Procurement and Sourcing Exam Review
Course Introduction
Procurement and Sourcing explores the strategic processes involved in acquiring goods and services necessary for organizational operations. This course covers key topics such as supplier selection, negotiation strategies, contract management, ethical considerations, risk assessment, and the impact of global markets on sourcing decisions. Students will learn how effective procurement contributes to organizational efficiency and competitiveness, develop analytical skills to evaluate supply options, and understand the integration of technology and sustainability practices within supply chain management. The course emphasizes both theoretical frameworks and practical applications through real-world case studies and simulations.
Recommended Textbook Operations and Supply Chain Management 15th Edition by F. Robert Jacobs
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Page 2
Chapter 1: Introduction
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Q1) The goods-services continuum consists of which set of the following categories?
A)No goods, some goods, even mix, some service, no service
B)Pure goods, core goods, core services, pure services
C)No service, some service, good service, excellent service
D)Self-service, help desk service, face-to-face service, service-with-a-smile
E)None of these
Answer: B
Q2) Service science management and engineering aims to apply the latest concepts in information technology to continue to improve service productivity of technology-based organizations.
A)True
B)False
Answer: True
Q3) "Business analytics" involves the analysis of data through a unique combination of linear programming, game theory, and queuing theory to better solve business problems.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Strategy
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Q1) An operations strategy must resist change because of the long-term nature of equipment and personnel investments.
A)True
B)False
Answer: False
Q2) Which of the following is a partial measure of productivity?
A)Output/Materials
B)Output/(Labor + Capital + Energy)
C)Output/All resources used
D)Output/Inputs
E)All of these
Answer: A
Q3) Order winners and order qualifiers are
A)two identical ways to define characteristics of a product or services
B)order winner is a screening criterion
C)order qualifier is a differentiating criterion
D)both B and C are true
E)order winner is a differentiating criterion and order qualifier is a screening criterion
Answer: C
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Page 4
Chapter 4: Project Management
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Sample Questions
Q1) CPM is an abbreviation for critical path method.
A)True
B)False
Answer: True
Q2) A simple project listing of five activities and their respective time estimates are presented here:
Using CPM, which activities make up the critical path?
A)A, C, D, E
B)A, B, D, E
C)A, C, B, D, E
D)A, D, E
E)None of these
Answer: B
Q3) A disadvantage of a matrix project organizational structure is that a project manager is held responsible for successful completion of the project.
A)True
B)False
Answer: False
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Chapter 3: Design of Products and Services
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Q1) Which of the following is primarily used to help design products that will connect product attributes with customer desires?
A)Phase 0: Planning
B)House of quality matrix
C)Value analysis/value engineering
D)Concurrent engineering
E)System-level design
Q2) Advocates of financial modeling of product design projects argue that:
A)Financial analysis focuses on measurable quantities only.
B)Financial analysis brings discipline and control to the product development process.
C)Sufficiently rigorous financial analysis can accurately forecast the product's profit potential.
D)Financial analysis is as solid as the assumptions that go into the model.
E)Financial analysis nurtures innovation and creativity.
Q3) The ecodesign approach focuses exclusively on the design and commercial launch phases of the product's life cycle.
A)True
B)False
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6
Chapter 5: Strategic Capacity Management
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Sample Questions
Q1) A capacity cushion is the amount of capacity less than expected demand.
A)True
B)False
Q2) The capacity focus concept can be put into practice through a mechanism called which of the following?
A)Best operating level (BOL)
B)Plant within a plant (PWP)
C)Total quality management (TQM)
D)Capacity utilization rate (CUR)
E)Zero changeover time (ZXT)
Q3) At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000, with a probability of 90%; the expected benefit of selecting machine B is $80,000, with a probability of 50%; and the expected benefit of selecting machine C is $60,000, with a probability of 75%?
A)Machine A
B)Machine B
C)Machine C
D)You would be indifferent between machines A and C.
E)You would be indifferent between machines A and B.
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Chapter 6: Learning Curves
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Sample Questions
Q1) Learning curves have a wide range of business applications.
