Deck 12: Purchasing and Supply Chain Analysis: Tools and Techniques

Question 1

When using quantity discount analysis,the key calculation is the incremental cost of each additional unit at different quantity levels.

Answer 1

True

Question 2

Offering a supplier a longer-term contract with guaranteed volumes encourages investment in equipment that results in lower production costs.

Answer 2

True

Question 3

If learning occurs at a supplier during the performance of a purchase contract and the buyer does not take that into account,then the supplier will not reap the financial benefits that result from learning.

Answer 3

False

Question 4

The work force factor of the learning curve refers to the ability of the worker on the job to learn and improve through repetitive effort and increased efficiency but not the effort by management to pursue productivity gains.

Question 5

The learning curve requires the accurate collection of cost and labor data,particularly during the latter stages of production.

Question 6

Because a project usually has a defined scope with agreed-upon tasks,responsibilities,and deliverables,it is often more difficult to measure project success compared with other types of work.

Question 7

In a Gantt chart,a network is a graphical representation that shows how each individual activity relates in time and sequence to all other activities.

Question 8

There is a strong correlation between effective planning and successful project outcomes.

Question 9

The longest path (in time)through the PERT network is the critical path.

Question 10

The advantage of a Gantt chart is that it can be easily updated to show the activities of larger,more complex projects.

Question 11

Value analysis is traditionally applied to tangible products and as such cannot be applied to services.

Question 12

Activities without any slack are by definition on the critical path.

Question 13

Learning-curve analysis is a key reason why many buyers consolidate purchase volumes with fewer suppliers.

Question 14

Activities on the critical path will have slack.

Question 15

A producer realizes the most dramatic learning improvements over early volumes when the effect from learning is the greatest.

Question 16

Each activity in PERT has three time estimates: (1)most likely,(2)pessimistic,and (3)optimistic.

Question 17

Projects have certain characteristics that make them unique compared with other forms of work.

Question 18

In collaborative relationships,buyers and suppliers can work together to mutually share the benefits of learning curves and productivity improvements.

Question 19

All processes and items can benefit from or exhibit improvement from learning.

Question 20

The primary objective of value analysis is to increase the value of an item or service at the lowest cost without sacrificing quality.

Question 21

In a PERT network,a/an ____ is the earliest time a project can finish given the expected activity time.

A) late finish
B) on time start
C) on time finish
D) early start
E) early finish

Question 22

A/An ____ visually displays the tasks and times associated with a project and consists of a horizontal bar chart with activities listed vertically and times or dates displayed horizontally.

A) PERT tool
B) Gantt chart
C) CPM tool
D) TCO chart
E) networking tool

Question 23

In a PERT network,which of the following is not one of the times shown?

A) Early start.
B) Late start.
C) On time start.
D) Early finish.
E) Late finish.

Question 24

In a PERT network,the difference between the ____ and the ____ is slack.

A) early start....late finish
B) late start....early finish
C) early start....early finish
D) late start....early start
E) None of these choices.

Question 25

When a process crosses functional boundaries,there is a risk that no one actually owns or takes responsibility for the entire process.

Question 26

In a PERT network,the difference between the ____ and the ____ is slack.

A) late finish....early finish
B) late start....late finish
C) early finish....late start
D) early start....early finish
E) None of these choices.

Question 27

Which of the following is not one of the six phases of a project?

A) Precompletion.
B) Project definition.
C) Preliminary studies.
D) Performance.
E) Postcompletion.

Question 28

Users apply ____ to projects where there is a single known time for each activity with no variance,while ____ applies to projects where time estimates are variable or uncertain.

A) Gantt charts....CPM
B) PERT....CPM
C) Gantt charts....PERT
D) CPM...PERT
E) PERT....TCO

Question 29

Most processes do not cross functional boundaries.

Question 30

Which of the following is not one of the network rules for PERT/CPM?

A) Networks start and finish at multiple events.
B) Identify each unique activity within a project by a capital letter that corresponds only to that activity.
C) Branch direction indicates the general progression in time from left to right.
D) When a number of activities end at one event, no activity starting at that event may begin before all activities ending at that event are complete.
E) Two or more activities cannot share graphically the same beginning and ending events.

Question 31

In a PERT network,a/an ____ is the latest point in time an activity can begin without delaying the entire project.

A) late start
B) late finish
C) early start
D) early finish
E) on time finish

Question 32

All of the following are points that should be considered before initiating a project except ____.

