Procurement and Sourcing Management
Midterm Exam
Course Introduction
Procurement and Sourcing Management examines the strategies and processes involved in acquiring goods and services for organizations. This course covers the fundamentals of procurement, sourcing decisions, supplier evaluation, negotiation techniques, contract management, and risk mitigation. Students will explore best practices in global sourcing, ethical and sustainable procurement, as well as the integration of technology in supply chain operations. Practical case studies and real-world applications will enable students to develop analytical and decision-making skills essential for managing procurement functions effectively in various industries.
Recommended Textbook Operations Management Creating Value Along the Supply Chain 7th Edition by
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Page 2
Roberta S. Russell
Chapter 1: Operations Management
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Questions
Q1) Briefly describe how operations can be viewed as a transformation process. Answer: Operations is often defined as a transformation process.Inputs such as raw materials,labor,equipment,and capital are transformed into outputs goods and services).Customer feedback is used to adjust the transformation process.An objective of the operations manager is to ensure that the transformation process operates efficiently and the outputs of the process have greater value than the sum of the inputs.In this way the transformation process creates value,making it possible to view the transformation process as a value chain extending from supplier to customer.
Q2) Mass production refers to high-volume production of a standardized product.
A)True
B)False
Answer: True
Q3) Mass production is well suited to all of the following except
A)producing large volumes of goods quickly
B)adapting quickly to changes in market demand
C)producing standardized products for a large market
D)all of the above
Answer: B
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3
Chapter 2: Quality Management
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Sample Questions
Q1) All of the following are part of DMAIC except:
A)Improve
B)Control
C)Measure
D)Implement
Answer: D
Q2) Most members of a supply chain understand the importance of high quality because they are both customers and suppliers.
A)True
B)False
Answer: True
Q3) McDonald's has a reputation for high-quality service resulting from the application of quality management principles.
A)True
B)False
Answer: True
Q4) The Deming Wheel is also known as the plan-do-check-act PDCA)cycle.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Statistical Quality Control
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Q1) For a given process,the process capability ratio is NOT related to its control limits.
A)True
B)False
Answer: False
Q2) A sequence of sample points that display a pattern is known as a run.
A)True
B)False Answer: True
Q3) In some cases,the xbar-chart is used without the R-chart because the within sample variation is not of concern.
A)True
B)False
Answer: True
Q4) Process control is achieved by taking periodic samples from a process and plotting the sample points on a chart to determine if the process is within control limits.
A)True
B)False
Answer: True
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Chapter 4: Product Design
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Q1) Employing a systematic approach to analyzing the causes and effects of product failures is known as design for manufacture DFM).
A)True
B)False
Q2) Quality Function Deployment QFD)translates the voice of the customer into technical design requirements.
A)True
B)False
Q3) All of the following can improve a product's reliability except A)simplifying product design
B)improving individual component reliability
C)changing the product warranty
D)adding redundant components.
Q4) If a product fails 10 times in 500 hours of operation,then its mean time between failures MTBF)is
A)0.02 hour
B)0.10 hour
C)20 hours
D)50 hours
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Chapter 5: Service Design
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Sample Questions
Q1) Consider an espresso stand with a single barista.Customers arrive to the stand at the rate of 28 per hour according to a Poisson distribution.Service times are exponentially distributed with a service rate of 35 customers per hour.The probability that the server is idle is
A)0.20
B)0.60
C)0.80
D)1.00
Q2) A small diner has one employee and a counter with seating for 8 customers.The diner does not package food for takeout.Customers arrive at the diner at the rate of 20 per hour Poisson distributed).Service times are exponentially distributed and average 24 per hour.Customers that arrive when all seats are taken do not enter the diner.What is the average number of customers waiting average queue length)?
A)2.0432
B)2.8364
C)3.9785
D)5.9782
Q3) How can psychology be used to improve waiting lines? Provide an example.
Q4) How are waiting line costs and service quality related?
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Chapter 6: Processes and Technology
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Sample Questions
Q1) Process planning determines how a manufactured good is produced or a service is provided.