A)True
B)False
Q2) A company's production process has an 80 percent learning curve rate.The process has produced 1,000 units to date.A process refinement is estimated to allow a future learning curve rate for the identical product of 75 percent.However, the initial unit made using the new process will take the same amount of time as the initial unit produced using the old process.At what point, using the new process, will the production rate exceed the production rate achieved by the old process?
A)Before the 50<sup>th</sup> unit
B)Before the 80<sup>th</sup> unit
C)Before the 100<sup>th</sup> unit
D)Before the 120<sup>th</sup> unit
E)Before the 250<sup>th</sup> unit
Q3) A learning curve is a line displaying the relationship between unit production time and the cumulative number of units produced.
A)True
B)False
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8
Chapter 7: Manufacturing Processes
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Sample Questions
Q1) Break-even analysis can only be used in production equipment decision making when dealing solely with fixed costs, not variable costs.
A)True B)False
Q2) In studying positioning of inventory in supply chains, which, if any, of the following is most appropriate?
A)As order decoupling point moves towards source inventory investment goes down.
B)As order decoupling point moves towards the source customer lead time gets longer.
C)As order decoupling point moves towards the source inventory investment increases.
D)As order decoupling point moves towards the source customer lead time is unchanged.
E)A and B are true
Q3) The essential issue in satisfying customers in the make-to-stock environment is to balance the cost of the finished item against the willingness of the consumer to pay for it.
A)True B)False
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9
Chapter 8: Facility Layout
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Sample Questions
Q1) Which of the following basic types of production layout formats is one that has similar equipment or functions are grouped together?
A)Production line layout
B)Assembly line layout
C)Workcenter layout
D)Group technology layout
E)Manufacturing cell layout
Q2) A project layout is characterized by a relatively low number of production units in comparison with workcenter and assembly-line formats.
A)True
B)False
Q3) Which of the following is the most appropriate answer regarding a manufacturing cell layout?
A)allocates dissimilar machines into cells to produce product families (similar shapes and processing requirements).
B)Improves operator expertise
C)reduces cost
D)A, B and C
E)A and B only
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Page 10
Chapter 9: Service Processes
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Sample Questions
Q1) Which of the following are alternative possible service encounters included in the service-system design matrix?
A)Mail contact
B)Warranty
C)Sales call
D)Field service
E)None of these
Q2) Which of the following is a characteristic that can be used to guide the design of service systems?
A)Services cannot be inventoried.
B)Services are all similar.
C)Quality work means quality service.
D)Services businesses are inherently entrepreneurial.
E)Even service businesses have internal services.
Q3) When recovering from a defective service encounter, a botched task calls for material compensation.
A)True
B)False
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Chapter 10: Waiting Line Analysis and Simulation
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Sample Questions
Q1) Being user-friendly and easy to understand typically means that the simulation produces less accurate results.
A)True
B)False
Q2) In a department 25 machines are kept running by three operators who respond to randomly occurring equipment problems.
A)True
B)False
Q3) Which of the following is not a queue discipline discussed in the textbook?
A)First come, first served
B)Last in, first out
C)Limited needs
D)Shortest processing time
E)Best customer first
Q4) There are different queuing models to fit different queuing situations.
A)True
B)False
Q5) Best customer last is a queue discipline discussed in the textbook.
A)True
B)False
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Chapter 11: Process Design and Analysis
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Sample Questions
Q1) Inventory turn is a better measure than the total value of inventory for comparative purposes because it is a relative measure.
A)True
B)False
Q2) Process analysis can help answer many important questions such as how many customers can a process handle per hour.
A)True
B)False
Q3) McDonald's fast-food restaurants use a make-to-order production process. A)True B)False
Q4) Little's law says there is a long-term relationship among the inventory, throughput, and flow time of a production system in steady state. A)True
B)False
Q5) A triangle is conventionally used in a process flowchart to represent a storage area or queue. A)True B)False
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Chapter 12: Six Sigma Quality
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Sample Questions
Q1) Which of the following is the cost of quality classification for costs such as defects that pass through the system (e.g., customer warranty replacements, loss of customer or goodwill, handling complaints, and product repair)?
A)Appraisal costs
B)Prevention costs
C)External failure costs
D)Customer return cost
E)Workmanship costs
Q2) ISO 9000 is primarily concerned with environmental management.
A)True
B)False
Q3) A quality guru named Joseph M.Juran is well known for his program structured around "14 points" for management.
