d

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline? A) horizontal B) seasonal C) random D) cyclical

a

The electricity bill at Padco was driven solely by the lights throughout the office; everything else was driven by alternative energy sources. The office was open roughly 8 hours a day, five days a week and the cleaning crew spent about the same amount of time in the offices each week night. The kilowatt hour usage for the office was best described as a: A) horizontal demand pattern. B) random demand pattern. C) seasonal demand pattern. D) cyclical demand pattern.

b

A regression equation with a coefficient of determination near one would be most likely to occur when the data demonstrated a: A) seasonal demand pattern. B) trend demand pattern. C) cyclical demand pattern. D) random demand pattern.

c

Professor Willis noted that the popularity of his office hours mysteriously rose in the middle and the end of each semester, falling off to virtually no visitors throughout the rest of the year. The demand pattern at work is: A) cyclical. B) random. C) seasonal. D) trend.

d

There are historically three 32-month periods of generally rising prices in the stock market for every one 9-month period of falling prices. This observation leads you to conclude that the stock market exhibits a: A) random pattern. B) trend pattern C) seasonal pattern. D) cyclical pattern.

a

Polly Prognosticator was the greatest quantitative forecaster in recorded history. A skillful user of all techniques in your chapter on forecasting, she knew better than to try and develop a forecast for data that exhibited a: A) random pattern. B) horizontal pattern. C) seasonal pattern. D) cyclical pattern.

c

Which one of the following statements about the patterns of a demand series is FALSE? A) The five basic patterns of most business demand series are the horizontal, trend, seasonal, cyclical, and random patterns. B) Estimating cyclical movement is difficult. Forecasters do not know the duration of the cycle because they cannot predict the events that cause it. C) The trend, over an extended period of time, always increases the average level of the series. D) Every demand series has at least two components: horizontal and random.

b

One aspect of demand that makes every forecast inaccurate is: A) trend variation. B) random variation. C) cyclical variation. D) seasonal variation.

b

A weary traveler shows up at a hotel desk at midnight without a reservation. The desk clerk informs him that there is a room available, but sadly it is marked up 80% higher than the usual price. This is an example of: A) promotional pricing. B) yield management. C) backlogs. D) backorder.

a

"Well if you're out of Duff I'll just take my business elsewhere!" the customer shouted as he stomped out of the Quickie Mart. This unfortunate incident could be described as: A) a stockout. B) a backorder. C) a backlog. D) yield management.

d

What is the difference between a reservation and an appointment? A) There is no difference between the two terms. B) The term reservation implies that the customer has paid in advance. C) The term appointment implies that the customer has paid in advance. D) The term reservation is issued when the customer occupies the facility to receive service

b

In the winter, Handyman Negri repaired snowblowers and in the summer he earned extra money by repairing lawnmowers, a classic example of: A) promotional pricing. B) complementary products. C) mixed model service. D) yield management.

trend

A systematic increase or decrease in the mean of the series over time is a(n) ________.

random

Variations in demand that cannot be predicted are said to be a(n) ________ pattern.

demand management

Nathan managed to level the customer requests for his valuable services by offering reservations, deploying some promotional pricing, and engaging in yield management, all forms of _

t

Aggregation is the act of clustering several similar products or services

f

Aggregating products or services together generally decreases the forecast accuracy.

c

Which one of the following statements about forecasting is FALSE? A) Causal methods of forecasting use historical data on independent variables (promotional campaigns, competitors' actions, etc.) to predict demand. B) Three general types of forecasting techniques are used for demand forecasting: time-series analysis, causal methods, and judgment methods. C) Time series express the relationship between the factor to be forecast and related factors such as promotional campaigns, economic conditions, and competitor actions. D) A time series is a list of repeated observations of a phenomenon, such as demand, arranged in the order in which they actually occurred.

b

When forecasting total demand for all their services or products, few companies err by more than: A) one to four percent. B) five to eight percent. C) nine to twelve percent. D) thirteen to sixteen percent.

b

Which one of the following statements about forecasting is TRUE? A) The five basic patterns of demand are the horizontal, trend, seasonal, cyclical, and the subjective judgment of forecasters. B) Judgment methods are particularly appropriate for situations in which historical data are lacking. C) Casual methods are used when historical data are available and the relationship between the factor to be forecast and other external and internal factors cannot be identified. D) Focused forecasting is a technique that focuses on one particular component of demand and develops a forecast from it.

judgement

____ methods of forecasting translate the opinions of management, experts, consumers, or salesforce into quantitative estimates.

casual

____ methods use historical data on independent variables to predict demand.

time-series

________ analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand, and it recognizes trends and seasonal patterns.

t

Forecasts almost always contain errors

t

Forecast error is found by subtracting the forecast from the actual demand for a given period.

f

A bias error results from unpredictable factors that cause the forecast to deviate from actual demand.

t

Bias is the worst kind of forecasting error.

a

Which one of the following is most useful for measuring the bias in a forecast? A) cumulative sum of forecast errors B) standard deviation of forecast errors C) mean absolute deviation of forecast errors D) percentage forecast error in period t

b

A tracking signal greater than zero and a mean absolute deviation greater than zero imply that the forecast has: A) no bias and no variability of forecast error. B) a nonzero amount of bias and a nonzero amount of forecast error variability. C) no bias and a nonzero amount of forecast error variability. D) a nonzero amount of bias and no variability of forecast error.

a

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand. Specifically, the forecast errors were found to be: Mean absolute percent error = 10% Cumulative sum of forecast errors = 0 Which one of the statements concerning this forecast is TRUE? A) The forecast has no bias but has a positive standard deviation of errors. B) The forecast has a positive bias and a standard deviation of errors equal to zero. C) The forecast has no bias and has a standard deviation of errors equal to zero. D) The forecast has a positive bias and a positive standard deviation of errors.

