Deck 16: Lean Supply Chain Management

Question 1

WIP is incomplete - it has not yet been transformed to a saleable finished good.

Answer 1

True

Question 2

Suppliers that cannot meet delivery schedules create delivery uncertainty.

Answer 2

True

Question 3

All cost accounting systems are capable of identifying and assigning the true costs related to maintaining physical inventory.

Answer 3

False

Question 4

Suppliers seldom offer quantity discounts to encourage larger orders from purchasers.

Question 5

Unnecessary inventory usually results from one thing: uncertainty.

Question 6

Anything less than perfect quality leads to waste.

Question 7

In a pull system,an upstream work center or operation will create output regardless whether a downstream center directly requests that output.

Question 8

Supply chains are sensitive to changes in markets,including changes in the availability of material supply as well as price changes.

Question 9

If WIP builds up at a workstation,a scheduler should not have to reroute the flow of material to another work center.

Question 10

It is often difficult to quantify the total costs associated with ordering and carrying physical inventory.

Question 11

From the financial accounting perspective,inventory has historically been considered a current asset.

Question 12

A lower-than-anticipated finished-goods inventory level may mean that a decrease in customer demand is occurring.

Question 13

The most basic and the easiest inventory-related cost to quantify and track is unit cost.

Question 14

Even in an era of just-in-time production,almost all firms hold some level of preproduction inventory.

Question 15

Ordering costs are a composite of the costs associated with the release of a material order.

Question 16

The true cost of MRO inventory often goes unnoticed because firms fail to track these items with the same intensity as production inventory.

Question 17

Production inventory consumes a minor portion of inventory investment.

Question 18

According to Shook,lean is a philosophy that seeks to shorten the time between when the customer order and the shipment to the customer by eliminating waste.

Question 19

Carrying costs do not vary with the level of inventory,which makes these costs fixed.

Question 20

It is harder to increase a material release by 10% or carry safety stock to cover supplier quality problems than to correct a problem's root cause.

Question 21

Using a DRP system,if supplier quality and lead times are reliable,planners can time the arrival of components just before production of the final part number.

Question 22

According to JIT,inspection is a waste of both time and personnel caused by defects.

Question 23

When inventory moves so fast that firms essentially hold zero inventory on hand,they are following a system known as [the] ____.

A) MRP
B) TQM
C) Boulwarism
D) lean supply chain
E) None of these choices.

Question 24

When physical inventory exceeds the amount the computerized system believes is available,the physical inventory can be sold or used to satisfy customer demand.

Question 25

Very few organizations use distributors to provide at least some portion of their inventory requirements,particularly maintenance,repair,and operating supplies.

Question 26

Lean is an easy approach to implement.

Question 27

A major step toward eliminating delivery uncertainty is a commitment to stable release schedules with realistic (but not overly generous)supplier lead times.

Question 28

Shortening the material pipeline in terms of time between suppliers and a buyer can reduce the average amount of inventory in a system.

Question 29

Most inventory waste results from underlying problems that workers have failed to correct.

Question 30

Decisions in lean can be based on the opinions or preferences of influential individuals,as well as on facts and data.

Question 31

A logical place to begin when managing inventory investment is to make sure there is agreement between physical and electronic inventory.

Question 32

The underlying emphases of lean are relevant to all organizations,regardless of the specific planning and control tools that are used.

Question 33

____ means that inventory moves through the supply chain continuously with minimal queuing or non-value-added activity being performed.

A) Pull
B) Flow
C) Striving for excellence
D) MRP
E) TQM

Question 34

Continuous improvement involves small,daily improvements that ensure that the process in moving forward.

Question 35

The ability to plan material requirements accurately increases as order-cycle time lengthens.

Question 36

The use of consignment reduces the average amount of inventory a buyer owns as well as improves velocity.

Question 37

Buyers should not accept any of the blame for delivery uncertainty.

Question 38

____ means that supply chains must have perfect quality.

A) lean
B) flow
C) pull
D) push
E) striving for excellence

Question 39

____ means that customer orders start the work process,which ripples down through the supply chain.

A) Flow
B) Striving for excellence
C) Pull
D) MRP
E) None of these choices.

Question 40

Specifying customized parts when standardized parts are available adversely affects material inventory because customized parts are usually more expensive.

Question 41

____ are calculated as Average Inventory in Units ´ Unit Price ´ Carrying Cost per Year.

A) Quality costs
B) Ordering costs
C) Inventory carrying costs
D) MRO costs
E) Cycle counting costs

Question 42

All of the following are considered to be the right reasons for investing in inventory except ____.

A) avoid disruptions in operational performance
B) Unreliable supplier delivery
C) support customer service requirements
D) hedge against marketplace uncertainty
E) take advantage of order quantity discounts

Question 43

____ inventory includes the items purchased from suppliers or produced internally to directly support production requirements.

A) Work-in-process
B) Finished-goods
C) MRO suppliers
D) Pipeline/in-transit
E) Raw material and semifinished items

Question 44

All of the following are common signaling methods used in a kanban system except ____.

A) single card system
B) color coding of containers
C) designated storage spaces
D) computerized bar coding systems
E) verbal notification

Question 45

Which of the following is not one of the key principles of the lean concept?

A) Maximize the use of people.
B) Simplify first, and only then apply new technology.
C) Focus on gradual, but continuous, improvement.
D) Minimize waste (including poor quality).
E) All of these choices.

Question 46

Which of the following is not one of the wrong reasons for investing in inventory?

A) Poor quality and material yield.
B) Extended order-cycle time from global sourcing.
C) Hedge against marketplace uncertainty.
D) Specifying custom items for standard applications.
E) Inefficient manufacturing processes.

