Question 1

According to the text,the cost of importing a foreign sourced product,including freight,insurance,and packing
A) is insignificant.
B) may range from 26 to 110 percent of the cost of the product.
C) may range from 10 to 12 percent of the cost of the product.
D) may not be charged if the terms of sale are CIF, port of entry.

Accepted Answer

The buyer must understand the terms of sale because international freight, insurance, and packing can add as much as 10 to 12 percent to the quoted price, depending on the sales terms.

Question 2

For purchases of capital goods such as manufacturing equipment,many U.S.buying organizations now use _____ to analyze purchasing decisions,including trade-in or future estimated salvage value.
A) e-procurement
B) activity-based costing
C) total costing
D) life-cycle costing

Accepted Answer

For purchases of capital goods such as manufacturing equipment, many U.S. buying organizations now use "life-cycle costing" to analyze purchasing decisions through the life of the purchased item, including trade-in or future estimated salvage value.

Question 3

Synchronous production has an advantage over just-in-time in that
A) the product flow through the system is balanced without the work of balancing the output of each operation.
B) it is a balanced system.
C) it works better because it uses trial and error to put the system into effect.
D) it is a total system, whereas just-in-time is not.

Accepted Answer

Because work is assigned to each operation rather than to the entire system, as in JIT, there is no need for more work in process than what is actually being worked on. Inventory can also be placed near the bottleneck to avoid any shutdown in this crucial operation, and sometimes, unlike the case with JIT, there may even be a quality control inspector to check the bottleneck operation's input.

Question 4

Quality circles meet to discuss ways to improve
A) production speed.
B) their functional areas.
C) product quantity.
D) pricing.

Accepted Answer

A quality circle is a small work group that meets periodically to discuss ways to improve its functional areas and the quality of the product.

Question 5

Problems associated with e-procurement include
A) it must be isolated from the company's overall business system.
B) it must be completed before the firm can engage in other purchasing functions, such as supplier determination and analysis.
C) it can expose the company to a wide range of potential security issues.
D) it reduces entry barriers to international market opportunities.

Accepted Answer

Security is often another significant concern for e-procurement. For B2B electronic commerce to achieve its full potential, access to the company's internal systems from outside is critical. Companies are wary of opening up the details of their business-including pricing, inventory, or design specifications-to competitors, to avoid risking the loss of brand equity and margins. In addition, exposing internal business systems to access via the Internet can expose the firm to a wide range of potential security issues, such as unauthorized entry (i.e., "hacking") and fraudulent orders.

Question 6

Mass customization
A) refers to a company's use of standardized production systems to produce and deliver products and services.
B) is usually appropriate in situations where there is the limited potential for differentiating a product for a particular customer.
C) typically requires the company to reconceptualize the design of its products as well as the design and integration of the processes used for producing and delivering the product to customers.
D) is also known as lean production.

Accepted Answer

Mass customization is usually appropriate in situations where it is feasible to delay differentiating the product for a particular customer until the last possible point in the supply network. This typically requires that the company reconceptualize the design of its product as well as the design and integration of the processes used for producing and delivering the product to customers. In practice, this means reconceptualizing and often reconfiguring the company's entire supply chain.

Question 7

Which of the following is not true about Six Sigma?
A) It is a process for reducing defects and eliminating variation.
B) It literally means a maximum of 3.4 defects per thousand occurrences.
C) It includes five steps: define, measure, analyze, improve, and control.
D) The CEO is often the driving force for implementing Six Sigma.

Accepted Answer

Six Sigma literally means a maximum of 3.4 defects per million occurrences, versus the two- or three-sigma level (more than 300,000 unsatisfactory experiences per million customer contacts) at which most businesses operate.

Question 8

Benefits of global electronic purchasing initiatives include
A) increased backward integration.
B) exposure to exchange rate fluctuations.
C) optimized supply chains across an entire network of organizations.
D) increased barriers to entry for international market opportunities.
E) elimination of potential security issues.

Accepted Answer

Emerging industry-based business-to-business (B2B) exchanges can help optimize the supply chain across an entire network of organizations, not merely within a single company. These exchanges can create value by aggregating the purchasing power of buyers, improving process efficiency, integrating supply chains, enhancing content dissemination, and improving overall market efficiency within and across nations.

Question 9

The basic approaches to mass customization include all of the following except
A) transparent.
B) adaptive.
C) cosmetic.
D) concurrent.
E) collaborative.

Accepted Answer

There are four basic approaches to mass customization: (1) collaborative-a company helps customers choose the required product features; (2) adaptive-the company offers a standard product that users can modify themselves; (3) cosmetic-only the product's presentation is customized, such as packaging or color; and (4) transparent-customers are provided with individualized product or service offerings without their knowing it, such as on website interfaces.

Question 10

According to the text,when examining production activities,managers are quick to recognize that inventory costs are a major factor and getting rid of inventory can lower labor cost by ______ or more.
A) 15 percent
B) 25 percent
C) 40 percent
D) two-thirds
E) 75 percent

Accepted Answer

When examining production activities, managers are quick to recognize that inventory costs are a major factor. Getting rid of inventory can lower labor cost by 40 percent or more.