MSE, MAD

The dispersion of forecast errors is measured by both MAD and MSE, which behave differently in the way they emphasize errors. ________ gives larger weight to errors and ________ gives smaller weight to errors.

f

Judgment methods of forecasting are quantitative methods that use historical data on independent variables to predict demand.

f

Salesforce estimates are extremely useful for technological forecasting.

t

Technological forecasting is an application of executive opinion in light of the difficulties in keeping abreast of the latest advances in technology.

f

Market research is a systematic approach to determine consumer interest by gaining consensus from a group of experts while maintaining their anonymity.

f

Judgment methods of forecasting should never be used with quantitative forecasting methods.

f

The Delphi method is a process of gaining consensus from a group of experts by debate and voting throughout several rounds of group discussion led by a moderator.

c

Using salesforce estimates for forecasting has the advantage that: A) no biases exist in the forecasts. B) statistical estimates of seasonal factors are more precise than any other approach. C) forecasts of individual sales force members can be easily combined to get regional or national sales totals. D) confusion between customer "wants" (wish list) and customer "needs" (necessary purchases) is eliminated.

a

The judgment methods of forecasting are to be used for purposes of: A) making adjustments to quantitative forecasts due to unusual circumstances. B) generating data for use in time-series approaches. C) providing the calculations necessary for quantitative forecasts. D) calculating the forecast error for quantitative methods.

a

The Delphi method of forecasting is useful when: A) judgment and opinion are the only bases for making informed projections. B) a systematic approach to creating and testing hypotheses is needed and the data are usually gathered by sending a questionnaire to consumers. C) historical data are available and the relationship between the factor to be forecast and other external or internal factors can be identified. D) historical data is available and the best basis for making projections is to use past demand patterns.

b

The manufacturer developed and tested a questionnaire, designed to assist them in gauging the level of acceptance for their new product, and identified a representative sample as part of their: A) salesforce estimate. B) market research. C) executive opinion. D) Delphi method.

c

It would be most appropriate to combine a judgment approach to forecasting with a quantitative approach by: A) having a group of experts examine each historical data point to determine whether it should be included in the model. B) combining opinions about the quantitative models to form one forecasting approach. C) adjusting a forecast up or down to compensate for specific events not included in the quantitative technique. D) developing a trend model to predict the outcomes of judgmental techniques in order to avoid the cost of employing the experts.

delphi method

The ________ is a process of gaining consensus from a group of experts while maintaining their anonymity.

market research

____ is a systematic approach to determine consumer interest in a product or service by creating and testing hypotheses through data-gathering surveys

t

The causal method of forecasting uses historical data on independent variables (such as promotional campaigns and economic conditions) to predict the demand of dependent variables (such as sales volume).

f

The closer the value of the sample correlation coefficient is to -1.00, the worse the predictive ability of the independent variable for the dependent variable.

t

A linear regression model results in the equation Y = 15 - 23X. If the coefficient of determination is a perfect 1.0, the correlation coefficient must be -1.

b

A linear regression model is developed that has a slope of -2.5 and an intercept of 10. The sample coefficient of determination is 0.50. Which of the following statements is TRUE? A) The sample correlation coefficient must be 0.250. B) The sample correlation coefficient must be -0.707. C) The sample correlation coefficient must be -0.250. D) The sample correlation coefficient must be 1.00.

d

The number of #2 pencils the bookstore sells appears to be highly correlated with the number of student credit hours each semester. The bookstore manager wants to create a linear regression model to assist her in placing an appropriate order. In this scenario: A) the dependent variable is student credit hours. B) there are two independent variables. C) there are two dependent variables. D) the independent variable is student credit hours.

b

Which one of the following is an example of causal forecasting technique? A) weighted moving average B) linear regression C) exponential smoothing D) delphi method

linear regression

________ is a causal method of forecasting in which one variable is related to one or more variables by a linear equation.

dependent

the ________ variable is the variable that one wants to forecast.

independent variables

___ are assumed to "cause" the results that a forecaster wishes to predict.

sample correlation coefficient, r

A(n) ________ measures the direction and strength between the independent variable and the dependent variable.

same coefficient of determination, r-squared

The ________ measures the amount of variation in the dependent variable about its mean that is explained by the regression line

t

Time-series analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand.

f

The naive forecast may be adapted to take into account a demand trend.

t

A naive forecast is a time-series method whereby the forecast for the next period equals the demand for the current period.

t

A simple moving average of one period will yield identical results to a naive forecast.

t

An exponential smoothing model with an alpha equal to 1.00 is the same as a naive forecasting model.

t

The trend projection with regression model can forecast demand well into the future.

