Materials quiz

A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow is called a:

• resource plan.

• business plan

• strategic plan.

• hoshin plan.

Answer explanation

A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow.

Which of the following types of files is a key input to material requirements planning (MRP)?

• Work center master file

• Bill of material

• Routing file

• Supplier master file

Answer explanation

The bill of material (BOM) is a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly, showing the required quantity of each. When the MRP BOM explosion occurs, the BOM enables the identification of all items and quantities that need to be replenished. The routing file includes the operations to be performed, their sequence, the various work centers involved, and the standards for setup and run. The supplier master file contains the detail on suppliers used by the company and is considered part of the MRP output for purchase replenishment. The work center file contains the detail on the productive resources that are available for MRP production order output.

What is the distinction between the distribution channel and the transaction channel?

• The distribution channel is concerned with the route of goods; the transaction channel is concerned with the costs.

• The distribution channel is concerned with the route of goods; the transaction channel is concerned with the transfer of ownership.

• The distribution channel is concerned with warehouses; the transaction channel is concerned with transportation nodes.

• There is no distinction.

Answer explanation

The distribution channel is the distribution route, from raw materials through consumption, along which products travel. The transaction channel deals with the change of ownership of goods and services.

Input/output control is a technique for monitoring the:

• production plan.

• capacity requirements plan

• master production schedule

• material requirements plan.

Answer explanation

Input/output control is a technique in which the actual input and output of a work center is compared with the planned input and output developed by capacity requirements planning.

Which of the following terms applies to spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable

• Capacity management

• Input/output control

• Load leveling

• Line balancing

Preventive maintenance—comprising adjustments, replacements, and basic cleanliness—is used to forestall machine breakdowns. With regular preventive maintenance, what can be expected to happen to the cost of failure and poor quality?

• It will be reduced in the long term.

• It will increase in the long term.

• It will be reduced in the short term.

• It will increase in the short term.

Answer explanation

Preventive maintenance ensures that production quality is maintained and that delivery schedules are met. A well-cared-for machine is also more likely to last longer and suffer fewer problems. Increased investment in prevention will initially make costs rise, because failure costs will not immediately drop. Investing in quality has a long-term positive return on investment.

Which originates with the department or person who will be the ultimate user?

• Vendor selection

• Purchase order

• Purchase order

• Request for quotation (RFQ)

Answer explanation

A purchase requisition is prepared by the person or department who will be the ultimate user.

Because a purchase order originates from the company’s purchasing department and is sent to the vendor or supplier, it is not the correct answer. Vendor or supplier selection and requests for quotation (to obtain the price information before an order is placed) are the responsibilities of the purchasing department.

Which is set up when a product is available from several sources but only one source gets all of the business?

• Single-source supplier

• Purchase requisition

• Multisourcing

• Sole-source supplier

Sales and operations plans perform which of the following actions?

• Take into account the forecast, the production plan, and other important considerations such as the backlog, the availability of material, the availability of capacity, and management policies and goals.

• Describe how to marshal and determine actions to support the mission, goals, and objectives of an organization.

• Reconcile all supply, demand, and new product plans at the aggregate level and tie to the business plan.

• Determine in detail the amount of labor and machine resources required to accomplish the tasks of production.

A benefit of implementing electronic data interchange (EDI) with a supplier is a reduction in:

• safety stock.

• data errors.

• lot size.

• postage expense.

Answer explanation

EDI is the electronic exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices. It replaces manual entries, which in turn minimizes data errors.