Question 11

Just-in-time
A) is a patented Japanese process for quality control.
B) requires materials and parts arrive at each point in the production process when they are needed.
C) requires parts and materials arrive at a manufacturing plant at least one month in advance to avoid "stockouts."
D) permits greater flexibility in Toyota's production schedule.

Accepted Answer

Parts and components have to be delivered to each point in the production process at the time they are needed, hence the name.

Question 12

Synchronous manufacturing systems
A) is a balanced system while a JIT system is unbalanced.
B) takes longer to install than a JIT system, but production capacities are larger.
C) is faster than a JIT system because no allowances are made for contingencies.
D) is also called the theory of constraints.

Accepted Answer

Synchronous manufacturing is also called the theory of constraints (TOC).

Question 13

Total quality management
A) is the control of quality in all areas of the organization, not just production.
B) refers to quality control in not only the production of the firm's products, but also to quality control of all suppliers.
C) refers to the control of quality in all functional areas of the firm.
D) requires adoption of concurrent engineering principles in product design.

Accepted Answer

A companywide management approach in which the entire organization is managed so that it excels on all dimensions of product and services that are important to the customer.

Question 14

An entire manufacturing system with unbalanced operations that emphasizes total system performance is
A) JIT.
B) quality circles.
C) synchronous manufacturing.
D) concurrent engineering.

Accepted Answer

An entire manufacturing system with unbalanced operations that emphasizes total system performance is synchronous manufacturing.

Question 15

The output of a synchronized manufacturing system is set
A) at the capacity of the operation with the highest output.
B) at the output of the slowest operation that is working at full capacity.
C) at the level that permits the system to be balanced.
D) so that all production operations can produce the same amount to eliminate stockpiling.

Accepted Answer

The system's output is determined by and limited to the output of the slowest operation, or bottleneck, that is working at full capacity.

Question 16

Just-in-time requires all of the following except
A) components, whether purchased from outside suppliers or made in the same plant, have to be defect-free.
B) it is necessary to eliminate process time.
C) manufacturers have to have the cooperation of their suppliers.
D) managers attempt to get product designers, production managers, purchasing people, and marketers to work together as a team.
E) parts and components have to be delivered to each point in the production process at the time they are needed.

Accepted Answer

It is necessary to reduce process time, but not possible to eliminate it entirely.

Question 17

Many American manufacturers made the mistake of rushing to copy parts of Japan's just-in-time production system without considering
A) that cultural differences between Japanese and Westerners would prevent the system from being transferred effectively.
B) that the American legal system and approach to unionization would not permit its successful adoption.
C) that it is a total system that focuses on covering management of people, material and relations inside the company and with suppliers.
D) that it was patented by Japan.

Accepted Answer

JIT is a total system covering the management of people, materials, and relationships both inside the company and with suppliers.

Question 18

A ___________ is the name given to an operation in a synchronous manufacturing system whose output sets the limit for the entire system's output.
A) limiting point
B) strangle point
C) bottleneck
D) critical operation

Accepted Answer

A bottleneck is the name given to an operation in a synchronous manufacturing system whose output sets the limit for the entire system's output.

Question 19

"Little JIT" refers to
A) reducing the size of the production facility to make it more manageable.
B) narrowing the focus to the management of goods inventories.
C) working with designers, production managers, and marketers to simplify product design.
D) lean production.

Accepted Answer

Many manufacturers that attempted to transform their operations by adopting JIT principles mistakenly incorporated only one part of JIT: the narrow focus on managing goods inventories, sometimes called "little JIT."

Question 20

Which of the following is not true about "big JIT"?
A) It is a total system covering the management of people, materials, and relationships with suppliers.
B) It is called lean production.
C) It requires a thorough and companywide commitment to managing quality, of which continuous improvement is an integral part.
D) It requires concurrent engineering.

Accepted Answer

"Big JIT" is a total system covering the management of people, materials, and relationships with suppliers (this total system is also called lean production). It requires a thorough and companywide commitment to managing quality, of which continuous improvement is an integral part.

Quiz 18: Appendix C: Global Operations and Supply Chain Management

According to the text,the cost of importing a foreign sourced product,including freight,insurance,and packing

For purchases of capital goods such as manufacturing equipment,many U.S.buying organizations now use _____ to analyze purchasing decisions,including trade-in or future estimated salvage value.

Synchronous production has an advantage over just-in-time in that

Quality circles meet to discuss ways to improve

Problems associated with e-procurement include

Mass customization

Which of the following is not true about Six Sigma?

Benefits of global electronic purchasing initiatives include

The basic approaches to mass customization include all of the following except

According to the text,when examining production activities,managers are quick to recognize that inventory costs are a major factor and getting rid of inventory can lower labor cost by ______ or more.

Just-in-time

Synchronous manufacturing systems

Total quality management

An entire manufacturing system with unbalanced operations that emphasizes total system performance is

The output of a synchronized manufacturing system is set

Just-in-time requires all of the following except

Many American manufacturers made the mistake of rushing to copy parts of Japan's just-in-time production system without considering

A ___________ is the name given to an operation in a synchronous manufacturing system whose output sets the limit for the entire system's output.

"Little JIT" refers to

Which of the following is not true about "big JIT"?