a

Which one of the following statements about forecasting is FALSE? A) You should use the simple moving-average method to estimate the mean demand of a time series that has a pronounced trend and seasonal influences. B) The weighted moving-average method allows forecasters to emphasize recent demand over earlier demand. The forecast will be more responsive to change in the underlying average of the demand series. C) The most frequently used time-series forecasting method is exponential smoothing because of its simplicity and the small amount of data needed to support it. D) In exponential smoothing, higher values of alpha place greater weight on recent demands in computing the average.

a

When the underlying mean of a time series is very stable and there are no trend, cyclical, or seasonal influences: A) a simple moving-average forecast with n = 20 should outperform a simple moving-average forecast with n = 3. B) a simple moving-average forecast with n = 3 should outperform a simple moving-average forecast with n = 15. C) a simple moving-average forecast with n = 20 should perform about the same as a simple moving-average forecast with n = 3. D) an exponential smoothing forecast with a = 0.30 should outperform a simple moving-average forecast with α = 0.01.

b

With the multiplicative seasonal method of forecasting: A) the times series cannot exhibit a trend. B) seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast. C) the seasonal amplitude is a constant, regardless of the magnitude of average demand. D) there can be only four seasons in the time-series data

a

Which one of the following statements about forecasting is FALSE? A) The method for incorporating a trend into an exponentially smoothed forecast requires the estimation of three smoothing constants: one for the mean, one for the trend, and one for the error. B) The cumulative sum of forecast errors (CFE) is useful in measuring the bias in a forecast. C) The standard deviation and the mean absolute deviation measure the dispersion of forecast errors. D) A tracking signal is a measure that indicates whether a method of forecasting has any built-in biases over a period of time.

a

Which statement about forecast accuracy is TRUE? A) A manager must be careful not to "overfit" past data. B) The ultimate test of forecasting power is how well a model fits past data. C) The ultimate test of forecasting power is how a model fits holdout samples. D) The best technique in explaining past data is the best technique to predict the future.

b

A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses: A) the entire data set available to develop the forecast. B) the older observations in the data set to develop the forecast and more recent to check accuracy. C) the newer observations in the data set to develop the forecast and older observations to check accuracy. D) every other observation to develop the forecast and the remaining observations to check the accuracy.

larger

In an exponential smoothing model a ________ value for alpha results in greater emphasis being placed on more recent periods.

naive

A(n) ________ forecast is a time-series method whereby the forecast for the next period equals the demand for the current period.

holdout set

A(n) ________ is a portion of data from more recent time periods that is used to test different models developed from earlier time period data.

simple moving average

____ is a time-series method used to estimate the average of a demand time series by averaging the demand for the n most recent time periods.

f

Combination forecasting is a method of forecasting that selects the best from a group of forecasts generated by simple techniques.

t

Combination forecasting is most effective when the techniques being combined contribute different kinds of information to the forecasting process

t

Focus forecasting selects the best forecast from a group of forecasts generated by individual techniques.

t

Better forecasting processes yield better forecasts.

d

A forecasting system that brings the manufacturer and its customers together to provide input for forecasting is a(n): A) nested system. B) harmonically balanced supply chain. C) iterative Delphi method system for the supply chain. D) collaborative planning, forecasting, and replenishment system.

c

Barney took what he liked to call "the shotgun approach" to forecasting. Every period he tried a number of different forecasting approaches and at the end of the period he reviewed all of the forecasts to see which was the most accurate. The winner would be used for next period's forecast (but he still made forecasts all possible ways so he could use the system again for the following period). The more formal name for this technique is: A) combination forecasting. B) post-hoc forecasting. C) focus forecasting. D) shotgun forecasting. He is using the correct terminology.

d

Andy took what he liked to call "the sheriff without a gun" approach to forecasting. Every period he tried a number of different forecasting approaches and simply averaged the predictions for all of the techniques. This overall average was the official forecast for the period. The more formal name for this technique is: A) grand averaging. B) focus forecasting. C) simple average. D) combination forecasting.

a

The local building supply store experienced what they considered to be irregular demands for lumber after the devastating hurricane season. These unusual data points were considered: A) nonbase data. B) outliers. C) residuals. D) erroneous.

combination forecasts

_____ are produced by averaging independent forecasts based on different methods or different data, or both.

nonbase (data)

A history file of past demand will often be separated into two parts; the ________ part will reflect irregular demands.

f

Supply chain integration is the effective coordination of supply chain processes through the seamless flow of information to suppliers, but does not include customers, such as distributors and retailers.

t

Supply chain integration is the effective coordination of supply chain processes through the seamless flow of information to suppliers, up and down the supply chain

t

A supply chain can be thought of as a river that flows from raw material suppliers to consumers.

t

The finished goods of one firm may actually be the raw materials for another firm.

f

The bullwhip effect says that in any supply chain, the ordering patterns experience increasing variance as you move closer to the end customer.

t

A common disruption of the external supply chain is product and service mix changes

f

A common disruption of the external supply chain is engineering changes

t

A common disruption of the supply chain resulting from internal causes is order batching.

f

A common disruption of the supply chain resulting from internal causes is demand volume changes

f

The SCOR model provides guidelines for how materials are to be delivered along a supply chain.

t

The SCOR model focuses on the supply chain processes of planning, making, sourcing, delivering, and returning.

