TRUE/FALSE (indicate whether the question is True or False) (One point each) 1. Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management. 2. Outsourcing refers to transferring a firms activities that have traditionally been internal to external suppliers. 3. The layout approach that addresses trade-offs between space and material handling is called the fixed position layout. 4. A Gantt load chart shows the loading and idle time of several departments, machines, or facilities. 5. Technology, location, and layout decisions are all possible constraints on the human resource strategy. 6. The most common tactic to arrange departments in a process-oriented layout is to minimize material handling costs. 7. Finite capacity scheduling allows virtually instantaneous changes by operators, which is the technique's primary advantage over rule-based scheduling. MULTIPLE CHOICE (Circle the best answer) (One point each) 1. Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory. 2. What type of negotiating strategy requires the supplier to open its books to the purchasers? a. cost-based price model b. market-based price model c. competitive bidding d. price-based model e. none of the above 3. The three components that can lead to competitive advantage through effective scheduling are a. aggregate planning, intermediate scheduling, and medium-term planning b. forward scheduling, real-time scheduling, and backward scheduling c. the item master file, the routing file, and the work-center master file d. lower costs, faster delivery, and more dependable schedules e. Gantt charts, Johnson's rule and the Pareto principle 4. A good layout requires determining: a. material handling requirements b. capacity and space requirements c. environment and aesthetics d. cost of moving between various work areas e. all of the above 5. Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency e. assumes that the most frequently used items must be counted more frequently 6. The objective of a human resource strategy is to a. produce the demand forecast at lowest labor cost b. match employment levels with demand c. achieve a reasonable quality of work life at low cost d. manage labor and design jobs so people are effectively and efficiently utilized e. all of the above 7. The type of layout which features departments or other functional groupings in which similar activities are performed is: a. process-oriented b. product-oriented c. fixed-position d. mass production e. unit production 8. Four of the components of job design are a. employment stability, work schedules, work sampling, motivation, and incentive systems b. job specialization, job expansion, psychological components, and self-directed teams c. labor specialization and enrichment, motivation and incentive systems, employment stability, and work sampling d. ergonomics and work methods, method time measurement, work schedules, and incentive systems e. labor specialization, time studies, work sampling, and pre-determined time standards 9. Which one of the following statements about purchasing is true? a. The cost of purchases as a percent of sales is often small. b. Purchasing provides a major opportunity for price increases. c. Purchasing is always more efficient than making an item. d. Purchasing has an impact on the quality of the goods and services sold. e. Competitive bidding is a major factor in long-term cost reductions. FILL IN THE BLANK (One point each) 1. When demand is constant and lead time is variable, safety stock computation requires three inputs: the value of z, _____________, and the standard deviation of lead time. 2. Rerouting work, changing work sequence, and accepting idleness at other workstations are some techniques for dealing with a _____________. 3. A(n) ____________ system triggers inventory ordering on a uniform time frequency. 4. The supply chain strategy of ____________ increases the willingness to participate in JIT. 5. __________ are fees manufacturers pay to get their products displayed. 6. Local optimization, incentives, and large lots all contribute to __________ about what is really occurring in the supply chain. 7. A(n) _____________ is a group of empowered individuals working together to reach a common goal. 8. ___________ is the maximum time that the product is available at each workstation. 9. __________ are drawings used to analyze movement of people or material. SHORT ANSWER (10 points each) 1. What are the main reasons that an organization has inventory? 2. Identify the reasons for making in the make-or-buy decision. 3. What makes short-term scheduling of strategic importance? 4. Briefly explain what "slotting" is. Why is slotting considered a "controversial" practice? What ethical issues might arise with regard to slotting? 5. To maximize team effectiveness, managers need to do more then just form teams. What should managers do to maximize team effectiveness? 6. Discuss the six factors that a Project Manager always needs to consider when managing a project. PROBLEMS (7.5 points each) 1. A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the firm operates 250 days per year. Annual demand 22,000 Daily demand 88 Daily production 250 Desired lot size (2 hours of production) 63 Holding cost per unit per year $50 a. What is the setup cost, based on the desired lot size? b. What is the setup time, based on $40 per hour setup labor? 2. Given the following data, find the expected breakdown cost. The cost per breakdown is $200. Number of breakdowns per week 0 1 2 3 4 Weekly frequency 5 12 10 18 5 Number of breakdowns per week 0 1 2 3 4 Total Weekly Probability .10 .24 .20 .36 .10 1.00