lead time
Answer: The total time it takes to order raw materials, make product, and deliver the
product to the customer
, Q11
Inventory and time High levels of inventory hide a number of
Answer: PROBLEMS
Q12
Inventory covers up problems like
Answer: Unreliable suppliers Inaccurate forecasts Production problems Quality issues
Unpredictable high demand
Q13
Supply Chain trained professional know that the most money is to be made when the inventory
at all levels keeps moving.
Answer: Demand is not as predictable as it may have once was Lead times are not
constant Costs are variable -- Order cost relationships have changed with EDI and
internet applications Production capacity can be at a premium Individual products are
closely linked to others and need to be supplied with them
Q14
Inventory planning for retailing Vendor Managed Inventory
Answer: The manufacturer is given responsibility for monitoring and controlling and
planning inventory levels. For manufacturers it allows the development of a closer and
more binding relation with the retailer as well as giving greater visibility to the supply
chain. For retailers, there is a reduction in operating costs and a delay in payment for
the products -- do not pay until used or until a significant amount of time has passed.
Q15
Inventory planning for retailing Continuous Replenishment Program
Answer: Uses up to the minute point of sales (POS) information to identify real time
demand and to pull product directly from the supplier. Goal is to reduce pipeline
inventory Allow the synchronize the flow of product through the distribution systems.
Q1
For a transport company fuel may represent as much as % of the total operating budget.
Answer: 35%
Q2
Vendor Managed Inventory
Answer: The supplier takes responsibility for the inventory held at the client's
premises. Ownership of the inventory passes to the client when the inventory is
utilized. The overall level of inventory in the client's warehouse can be reduced.
Q3
The quality of supplies
Answer: Substandard goods will need to be stored awaiting collection by the supplier.
When good are received or noticed that they are substandard, the supplier is
contacted and an RMA (return material authorization) number is obtained from the
supplier. This number is attached to all paperwork and the outside of the packaging so
the supplier can process the return effectively. Supplier must have quality
management systems in place.
Q4
The hierarchy of importance The four categories used are:
Answer: Routine purchases -- use online catalogs Commodities -- quote frequently to
get the best price --multiple suppliers Critical items -- work with approved suppliers to
ensure the flow of supply never stops -- bottle-neck parts -- a specially designed screw
that only one supplier can make may only cost $1.49 but can stop shipment of a
$20,000 piece of equipment Strategic items -- develop strategic partnerships with
suppliers like Pillsbury developing a contract with Sonoco to produce the cans that
they put their product into.
Q5
Method of Supply The speed of processing goods received in a warehouse can be significantly
improved if suppliers provide the goods in ...
Answer: the right quantities, at the allotted time, correctly labeled and bar coded.
,Q6
Different Inventory Requirements
Answer: Dependent demand verses Independent demand Push verses pull systems
Q7
Dependent demand verses Independent demand
Answer: Independent demand has to be forecasted or knowledge gained from outside
the supply chain. It is addressed in MRP II by Sales and Operations Planning and
Master Scheduling. Finished goods, Service parts, and MRO parts have independent
demand. The lead time for the independent demand items will be the manufacturing
lead time if manufactured. (does not include lead time for components and raw
materials) Dependent Demand can be calculated on a bills of material --components
and raw materials are dependent demand. Safety stock is not usually carried at these
levels unless the lead times are long.
Q8
Push verses pull systems
Answer: Push -- the more traditional approach -- where inventory requirement is used
to ANTICIPATE future demand requirements (build to stock) Pull -- where the actual
demand for a product is used TO PULL the product through the system (build to
order). The pull system can react quickly to sudden changes in the demand.
Q9
The Decoupling point
Answer: Finished Goods -- Make-to-stock -- customers are served from finished goods
inventory Semi-finished -- Assemble-to-order -- a number of pre-assembled modules
and different products are combined to satisfy a customer order requirement
Components -- Make-to-order -- product ordered are made specifically for the
customer from raw material. Raw Materials -- Engineer-to-order -- product designed by
the customers then raw material orders are placed --important point -- some
engineer-to-order parts may be at the supplier's supplier
Q10
Logistics Lead time
Answer: The total time it takes to order raw materials, make product, and deliver the
product to the customer
, Q11
Inventory and time High levels of inventory hide a number of
Answer: PROBLEMS
Q12
Inventory covers up problems like
Answer: Unreliable suppliers Inaccurate forecasts Production problems Quality issues
Unpredictable high demand
Q13
Supply Chain trained professional know that the most money is to be made when the inventory
at all levels keeps moving.
Answer: Demand is not as predictable as it may have once was Lead times are not
constant Costs are variable -- Order cost relationships have changed with EDI and
internet applications Production capacity can be at a premium Individual products are
closely linked to others and need to be supplied with them
Q14
Inventory planning for retailing Vendor Managed Inventory
Answer: The manufacturer is given responsibility for monitoring and controlling and
planning inventory levels. For manufacturers it allows the development of a closer and
more binding relation with the retailer as well as giving greater visibility to the supply
chain. For retailers, there is a reduction in operating costs and a delay in payment for
the products -- do not pay until used or until a significant amount of time has passed.
Q15
Inventory planning for retailing Continuous Replenishment Program
Answer: Uses up to the minute point of sales (POS) information to identify real time
demand and to pull product directly from the supplier. Goal is to reduce pipeline
inventory Allow the synchronize the flow of product through the distribution systems.