d

Which of the following is NOT a component of the supply chain? A) order fulfillment B) materials C) customer relationship D) competitors

b

The bullwhip effect is characterized by: A) ordering patterns that experience increasing variance as you proceed downstream in the chain. B) ordering patterns that experience increasing variance as you proceed upstream in the chain. C) purchasing patterns that experience increasing variance downstream in the chain. D) purchasing patterns that experience decreasing variance as you proceed upstream in the chain.

c

Which of the following changes would decrease the likelihood of the bullwhip effect? A) changing the mix of items in an order B) sending partial shipments of an order C) instituting a policy of no discounts or promotions D) sending late deliveries of an order

a

Which of the following changes would increase the likelihood of a supply chain experiencing the bullwhip effect? A) engineering changes to the design of a product B) instituting a more accurate materials management information system C) closely coordinating promotions with the internal marketing department and suppliers D) using a more reliable delivery company

d

Which of the following is NOT an internal cause of supply chain disruptions? A) engineering changes B) batching of orders C) service or product promotions D) underfilled shipments

b

Which of the following is NOT an external cause of supply chain disruptions? A) late deliveries B) new service or product introductions C) customer service or product mix changes D) underfilled shipments

a

One source of disruption caused by the internal supply chain is: A) forecast error. B) underfilled shipments. C) volume changes. D) late deliveries

c

One source of disruption caused by the external supply chain is: A) product or sales promotions. B) new product or service introduction. C) late deliveries. D) engineering changes.

b

Possible causes of disruption due to internal supply chain problems are: A) late deliveries. B) machine breakdowns or inexperienced workers. C) product and service mix changes. D) underfilled shipments.

b

The SCOR model focuses on the basic supply chain processes of: A) source, control, operate, return. B) plan source, make deliver, return. C) purchase, operate, control, logistics. D) operations, marketing, finance.

b

The SCOR model requires a(n): A) three-tier supply chain. B) point of reference. C) make-to-order or assemble-to-order product. D) process view.

factory of upstream, customer or downstream

The bullwhip effect results in greater demand variability at the ________ end of the supply chain and lesser demand variability at the ________ end of the supply chain.

SCOR

The ________ model focuses on the supply chain processes plan, source, make, deliver, and return

f

Concurrent engineering is the term used to describe a firm's development of a new product after it has been discovered that a competitor is engineering a similar product for launch

t

Concurrent engineering helps firms avoid the costly mismatch between the design of a new offering and the capability of the processes required to produce it.

f

The ramp-up stage of the development process precedes the full launch stage.

t

A strain is placed on the supply chain during the ramp-up stage of the development process due to changing volumes, quality issues and last minute design changes

c

Which of the following is NOT a stage in the New Service / Product Development Process? A) development B) design C) maintenance D) analysis

a

The stage of new product or service development that links the creation of new services or products to the corporate strategy of the firm is called: A) design. B) analysis. C) development. D) full launch

b

The product development team ensures compatibility of the proposed product with corporate strategy and regulatory standards in the: A) design stage. B) analysis stage. C) development stage. D) full launch stage.

c

The stage of new service or product development at which personnel are trained and some pilot runs can be conducted to look for possible problems in production is called: A) design. B) analysis. C) development. D) full launch.

a

A new product development team that is composed of product and process engineers, marketers, quality specialists, and buyers that work together to make sure the new product can actually be built is engaging in: A) concurrent engineering. B) joint application development. C) reverse logistics. D) core process design.

concurrent engineering

_ brings product engineers, process engineers, marketers, buyers, information specialists, quality specialists and suppliers together to work jointly to design a product and all its processes.

t

In presourcing, suppliers are selected early in the concept-development stage.

t

Once certified, a supplier can be used by the purchasing department without the purchaser having to make background checks.

t

Value analysis is a systematic effort to reduce the cost or improve the performance of a service or product.

t

Electronic Data Interchange enables the transmission of routine, standardized business documents from computer to computer over telephone or direct leased lines.

t

Green purchasing involves identifying, assessing, and managing the flow of environmental waste and finding ways to reduce it and minimize its impact on the environment.

f

The competitive orientation to supplier relations is that the buyer and supplier are partners.

t

In a competitive orientation to negotiations between buyer and supplier, the buyer does not always possess the power in the relationship—the supplier sometimes holds the power and can exercise this power during negotiations with the buyer.

t

The most used form of e-purchasing today is electronic data interchange.

f

A catalog hub is a central distribution point where buyers may purchase items directly from manufacturers before the items are shipped to retailers.

t

An electronic market that brings together textbook sellers, office supply companies, apparel vendors, and students is an example of an exchange.

f

Early supplier involvement is a program that allows suppliers to fill orders prior to the customer placing them.

a

Which one of the following statements is TRUE about purchasing? A) Purchasing's primary role is to satisfy the firm's long-term supply needs. B) Purchasing's primary role should be placing and tracking orders. C) Purchasing's primary role is to negotiate lower prices. D) Purchasing's primary role is to negotiate prices and delivery dates.

c

The practice of selecting suppliers and giving them significant responsibility for the design of certain components or systems of the product is called: A) value analysis. B) locus of control. C) presourcing. D) vendor-managed inventories.

