1. ABC analysis is based upon the principle that:
There are usually a few critical items, and many items which are less critical
All items in inventory must be monitored very closely
An item is critical if its demand is higher than that of the other items in stock
The ROP (in terms of volume) should be higher for c items than for b items
An item is critical if its price per unit is the highest compared to the other items in stock
2. Which of the following is an example of competing on quick response?
A firm's products are delivered to customers faster than its competitors
A firm produces its product with less raw material waste than its competitors
A firm offers more innovative products than its competitors
A firm's research and development department generate many ideas for new products
A firm advertises more than its competitors
3. The following Supply Chain Management technologies and strategies help reduce the bullwhip effect except:
ROP
CPFR
ABC analysis
3PL
both (c) and (d)
4. In the make-or-buy decision, one of the reasons for buying is:
To minimize the setup cost in inventory management
To increase the risk of unethical production
To remove supplier collusion
To avoid reciprocity
None of the above
5. An inventory decision rule at Carrefour states "when the inventory level goes down to 12 gearboxes, 700 gearboxes will be ordered". Which of the following statements is true?
The reorder point is 700 units, and 12 is the EOQ.
Twelve is the reorder point, and 700 is the order quantity.
The number 700 depends only on the demand during lead time.
Twelve is the number of orders per year, and 700 is the reorder point.
None of the above
6. Which of the following is not an assumption of the simple EOQ model?
Demand is known and constant
Lead time is known and constant.
Stockouts are allowed
Only ordering (or setup) cost and holding (or carrying) cost are considered
Shortages are not allowed
7. A disadvantage of the "few suppliers" strategy is:
The high cost of switching suppliers
The lack of cost savings for customers and suppliers
The increase in collaboration with the few suppliers
The cost of lack of trust
All of the above are disadvantages of the "few suppliers" strategy.
8. ABC analysis divides on-hand inventory into three classes, generally based upon:
Item quality
Unit price
The number of units on hand
Annual dollar volume
None of the above
9. Dependent demand and independent demand items differ in that:
For any product, all components are dependent-demand items
The need for independent-demand items is forecasted
The need for dependent-demand items is calculated
All of the above are true
None of the above is true
10. A candy manufacturer in Ajman purchased the distributor that sells to local supermarkets. This is an example of:
horizontal integration
forward vertical integration
backward vertical integration
Bullwhip effect
None of the above
11. If we consider The XYZ Milk Company (a manufacturer of milk products and a supplier to Sharjah Co-op, but not owned by Sharjah Co-op) as the focal firm, then the Sharjah Co-op supermarket is placed _____________________ this XYZ Milk company.
Upstream to
Downstream to
Internal within
Horizontally integrated with
None of the above
12. The EOQ model with quantity discounts attempts to determine:
the lowest amount of inventory necessary to satisfy customers.
the lowest purchasing price.
the order quantity that minimizes the annual ordering cost.
the order quantity that minimizes total cost.
the shortest lead time.
13. The Pittsburgh Company produces cast bronze valves for use in offshore oil platforms. Currently, this company produces 1600 valves per day. There are 20 workers at this company producing these valves. These workers work from 7:00 a.m. until 4:00 p.m. They all take a 30-minute break for lunch. They also take a 15-minute break during the morning work session and another 15 minutes break during the afternoon work session. The labor productivity is:
18.88 valves per labor hour
22 valves per labor hour
80 valves per labor hour
Not enough information to answers this question
None of the above
14. Mass customization is characterized by:
Low volume and low variety.
High volume and low variety
High volume and high variety
All of the above
None of the above
15. Productivity can be improved by:
Increasing inputs while holding output steady
Decreasing output while holding inputs steady
Increasing inputs and output in the same proportion
Decreasing inputs while holding output steady
None of the above
