Supply Chain Management Practice Exam
Course Introduction
Supply Chain Management explores the integrated process of planning, implementing, and controlling the efficient flow of goods, services, and related information from the point of origin to the point of consumption. The course examines the strategic roles of supply chains in global business, covering key topics such as procurement, logistics, inventory management, demand forecasting, and supplier relationships. Students will learn how effective supply chain coordination and modern technologies can improve organizational performance, customer satisfaction, and competitive advantage. Through case studies and real-world examples, the course also addresses challenges and best practices in managing risks and sustainability within supply chains.
Recommended Textbook
OM 5 5th Edition by David Alan Collier
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Chapter 1: Goods, Services, and Operations Management
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Sample Questions
Q1) Every job entails some aspect of operations management.
A)True
B)False
Answer: True
Q2) Which of the following is the correct sequence describing the evolution of operations management?
A) Efficiency, customization, quality, service, sustainability, and time-based competition
B) Quality, efficiency, time-based competition, sustainability, customization, and service
C) Efficiency, quality, customization, time-based competition, service, and sustainability
D) Quality, service, customization, time-based competition, efficiency, and sustainability Answer: C
Q3) Service encounters consist of one or more moments of truth.
A)True
B)False
Answer: True
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3
Chapter 2: Value Chains
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Sample Questions
Q1) The decision to offshore or outsource involves a variety of economic and noneconomic issues.
A)True
B)False
Answer: True
Q2) A value chain describes the flow of customer information through a production system.
A)True
B)False
Answer: False
Q3) The operational structure of a value chain deals with the _____.
A) management hierarchies
B) customer services and returns
C) configuration of resources
D) order tracking reports
Answer: C
Q4) A supply chain is more inclusive than a value chain.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Measuring Performance in Operations
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Sample Questions
Q1) Queue time is a fancy term for service time variance.
A)True
B)False
Answer: False
Q2) Productivity is the ratio of the input of a process to the output.
A)True
B)False Answer: False
Q3) The five dimensions of service quality measurement pertain to behavioral characteristics, which are easier to measure than physical and technical characteristics.
A)True
B)False
Answer: False
Q4) Reliability is the ability to perform a service dependably and accurately.
A)True
B)False
Answer: True
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Chapter 4: Operations Strategy
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Sample Questions
Q1) A creative workforce and a strong supply chain can be considered as an organization's core competency.
A)True
B)False
Q2) In today's global market, mass customization has become less important than it was in the past.
A)True
B)False
Q3) Explain the difference between an order qualifier and an order winner. Provide some examples.
Q4) The style and fit of a jacket can be classified as a(n) _____.
A) search attribute
B) experience attribute
C) credence attribute
D) variant attribute
Q5) Order qualifiers are goods and service features and performance characteristics that differentiate one customer benefit package from another and win a customer's business.
A)True
B)False
Page 6
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) Offshoring is a phenomenon by which the same or an increased quality and quantity of goods and/or services are created using fewer natural resources.
A)True
B)False
Q2) Information technology has significantly affected health care. Which of the following is NOT an outcome?
A) Cost reduction
B) Revenue enhancement
C) Faster exchange of handwritten charts between physicians and nurses
D) Improved clinical efficiency and patient care
Q3) Enterprise resource planning (ERP) systems consist of a single module that is implemented to maintain the level of autonomy.
A)True
B)False
Q4) What are the benefits and challenges of technology?
Q5) Procter & Gamble use bricks-and-mortar intermediaries.
A)True
B)False
Q6) Differentiate between hard technology and soft technology.
Page 7
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) A(n) _____ is included in service provider publications and advertisements.
A) artifact
B) service-encounter design
C) explicit service guarantee
D) service-upset clause
Q2) In a two-component parallel system, the overall reliability is 0.9984. If the reliability of the first component is 0.9880, determine the reliability of the second component.
Q3) To improve system reliability, one option is to:
A) use better components.
B) use more components in series.
C) use quality function deployment.
D) eliminate redundancy.
Q4) An analysis of the current mortgage loan process found that the overall system reliability of a part of the total process consisting of three stages was low. After much analysis, the process manager decided to add redundancy to this part of the process. So, clerks A and B checked one another's work as well as clerks C and D in the new process. Consider each pair to be parallel. A study found that all clerks performed at an average reliability of 0.85. What is the reliability of the new process with more redundancy?
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) Flow time is the average time an entity takes to complete one cycle of a process
A)True
B)False
Q2) What are some management strategies to improve process designs?
Q3) Which of the following is NOT a common process design improvement strategy?