d

A systematic effort to reduce the cost or improve the performance of services or products is known as: A) presourcing. B) cooperative orientation. C) supplier certification. D) value analysis.

c

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a supplier values identification with a buyer, this is called a(n) ________ source of power. A) expert B) reward C) referent D) legal

a

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a buyer has access to knowledge, information and skills desired by the supplier, this is called a(n) ________ source of power. A) expert B) reward C) referent D) coercive

d

Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a buyer can threaten to cancel future business unless the supplier adheres to the buyer's demands, this is called a ________ source of power. A) legal B) reward C) referent D) coercive

b

Approaches to e-purchasing include all of the following EXCEPT: A) catalog hubs. B) radio frequency identification (RFID). C) exchanges. D) electronic data interchange (EDI).

a

Examples of radio frequency identification (RFID) could include all of the following EXCEPT: A) tracking the status of engineering changes during development of a new product line. B) tracking cases and pallets of products into and out of warehouse inventories. C) air travel use for baggage tracking. D) tracking the flow of parts through a manufacturing process.

d

The practice whereby a manufacturer has inventories of materials on consignment from its suppliers falls under the scope of: A) inventory pooling control. B) virtual distribution. C) electronic inventory control. D) vendor-managed inventories.

a

One of the benefits of a cooperative orientation in supplier relationships is: A) the buyer sometimes suggests ways to improve the supplier's operations. B) the supplier implements its own quality standards. C) the buyer does not have to share much information with the supplier. D) the supplier has complete freedom in choosing the delivery time.

d

Which one of the following statements correctly represents a benefit of centralized buying? A) Local managers have more control over their business. B) Purchases and production schedules are meshed more easily. C) Customization to local preferences is simplified. D) Increased buying power can result in significant savings in purchasing costs.

d

Which one of the following statements is TRUE about a cooperative orientation in supplier relationships? A) It cannot be implemented in Western countries because competitive bidding is more effective in that culture. B) It cannot be implemented in the Western countries because it always benefits the supplier. C) It requires all parts and subassemblies to be purchased from the same supplier. D) It requires few suppliers for each item or service.

purchasing

___ is the management of the acquisition process, which includes deciding which suppliers to use, negotiating contracts, and deciding whether to buy locally.

cooperative orientation

__ is a supplier relation in which the buyer and seller are partners, each helping the other as much as possible.

green purchasing

Steve-O engaged in ________ by using only suppliers that recycled and managed their flow of environmental waste.

supplier certification

_ programs verify that potential suppliers have the capability to provide materials or services which the buying firms require.

sole sourcing

___ is the awarding of a contract for an item or service to only one supplier.

value analysis

__ is a systematic effort to reduce the cost or improve the performance of products and services, either purchased or produced

presourcing

Knoxville Industries had their supplier design the improved body armor for their new apparel. This level of supplier involvement, known as ________ was sure to result in a pain free season.

exchanges

___ are electronic marketplaces where buying and selling firms meet to do business, without protracted contract negotiations.

economic dependency

__ is the condition where the buyer has purchasing power when the purchasing volume represents a significant share of the supplier's sales

t

The order-fulfillment process involves the activities to deliver a product or service to the customer

t

Vendor-managed inventories are an example of the forward-placement tactic.

t

Using rail to move large quantities of goods is relatively cheap, but transit times are long and often variable.

f

A cross-docking warehouse holds inventory from manufacturers until retailers are prepared to sell the items.

b

Which of the following statements about cross-docking is NOT correct? A) Cross-docking is packing products on incoming shipments so they can be easily sorted for outgoing shipments based on their final destination. B) Cross-docking reduces inventory and storage space requirements, but handling costs and lead times tend to increase. C) Items are moved from incoming vehicles to outgoing vehicles without being stored in warehouse inventory. D) Inbound and outbound shipments must be tightly coordinated for cross-docking to work.

d

What is the meaning of the acronym 3PL? A) three profit/loss periods B) three purchasing locations C) three partner leverage D) third party logistics provider

a

What services are typically offered by a 3PL? A) transportation B) product design C) catalog hub D) auction

order fulfillment

The ________ process involves the activities required to deliver a product or service to a customer.

vendor managed inventories

___ is an extreme application of the forward placement tactic.

a

Which of the following is NOT an advantage the Internet provides for a firm's order placement process? A) greater variety and better quality of products available B) cost reduction C) increase in revenue flow D) pricing flexibility E) global access

b

Which of the following is NOT an advantage resulting from a firm outsourcing its customer service process? A) Specific detailed questions can be answered by the customer service representative. B) The firm gains more control over the customer interface process. C) Customer service labor costs are low. D) Automated systems are replaced by human contact.

d

Which of the following is NOT a lever in an integrated supply chain? A) collaborative activities by supply chain partners B) reduced replenishment lead times C) reduced order lot sizes D) elimination of product shortages and backorders

order placement

The ________ process involves the activities required to register the need for a product or service and to confirm the acceptance of the order

f

Production shifting is a form of low-cost hopping.

t

One way to mitigate the bullwhip effect is to refuse to offer discounts and sales

b

A company adopts the supply chain strategy of contracting with a number of geographically dispersed suppliers just in case prices rise in one part of the world. This approach is known as: A) price hopping. B) hedging. C) outsourcing. D) futures.

