Basics of Supply Chain Management

1. Which of the following is generally a function of the physical distribution

system?
A. Production activity control
B. production planning
C. packaging
D. bill of material
2. A forecast is typically more accurate for
A. Groups of items rather than for individual items
B. Daily rather than monthly periods of time
C. Physical units rather than monetary units
D. Far out in the future rather than nearer time periods
3. A companys strategic plan:
A. Provide the manufacturing plan for families of end items
B. Outlines the sales plan for the next year
C. Is a statement of goals and objectives for a long-range period?
D. Outlines new products for the next year.
4. For a given product , the line haul cost is $1.50 per mile. The product will move
400 miles . If 40,000 pounds are being shipped, what is the cost per hundred
weight?
A. 1.00
B. 1.50
C. 2.00
D. 2.50
5. The annual cost of goods sold for a company is $40 million and the average
inventory is $10 million, By how much the inventory need to be reduced to have
annual inventory turns equal 20 turns?
A. $2 million
B. $4 million
C. $6 million
D. $8 million
6. According to the EOQ formula, if the ordering costs for an item are greatly
reduced , what is the likely impact on the quantity ordered?
A. Order multiples will increase
B. Order quantities will increase
C. Order multiples will decrease
D. Order quantities will decrease

7. A work center has 4 machines available for 8 hours per day, 5 days per week.
The work center is utilized 100 hours but produces 120 hours of standards work.
The efficiency of the work center is:
A. 50%
B. 62.5 %
C. 75 %
D. 120 %
8. Which of the following will affect available capacity?
Product specifications
Product mix
Quantity of customer order
Work pace
A.
B.
C.
D.

1,2 and 3.
1,2 and 4.
2,3 and 4.
1,3 and 4.

9. Which of the following are inputs to the Material Requirements Planning

system?
Master Production Schedule
Inventory records
Production Plan
Bill of Materials
A.
B.
C.
D.
10.

1,2 and 3.
1,2 and 4.
2, 3 and 4.
1,2,3 and 4.

Week
Customer Orders
MPS
ATP

1
60
110
20

2
30

3
20
110
50

4
40

Based on the above, what action can the planner take regarding an order for 60
in week 3?
A. Reject the order for 60; tell the customer 50 are available.
B. Accept the order for week 4 for 60
C. Accept the order for week 2 for 60
D. Accept the order for week 3 for 60
11. Which of the following manufactured product types are best suited for the
flow manufacturing?
A. Wide range of disparate products

B. Limited range of similar products

C. Low volume of similar products
D. High volume of disparate products
12. You are working as a Master Scheduler in a discrete manufacturing company.
A large customer has asked if you can deliver an order, but you have some short
term capacity coantraints. Which of the following actions could be taken so the
order can be delivered?
People could be hired
Overtime could be worked
Inventory could be built in the slow times
Work could be subcontracted
A.
B.
C.
D.

1,2 and 3.
2,3 and 4.
1,3 and 4.
1,2 and 4.

13. A company wants to produce at a level rate. Based on the following

information , what production rate will provide a projected inventory of 20 at the
end of period five?
Period
1
Forecast Demand 20
Planned Production
Planned Inventory 10
A.
B.
C.
D.

2
10

3
15

4
15

5
10

14
15
16
17

14. The last operation is scheduled for completion on the due date. Other
previous operations are scheduled so that the due date can be met. This
describes:
A. backward scheduling
B. master scheduling
C. capacity scheduling
D. forward scheduling

Ans:
1-c
11-b

2-a
3-c
12-d 13-c

4-b
5-d
14-a

6-d

7-d

8-b

9-b

10-d