A)True
B)False
Q2) Mass production is characterized by high volumes of a standard product for a mass market.
A)True
B)False
Q3) Producing a high volume of a single product is a characteristic of batch production.
A)True
B)False
Q4) Which of the following is not a characteristic of mass production?
A)made-to-stock
B)stable demand
C)high product variety
D)high product volume
Q5) A firm's process strategy rarely defines its capital intensity.
A)True
B)False
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Chapter 17: Scheduling
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Sample Questions
Q1) Sequencing involves determining the order in which jobs are released to the shop floor.
A)True
B)False
Q2) If a job is ahead of schedule,then its critical ratio (CR)will be
A)less than one.
B)greater than one.
C)equal to one.
D)none of the above.
Q3) Which of the following is not typically considered an objective of scheduling?
A)minimizing job lateness
B)maximizing time in the system
C)minimizing overtime
D)maximizing machine utilization
Q4) The assignment method of linear programming can be used for both loading and employee scheduling.
A)True
B)False
Q5) What is the difference between infinite scheduling and finite scheduling?
Q6) Why is monitoring an important component of job shop scheduling?
Page 9
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Chapter 7: Capacity and Facilities
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Sample Questions
Q1) The basic objective of the facility layout decision is to ensure a smooth flow of inventory through the system.
A)True
B)False
Q2) Cellular layouts combine the flexibility of process layouts with the efficiency of product layouts.
A)True
B)False
Q3) What are the advantages of a cellular layout?
Q4) Cycle time refers to
A)the time required for a product to go through a process layout.
B)the time between finished units coming off an assembly line.
C)the time needed to complete the tasks at a work station.
D)the difference between task time and work station time.
Q5) Briefly describe a cellular layout and its objectives.
Q6) A process layout arranges activities sequentially.
A)True
B)False
Q7) Briefly describe the two constraints under which assembly line balancing must operate.
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Chapter 8: Human Resources
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Sample Questions
Q1) In the U.S,affirmative action and equal opportunity are basically the same.
A)True
B)False
Q2) Learning curves are useful for measuring work improvement for repetitive,simple jobs requiring short times to complete.
A)True
B)False
Q3) Job design includes determining the characteristics a worker needs to meet the job requirements.
A)True
B)False
Q4) With total quality management,employees are usually given precise directions to achieve narrowly defined objectives.
A)True
B)False
Q5) With total quality management,employees receive broad job training making them more flexible in where they can work
A)True
B)False
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Chapter 9: Project Management
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Sample Questions
Q1) A(n)_______________ is a project team structure that includes members from different functional areas.
A)matrix organization
B)project network
C)organizational breakdown structure
D)work breakdown structure
Q2) PERT stands for program enterprise and resource technique.
A)True
B)False
Q3) Using Table 9.3,the latest start (LS)time for activity D is
A)8 days.
B)11 days.
C)19 days.
D)12 days.
Q4) Using Table 9.2,the variance for activity E is
A)1.291.
B)1.667.
C)2.582.
D)2.778.
Q5) What is a scope statement?
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Chapter 10: Supply Chain Management: Strategy and Design
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Sample Questions
Q1) Inventory turnover is computed by
A)dividing the cost of goods sold by the average aggregate inventory value.
B)dividing the average aggregate inventory value by costs of goods sold.
C)multiplying the average aggregate inventory value by cost of goods sold.
D)subtracting cost of goods sold from the average aggregate inventory value.
Q2) Supply chain management focuses on integrating and managing the flow of manufactured goods,services and related information.
A)True
B)False
Q3) Collaborative planning,forecasting,and replenishment CPFR)is a useful tool supporting supply chain integration.
A)True
B)False
Q4) What processes comprise the supply chain and how are the processes integrated?
Q5) Use of radio frequency identification RFID)technology makes it possible for a customer to determine production schedules.
A)True
B)False
Q6) List and explain the three key supply chain performance indicators.
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Chapter 11: Global Supply Chain Procurement and Distribution
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Q1) E-procurement is mostly used to purchase indirect products that support production.