Question 47

All of the following are important barriers to lean supply except ____.

A) domestic sourcing
B) dispersed supply base
C) historic buyer-supplier relationships
D) number of suppliers
E) supplier quality performance

Question 48

____ involves frequent deliveries of smaller quantities directly to the point of use at the buyer.

A) Lean supply
B) Lean transportation
C) Lean warehousing
D) Lean ordering
E) None of these choices.

Question 49

____ represents the funds committed to operating a business,including the purchase and holding of inventory.

A) Pipeline inventory
B) WIP
C) MRO
D) Working capital
E) None of these choices.

Question 50

A ____ system is a production control approach that uses containers,cards,or visual cues to control the production and movement of goods through the supply chain.

A) MRP
B) DRP
C) lean supply
D) JIT kanban system
E) lean transportation

Question 51

When firms produce goods in anticipation of future customer orders,they are operating in a/an ____ environment.

A) assemble-to-order
B) make-to-order
C) make-to-stock
D) just-in-time
E) None of these choices.

Question 52

____ inventory includes completed items or products that are available for shipment or future customer orders.

A) WIP
B) Finished-goods
C) MRO
D) Pipeline/in-transit
E) Raw materials and semifinished items

Question 53

Which of the following is an example of WIP inventory?

A) Waiting to be moved to another process.
B) Currently being worked on at a work center.
C) Lining up at a processing center due to a capacity bottleneck or machine breakdown.
D) All of these choices.
E) None of these choices.

Question 54

____ refers to how quickly raw material and work-in-process inventory transform into finished goods that the customer accepts.

A) Volume
B) Velocity
C) Value
D) Mass
E) None of these choices.

Question 55

All of the following are categories of inventory except ____.

A) just-in-time inventory
B) raw material and semifinished item inventory
C) work-in-process inventory
D) MRO supplies inventory
E) pipeline/in-transit inventory

Question 56

____ of inventory relates to the amount of inventory that a firm owns at any given time.

A) Volume
B) Velocity
C) Value
D) Mass
E) None of these choices.

Question 57

____ inventory includes the items used to support production and operations.

A) Raw materials and semifinished items
B) WIP
C) Finished-goods
D) MRO
E) Pipeline/in-transit

Question 58

____ inventory is being moved to a customer or is located throughout distribution channels.

A) Pipeline/in-transit
B) MRO
C) WIP
D) Raw materials and semifinished items
E) Just-in-time

Question 59

Which of the following is a component of carrying cost?

A) Cost of capital.
B) Cost of storage.
C) Cost of obsolescence, deterioration, and loss.
D) All of these choices.
E) None of these choices.

Question 60

When firms produce goods in response to a customer order,they are operating in a/an ____ environment.

A) make-to-order
B) make-to-stock
C) make-to-forecast
D) WIP
E) None of these choices.

Question 61

All of the following action support reduced order-cycle time with suppliers except ____.

A) global sourcing
B) expanded electronic capability
C) supplier development support
D) order-cycle time measurement
E) focus on second- and third-tier suppliers

Question 62

The downside of poor forecasting includes all of the following except ____.

A) higher inventory volumes
B) poor customer service as inventory is misallocated across locations and products
C) higher inventory carrying charges
D) excessive safety stock levels
E) increased customer service

Question 63

In ____,demand for an item is not directly dependent upon the demand for any other item that is produced.

A) dependent demand
B) independent demand
C) codependent demand
D) perfect order
E) just-in-time

Question 64

Which of the following is not one of the functions of a distribution resource planning system?

A) Forecasting finished-goods inventory requirements.
B) Establishing correct inventory levels at each stocking location.
C) Determining the timing and replenishment of finished-goods inventories.
D) Producing a time-phased set of material, component, and subassembly requirements timed to support an expected build schedule.
E) Transportation planning and vehicle load scheduling.

Question 65

A ____ details the components or subassemblies and the quantity required to produce a final part number or end item.

A) kanban
B) perfect order
C) bill of material file
D) DRP system
E) RFID system

Question 66

According to the APICS Dictionary,____ is defined as the process of a supplier placing goods at a customer location without receiving payment until after the buyer uses the goods.

A) Kanban
B) Just-in-time
C) Consignment
D) MRO
E) None of these choices.

Question 67

Which of the following is not one of the benefits of simplified designs?

A) Fewer suppliers.
B) Increased number of manual transactions.
C) Reduced transactions to support the inventory.
D) Fewer part numbers.
E) Lower inventory management costs.

Question 68

____ pertains to the unit cost of the inventory.

A) Volume
B) Velocity
C) Value
D) Mass
E) None of these choices.

Question 69

Record integrity is the result of various activities and procedures designed to ensure that the amount of ____ is equal to the computerized record of ____.

A) MRP....kanban
B) kanban....MRP
C) ROH....POH
D) POH....ROH
E) None of these choices.

Question 70

A ____ system takes a period-by-period set of master production schedule requirements (anticipated or booked customer orders)and produces a time-phased set of material,component,and subassembly requirements timed to support an expected build schedule.

A) kanban
B) DRP
C) just-in-time
D) perfect order
E) MRP

Question 71

The ____ is one that is delivered on time,accurately,and in perfect condition.

A) kanban order
B) MRO order
C) consignment order
D) perfect order
E) MRP order

Question 72

Which of the following is not one of the policies used to improve design simplification and reduce complexity?

A) Increase the number of suppliers.
B) Establish premium pricing for customization.
C) Establish geographic-specific options and standards.
D) Do not eliminate frequently requested options.
E) Utilize business modeling and TCO tools to support complexity reduction decisions.