a

One electronics manufacturer manages risk by making agreements with factories well in advance to guarantee productive capacity at an agreed price. If their product is popular, then they can use that productive capacity during an otherwise busy season at a lower cost. Such an agreement could best be described as: A) a futures contract. B) low-cost hopping. C) theory of constraints management. D) the bullwhip effect.

access control

When I signed on at Seagate, they gave me an ID card that was dutifully checked each morning as I stumbled in to the office at 7:30. This process could best be described as ________.

iso 28000:2007

The standard for supply chain security management is

t

If the customer must be physically present at the process, location is an important issue.

t

Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high impact on the company's ability to meet its goals and the factors themselves must be affected by the location decision.

f

When outbound transportation costs are a dominant factor, manufacturing facilities should be located close to suppliers and resources needed for production.

t

One dominant factor in locating manufacturing facilities is a favorable labor climate

f

Traffic flows are one dominant factor in locating manufacturing location

f

Service location decisions are driven primarily by the operating costs at the locations under consideration.

t

Many firms are concluding that large, centralized manufacturing facilities in low-cost countries with poorly trained workers are not sustainable

t

Critical mass is a situation whereby several competing firms cluster near one location, and thus attract more customers than the total number who would shop at the same stores in scattered locations.

f

More than 80 percent of all relocations are within 10 miles of the first location, so usually the existing workforce is displaced.

t

Repeated onsite expansion ultimately leads to diseconomies of scale

f

When comparing several sites, typically a company will pick specific available site locations, then broaden their choices to communities, and finally to alternate regions.

t

On average, it is less expensive to relocate a service-oriented business than a manufacturing business

d

An important factor for locating new manufacturing plants is: A) proximity to customers. B) location of competitors. C) proximity to markets. D) favorable labor climate.

c

A favorable labor climate might include all of the following EXCEPT: A) a good work ethic. B) no union presence. C) high average wages. D) an educated work force.

d

Quality of life issues include: A) proximity to markets. B) prevailing wage rates. C) local and state taxes. D) recreational facilities.

c

Which of the following location factors was NOT found to dominate location decisions for new U.S. manufacturing plants? A) proximity to the parent company's facilities B) quality of life C) proximity to competitors' facilities D) favorable labor climate

a

Which of the following statements about locating facilities in the service sector is BEST? A) The factors that apply to manufacturing firms often also apply to service facilities, but the impact of the location on sales and customer satisfaction is an important addition. B) Management should avoid locating facilities where competitors are already well established, as illustrated by new car showrooms. C) Creating a critical mass is a strategy that avoids locating near competing firms. D) "Site specific" factors are the main reason for locating warehousing and distribution operations near the customer.

f

The center of gravity method considers a greater number of location factors than the break-even analysis.

t

When using the load-distance method to select a new location, the decision maker can represent the number of trips to be made, the number of customers needing a physical presence, or number of tons per week, among other measures, as loads.

d

A quantitative method used to evaluate single locations based primarily on proximity is: A) break-even analysis. B) the transportation method. C) a preference matrix. D) the load-distance method

c

Which of these is most likely to be classified as a "load" when using the load-distance model? A) a process B) a supplier C) a shipment D) a customer

b

he load-distance model is used to minimize the total: A) number of loads. B) distance traveled. C) cost of doing business. D) profit of competitors.

b

Which of these distance calculation methods provides the most accurate input to a load-distance calculation? A) GIS B) rectilinear distance C) Euclidean distance D) center of gravity

b

The center of gravity technique does not take into consideration the: A) total volume of product any given site receives. B) location of any given site. C) number of locations that must be served. D) balance of supply and demand.

t

A decision maker using break-even analysis must assume that suppliers do not provide discounts for large orders.

t

Break-even analysis can help a manager compare location alternatives on the basis of quantitative factors that can be expressed in terms of total cost.

a

A quantitative method used to evaluate multiple locations based on total cost of production or service operations is called A) break-even analysis. B) the transportation method. C) a preference matrix. D) the load-distance method.

d

Which of the following statements about break-even analysis is incorrect? A) No start-up costs exist. B) Economies of scale cannot be achieved. C) Variable costs vary as output changes. D) Fixed costs vary as output changes.

t

The transportation method provides optimal solutions for minimization of shipping costs in multiple facility location problems.

f

A dummy plant is useful for problems where the sum of the plant capacities equals the sum of the demands.

b

Which of the following is NOT a step in setting up a transportation tableau? A) Create a row for each plant being considered. B) Remove the lowest and highest cost intersections from consideration. C) Create a column for each warehouse being considered. D) Add a column and a row for plant capacities and total demands.

d

Which of the following invalidates any analysis using the transportation method? A) unequal supply and demand amounts B) more sources than destinations C) more destinations than sources D) lack of a linear increase in shipping costs

a

The transportation method of production planning is a special case of: A) linear programming. B) integer programming. C) queuing theory. D) goal programming

dummy

If the total supply does not equal the total number of units demanded, then the modeler should use a(n) ________ warehouse as part of the transportation method.

per unit or a single unit shipped form a factory to a warehouse

Costs that are represented in each cell of a transportation tableau are based on

possible shipping route

Each cell in the interior of a transportation tableau not in the requirements row or capacity column is a(n) ________.