A)True
B)False
Q2) Logistics includes distribution and transportation activities within a supply chain.
A)True
B)False
Q3) Long life,high capital cost and low operating costs are associated with which mode of transportation?
A)pipeline
B)canal
C)barges
D)water
Q4) The focus of distribution,what it accomplishes,is referred to as A)logistics
B)order fulfillment
C)customer service
D)maintaining inventories
Q5) List and discuss some of the forces driving globalization.
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Chapter 12: Forecasting
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Q1) Correlation in linear regression is a measure of the strength of the relationship between the dependent variable,demand,and an independent (explanatory)variable.
A)True
B)False
Q2) The larger the mean absolute deviation (MAD)the more accurate the forecast.
A)True
B)False
Q3) Forecasts based on mathematical formulas are referred to as qualitative forecasts.
A)True
B)False
Q4) A mathematical technique for forecasting that relates the dependent variable to an independent variable is
A)correlation analysis.
B)exponential smoothing.
C)linear regression.
D)weighted moving average.
Q5) Explain how and why time series and regression forecasting methods differ.
Q6) Explain the difference between qualitative and quantitative forecasting methods.
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Chapter 13: Inventory Management
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Q1) Product deterioration,spoilage,breakage,and obsolescence are examples of shortage costs.
A)True
B)False
Q2) A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate.The cost to order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00.If the restaurant orders the economic order quantity then the total annual inventory cost for napkins is
A)$62,500.
B)$5,000.
C)$2,500.
D)$1250.
Q3) The economic order quantity occurs when the annual carrying cost is equal to the annual ordering cost.
A)True
B)False
Q4) Dependent demand is determined by external market conditions.
A)True
B)False
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Chapter 13: Operational Decision-Making Tools: Simulation
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Q1) At a Wal-Mart store,simulation can be used to analyze waiting lines at check-out stands to determine the required staffing levels.
A)True
B)False
Q2) Simulation analysis is useful for operational problems that A)are easy to solve analytically.
B)can't be solved analytically.
C)require an optimal solution.
D)meet specific analytical criteria.
Q3) As a simulation model becomes more complex,using a computer application is virtually impossible.
A)True
B)False
Q4) What is simulation and why is it a popular decision-making tool?
Q5) Simulation analysis is the preferred method used at hospitals to determine the type of treatment a patient requires.
A)True
B)False
Q6) In what ways is simulation relevant to analyzing production problems?
Page 17
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Chapter 14: Operational Decision-Making Tools: Linear Programming
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Q1) A company produces product A and product B.Each product must go through two processes.Each A produced requires two hours in process 1 and five hours in process 2.Each B produced requires six hours in process 1 and three hours in process 2.There are 80 hours of capacity available each week in each process.Each A produced generates $6.00 in profit for the company.Each B produced generates $9.00 in profit for the company.If the company produces 6 units of A and 9 units of B the constraint for process 1 is represented by
A)2A + 5B < 80
B)2A + 6B > 80
C)2A + 6B < 80
D)2A + 6B < 80.
Q2) The feasible solution space contains the values for the decision variables that satisfy the majority of the linear programming model's constraints.
A)True
B)False
Q3) Linear programming is a mathematical modeling technique based on linear relationships
A)True
B)False
Page 18
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Chapter 14: The Sales and Operations Planning Process
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Q1) Implementing a companywide game plan for allocating resources addresses the long-standing battle between operations and marketing.
A)True
B)False
Q2) In capacity planning,the feasibility of the sales and operations production plan is verified by a
A)resource requirements plan.
B)rough-cut capacity plan.
C)capacity requirements plan.
D)master production schedule.
Q3) A company is developing a linear programming model for its aggregate production plan.Each worker can produce 500 units per quarter.If Wt = workforce size in period t and Pt = number of units produced in period t,then the production constraint for period 3 is
A)W3 = 500P3
B)P3 = W3 - 500
C)P3 = 500W3
D)P3 = W3/500
Q4) Briefly discuss the two primary objectives of aggregate planning.