A) Increasing revenue
B) Decreasing agility
C) Decreasing cost
D) Decreasing process flow time
Q4) Standard goods are made in anticipation of customer demand and stocked in inventory and therefore, are usually available,
A)True
B)False
Q5) Transferring material between two non-adjacent workstations, waiting for service, and requiring multiple approvals are examples of:
A) a value stream.
B) a process map.
C) non-value-added activities.
D) a service blueprint.
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Chapter 8: Facility and Work Designs
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Sample Questions
Q1) A fixed-position layout is based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service.
A)True
B)False
Q2) Is this a good assembly-line balancing solution? Explain. What do you recommend?
Q3) Which of the following is NOT a common reason for facility layout studies?
A) There is significant change in demand or throughput volume.
B) A new good or service is introduced to the customer benefit package.
C) A new material supplier is used.
D) Different process, equipment and/or technology are installed.
Q4) The facility layout in a library would most likely be a process layout.
A)True
B)False
Q5) Process layouts generally require less investment in equipment than product layouts because the equipment is less specialized.
A)True
B)False
Q6) Differentiate between a flow-blocking delay and lack-of-work delay. How can each be reduced?
Page 10
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) Which one of the following statements is FALSE?
A) Boeing's new 787 Dreamliner airplane has encountered many startup and supply chain coordination problems.
B) General Motors pushes finished goods from its dealers to the customers.
C) Zappos uses third-party logistics for customer deliveries, return, and inbound shipping.
D) Federal Express has over one million pickup and delivery sites and therefore, is a good example of multisite management.
Q2) What are the key functions of a supply chain?
Q3) Which one of the following statements about sustainable supply chains is FALSE?
A) Cannibalization of parts for use and repair of other equipment is part of a reverse logistics supply chain.
B) Reverse logistics includes using raw materials and parts to assemble new finished goods.
C) A green sustainable supply chain process develops outputs that can be reclaimed and reused at the end of their life-cycle.
D) For products that are of high enough value, it is normally more cost-effective to remanufacture or refurbish the product.
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Chapter 10: Capacity Management
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Sample Questions
Q1) Average safety capacity (%) is computed as:
A) Average resource utilization (%) 100%.
B) 100% Average resource utilization (%).
C) [maximum safety capacity (%) + minimum safety capacity (%)]/2.
D) 100% maximum resource utilization (%).
Q2) Define a revenue management system (RMS) and explain how it works. Give several examples of assets that can be managed using RMS.
Q3) It is never appropriate to expand capacity in advance of growing demand because the excess capacity will always be underutilized.
A)True
B)False
Q4) Offering complementary goods or services is an example of a short-term capacity strategy.
A)True
B)False
Q5) Capacity costs depend primarily on annual operating and maintenance costs.
A)True
B)False
Q6) What is safety capacity? Discuss reasons for using it.
Page 12
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) Better operational decisions can be made by integrating forecasting with value chain and capacity management systems.
A)True
B)False
Q2) The Espresso Cart had the following pattern of espresso sales over the last two weeks:
\(\begin{array}{|l|c|l|c|}
\hline {\text { Week 1 }} && \text { Week 2 } & \\
\hline \text { Monday } & 873 & \text { Monday } & 912 \\
\hline \text { Tuesday } & 904 & \text { Tuesday } & 859 \\
\hline \text { Wednesday } & 911 & \text { Wednesday } & 906 \\
\hline \text { Thursday } & 887 & \text { Thursday } & 900 \\
\hline \text { Friday } & 899 & \text { Friday } & ? \\
\hline
\end{array}\) What is the forecast for Friday's sales using a three-day moving average?
Q3) Define regression analysis and explain how it is an approach to forecasting.
Q4) A nine-month simple moving average would approximately equate with what alpha ( ) factor for simple exponential smoothing?
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Page 13
Chapter 12: Managing Inventories
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Sample Questions
Q1) Using the data below, find the economic order quantity (EOQ), the total annual cost associated with the economic order quantity, and the reorder point.
\(\begin{array}{|l|l|}
\hline\text { Annual Demand: } & 15,000 \text { units } \\
\hline \text { Weeks Operating: } & 52 \text { weeks/year } \\
\hline \text { Ordering Costs: } & \$ 60 / \text { order } \\\hline \text { Holding Costs: } & \$ 7 / \text { unit/year } \\
\hline \text { Lead Time: } & 5 \text { weeks } \\ \hline \end{array}\)
Q2) Costs associated with backordering products are called _____ costs.
A) holding
B) shortage
C) ordering D) setup
Q3) Radio-frequency identification (RFID) tags are used to track stock-keeping units in supply chains.
A)True
B)False
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Page 14
Chapter 13: Resource Management
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Sample Questions
Q1) A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Determine the level production rate if a level strategy is selected with the goal of ending Period 4 with 100 units in inventory.