A)True
B)False
Q4) ISO 14000 is primarily concerned with environmental management.
A)True
B)False
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Page 14
Chapter 13: Statistical Quality Control
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Sample Questions
Q1) You are developing an X-bar chart based on sample means.You know the standard deviation of the sample means is 4, the desired confidence level is 99.7 percent, and the average of the sample means is 24.Which of the following is your UCL?
A)36
B)24
C)12
D)4
E)None of these
Q2) For which of the following should we use a p-chart to monitor process quality?
A)The dimensions of brick entering a kiln
B)Lengths of boards cut in a mill
C)The weight of fluid in a container
D)Grades in a freshman "pass/fail" course
E)Temperatures in a classroom
Q3) Standard practice in statistical process control for variables is to set control limits so that 95 percent of the sample means will fall within the UCL and the LCL.
A)True
B)False
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15
Chapter 14: Lean Supply Chains
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Q1) Group technology includes the set of psychological tests and training exercises given to group workers to ensure a high level of teamwork.
A)True
B)False
Q2) One of the few lean techniques that does not work well in service firms is demand-pull scheduling.
A)True
B)False
Q3) Company unions in Japan exist to foster a cooperative relationship with management.
A)True
B)False
Q4) Value stream mapping involves materials, not information.
A)True
B)False
Q5) The goal of JIT production is to drive all inventory queues lower.
A)True B)False
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Chapter 15: Logistics Distribution, and Transportation
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Q1) Facility location analysis considers proximity to customers important to timeliness of deliveries.
A)True
B)False
Q2) Services typically have multiple site locations to maintain close contact with customers.
A)True B)False
Q3) Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of low wage costs and/or skill levels.
A)True
B)False
Q4) A major problem in a plant location decision based on the factor-rating system is that simple point-rating schemes do not account for the wide variance of costs that may occur within each factor used in the analysis.
A)True
B)False
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Chapter 16: Global Sourcing and Procurement
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Sample Questions
Q1) A financially driven reason for outsourcing is that it can reduce costs through a lower cost structure.
A)True
B)False
Q2) Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers.
A)True
B)False
Q3) A stable supply process is one where the manufacturing process and the underlying technology are mature and the supply base is well established.
A)True
B)False
Q4) A financially driven reason for outsourcing is that it can shorten cycle time.
A)True
B)False
Q5) An organizationally driven reason for outsourcing is that it can transform the organization.
A)True
B)False
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Chapter 17: Enterprise Resource Planning Systems
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Sample Questions
Q1) What are two of the main objectives of ERP?
A)Transaction processing and decision support
B)Product tracking and customer invoicing
C)Transaction processing and logistic optimizing
D)Resource tracking and master schedule planning
Q2) What is transaction processing?
A)The decision support system used to efficiently handle multiple transactions
B)The posting and tracking of the detailed activities of a business
C)The movement of paperwork through a system using a decision tree
D)The scheduling of machinery to minimize time and scrap
Q3) Only manufacturing affects the inventory account.
A)True
B)False
Q4) When selecting an ERP system, it is possible to take a multivendor approach.
A)True
B)False
Q5) A typical ERP system has modules that use the same user interface, similar to that of Microsoft Office products.
A)True
B)False
19
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Chapter 18: Forecasting
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Q1) In the simple exponential smoothing forecasting model, you need at least 30 observations to set the smoothing constant alpha.
A)True
B)False
Q2) Which of the following forecasting methods uses executive judgment as its primary component for forecasting?
A)Historical analogy
B)Time series analysis
C)Panel consensus
D)Market research
E)Linear regression
Q3) Continual review and updating in light of new data is a forecasting technique called second-guessing.
A)True
B)False
Q4) Cyclical influences on demand may come from occurrences such as political elections, war, or economic conditions.
A)True
B)False
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Chapter 19: Sales and Operations Planning
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Sample Questions
Q1) Pricing for a service should primarily relate to the cost of providing the service and has little to do with capacity issues the service provider might face.
A)True
B)False
Q2) Matching the production rate to the order rate by hiring and laying off employees as the order rate varies is which of the following pure production planning strategies?
