Product life cycles for many products are ________, forcing companies to not only become ________

in design but also to communicate changes and needs to suppliers and distributors.
1. shrinking rapidly, more flexible
2. shrinking rapidly, less flexible
3. growing rapidly, more flexible
4. growing rapidly, less flexible
All portions of the material production from __________ to ___________ are considered to be a linked
chain under the supply chain concept.
1. work in process, final customer
2. raw material, work in process
3. work in process, raw material
4. raw material, final customer
To get the most profit, a company should________
1. Provide little customer service
2. Provide high production costs
3. Provide the lowest inventory investment
4. Provide the highest distribution costs
Finance must keep investment and costs low. This can be done by___________
1. Increasing inventory so inventory investment is at a maximum
2. Decreasing the number of plants and warehouses
3. Producing small quantities
4. Using short production runs
Today the concepts of ______ manufacturing stress the need to supply customers with what they want
when they want it and to keep inventories at a _______.
1. TQM, maximum
2. Six Sigma, maximum
3. JIT, minimum
4. ISO 9000, minimum
The concept of having ____ department(s) responsible for the flow of materials, from supplier through
production to consumer, is relatively new.
1. one
2. multiple
3. functional
4. none of the above
Materials management is also called____________
1. Distribution planning
2. Control and logistics management
3. Both of the above
4. Neither of the above
Materials management is a coordinating function responsible for planning and controlling materials
flow. Its objective(s) is/are:
1. Maximize the use of the firm's resources
2. Provide the required level of customer service
3. Both of the above
4. Neither of the above

_______ and ______ are costs that increase or decrease with the quantity sold.
1. Direct labor, indirect material
2. Direct labor, direct material
3. Indirect labor, indirect material
4. Indirect labor, direct material
Inventory not only makes up a portion of the cost of goods sold but has to be purchased at the
beginning of production to be processed into finished goods. This type of inventory is called
_____________.
1. work-in-process
2. finished goods
3. raw materials
4. none of the above
A good planning system must consider:
1.
2.
3.
4.

What are we going to make?

What does it take to make it?
What do we have and need?
All of the above

_______ is the capability of manufacturing to produce goods and services.

1.
2.
3.
4.

Capacity
Priority
Planning
Control

________ is responsible for analyzing the marketplace and deciding the firm's response, the markets
to be served, the products supplied, and desired levels of customer service.
1.
2.
3.
4.

Marketing
Finance
Production
Engineering

______ must satisfy the demands of the marketplace. It does so by using plants, machinery,
equipment, labor, and materials as efficiently as possible.
1.
2.
3.
4.

Marketing
Finance
Production
Engineering

The _____________________ is a plan for the production of individual end items.

1.
2.
3.
4.

MPS
JIT
MRP II
MRP

Purchasing and ___________ represent the implementation and control phase of the production
planning and control system.
1.
2.
3.
4.

production activity control (PAC)

material requirements planning (MRP)
just-in-time (JIT)
marketing

A _________ strategy means producing the amounts demanded at any given time.
1.
2.
3.
4.

production leveling
chase
subcontracting
TQM

In the _____________ environment, several product options exist (e.g., automobiles) and the customer
is not willing to wait until the product is made. Therefore manufacturers produce and stock standard
component parts.
1.
2.
3.
4.

make-to-order
assemble-to-order
level production
make-to-stock

____________ is the first step in a manufacturing planning and control system.

1.
2.
3.
4.

Production planning
Achieving the forecast
Maintaining the required inventory levels
Maintaining the planned backlog

The cost of a _________ that is too large equals the cost of turning away business.
1.
2.
3.
4.

production plan
backlog
resource plan
capacity plan

The MRP forms a vital link between sales and production as follows:
1.
2.
3.
4.

The MRP makes possible valid order promises.

The MRP is a plan of what is to be produced and when.
The MRP is a contract between marketing and manufacturing.
All of the above

The information needed to develop an MPR includes:

1.
2.
3.
4.