A) make sure the objectives and outcomes are championed by senior executive management
B) measure subjectively
C) place the program under the leadership of people with skill, credentials, and credibility
D) establish an effective governance process with a cross-functional team
E) break down the project into phased deliverables

Question 33

In a PERT network,a/an ____ is the latest time an activity can finish without delaying the entire project.

A) late start
B) late finish
C) on time finish
D) early start
E) late start

Question 34

In a PERT network,a/an ____ is the earliest point in time an activity can begin.

A) late start
B) on time start
C) early finish
D) early start
E) late finish

Question 35

All of the following are characteristics of the postcompletion phase of a project except ____.

A) confirm that the final project meets the expectations of management or customers
B) reassign project personnel to other positions or other projects
C) restore any equipment and facilities used to their original status
D) conduct a postimplementation meeting to discuss the strengths and weaknesses of the project
E) identify broad budget, personnel, and resource requirements

Question 36

The ____ (in time)through a PERT network is the ____.

A) longest path....critical path
B) shortest path....critical path
C) longest path....slack path
D) shortest path....slack path
E) None of these choices.

Question 37

Many organizations are attempting to develop new products concurrently rather than sequentially,which not only saves time and money but also allows agreement on major issues early in the process.

Question 38

Because most processes move across functional boundaries,it is illogical to have those groups involved with mapping and improving the process.

Question 39

A/An ____ is a series of tasks that requires the completion of specific objectives within a certain time frame; has defined start and stop dates; consumes resources,particularly time,personnel,and budget; and operates with limited resources.

A) process
B) work order
C) purchase order
D) project
E) team charter

Question 40

Organizations should not use process mapping to redesign or reengineer processes.

Question 41

[A/An] ____ establishes the rate of improvement due to learning as producers realize direct-labor cost improvements as production volumes increase.

A) leverage
B) learning curve
C) knowledge curve
D) product life cycle
E) short-term contract

Question 42

____ is a tool that reduces processes to their component parts or activities and helps identify and then eliminate non-value-adding activities (waste)or delays within a process.

A) Process mapping
B) TCO
C) PERT/CPM
D) QDA
E) Productivity analysis

Question 43

A/An ____ consists of activities or steps that can be performed at the same time during the main flow of work.

A) intermittent process
B) continuous process
C) standardized process
D) concurrent process
E) None of these choices.

Question 44

When referring to learning improvement,the ____ represents a reduction in the cumulative average number of labor hours as production doubles from a previous level.

A) critical path
B) slack path
C) expected activity time
D) learning rate
E) sequential process

Question 45

____ is a technique used to examine the incremental changes in cost between quantities within a supplier's price quotation.

A) TCO
B) Price analysis
C) Market-share pricing
D) Competition pricing
E) Quantity discount analysis

Question 46

A ____ is one in which the set of steps or activities that make up the activity occur one after the other.

A) continuous process
B) sequential process
C) concurrent process
D) standardized process
E) None of these choices.

Question 47

Which of the following is not one of the critical steps to process mapping?

A) Search for better ways and methods to perform the tasks comprising a process.
B) Replace sequential activities with concurrent activities whenever possible.
C) Identify those activities that contribute to waste or add minimal value to the process and target those for elimination.
D) Identify the time associated with each part of a process and identify how much of that time is waste.
E) Utilize all sequential activities whenever possible as concurrent activities are wasteful.

Question 48

Which of the following is not a question that value analysis teams should ask to determine if opportunities exist for item,product,or service improvement?

A) Are there additional uses for this product?
B) Can we use a different color of paint?
C) Is there a better production method to produce the item or product?
D) If we are making an item now, can we buy it for less?
E) Are packaging cost reductions possible?

Question 49

Which of the following is false regarding when to use the learning curve?

A) Learning-curve analysis is appropriate when a supplier uses a new production process.
B) Learning-curve analysis is appropriate when a supplier produces any item for the first time.
C) The learning curve is appropriate when a supplier produces a technically complex item for the first time.
D) All processes and items can benefit from or exhibit improvement from learning.
E) The human factors present at the beginning of production must remain fairly constant over time to apply the learning curve.

Question 50

The term ____ applies to the reduced direct labor requirement per unit of output due to the effects of learning,while the term ____ refers to the longer-term factors of production that systematically reduce production costs.

A) learning curve....experience curve
B) learning curve....infinity curve
C) experience curve....Boeing curve
D) experience curve....learning curve
E) None of these choices.

Question 51

____ techniques are primarily applied to existing products and services,while ____ is the application of value principles during product or service design.

A) Value analysis....total cost of ownership
B) Value engineering....price analysis
C) Value analysis....value engineering
D) Price analysis....cost analysis
E) Value engineering....value analysis