Q2) Good solutions to aggregate planning situations using spreadsheets can be found by trial-and-error approaches.
A)True
B)False
Q3) Using the data in Table 1, determine the annual inventory-holding cost if Academic decides to use a level production rate of 650 units per quarter.
A) $2,925.00
B) $1,012.50
C) $2,025.00
D) $4,500.00
Q4) In materials requirements planning (MRP), it is essential that all dependent demand requirements be ordered at the beginning of the planning period.
A)True
B)False
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Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) Explain the three categories of criteria used to evaluate job sequencing performance. For each category, provide two example measures.
Q2) The shortest processing time (SPT) rule:
A) maximizes the number of jobs in the system.
B) maximizes average flow time.
C) minimizes resource utilization.
D) minimizes work-in-process inventory.
Q3) In a two-resource sequencing problem:
A) the makespan is the same for any sequence of jobs.
B) flow time is maximized.
C) the goal is to minimize makespan.
D) each job can be processed by either resource first.
Q4) Since all jobs eventually get done, job sequencing has no effect on resource utilization.
A)True B)False
Q5) Give at least five examples of service organizations (and employee types) where, due to high variability in customer demand, staff-scheduling problems are prevalent.
Q6) Differentiate between scheduling and sequencing.
Page 16
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Chapter 15: Appendix: Quality Management
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Sample Questions
Q1) A job had a normal time of 2.43 minutes, an allowance of 20 percent, and a forecast demand of 120 units per day. How long should it take to produce one day's output?
Q2) A performance rating factor (PRF) of 130 percent means that a worker is slow and needs 30 percent more time.
A)True
B)False
Q3) An employee was observed over an extended period of time for a work-sampling study with the following results:
\(\begin{array}{lll}&& \text { Performance } \\
\text { Activity } & \text { Percentage of Time } & \text { Rating Factor }\\
\text { On the Phone } & 30 & 1.15 \\
\text { Filing } & 35 & 0.70 \\
\text { Face-to-Face with Customer } & 25 & 1.10 \\
\text { Idle } & 10 & \ldots . . .
\end{array}\) While doing her job in a 40-hour workweek, the employee helped 120 face-to-face, walk-in customers. Determine the standard time in minutes that it took her to help each customer.
Q4) Define work measurement and what it leads to from an operations perspective.
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Chapter 15: Quality Management
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Sample Questions
Q1) Explain the four components of the cost of quality.
Q2) In reference to quality cost classifications, information-systems development costs would normally fall in _____category.
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs
Q3) Costs of recalls and warranty claims are classified as internal failure costs.
A)True
B)False
Q4) As a front-desk manager of a mid-market hotel, your shift received 29 customer complaints last week. A total of 428 guests stayed in the hotel over the past week (7 days) with 12 front-desk customer touch points or moments of truth. The epmo is
A) less than 200
B) more than or equal to 200 but less than 400
C) more than or equal to 400 but less than 600
D) more than or equal to 600
Q5) List the three principles of total quality.
Q6) Define poka-yoke, and provide some examples.
Page 18
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Chapter 16: Quality Control and Spc
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Q1) A company is measuring the time it takes to complete an order. Twenty-five samples of size 6 resulted in an average time of 80 minutes with an average range of 20 minutes. Find control limits for the appropriate control chart(s) that would be used to monitor this process.
Q2) Evaluating the trade-offs between the costs of detection or replacement of a defective part and costs of allowing a nonconformity to continue through the production process is related to _____.
A) supplier certification and management
B) in-process control
C) finished-goods control
D) a continuous metric
Q3) To monitor the fraction of printed circuit boards that do not pass a functional test, a(n) _____ is used.
A) k-chart
B) p-chart
C) c-chart
D) R-chart
Q4) Find the control limits for a c-chart with c-bar= 7.
Q5) Define and give an example of the three components of any control system.
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Chapter 16: Appendix: Queuing Analysis
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Sample Questions
Q1) Discuss three categories of information necessary to develop a queuing model.
Q2) Triage is a form of preemption.
A)True
B)False
Q3) A local bank has two drive-through teller windows with an essentially unlimited queue length. They estimate that the arrival rate during their most busy time will average about 40 cars per hour. They also estimate they can serve an average of 50 cars per hour. Management wants to make sure that the system is operating efficiently.
a. What is the probability that there will be no cars in the system?
b. On average, how many cars are in the system?
c. How long would a car be waiting (in seconds) in the drive-through, on average?
Q4) According to the single-server queuing model, when \(\lambda\) = \(\mu\), the operating characteristics are not defined, which means that these times and numbers of items grow infinitely large.
A)True
B)False
Q5) What are the seven key assumptions for the multiple-server waiting line model?
Q6) Describe at least four queue disciplines.