The production plan

Forecasts for individual end items
Actual orders received from customers and for stock replenishments.
All of the above

A schedule is satisfactory when:

1. Capacity is greater than the production plan
2. It doesn't specify to the plant when to start production
3. Capacity is consistent with the production plan
4. It doesn't specify to the plant when to stop production

The objectives in developing an MRP include:

1. To maintain the desired level of customer service by maintaining finished goods
inventory levels or by scheduling to meet customer delivery requirements
2. To make the best use of material, labor, and equipment
3. To maintain inventory investment at the required levels
4. All of the above

To reach its objectives, the master production schedule must:

1.
2.
3.
4.

Satisfy customer demand

Be outside the capacity of manufacturing
Be outside the guidelines of the production plan
Be outside both the capacity of manufacturing and the guidelines of the production plan

The first step in preparing an MPS is:

1.
2.
3.
4.

Resolve differences between the preliminary MPS and the capacity available.
Check the preliminary MRP against available capacity.
Develop a preliminary MRP.
Develop a rough-cut capacity plan.

Critical resources in rough-cut capacity planning include:

1. Bottle-neck operations
2. Labor
3. Critical materials
4. All of the above

It is possible to increase the available capacity by:

1. Using fewer workers
2. Scheduling overtime
3. Limiting subcontracting
4. Rerouting away from other work centers

In the __________________ environment, many different end items are made from a small number of
components.
1.
2.
3.
4.

make-to-stock
make-to-order
assembly-to-order
engineer-to-order

In the __________________ environment, many end items can be made from combinations of basic
components and subassemblies.
1.
2.
3.
4.

make-to-stock
make-to-order
assembly-to-order
engineer-to-order

The sides, ends, legs, and tops of tables are ________ demand items.
1.
2.
3.
4.

dependent
independent
forecast
calculated

Since _______ demand is not related to the demand for any other assemblies or products, it must be
___________.
1.
2.
3.
4.

dependent, forecast
dependent, calculated
independent, forecast
independent, calculated

All major inputs to the MRP system include:

1. Master production schedule and bill of material
2. Bill of material and inventory records
3. Inventory records and master production schedule
4. Master production schedule, inventory records, and bills of material

The ___________ is a statement of which end items are to be produced, their quantity, and the dates
they are to be completed.
1.
2.
3.
4.

MRP
MPS
inventory record
bill of materials

The bill of materials shows all the parts required to make __________.
1.
2.
3.
4.

one item
the MPR
work-in-process inventory
raw materials inventory

A _________ is used when companies usually make more than one product and the same
components are often used in several products.
1.
2.
3.
4.

single-level bill
multiple bill
multilevel bill
product tree

Financially, inventories are very important to manufacturing companies and represent _________ of
total assets on the balance sheet.
1.
2.
3.
4.

10% to 45%
25% to 40%
20% to 60%
50% to 80%

__________ are purchased items received that have not entered the production process. They include
purchased materials, component parts, and sub-assemblies.
1. Raw materials
2. Work-in-process
3. Finished goods
4. MRO supplies
___________ include hand tools, spare parts, lubricants, and cleaning supplies.
1. Raw materials
2. Work-in-process
3. Finished goods
4. MRO supplies

Inventory serves as a buffer between:

1.
2.
3.
4.

Supply and demand

Finished goods and component availability
Customer demand and finished goods
All of the above

__________ inventory is held to cover random unpredictable changes in supply and demand or lead
time.
1. Anticipation
2. Fluctuation
3. Lot-size
4. Transportation

_______is a measure of customer service.

1.
2.
3.
4.

Percentage of orders shipped on schedule

Percentage of line items shipped on schedule
Order-days out of stock
All of the above

Storing inventory requires ___________________ and as inventory increases, so do these costs.

