What type of inventory category is for items used in production that do not become a part of the product?
A.Work in Progress
B.MRO Inventory
C.Service Parts
D.Raw Materials
B. MRO Inventory
Explanation: Maintenance, repair, and operational supplies (MROs) are items used in production that do not become a part of the product. These include hand tools, spare parts, lubricants, and cleaning supplies.
Which of the following activities are a part of Physical Supply/ Distribution
I. Packaging
II. Transportation
III. MRP
IV. Order entry
A.I.II, & IV Only
B.I, II, III, & IV
C.I & II Only
D.I, III, IV
A.I.II, & IV Only
Explanation: Physical Supply/ Distribution include all of the following activities 1. Transportation 2. Distribution inventory 3. Warehousing 4. Packaging 5. Materials handling 6. Order Entry
If your company was going to turn oil into gasoline, what operating process type should you use?
A.Line/ Repetitive
B.Project
C.Lot/ Batch
D.Continuous
D.Continuous
Explanation: Since turning oil into gasoline is a process - a continuous process line would be best for this company.
Just in Time philosophy is:
A. the elimination of waste
B.Materials show at the dock at the right time
C. Produce high quality products for customer
D.Get products to customers quickly
A. the elimination of waste
Explanation: Just in Time manufacturing is measured in many ways, but the most popular is "the elimination of waste". Waste means anything other than the minimum amount of materials and resource that is absolutely necessary to add value.
What tool is used to rank the frequency of a material being purchased by a customer?
Explanation: When you rank the frequency of something (problems/ customer orders, etc) you would use Pareto analysis to rank them (Pareto analysis is also known as the 80/20 rule)
Explanation: An Ishikawa diagram is also called a case and effect diagram or a fishbone diagram
For master production scheduling, the minimum planning horizon is equal to the:
A.shortest cumulative lead time
B.Just in time
C.Manufacturing lead time
D.longest cumulative lead time
D.longest cumulative lead time
Explanation: For master production scheduling, the minimum planning horizon is the longest cumulative or end to end lead time.
What would BEST describe Rough Cut Capacity Planning?
A.Check if resources are available by product family
B.Check if critical resources are available to support the preliminary MPS
C.Check if there is enough capacity against a work center to support Production Activity Control
D.Check if there is enough capacity for to support MRP
B.Check if critical resources are available to support the preliminary MPS
Explanation: The RCCP is to check if critical resources are available to support the preliminary MPS
If company A has
8 Million in Revenue
15 Million in Assets
10 Million in Liabilites
4 Million in Expenses
What does Owners Equity equal to ?
A. -5 Million
B. 5 Million
C. 4 Million
D. 11 Million
B. 5 Million
Explanation: Assets = Liabilities + Owners equity on the balance sheet. For this equation we will rearrange the variables to be Assets- Liabilities = Owners Equity so 15 Million - 10 Million = 5 Million Expense and Revenue are not used in Owners' Equity Calculation
What function(s) would want to maintain high finished goods inventory?
A. Production Only
B. Marketing Only
C. Production and Marketing
D. Finance and Marketing
B. Marketing Only
Explanation: Marketing function would want to maintain high inventories so that goods are always available. This would satisfy's marketing objective of high customer service. Production would want high raw material inventories, but would not necessarily want high finished goods inventory. Finance would always want low inventory to reduce costs
A Master Production Schedule is defined as:
A. Driven from Materials Requirements Plan
B. An anticipated build schedule
C. Driven from RCCP
D. An actual build schedule
B. An anticipated build schedule
Explanation: A Master Production Schedule is defined as an ANTICIPATED build schedule. It is an initial plan. The actual build schedule is called the final assembly schedule (FAS) MPS drives MRP not MRP drives MPS MPS drives RCCP not RCCP drive MPS
The role of central supply in a decentralized distribution system is to:
A. Respond to orders from distribution site
B. Replenish stock at regular intervals
C.To forecast demand on behalf of the distribution center
D.To help coordinate forecasts across the distribution network
A. Respond to orders from distribution site
Explanation: In a decentralized distribution system, each distribution center is responsible for their own forecasts and placing orders on centralized supply. In a centralized system central supply will plan forecasts on behalf of the distribution center and send them parts when central supply sees it is necessary
Which of the following does Capacity Requirements Planning shows the feasibility for?
A. Production Planning
B. Material Requirements Planning
C. Master Production Scheduling
D. Production Activity Control
B. Material Requirements Planning
Explanation: Capacity requirements planning shows the feasibility for Material requirements planning Rough Cut Capacity shows the feasibility of Master Production Scheduling
What is the best reason to hold inventory?