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Chapter 17: Appendix: Modeling Using Linear Programming
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Q1) The Pacific Computer Company makes two models of notebook personal computers: Model 410 with CD-ROM drive, and Model 540 with DVD drive. Profits on each model are $100 and $150, respectively. Weekly manufacturing data (in minutes) are given below: \(\begin{array}{cccc}\text { Notebook } & \text { Dept. A } & \text { Dept. B } \\ \text { Model } & \text { Manuf. Time } & \text { Manuf. Time }&\text { Assembly Time }\\ 410 & 5 & 14 & 25 \\ 540 & 10 & 7 & 40 \end{array}\)
Manufacturing time available in department A for the coming week is 300 minutes, and for department B, it is 420 minutes. Total time available during the week to assemble the fabricated units is 1600 minutes.
a. What is the objective function if the company wants to maximize profits?
b. What is the constraint corresponding to Department A assuming x<sub>1</sub> corresponds to Model 410?
c. What is the optimum solution point for this problem?
d. What is the maximum possible total profit?
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Chapter 17: Lean Operating Systems
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Q1) Lean principles are mostly beneficial to manufacturers and provide little value to service organizations.
A)True
B)False
Q2) A company is using a Kanban system with 2 containers, each holding 50 parts, between a downstream (using) and an upstream (producing) work center. The using work center can handle 250 jobs per day. The average elapsed time for the entire cycle is currently 0.25 days. The company is concerned about the safety factor for the operation and the size of the containers.
a.What is the efficiency rating of the current operation?
b.If the company decides to use only one container, how many parts must it hold?
c.If the safety factor is changed to 0.12 and there are still 2 containers, how many parts must each container now hold?
Q3) The maximum authorized inventory for the problem given in #35 is _____.
A) less than or equal to 200 units
B) more than 200 but less than or equal to 300 units
C) more than 300 but less than or equal to 400 units
D) more than 400 units
Q4) Explain the purpose of visual controls and give examples.
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Chapter 18: Appendix: Simulation
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Q1) The Excel function RAND( ) generates random numbers that provide a continuous range of values. Unlike those for two-digit numbers, these values are not limited to probability increments of 0.01.
A)True
B)False
Q2) A computer implementation free from logical errors and bugs refers to:
A) verification.
B) validation.
C) customization.
D) estimation.
Q3) Explain the major differences between a fixed-time and a next-event simulation model.
Q4) Which of the following is NOT an advantage of simulation?
A) It provides a convenient experimental laboratory.
B) It can perform "what-if" studies.
C) It does not disrupt the current process.
D) It guarantees accuracy of outputs.
Q5) With a fixed-time-increment simulation model, detailed information is lost.
A)True
B)False
23
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Chapter 18: Project Management
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Q1) What is the critical path and expected completion time for this project?
A) B-D-G; 12 weeks
B) A-D-G; 12 weeks
C) B-G; 10 weeks
D) A-F-G; 14 weeks
Q2) Which is NOT true of the critical path?
A) The activities on the critical path take the shortest time to complete.
B) The activities on the critical path define the total project completion time.
C) It is the project path with zero slack.
D) The delays in critical path activities will delay the project.
Q3) Slack for activity E is:
A) less than 4.
B) between 4 and 6.
C) between 6 and 8.
D) greater than 8.
Q4) Using a beta probability distribution to characterize uncertain activity times is practical because it allows managers to use judgmental estimates to identify the distribution.
A)True
B)False
24
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Chapter 19: Appendix: Decision Analysis
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Q1) The following table shows cost payoffs for four decision variables and four states of nature. \(\begin{array}{c|cccc} & \mathrm{S}_{1} & \mathrm{~S}_{2} & \mathrm{~S}_{3} & \mathrm{~S}_{4} \\ \hline\mathrm{d}_{1} & 16 & 8 & 15 & 4 \\ \mathrm{~d}_{2} & 12 & 12 & 10 & 6 \\ \mathrm{~d}_{3} & 10 & 12 & 16 & 10 \\ \mathrm{~d}_{4} & 9 & 14 & 20 & 12 \end{array}\)
a. Which decision variable would be selected using minimin criteria?
b. Which decision variable would be selected using minimax?
c. Which decision variable would be selected using minimax-regret criteria.
d. Suppose the decision maker assigns the probability for S<sub>1</sub> = 0.10; S<sub>2</sub> = 0.25; S<sub>3</sub> = 0.45; and S<sub>4</sub> = 0.20, which decision variable would be selected using the expected value criterion?
Q2) Decision analysis situations often have multiple objectives.
A)True B)False
Q3) Differentiate between uncertainty and risk.
Q4) Explain the structure and purpose of a decision tree.
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