1.
2.
3.
4.

space and workers

workers and equipment
space and equipment
space, workers, and equipment

Liabilities are obligations or amounts owed by a company and include:

1. Accounts payable
2. Wages payable
3. Long-term debt
4. All of the above
The risks in carrying inventory are:
1. Obsolescence and damage
2. Damage and pilferage
3. Pilferage and deterioration
4. Obsolescence, damage, pilferage, and deterioration

________ is the costs incurred in the process of making revenue.

1. Income
2. Cost of goods sold
3. Expenses
4. Retained earnings

A(n) _____________ lists all the parts needed to make one complete assembly.
1.
2.
3.
4.

summarized parts list

indented bill
multilevel bill
single-level bill

___________ is the process of multiplying the requirements by the usage quantity and recording the
appropriate requirements throughout the product tree.
1. Offsetting
2. Planning orders
3. Lead time
4. Exploding

_______________ means that authorization is given to purchasing to buy the necessary material or to
manufacturing to make the component.
1.
2.
3.
4.

Planned order release

Releasing an order
Scheduled receipts
Open orders

____________ are orders placed on manufacturing or on a vendor and represent a commitment to

make or buy.
1.
2.
3.
4.

Planned order releases

Releasing orders
Scheduled receipts
Open orders

______________involves long-range capacity resource requirements and is directly linked to

production planning.
1. Resource planning

2. MRP
3. Capacity requirements planning
4. Rough-cut capacity planning

Resource planning involves changes in staffing, capital equipment, product design, or other facilities
that take a ________ time to ___________.
1.
2.
3.
4.

short, acquire and eliminate

long, acquire and eliminate
short, utilize and change
long, utilize and change

The inputs needed for a CRP include:

1.
2.
3.
4.

Open shop orders

Planned order released
Routings
All of the above

The Gregorian calendar:

1.
2.
3.
4.

Has an equal number of days per month

Spreads holidays evenly throughout the year
Works on a decimal base
Presents problems for manufacturing planning and control

Capacity needs to be measured:

1.
2.
3.
4.

At the machine or individual worker level

At the work center level
At the plant level
All of the above

_____________ is the number of hours a work center can be used.

1.
2.
3.
4.

Demonstrated capacity
Rated capacity
Available hours
Utilization

Rated capacity is calculated by taking into account the work center ___________.
1.
2.
3.
4.

utilization and efficiency

utilization and demonstrated capacity
efficiency and production
efficiency and demonstrated capacity

The term _____________means that the work center is overloaded and the term ________________
means the work center is under loaded.
1. undercapacity, overcapacity
2. overcapacity, under capacity

3. overcapacity, utilization
4. utilization, under capacity

In the _________ run, capacity ________ be adjusted.

1.
2.
3.
4.

short, can
short, cannot
long, cannot
none of the above

If the workload in a manufacturing plan cannot be changed, an alternative is to:

1.
2.

Schedule overtime
Schedule undertime

3.
4.

Adjust the workforce by hiring

All of the above

______________is concerned with the production of high-volume standard products.

1.
2.

Flow manufacturing
Intermittent manufacturing

3.
4.

Product manufacturing
All of the above

Routings are fixed and work centers are arranged according to the routing in ________________.
1.

flow manufacturing

2.
3.

intermittent manufacturing
product manufacturing

4.

all of the above

Flow of work through the shop is varied and depends on the design of a particular product. In
_____________, as orders are processed, they will take more time at one workstation than at another.
Thus, the work flow is not balanced.
1.
2.

flow manufacturing
intermittent manufacturing

3.
4.

product manufacturing
all of the above

An example of project manufacturing is:

1.

Gasoline

2.
3.

Automobiles
Appliances

4.

Large shipbuilding

The __________________ contains a list of the single-level components and quantities needed to
assemble a parent item.
1.

work center master file

2.
3.

item master file

product structure file (bill of material file)

4.

routing file

The _________________ collects all of the relevant data on a work center.

1.

work center master file

2.
3.

item master file

product structure file (bill of material file)

4.

routing file

Each active manufacturing order has a record in the _____________________.