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Chapter 15: Resource Planning
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Q1) Customer relationship management systems change the focus from managing products to managing customers.
A)True
B)False
Q2) Modular bills of material are used to group small,lose parts together into a kit.
A)True
B)False
Q3) Capacity requirement planning (CRP)converts the material plan into labor and machine workloads.
A)True
B)False
Q4) The item master file contains all the following except A)on-hand quantities.
B)lead times.
C)planned order releases.
D)on-order quantities.
Q5) When is it appropriate to use material requirements planning (MRP)?
Q6) What is the difference between independent and dependent demand?
Q7) What is Enterprise Resource Planning (ERP)?
Page 20
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Chapter 16: Lean Systems
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Q1) The concept of allocating extra time to a schedule for planning,problem solving,and maintenance is known as
A)preventative scheduling.
B)preventive maintenance.
C)over capacity maintenance.
D)under capacity scheduling.
Q2) Kaizen is a Japanese term that means fool proofing to prevent defects.
A)True
B)False
Q3) All of the following factors pressure companies for quicker response and shorter cycle times except
A)demanding customers.
B)longer product life cycles.
C)globalization.
D)All the above are factors.
Q4) Reducing variability in production through more accurate demand forecasts is one way to maintain uniform production levels.
A)True
B)False
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Chapter 18: Operational Decision-Making Tools: Decision Analysis
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Q1) Quantitative methods are tools available to operations managers to help make a decision or recommendation.
A)True
B)False
Q2) The maximum value of perfect information to the decision maker is known as
A)the expected value of perfect information
B)the expected value of imperfect information
C)the minimum of the minimax regret
D)none of the above
Q3) A decision criterion that results in the maximum of the minimum payoffs is called a maximin criterion.
A)True
B)False
Q4) When probabilities can be assigned to the occurrence of states of nature in the future,the situation is referred to as
A)decision making under risk
B)decision making under certainty
C)decision making under uncertainty
D)none of the above
22
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Chapter 19: Operational Decision-Making Tools: Acceptance Sampling
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Q1) Acceptance sampling is still used today for all the following reasons except A)government regulations.
B)contractual requirements.
C)industry standards.
D)total quality management principles.
Q2) What is the advantage of a multiple-sampling plan?
Q3) A sampling plan provides a set of guidelines for accepting a lot.
A)True
B)False
Q4) Six Sigma companies report defective parts per million (PPM)versus the more traditional defective parts per hundred.
A)True
B)False
Q5) The probability of rejecting a lot that has an acceptable quality level is referred to as the
A)producer's risk.
B)consumer's risk.
C)lot tolerance percent defective.
D)acceptable quality level.
Page 23
Q6) .Is acceptance sampling consistent with TQM?
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Chapter 20: Decision-Making Tools: Facility Location Models
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Q1) Facility location is often overlooked because it is not an important aspect of a firm's strategic plan.
A)True
B)False
Q2) Which of the following is not a primary factor in location decisions for manufacturing plants?
A)proximity to raw materials
B)proximity to customers
C)proximity to different modes of transportation
D)proximity to significant labor pools
Q3) ___________ attracts manufacturing facilities because of its transportation,skilled labor,strong work ethic,incentive programs and social services?
A)Kansas
B)Arkansas
C)Ohio
D)Idaho
Q4) Transportation costs are generally a function of distance,weight,and time.
A)True
B)False
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Chapter 21: Operational Decision-Making Tools: Work Measurement
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Q1) Work sampling is a technique for determining the proportion of time a worker or machine is idle.
A)True
B)False
Q2) For a particular time study a company would like to be 90% confident that the average job cycle time is within 5% of the true average job cycle time.Assume that the average job cycle time was 15.76 minutes and the standard deviation of the sample was 3.2 minutes.The number of cycles that should be used in this time study would be
A)45
B)93
C)127
D)236
Q3) The basic principle underlying an incentive piece-rate wage system is that workers produced more if they were paid for the additional ouput.
A)True
B)False
Q4) List the steps in work sampling.
Q5) What is work sampling and what is its primary use?
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