A. Reduce the amount of purchases from suppliers
B. To decouple production from demand variation
C. Minimize the levels in a Bill of Materials
D. A company should never hold inventory
B. To decouple production from demand variation
Explanation: The reason to hold inventory is to decouple production schedule from the variation in demand. Holding inventory does not reduce purchases from suppliers, minimize the levels in a BOM. It is a goal to hold as little inventory as possible, but not to have no inventory
What is MOST likely to be independent demand?
A. Raw Material for a factory
B. A sub assembly at the factory
C. A spare part for a jet engine
D. WIP Inventory
C. A spare part for a jet engine
Explanation: Independent demand is what a customer will purchase from the company. A jet plane spare part is the only independent item. All other answers are sub assemblies (dependent) on higher level items that would be sold to a customer.
In a Physical Distribution System, DRP stands for what?
A. Dividend Reinvestment Plan
B. Disaster Recovery Plan
C. Distribution Recovery Plan
D. Distribution Requirements Planning
D. Distribution Requirements Planning
Explanation: is a method used in business administration for planning orders within a supply chain. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements. This process is also commonly referred to as Distribution Resource Planning.
Which of the following is NOT an important role of a warehouse?
A. Product Mixing
B. Transportation consolidation
C. Service
D. Assembly
D. Assembly
Explanation: Warehouses serve three important roles 1. Transportation consolidation 2. Product mixing 3. Service
Each of the following are a part of the marketing strategy 4p's EXCEPT:
B. Packaging
Explanation: The marketing 4p's are
1. Product
2. Price
3. Promotion
4. Place
Demand ManagementDemand over the past 5 months has been 86, 90, 95, 92, and 89 units respectively. Using a three-month moving average, calculate the forecast for the 6th month.
A. 92
B. 82
C. 90
D. 91
A. 92
Explanation: Remember to take only the last three months in your formula. Any months before the last three months we can discard for this problem. (95+92+87)/3=92
Which of the following best describe VMI?
A. Supplier takes full responsibility for maintaining an agreed inventory of the material
B. Vertical alignment of inventory
C. Vendor Integration through EDI
D. Visual card to pull new inventory
A. Supplier takes full responsibility for maintaining an agreed inventory of the material
Explanation: VMI stands for Vendor Managed Inventory and is a method of a vendor to take responsibility of the inventory levels for a customer, usually at the point of use.
Annual Sales = $26 million
Average General and administrative expenses = $6 million Average inventory = $2 million
Annual Cost of goods sold = $12 million
The inventory turnover Ratio equals:
A. 2.166
B. 2
C. 6
D. 3
C. 6
Explanation: Inventory Turns = annual cost of goods sold/ average inventory in dollars. 12M/2M=6 Inventory Turns
In the Theory of Constraints (TOC) the rope refers to
A. pull of materials out of the bottleneck
B. the scheduled shipping of a product from a plant
C. scheduling materials into the bottleneck at a constant pace
D. Holding a queue of input materials before the bottleneck
A. pull of materials out of the bottleneck
Explanation: Theory of constraints drum-buffer rope, the rope refers to the "pull" of the materials through the constraint. Drum is to schedule the materials into the constraint at a constant pace and buffer is to hold a queue before the constraint so the constraint will always have materials available.
A Routing file contains the following information
I. Unit Run time
II. Manufacturing Lead Time
III. Set-up time
IV. Work Center
A. III & IV Only
B. I, II, & III Only
C. I, III, & IV Only
D. II & IV Only
C. I, III, & IV Only
Explanation: Information on a routing file includes
1. Operation number
2. Work Center
3. Description
4. Setup
5 Unit Run
6. Labor Grade
Manufacturing lead time is part of the item master file, not the routing file
A work center consists of three machines and is operated eight hours per day for five days a week. Historically. The utilization has been 95% and the efficiency 90%. What is the rated capacity?
A. 114
B. 140.3
C. 34.2
D. 102.6
D. 102.6
Explanation: Available time = 3*8*5 = 120 hours a week Rated capacity = 120* .95*.9 = 102.6
The least important factor involved in selecting a site for a factory is the
A. Land availability
B. Current location of management
C. Near to suppliers
D. Skilled Labor
B. Current location of management
Explanation: Many factors are involved in selecting a site for a factory, but the least important factor is where management currently lives