A)Stable workforce, variable work hours
B)Chase
C)Level
D)Meeting demand
E)Minimizing inventory
Q3) Costs incurred in hiring, training, and laying off personnel are considered relevant aggregate operations planning costs.
A)True
B)False
Q4) The essence of yield management is the ability to manage supply.
A)True
B)False
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Chapter 20: Inventory Management
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Sample
Questions
Q1) One of the daily, delicate balancing acts that logistics managers have to perform involves the trade-off between inventory costs and the cost of stock-outs.
A)True
B)False
Q2) Using the simple order quantity model in an inventory control problem, Kathy calculated the order quantity to be 1000 units.In a review, she found out that the demand is actually double that of the quantity she had used and the holding cost is only half that of the value she used, The new economic order quantity using the correct data will be:
A)1000
B)2000
C)1414
D)707.1
E)cannot be found without other cost information.
Q3) In inventory models, high holding costs tend to favor high inventory levels.
A)True
B)False
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Chapter 21: Material Requirements Planning
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Sample Questions
Q1) Which of the following is an input to the master production schedule (MPS)?
A)Inventory records file
B)The aggregate plan
C)The bill of materials
D)The exception report
E)Planned order schedules
Q2) In a net change MRP system, requirements and schedules are updated whenever a transaction is processed that has an impact on the item.
A)True
B)False
Q3) The least unit cost method of lot-sizing adds ordering, stockout, and inventory carrying costs for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost.
A)True
B)False
Q4) Lot-for-lot (L4L) is the most common lot-sizing technique.
A)True
B)False
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Chapter 22: Workcenter Scheduling
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Q1) When work has been scheduled in a shop that does not have sufficient resources to complete the schedule on time, the system that generated the schedule is called which of the following?
A)Infinite loading
B)Machine-limited
C)Finite loading
D)Labor-limited
E)Constrained
Q2) Assume there are five jobs (i.e., A, B, C, D, and E) that need to be sequenced in a production schedule.The remaining operating time necessary for completion of job A is 4 days (i.e., job A will take 4 more days to complete), B will take 7 days, C will take 8 days, D will take 2 days, and E will take 5 days.All jobs are available now and the time now is 0.Using SOT rule sequence the jobs and find the schedule (single machine scheduling problem).What is the completion time of job B as per your schedule?
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Page 24
Chapter 23: Theory of Constraints
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Sample Questions
Q1) According to the theory of constraints, which of the following is an operational measurement that can be used to measure the firm's ability to make money?
A)Net profit
B)Throughput
C)Return on investment
D)Sales
E)Direct labor hours
Q2) JIT requires work-in-process when used with kanban so there is inventory to pull.When compared to synchronous manufacturing, this is viewed as a negative aspect of JIT.
A)True
B)False
Q3) Which of the following is a "focusing step" of Dr.Eli Goldratt's theory of constraints?
A)Reduce system constraints.
B)Reinforce system constraints.
C)Support system constraints.
D)If you have no system constraints, make some.
E)Identify system constraints.
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25
Chapter 24: Health Care
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Sample Questions
Q1) The textbook mentions seven trends in health care.Which of the following is one of them?
A)Remote surgical treatment
B)Gene therapy
C)Increasing legal costs
D)Increasing cost of healthcare
E)Integrated medical care
Q2) In recent surveys, about 32 percent of all Americans said they were dissatisfied with the quality of health care.
A)True
B)False
Q3) Britain's Florence Nightingale's approach, called "evidence-based medicine," underlies current approaches to medical practices.
A)True
B)False
Q4) In recent surveys, about 55 percent of all Americans said they were dissatisfied with the quality of health care.
A)True
B)False
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Chapter 25: Operations Consulting
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Q1) A key use of a customer survey used in the operations consulting phase of problem definition is customer loyalty analysis.
A)True
B)False
Q2) Profitability in consulting firms is achieved by leveraging the skills of the partners through use of midlevel and junior consultants.
A)True
B)False
Q3) Which of the following is the stage in the operations consulting process that immediately follows "present final report"?
A)Design, develop, and test alternative solutions
B)Develop systematic performance measures
C)Present invoice
D)Assure client satisfaction
E)Implement changes
Q4) Most consulting firms are very large organizations and are specialized by function or by industry.
A)True
B)False
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