BUS/230 Week 6 Quiz – Strayer
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43. Determination of the “best buy” is based on:
a. technical considerations.
b. quality issues.
c. a balance between price and quality.
d. an individual buyer’s perceptions.
e. a balance of requirements of marketing, engineering, operations, and supply
2. ISO 9001:2008 provides a tested framework for a systematic approach to consistently delivering product that satisfies customers’ expectations by managing:
a. supplier relationships.
b. total cost of ownership.
c. process capability.
d. six sigma.
e. organizational processes.
3. A sampling technique that is based on the cumulative effect of information that every additional item in the sample adds as it is inspected is called:
a. random sampling.
b. sequential sampling.
c. 100 percent testing.
d. cumulative sampling.
e. additive testing.
4. A process is capable when:
1. the supplier can predict the future distributions about the mean.
2. common causes are eliminated through process change.
3. it averages a set number of standard deviations within the specifications.
4. it produces the same exact result each time the activity is performed.
5. random causes are detected by statistical process controls and eliminated.
5. The role and responsibilities of supply may contribute to the containment of the cost of poor quality by addressing:
a. prevention costs
b. appraisal costs
c. internal costs
d. external costs
e. all of the above.
6. A six sigma (6σ) approach to quality:
a. focuses on preventing defects by using customer feedback.
b. means there are no more than 6 defects per million opportunities.
c. was developed by Japanese companies in the 1950s..
d. is very close to zero defects.
e. has soft goals such as happier customers and employees.
7. Upper (UCL) and lower control limits (LCL):
a. are set by design engineers to a specific product specification.
b. are dependent on a specific process.
c. set by a machine operator based on the daily production requirements.
d. require operator action when the process is outside normal operating range.
e. are a critical factor in the success of a TQM program.
8. Quality control in services is:
a. relatively difficult compared to quality control of goods.
b. especially difficult if the service is highly tangible.
c. performed exactly the same as it is for goods.
d. impossible to quantify if the service is highly intangible.
e. is most easily done on the buyer’s premises.
9. A supplier certification program:
a. adds cost to the supplier, but provides few benefits to the supplier.
b. may enable the buyer and seller to lower costs and improve quality.
c. may improve quality, but at best will not raise costs.
d. always improves quality, but usually at a higher purchase price.
e. typically cost more to implement than the value of the quality improvement.
10. Deming’s 14 points stress the importance of:
a. minimizing total cost with a single source.
b. incoming inspection in quality assurance.
c. top management in quality control.
d. annual rating or merit systems.
e. specialized education for high potential employees
True and False
1. It is unreasonable to expect a supplier to both improve quality and lower costs.
2. Any output produced within a range between the upper and lower specification limit is considered within tolerance.
3. Reliability refers to the match between a commercially available material, good or service and the intended function.
4. External failure costs are incurred when poor-quality goods or services are passed on to the customer and include costs of returns, warranty costs, and management time handling customer complaints.
5. Kaizen is a Japanese term for process control.
6. Total quality management (TQM) is a philosophy and system of management focused on long-term success through customer satisfaction.
7. One type of formal service quality evaluation process measures the gap between service expectations along defined dimensions and the perceptions of actual service performance.
8. Suitability is the mathematical probability that a product will function for a stipulated period of time.
9. Statistical process control (SPC) is a technique for testing a random sample of output from a process in order to detect if nonrandom, assignable changes in the process are occurring.
10. A Six sigma (6s) approach to quality focuses on preventing defects by using customer feedback to reduce variation and waste.
Quantity and Inventory
1. Inventory use that is determined directly by customer orders is called:
a. derived demand.
b. dependent demand
c. anticipated demand.
d. independent demand.
a. scheduled demand.
2. “A” items in ABC analysis are:
a. reviewed infrequently.
b. particularly critical in financial terms.
c. normally carried in large quantities.
d. ordered infrequently.
a. commonly managed by carrying inventory.
3. When the carrying cost of inventory is expressed as a percentage:
a. it is usually the same as the borrowing cost of the organization.
b. the lower it is, the lower the economic order quantity.
c. it usually exceeds 57.5 percent per year.
d. it must exclude the insurance cost of inventory.
e. it is multiplied by the material unit cost to calculate the per unit carrying cost.
4. On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $120. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:
a. buying 100 at a time will save the company $2,500 per year.
b. buying 100 at a time will save the company $2,000 per year.
c. buying 100 at a time will save the company $1,100 a year.
d. buying 100 at a time will save the company $900 per year.
e. buying 100 at a time will save the company $200 a year.
5. Closed-loop MRP:
a. is a system which closes the loop between the supplier and the purchaser.
b. requires a feedback loop between purchasing and accounting.
c. provides a feedback loop between capacity and the master production schedule.
d. requires a check between the master production schedule and inventory.
e. allows a unit manager to sequence jobs done in that department.
6. A buffer inventory:
a. protects against uncertainties in supply and demand.
b. is accumulated for a well-defined future need.
c. is held in anticipation of future needs.
d. covers demand that is expected in the future.
e. is carried to soften the impact of a significant price increase.
7. Stockout costs:
a. are easy to assess in most organizations.
b. can vary depending on whether it is a seller’s or a buyer’s market.
c. are about equal to or less than the cost of carrying additional inventory.
d. do not include present and future lost contribution on lost sales and customer goodwill because these are difficult to quantify.
e. are higher when it is a seller’s market.
8. Which statement is most accurate when thinking about deciding how much to buy::
a. managers seldom make purchase decisions until they are absolutely sure of the volume required.
b. balancing price, volume, carrying cost, and the cost of stockouts is key to successfully determining how much to buy at any point in time.
c. forecasts of future demand, lead times, and prices are usually fairly accurate.
d. the costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy
e. the price premium to attain the desired quantity is usually less than the costs of not having materials available when needed.
9. When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of:
a. a deterministic model.
b. a causal model.
c. a time series forecasting technique.
d. a qualitative forecasting technique.
e. a repetitive pattern modeling tool.
10. The three main inputs of a material requirements planning (MRP) system are:
a. an accurate bill of material, a master production schedule, and the inventory record.
b. required human resources, required machine resources, and available resources.
c. required manufacturing resources, a master production schedule, and required human resources.
d. results from Pareto analysis, inventory records and a master production schedule.
e. inventory records, annual sales forecast, and a master production schedule.
True and False
1. In fixed period inventory models, orders are placed when the reorder point is reached.
2. MRP II systems link the organization’s planning processes with its financial system to produce “what if” scenarios to help achieve sales and profitability projections.
3. In Kanban systems large raw material inventories are unnecessary.
4. JIT requires infrequent deliveries of relatively large quantities in compliance with quality standards.
5. Service coverage is the ability of purchasing to meet the needs of its internal customers.
6. ABC analysis categorizes purchases or inventory into different groups, normally based on the value or impact on the profitability of the organization.
7. Dependent demand items are part of a larger component or product, and use is derived from the production schedule for the larger component.
8. For the supply management function, time-based strategies that impact competitive advantage relate to cycle time reductions and greater coordination of materials and information flows.
9. CPFR is a business practice in which multiple trading partners agree to exchange knowledge and share risks to generate the most accurate forecast possible and develop effective replenishment plans.
10. The basic elements of inventory carrying costs are capital costs, inventory service costs, storage space costs, and projected costs of lost sales..