tableau

A(n) ________ is a standard matrix that is used to solve location problems using the transportation method.

t

A geographic information system contains demographic information

f

Geographical Information System (GIS) tools are useful in solving single-facility location problems, but because of software limitations, cannot be used for determining multiple-facility locations.

t

When using Geographical Information System (GIS) tools to solve multiple-facility location problems, an analyst may also use load-distance scores and center of gravity data to arrive at trial locations

f

Because Geographical Information System (GIS) tools are primarily quantitative in nature, a firm's managerial criteria, such as proximity to major metropolitan areas, are not able to be included in the GIS analysis.

d

Which of these is NOT identified as a component of a geographical information system? A) hardware B) data C) software D) network

b

Which of these is NOT a common functionality of a GIS? A) data storage B) communication C) map display D) modeling

b

Which of the following statements concerning the use of the Geographical Information System (GIS) method for locating multiple facilities is TRUE? A) GIS helps with general facility locations, but is not able to identify specific locations because the transportation structure of roads and interstate highways can't be included in the GIS databases. B) Load-distance scores and center of gravity data can be merged with customer databases to arrive at trial locations for facilities. C) When locating two new facilities, the entire operating area is split into four subregions, two for each new facility, so the best two locations from the four subregions can be selected. D) One weakness of the GIS method is that it is slow and cumbersome, and significant time must be allowed in order to reach a reasonable multiple-facility location decision.

d

Which of the following is an example of an organization using the Geographical Information System (GIS) method for locating multiple facilities? A) A company that is searching for a location for its combination manufacturing plant and warehouse to better serve several geographical regions of the country. B) Load-distance scores and center of gravity data being used to locate a facility to provide better customer service for multiple customers. C) A company that is searching for a manufacturing plant location that provides enough space for the plant to double in size over the next five years. D) A hospital network that wants to locate several satellite medical facilities in outlying areas to better serve a major metropolitan area.

t

One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer.

f

Forward placement is a reduction in inventory and safety stock because of the merging of variable demands from customers

a

Which one of the following statements on inventory placement of finished goods is BEST? A) Forward placement might help reduce transportation cost. B) Forward placement is consistent with a competitive priority that calls for customization. C) Inventory pooling should be avoided when demand in various regions fluctuates month to month. D) Backward placement is consistent with a competitive priority that calls for fast delivery times.

a

Which location shift would qualify as forward placement? A) from the manufacturer to a distribution center B) from the retailer to the wholesaler C) from the wholesaler to the manufacturer D) from the retailer to the manufacturer

b

he auto supply stores in the metroplex use a common database to track inventory and actually have very little in each location. Instead, customer requests are typically met with the reply, "We have some in our depot and can get it here by truck after 5 pm." This is an example of: A) forward placement. B) centralized placement. C) backward placement. D) depot placement.

centralized placement

Cornelius Controlfreak insisted that his manufacturing plant also be the sole location for all finished goods inventory. If any customer placed an order, they knew it would come from the only place on Earth that had a ready supply, Cornelius' plant warehouse. ________ was alive and well thanks to this approach.

inventory pricing

___ is a reduction in inventory and safety stock because of the merging of variable demands from customers.

forward placement

___ involves locating the stock closer to customers at a warehouse, distribution center, or retailer

b

Widgets, Inc. wishes to locate two new manufacturing facilities. Based on the following subjective criteria, where should the new facilities be located? (Excellent = 5, Very good = 4, Good = 3, Fair = 2, Poor = 1) A) B and D B) A and D C) C and D D) D and E

c

McKenna Restaurant wishes to open a new store. Based on the following subjective criteria, where 10 is excellent and 0 is poor, where should the new store be located? A) A B) B C) C D) D

t

The purpose of supply chain management is to synchronize a firm's processes with those of its suppliers and customers.

t

Supply chain management tries to match the flow of materials, services and information with demand.

t

The purpose of supply chain design is to shape a firm's supply chain to meet the competitive priorities of its operations strategies.

a

Which one of the following is TRUE for supply chain management? A) Supply chain applies to both manufacturing and service organizations. B) Supply chain applies only to manufacturing because it deals with flow of materials. C) Supply chain is about suppliers and does not include distributors or customers. D) Supply chain includes any operation that deals with materials.

d

Refer to Figure 10-1. The movement from point A to point B indicates the: A) increase in time it takes for your firm to deliver goods and services. B) decrease in time it takes for your firm to deliver goods and services. C) increase in cost. D) decrease in cost.

a

Refer to Figure 10-1. Which is the best statement if a company simultaneously moves from point A to point B and from point D to point C? A) The new supply chain efficiency curve is superior to the old one. B) The new costs are higher, but the performance is better. C) The new supply chain is still inferior to the supply chain efficiency curve. D) The new performance is worse, but the costs are lower.

supply chain management

__ is the synchronization of a firm's process with those of its suppliers and customers to match flow of materials, services and information with demand

supply chain design

____ seeks to develop a firm's supply chain to meet the competitive priorities of the firm's operations strategy.

f

Supply chain design for a service provider is driven primarily by the need to control the materials it consumes as it delivers its various services.

t

The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials

f

While it is important to manufacturing firms, little can be done to improve supply chain strategy in most service organizations.

t

The finished goods of one firm may actually be the raw materials for another firm.

