Materials Management

Question 1

They are created ahead of a peak selling season, a promotion program, vacation shutdown, or possibly the threat of a strike.

Answer 1

Anticipation Inventory

Question 2

This is built up from expectation of future demand.

Answer 2

Anticipation Inventory

Question 3

This exist because of the time needed to move goods from one location to another

Answer 3

Transportation Inventory

Question 4

Its purpose is to prevent disruptions in manufacturing of deliveries to customers.

Answer 4

Fluctuation Inventory

Question 5

This is created when items purchased or manufactured are in greater quantities than needed.

Answer 5

Lot-Sized Inventory

Question 6

This is held to cover random unpredictable fluctuations in supply & demand or lead time.

Answer 6

Fluctuation Inventory

Question 7

It is replenished cyclically when suppliers orders are received.

Answer 7

Cycle Stock

Question 8

What is/are the objective/s of inventory Management.

Answer 8

Maximum customer service
Low-cost plant operation
Minimum Inventory Investment

Question 9

This is the portion of inventory that depletes gradually as customers’ orders come in.

Answer 9

Cycle Stock

Question 10

These are made in cases where it is impossible to make or purchase items at the same rate that they will be used or sold.

Answer 10

Lot-Sized Inventory

Question 11

A highly market-oriented company DOES NOT focus on exceeding customer expectations. T/F

Answer 11

False

Question 12

Order winners provide a competitive advantage for the firm. T/F

Answer 12

True

Question 13

Manufacturing must design a strategy to achieve a long lead time. T/F

Answer 13

False

Question 14

Manufacturing must design a strategy to achieve a short lead time. T/F

Answer 14

True

Question 15

Which of the ff factors affect Operating Management

Answer 15

Government, Economy, Competition, Customers, Quality

Question 16

This/these is/are the basic strategies for Manufacturing and Lead Time. Select all that apply.

Answer 16

Engineer to order, Make to order, Assemble to order, Make to stock

Question 17

7. Customers and suppliers share the same perspective on Delivery Lead time. T/F

Answer 17

False

Question 18

The manufacturer does not start to make the product until a customer’s order is received.

Answer 18

Make-to-order

Question 19

The supplier manufactures the goods & sells from finished goods inventory.

Answer 19

Make-to-stock

Question 20

The final product is usually made from standard items but may include custom-designed components as well.

Answer 20

Make-to-order

Question 21

Delivery lead time is reduced further because there is no design time needed & inventory is held ready for assembly.

Answer 21

Assemble-to-order

Question 22

Delivery lead time is shortest

Answer 22

Make-to-stock

Question 23

Delivery lead time is reduced because there is a little design time required and inventory is held as raw material.

Answer 23

Make-to-order

Question 24

The customer has the least direct involvement in the product design.

Answer 24

Make-to-stock

Question 25

The customer’s specifications require significant customization

Answer 25

Engineer-to-order

Question 26

What is the main aim of Materials Management.

Answer 26

To improve a company’s profit

Question 27

This/these is/are the objective/s of Materials Management. Select all that apply.

Answer 27

Maximize the use of the firm’s resources Provide the required level of customer service

Question 28

Materials Management is also known by this/these term/s.

Answer 28

Distribution planning & control Logistics Management

Question 29

These are used either for sale or to provide inputs or supplies to the production process.

Answer 29

Inventories

Question 30

This is a coordinating function responsible for planning & controlling materials flow

Answer 30

Materials Management

Question 31

This is another term for distribution planning and control.

Answer 31

Materials Management

Question 32

These are materials and supplies that business or institution carries.

Answer 32

Inventories

Question 33

This is responsible for planning and controlling inventory from the raw material stage to the customer.

Answer 33

Inventory management

Question 34

What is the basic purpose of inventories?

Answer 34

Decouple supply and demand

Question 35

This is also called as cycle stock

Answer 35

Lot-Size Inventory

Question 36

Safety stock is also known by this/these term/s

Answer 36

Buffer Stock Reserve Stock

Question 37

If buyers expect prices to rise, they can purchase for this inventory when prices are low.

Answer 37

Hedge Inventory

Question 38

Transportation inventory is also known by this/these term/s

Answer 38

Pipeline Inventory Movement Inventory

Question 39

This takes advantage of quantity discounts to reduce shipping, clerical, and setup costs.

Answer 39

Lot-Sized Inventory

Question 40

This is the portion of inventory that depletes gradually as customers’ orders come in.

Answer 40

Cycle stock.

Question 41

These are made in cases where it is impossible to make or purchase items at the same rate that they will be used or sold.

Answer 41

Lot-Size Inventory

Question 42

This is carried out to protect against a possible stock out.

Answer 42

Fluctuation inventory Inventory Methods

Question 43

Items brought first are also used or sold first.

Answer 43

First in, first out method

Question 44

The earliest units brought are the first ones used.

Answer 44

First in, first out method

Question 45

Items still in stock are the newest ones.

Answer 45

First in, first out method

Question 46

This is serviced in the order of items with the earlier date of consumption regardless of the date of entry or acquisition.

Answer 46

First expired, first out method

Question 47

This assumes that items bought last are sold first.

Answer 47

Last in, first out method

Question 48

Reserves or material with low purchase price are consumed first.

Answer 48

Lowest in, first out method

Question 49

Requirements and materials are serviced in order from the most expensive items regardless of date of entry or acquisition.

Answer 49

Highest in, first out method

Question 50

There is only one inventory layer in this method

Answer 50

Weighted average method

Question 51

Reserves with high purchase price remain at the end

Answer 51

Lowest in, first out method

Question 52

The cost of any new inventory purchases are rolled into the cost of any existing inventory, which in turn is adjusted again as more inventory is purchased.

Answer 52

Weighted average method

Question 53

Products with an earlier date of consumption are shipped first.

Answer 53

First expired, first out method

Question 54

This method is banned under International Financing Reporting Standards.

Answer 54

Last in, first out method

Question 55

This is mostly used in the management of food and drugs.

Answer 55

First expired, first out method.

Question 56

Customer requirements are usually based on the following factors. Select all that apply

Answer 56

* Price * Delivery * Strategy * Quality * Management

Question 57

The products is made from standard components that the manufacturer can inventory and arrange according to to a customer order.

Answer 57

assemble-to-order