Supply Chain Management
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Course Introduction
Supply Chain Management explores the coordination and integration of all activities involved in sourcing, procurement, production, and logistics to deliver products and services efficiently from suppliers to customers. This course covers key concepts such as supply chain strategy, network design, inventory management, demand forecasting, transportation, and risk management. Students will learn to analyze supply chains, identify inefficiencies, and implement improvements using both traditional and technological tools. Emphasis is placed on the importance of collaboration among partners, ethical considerations, and the impact of globalization on supply chain operations.
Recommended Textbook
OM 4th Edition by David
Alan Collier
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Chapter 1: Goods, Services, and Operations Management
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Q1) Value creation processes focus on primary goods and services.
A)True
B)False
Answer: True
Q2) In relating operations management and the customer benefit package (CBP), which is the correct timing sequence?
A)Operating system processes lead to customer needs and expectations, which lead to customer benefit package.
B)Customer benefit package leads to customer needs and expectations, which lead to operating system processes.
C)Customer needs and expectations lead to customer benefit package, which leads to operating system processes.
D)Customer needs and expectations lead to operating system processes, which lead to customer benefit package.
Answer: C
Q3) Peripheral goods and services are not essential to a primary good or service.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Value Chains
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Q1) "The perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them" is the definition of
A)proportionality
B)competitiveness
C)value
D)equity
Answer: C
Q2) Backward integration refers to acquiring capabilities toward distribution.
A)True
B)False Answer: False
Q3) Vertical integration is a modern method of outsourcing.
A)True
B)False
Answer: False
Q4) Forward integration might include acquiring a customer.
A)True
B)False Answer: True
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Chapter 3: Measuring Performance in Operations
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Q1) Explain the concepts underlying the service-profit chain model.
Answer: The model is based on a set of cause-and-effect linkages between internal and external performance, and in this fashion, defines the key performance measurements on which service-based firms should focus.Because much of the value created in service processes is at the service encounter level, the Service-Profit Chain focuses on employees or service-providers.Healthy, motivated, well-trained, and loyal employees demonstrate higher levels of satisfaction that result in higher retention and productivity.This leads to higher levels of external service value to customers.External service value is created by service-providers mainly at the service encounter level.Buyers of services focus on outcomes, results, and experiences.Ultimately, good value creates higher customer satisfaction and loyalty, which in turn leads to higher revenue growth and profitability.
Q2) The quote "Happy employees create happy customers" best characterizes the Service-Profit Chain (SPC) model.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Operations Strategy
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Q1) Which one of the following statements in the Lawn Care Company (LCC) case study is true?
A)The LCC already had experience and capabilities in the residential lawn application service and market segment, and was considering using this expertise to enter the golf and park market segment.
B)The gross margin on grass seed and fertilizer were higher than on the lawn application service.
C)Service management skills play a major role in the LCC current strategy and vision of the business.
D)The order winner for the current strategy at LCC is high physical goods quality.
Q2) Because McDonald's and Pal's Sudden Service are both in the quick service restaurant business, we would expect their operations strategies to be nearly identical. A)True B)False
Q3) Explain the difference between an order qualifier and an order winner.Provide some examples.
Q4) What is the difference between corporate, business and functional strategy?
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Chapter 5: Technology and Operations Management
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Q1) Enterprise Resource Planning systems are designed to build customer relationships and loyalty.
A)True
B)False
Q2) A sociotechnical system integrates technology, people, and processes.
A)True
B)False
Q3) A principal advantage of numerical control (NC) is that an operator has only to load and unload parts and push a button to begin processing, and thus can tend several NC machines at one work center.
A)True
B)False
Q4) What are some of the benefits and challenges of technology?
Q5) Because of the Internet and e-commerce, all parts of the value chain can immediately know and react to changes in demand and supply.Thus, tight integration of the components of the value chain is no longer required.
A)True
B)False
Q6) Discuss the role of technology on productivity.
Page 7
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) The decision of what goods and services to offer and how to position them in the marketplace is mainly an operational decision.
A)True B)False
Q2) Japan's Genichi Taguchi argued that any variation within the specification limits is equally good in terms of quality and long-run cost.
A)True B)False
Q3) In a two-component parallel system, the overall reliability is 0.9994.If the reliability of the first component is 0.9890, determine the reliability of the second component.