c

A typical manufacturer spends: A) about 25% of its total income from sales on purchased services and materials. B) about 45% of its total income from sales on purchased services and materials. C) more than 60% of its total income from sales on purchased services and materials. D) almost 80% of its total income from sales on purchased services and materials.

f

The weeks of supply measure will improve if the weekly sales decrease.

t

Selling expenses, fixed expenses and depreciation are all considered operating expenses.

f

Increasing the percentage of on-time deliveries to customers actually reduces the total revenue of a firm

d

Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is: A) less than 2.0. B) greater than 2.0 but less than 2.5. C) greater than 2.5 but less than 3.0. D) greater than 3.0.

a

Weeks of inventory and inventory turns are reflected in: A) working capital. B) operating expenses. C) cost of goods sold. D) cash flow

d

Some discount stores are able to sell items before they have to pay their suppliers, resulting in a negative: A) net profit. B) return on assets. C) number of inventory turns. D) cash-to-cash measure.

weeks of supply

______ is an inventory measure obtained by dividing the average aggregate inventory value by sales per week at cost.

inventory turnover

, the annual sales at cost divided by the average aggregate inventory value, is the number of times a year that a firm completely replenishes its inventory.

cash-to-cash

The clever wine shop owner held a tasting, accepted customer orders and payments, and then placed an order with the vineyard. Since he paid the vineyard after he received the shipment (and well after he charged his customers), his ________ time was negative

t

Responsive supply chains work best when frequent product introduction exists

f

Efficient supply chains work best when contribution margins are high.

t

Efficient supply chains use low capacity cushions.

f

Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high

c

An efficient supply chain should be preferred when: A) product variety is high. B) competitive priority is customization. C) demand is highly predictable. D) demand is unpredictable.

b

An efficient supply chain typically has: A) a high capacity cushion. B) high inventory turns. C) supply chain partners that emphasize fast delivery time. D) supply chain partners that emphasize volume flexibility.

d

A responsive supply chain typically has: A) a low capacity cushion. B) high inventory turns. C) supply chain partners that emphasize low prices. D) supply chain partners that emphasize volume flexibility.

d

Responsive supply chains should be preferred when: A) product variety is low. B) demand is predictable. C) contribution margins are low. D) product variety is high.

a

The type of goods for which a responsive supply chain is appropriate are: A) fashion goods. B) products with a long shelf life. C) expensive products. D) those with infrequent design changes.

d

It is desirable for a firm in a responsive supply chain to have: A) low-capacity cushions. B) delivery by railroad. C) high-capacity utilization consistent with high-volume delivery. D) inventory investments as needed to enable fast delivery times.

b

The objective of a firm in a responsive supply chain is likely to be realized if it has a: A) standardized product. B) short lead time. C) low-capacity cushion. D) line-flow process.

design

When a customer orders an item that is a completely new and different product, the company's supply chain must be able to deliver an item that is ________-to-order.

assemble-to-order

In ________, the product is built to customer specifications from a stock of existing components.

make-to-order

Customer clothing and the Boeing 787 Dreamliner aircraft are based on standard designs but component production and manufacture of the final product is

t

Channel assembly is the process of using members of the distribution channel as if they were assembly stations in the factory.

c

A firm may choose to use members of the distribution channel as if they were assembly stations in the factory. Such an approach is known as: A) backward integration. B) postponement. C) channel assembly. D) deferred delay.

a

Which of the following is NOT identified in the text as a competitive advantage of a mass customization strategy? A) improvement of the quality of parts produced B) management of customer relationships C) elimination of finished goods inventory D) an increase in perceived value of services or products

a

_____ uses a firm's flexible processes to generate a wide variety of personalized services or products at reasonably low costs. A) Mass customization B) Channel assembly C) Postponement D) Forward integration

b

A somewhat successful computer manufacturer makes a generic computer in five exciting colors. Once orders are received, the computer guts are encased in the customer's choice of colored case at the factory. This approach to production is known as: A) channel assembly. B) postponement. C) strategic sourcing. D) strategic production.

c

A producer of medical devices makes a single model that can be customized to talk in and display any of 47 different languages. This customization is performed in one of their five regional distribution centers as firm orders are received, providing an elegant example of: A) backward integration. B) forward integration C) channel assembly. D) offshoring.

modular design

______ is essentially standardization in chunks.

postponement

____ is a concept whereby some of the final activities in the provision of a service or product are delayed until the orders are received.

channel assembly

___ is the process of using members of the distribution channel as if they were assembly stations in the factory.

d

The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for weeks, ultimately deciding to make, rather than buy. This decision resulted in increased: A) outsourcing. B) offshoring. C) postponement. D) backward integration.

d

Which of the following is not a benefit of outsourcing? A) comparative labor costs B) lower logistics costs C) reduction of transaction costs through use of the Internet D) technology transfer to another country or company

a

A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example of: A) offshoring. B) forward integration. C) backward integration. D) postponement.

backward integration

One way to gain control over suppliers in a chain is to buy a controlling interest in them, known as ________.

backward integration

When a company uses ________, it is moving upstream in the supply chain toward the source of raw materials.

offshore

There was no reason to build a new call center and hire hundreds of customer service representatives when there were perfectly viable options thousands of miles away. Hence, the company decided to ________ this process.