1.
2.

work center master file

item master file

3.
4.

product structure file (bill of material file)

shop order master file

_________ is the amount of time the job is waiting at a work center before an operation begins.
1.

Queue time

2.
3.

Setup time
Run time

4.

Wait time

The transit time between work centers is ____________.

1.
2.

setup time
run time

3.
4.

wait time
move time

_______________ is a method of reducing manufacturing lead time. The order is split into two or more
lots and run on two or more machines simultaneously.
1.
2.

Operation overlapping
Operation splitting

3.
4.

Infinite loading
Backward scheduling

On average, manufacturing firms spend about ________ of their sales dollars on the purchase of raw
materials, components, and supplies.
1.
2.

20%
50%

3.
4.

30%
40%

The objectives of purchasing include:

1.

Obtaining the goods and services at the highest price

2.
3.

Obtaining goods and services of the lowest quality

Ensuring the best possible service and prompt delivery by the supplier

4.

Obtaining goods and services at any quantity

A ________________ is a legal offer to purchase.

1.

quotation

2.
3.

purchase order
receiving order

4.

supplier's invoice

When the supplier's invoice is received, the following should agree:

The purchase order, the receiving report, and the invoice

The purchase order, the work order, and the production report
The receiving report, the quotation, and the material specification
The material specification, the purchase requisition, and the invoice

In purchasing an item or service from a supplier, which factor is not included when specifications are
being developed?
1.
2.

Delivery requirement
Quantity requirements

3.
4.

Price requirements
Functional requirement

________ is the systematic use of techniques that identify a required function, establish a value for that
function, and finally provide the function at the lowest overall cost.
1.
2.

Cost analysis
Functional analysis

3.
4.

Value analysis
Functional specifications

_______ is most often used in wholesale or retail businesses but is also used extensively in
manufacturing.
1.
2.

Description by brand
Description by specification

3.
4.

Description by function
Description by buyer

___________specifications and standard specifications are the two major sources of specifications or
ways of describing a product.
1.
2.

Functional
Buyer

3.
4.

Marketing
Production

______ sourcing is the use of more than one supplier for an item.
1.

Single

2.
3.

Multiple
Sole

4.

Engineering

Materials such as copper, coal, wheat, meat, and metals are:

1.

Standard products

2.
3.

Items of small value

Made-to-order items

4.

Commodities

_______________ occurs when a customer's order is received.

1.
2.

Demand management
Forecasting

3.
4.

Random variation
Order processing

Trends:
1.

Are level

2.
3.

Have no change from period to period

Can rise or fall

4.

All of the above

______________ is usually thought of as occurring on a yearly basis, but it can also occur on a weekly
or even daily basis.
1.

Seasonality

2.
3.

Random variation
A cycle

4.

A trend

Over a span of several years and even decades, wavelike increases and decreases in the economy
influence demand and are called _________.
1.

seasonality

2.
3.

random variation
cycles

4.

trends

______________ demand items need to be forecast.

1.
2.

Independent
Dependent

3.
4.

Both independent and dependent

Neither independent nor dependent

The near future holds _____ uncertainty than (as) the far future.
1.

less

2.
3.

more
the same

4.

all of the above

_______________ techniques are projections based on judgment, intuition, and informed opinions.
1.
2.

Extrinsic forecasting
Quantitative forecasting

3.

Intrinsic forecasting

4.

Qualitative forecasting

The Delphi method:

1.

Uses a panel of experts who give their opinion on what is likely to happen

2.

Consists of projections based on external indicators that relate to the demand for a company's products

3.

Uses economic indicators, such as housing starts and gasoline consumption, to forecast demand

4.

Uses historical data to forecast demand

Products likely to have seasonal or periodic demand patterns include:

1.

Toilet paper and paper towels

2.

Toothpaste and deodorant

3.

Skis and lawnmowers

4.

Milk and meat

______________ exists when the cumulative actual demand varies from the cumulative forecast.
1.
2.

Forecast error
Random variation

3.
4.

Mean absolute deviation

Bias