Q4) Assume the specifications for a part (in inches) are 5.00 \(\pm\) 0.37, and the Taguchi loss function is estimated to be L(x) = 9,300 (x - T)<sup>2</sup>.Determine the estimated loss if the quality characteristic under study takes on a value of 5.50 inches.
Q5) Describe the Taguchi loss function.Contrast it to the "goal post" model.
Q6) Explain the concept of Design Failure-Mode-and-Effect analysis.
Q7) Explain the importance of service recovery and service guarantees.
Q8) Define reliability.Include the four major elements.
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) A car rental company at a major airport has 70% of its fleet of 200 cars rented each day on average.Cars are rented for an average of 4 days.How many rentals are processed each day on average?
Q2) In designing processes, one often starts at the detail level and moves progressively toward the aggregate.
A)True
B)False
Q3) Explain how a product's life cycle has important implications in terms of process design and choice.
Q4) Explain and differentiate the characteristics of a project, job shop, flow shop and continuous flow process.
Q5) An order fulfillment process normally operates two shifts a day, six days per week.Under normal conditions, 380 orders can be processed per shift.What is the weekly capacity?
Q6) Dell computers and Subway sandwiches are examples of ____ goods.
A)Custom
B)Option
C)Standard
D)Job shop
9
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Chapter 8: Facility and Work Design
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Sample Questions
Q1) In a product layout such as an assembly line, a flow blocking delay occurs whenever one stage completes work and no units from the previous stage are waiting processing.
A)True
B)False
Q2) In a perfectly balanced assembly line, no bottlenecks exist.
A)True
B)False
Q3) Changes in goods and services for a firm's customer benefit package do not impact facility layouts.
A)True
B)False
Q4) An assembly line with 28 activities is to be balanced.The total amount of time required for all 28 activities is 39 minutes.The longest activity is 2.2 minutes and the shortest is 0.8 minutes.The line will operate for 450 minutes per day.Using a cycle time of 60 seconds, determine an assembly line balance by selecting the longest task available.Compute the total idle time, and assembly line efficiency.
Q5) Discuss the advantages and disadvantages of utilizing virtual teams.
Q6) Describe approaches used for process layout design.
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) In designing an efficient supply chain, an organization would need high levels of inventory stored in many small distribution centers.
A)True
B)False
Q2) Describe some common supply chain metrics used to evaluate performance.
Q3) Which one of the following statements is false?
A)Historically, General Motors used to push system to get vehicles to their dealers.
B)Wal-Mart is a good example of a highly efficient supply chain.
C)Sony is a good example of a global contract manufacturer.
D)Postponement is the process of delaying product customization until the product is closer to the customer at the end of the supply chain.
Q4) Explain the typical structure of a supply chain.
Q5) The bullwhip effect results from order amplification in the supply chain.
A)True
B)False
Q6) Explain the concept of postponement and provide an example of it.
Q7) Explain the difference between a supply chain and a value chain.
Q8) What are the key functions of a supply chain?
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Chapter 10: Capacity Management
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Sample Questions
Q1) In service organizations, capacity is more often viewed as ____
A)The maximum rate of output per unit time
B)Units of resource availability
C)The ability to meet any customer demand
D)The amount of overtime scheduled
Q2) C&M Machining is developing plans for a dedicated production line and needs to determine how many drill presses will be needed.Engineering estimates are that one drill press will be able to process 120 parts per hour.Daily demand is 2400 parts.C&M operates one 8 hour shift per day.How many drill presses are needed to meet the capacity requirements?
Q3) Which of the following is not a key consideration in long-term capacity strategy?
A)Equipment sharing
B)Initial investment in facilities and equipment
C)Annual cost of operating and maintaining facilities and equipment
D)Opportunity loss incurred from lost sales and reduced market share
Q4) Complementary goods or services balance seasonal demand cycles and therefore use excess capacity available.
A)True
B)False
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Chapter 11: Forecasting and Demand Planning
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Q1) A group of international experts published a set of principles of forecasting that includes all of the following except
A)Use quantitative rather than qualitative methods.
B)Combine forecasts from approaches that are similar.
C)Ask experts to justify their forecasts in writing.
D)Use multiple measures of forecast accuracy.
Q2) The manager of a gas station along an interstate highway has observed that gasoline sales generally increase each week over the summer months as more families travel by car on vacations.He also believes that sales are sensitive to fluctuations in the price of gasoline.He developed the following regression model: Sales = 59407 + 509 (Week) - 16463 (Price/gallon)
a.Interpret the coefficients of the independent variables in this model.
b.What is the sales forecast for the 11<sup>th</sup> week of the summer if the price per gallon is estimated to be $3.00?
Q3) What is a time series, and what types of characteristics typically make up time series?
Q4) Explain the difference between a moving average and single exponential smoothing forecasting model.
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Page 13
Chapter 12: Managing Inventories
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Q1) Because of demanding customers, organizations must always maintain a 100% service level.
A)True
B)False
Q2) Overnight shipping for emergency orders and compensation for overbooking at a hotel are examples of ordering costs.
A)True
B)False
Q3) "A" items typically comprise a high percentage of total dollar usage but a low percentage of unit volume.
A)True
B)False
Q4) When a customer is unwilling to wait for an item that is not in stock and purchases the item elsewhere, a backorder has occurred.
A)True
B)False
Q5) Define the EOQ model and explain its major assumptions.
Q6) Explain the difference between independent demand and dependent demand.
Q7) What are the four categories of inventory costs?
Page 14
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Chapter 13: Resource Management
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Q1) Which of the following is not correct regarding aggregate planning?
A)Large number of alternatives
B)Good solutions by trial-and-error method
C)Seasonal fluctuations in demand
D)Costs are sunk and irrelevant
Q2) What are the components of an MRP record?
Q3) "Level 3" planning represents aggregate planning at higher management levels of an organization.
A)True
B)False
Q4) Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by
A)The unit resource requirements minus the setup time
B)The unit resource requirements plus the setup time
C)The unit resource requirements and then adding in the setup time
D)The unit resource requirements and then subtracting the setup time
Q5) A company currently has no items in inventory.The demand for the next four months is 200, 400, 250 and 350 units.Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.
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Chapter 14: Operations Scheduling and Sequencing
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Q1) UPS, the world's largest package delivery company, is highly dependent on scheduling but not sequencing.
A)True
B)False
Q2) The time needed to process a given set of jobs is called
A)Flow time
B)Ready time
C)Makespan
D)Due date
Q3) Scheduling refers to specifying
A)The sequence that jobs must be completed
B)The due date for each job
C)The start and completion times of jobs
D)The makespan of each job
Q4) Appointments systems often overbook to maximize revenue.
A)True
B)False
Q5) A lateness measure can only be 0 or a positive number.
A)True
B)False
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Chapter 15: Quality Management
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Q1) Zero defects is achieved by identifying defects in production processes and fixing them.
A)True
B)False
Q2) ISO 9000:2000 principles consist of all of the following except
A)Involvement of people
B)Mutually beneficial supplier relationships
C)Zero defects
D)System approach to management
Q3) Using color coded wires to reduce mistakes associated with assembling complex electronic products is an example of poka-yoke.
A)True
B)False
Q4) At a gas station, a diesel pump nozzle that will not fit into a non-diesel automobile is an example of ____?
A)Kaizen blitz
B)dpmo
C)Poka-yoke
D)External failure
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Chapter 16: Quality Control and Spc
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Q1) Indications in a control chart of an out-of-control situation include all of the following except
A)Six or seven consecutive points that increase or decrease in value
B)About the same number of points above and below the center line
C)There are points outside control limits
D)There are no more points near the center line than there are close to the control limits
Q2) In manufacturing, quality control is generally applied at the receiving stage from suppliers, during various production processes, and at the finished goods stage.
A)True
B)False
Q3) Common cause variation
A)Cannot be explained except in an aggregate sense
B)Is easily detectable with statistical methods and control charts
C)Cannot be reduced through better technology, process design, or training
D)Is the responsibility of the workers who run the processes
Q4) A production process is sampled 24 times with a sample size of 6 yields an overall mean of 25.2 and an average range of 0.8.Determine the control limits for the x-bar and R charts.
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Chapter 17: Lean Operating Systems
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Q1) Toyota classified waste into seven major categories.Those categories include all of the following except
A)Motion
B)Ordering
C)Inventory
D)Waiting
Q2) The goal of total productive maintenance is to minimize the costs associated with routine maintenance activities.
A)True
B)False
Q3) How does Total Productive Maintenance (TPM) affect lean operating systems?
Q4) ABC Manufacturing uses a Kanban system for a component.The daily demand is 800 units.Each container has a combined waiting and processing time of 0.34 days.If the container size is 50 and efficiency (safety) factor is 9 percent, how many Kanban card sets should be authorized (round up)?
A)5 sets
B)6 sets
C)7 sets
D)8 sets
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Chapter 18: Project Management
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Q1) Which step in the project management process would involve developing alternative plans in anticipation of problems that might arise?
A)Project definition
B)Resource planning
C)Project scheduling
D)Project control
Q2) Which step in the project management process would involve determining time estimates for activities?
A)Project definition
B)Resource planning
C)Project scheduling
D)Project control
Q3) Which of the following is not an assumption of the critical path method?
A)Activities are independent of one another
B)Activity time estimates are stable
C)Activity times are characterized by a beta probability distribution
D)Once an activity is started it continues uninterrupted until completion
Q4) Explain the purpose of Gantt charts.
Q5) Describe how a project fits into each of the three common organizational structures.
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Q1) When timing a work activity with multiple tasks, the general rule is to take the largest sample size estimate and use it for all activities or tasks.
A)True B)False
Q2) The performance rating factor and allowances are based upon human judgment. A)True B)False
Q3) Regression analysis is used to predict times based on different attributes of work. A)True B)False
Q4) A Performance Rating Factor (PRF) of 130% means a worker is slow and needs 30% more time.
A)True B)False
Q5) For a time study, it is assumed the distribution of task times follow a Poisson distribution. A)True B)False
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Chapter 20: Queuing Analysis
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Q1) A multiple-server queuing model has three servers with a mean service time of five customers per server per hour.It has been determined that arrivals will average 12 per hour.Arrivals follow a Poisson distribution and service times follow an exponential distribution.
a.Calculate the probability that all three service channels are idle.
b.Determine the probability of five customers in the system.
c.Determine the average number of customers waiting for service.
d.Determine the average number of customers in the system.
e.Determine the average time a customer spends waiting for service.
f.Determine the average time a customer spends in the system.
g.Determine the probability an arriving customer will wait for service.
Q2) A university bookstore opens a booth and buys back used books during final exam week.From 9 to 12 in the morning students arrive at the rate of 35 per hour on average.The bookstore employee can service an average of 40 students per hour.
a.What is the average length of the line?
b.What is the average time (in minutes) a student spends in the bookstore (system)?
c.What is the chance that the bookstore employee will be idle?
Q3) Describe at least four queue disciplines.
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Chapter 21: Modeling Using Linear Programming
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Q1) Constant terms in the objective function are called object function ____.
A)Variables
B)Decision solutions
C)Coefficients
D)Constraints
Q2) The transportation problem is a special type of linear programming that arises in planning the distribution of goods and services from only one supply point to several demand locations.
A)True
B)False
Q3) Since price is usually set by market conditions, the blending problem use of linear programming attempts to meet demand at minimum cost.
A)True
B)False
Q4) The term 'programming' is used in linear programming because these models find the best 'program' or course of action to follow.
A)True
B)False
Q5) Explain the essence of a blending problem.
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Chapter 22: Simulation
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Q1) Differentiate and explain the importance of verification and validation.
Q2) Explain the major differences between a fixed-time and a next-event simulation model.Include advantages and disadvantages of each.
Q3) Discuss a simulator.How does it differ from simulation software such as ProcessModel?
Q4) 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
Q5) Define simulation and give some operations management examples.
Q6) A computer implementation free from logical errors and bugs refers to
A)Verification
B)Validation
C)Simulation
D)ProcessModel
Q7) A simulator is a general purpose simulation model.
A)True
B)False
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Chapter 23: Decision Analysis
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Q1) The expected value criteria is a good tool if
A)The decision will be made only one time
B)The decision will be made over-and-over again
C)The decision will be made under conditions of certainty
D)The decision has to be made quickly
Q2) Decision analysis situations often have multiple objectives.
A)True
B)False
Q3) Which of the following is not a similarity between a decision matrix and a decision tree?
A)Time
B)States of nature
C)Alternatives
D)Probabilities
Q4) The minimax regret approach is neither aggressive nor conservative.
A)True
B)False
Q5) Define the four major elements of a decision problem.
Q6) Explain the Expected Value of Perfect Information (EVPI) and how it helps a decision-maker.
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