BSM Practice Quetions & Answers

Basics of Supply Chain Management V3.0 Practice Test Answer Key

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1. Which of the following is considered a productivity system?

a. TQM b. Lean c. Six Sigma d. Statistical Process Control

b. Lean – Lean and JIT are productivity systems. TQM and Six Sigma are quality management systems and Statistical Process control is a statistical method used in many disciplines.

2. Which of the following Customer expectations would be in conflict with an organizational goal of low inventory investment?

a. Short delivery lead time b. High quality levels c. High flexibility to change

specifications d. Low cost

a. Short delivery leadtime is most commonly achieved by carrying safety stock.

3. Which of the following is not an element of product performance?

a. Durability b. Maintainability c. Changeability d. Reliability

c. The other three are listed as elements.

4. “Voice of the Customer” refers to which of the following?

a. All customer feedback received through customer service

b. Marketing’s summary of customer concerns

c. The exact customer’s words d. Customer responses to a satisfaction

survey

c. Voice of the customer is most commonly associated with unedited customer feedback.

5. The primary use for the House of Quality is a. To relate customer‐defined

attributes to technical features b. To define the structure of the quality

organization c. To define a framework for

understanding Lean Production d. To collect customer opinions about

product satisfaction

a. This is the primary function of the HofQ. Choices b and c are unrelated to HofQ. Option d, although one element of the HofQ diagram, is not the primary function of the exercise.



6. Which of the following is NOT a benefit of statistical Process control?

a. It adds value for the customer b. It eliminates cost c. It allows good product to be sorted

from bad d. It finds the cause of variation before

bad product is made

c. SPC is used to control a process so that bad product is not created. Option c describes inspection.

7. Which of the following defines waste? a. Anything that adds cost to the

product b. Anything that does not add value in

the eyes of the customer c. Anything that requires special

handling d. Anything that cannot be automated

b. In JIT/Lean literature, waste is defined as any activity that does not add value, as perceived by the customer. Option a. would include activities that do add value. Options c and d are not related to waste in JIT/Lean.

8. Which of the following is not an element of the House of Toyota?

a. Heijunka b. Jidoka c. Kaizen d. Taguchi

d. Taguchi methods are statistical methods developed by Genichi Taguchi to improve the quality of manufactured goods, but are not specifically part of the House of Toyota.

9. Which of the following is one of the eight generally accepted categories of waste?

a. Inspection b. Underproduction c. Unused people skills d. Material shortages

c. Although the other three options may be elements of the categories, only c is one of the categories of waste.

10. Which of the following is true about Heijunka?

a. It builds according to the actual flow of customer orders

b. It does not build according to the actual flow of customer orders

c. It builds according to the maximum flow of customer orders

d. It builds according to the minimum flow of customer orders

b. It does not build according to the actual flow of customer orders. It takes the total volume of orders in a period and levels them out so the same amount and mix are being made each day.



11. All of the following are benefits of mixed‐model scheduling EXCEPT

a. Labour requirements are stabilized b. Inventory is minimized c. Manufacturing efficiency is

maximized d. Demand on upstream suppliers is

smoother

c. Mixed‐model scheduling depends on frequent setups, which on its own would decrease manufacturing efficiency.

12. A facility, function, department, or resource whose capacity is less than the demand placed upon it is a

a. Constraint b. Bottleneck c. Capacity Constrained Resource d. Drum

b. Per the Theory of Constraints, this is the definition of a bottleneck. The other three are alternative names for a constraint, which does not necessarily have less capacity than demand.

13. In throughput accounting, throughput is defined as

a. The rate at which a company generates money through sales of a product

b. The rate at which the production line generates products

c. The length of time from when material enters a production facility until it exits

d. The length of time between payment to a supplier, and receipt of payment from a customer

a. In the Theory of Constraints, throughput is recognized when money is generated from sales, not when the product is produced.

14. Which TOC plant type would be best suited to production of custom office furniture?

a. V b. A c. T d. I

c. components and subassemblies flow into several different end configurations of furniture in a many‐to‐many relationship.

15. Each of the following is one of the five focusing steps in Theory of Constraints EXCEPT

a. Identify the constraint b. Exploit the constraint c. Minimize the constraint d. Start over

c. the Five steps are • Identify the constraint • Exploit the constraint • Subordinate everything else to the

constraint • Elevate the constraint • Start over



16. In Theory of Constraints, the “rope” refers to which of the following?

a. The schedule established at the constraint

b. The inventory in place to support throughput performance

c. The information flow from the constraint to material release

d. The signal to ship the customer

c. From the TOC reference material.

17. A production line’s least productive work center produces at 800 pieces per day, and market demand is 500 pieces per day. Which of the following is true?

a. The work center is a capacity‐constrained resource

b. The work center is a bottleneck c. The market is a constraint d. The market is a bottleneck

c. Because market demand is significantly below the production line’s capacity, the market is restricting the line’s ability to produce more goal units.

18. All of the following are ways to exploit the constraint EXCEPT

a. Stagger work breaks to run the resource continuously

b. Reduce the inventory queue in front of the resource

c. Ensure material quality is good before it goes into the resource

d. Schedule time for preventive maintenance to ensure maximum availability

b. A queue of inventory should be maintained ahead of the constraint to ensure the resource is never idle waiting for material

19. Which of the following is not a type of buffer in Theory of Constraints?

a. Stock buffers b. Quality buffers c. Protective capacity d. Time buffers

b. “Quality” is not a type of buffer defined in Theory of Constraints.

20. Which of the following is not a method used to elevate the constraint?

a. Add new equipment b. Make productivity improvements c. Reduce the inventory queue in front

of the resource d. Reorganize

c. Elevating the constraint refers to increasing the throughput of the constraint. Reducing the inventory queue is not a method to increase throughput.



21. According to throughput accounting, when is value recognized by an organization?

a. When the product is put into finished goods inventory

b. When the product is shipped to the customer

c. When the product is backflushed d. When the product is sold

d. Throughput accounting assumes that value is recognized only when something is SOLD.

22. Theory of Constraints relies on three global measures for financial analysis of business decisions. Those three measures are

a. Throughput, Investment, Operating Expense

b. Throughput, Inventory, Overhead Expense

c. Throughput, Investment, Overhead Expense

d. Throughput, Inventory, Operating Efficiency

a. T I & OE, as defined by the Theory of Constraints.

23. The process of combining statistical forecasting techniques and judgement to construct demand estimates for products or services across the supply chain from the supplier’s raw materials to the consumer’s needs is called

a. Delphi Method b. Seasonal Forecasting c. Sales and Operations Planning d. Demand Planning

d. Per the supplemental definitions in the 2009 Exam Content Manual for BSCM.

24. In lean, the resource that is scheduled based on the customer demand rate for that specific value stream is known as the

a. Kanban b. pacemaker c. bottleneck d. constraint

a. Per the supplemental definitions in the 2009 Exam Content Manual for BSCM.

25. A sales person promises immediate delivery to a customer in order to provide a high level of customer service. This in conflict with objective?

a. Maximizing production efficiency b. Minimizing cost c. Minimizing inventory investment d. All of the above

d. Any of the objectives listed may have to be compromised to meet the stated objective. Option a would occur if production lines had to be interrupted to expedite orders, option c would be compromised by the need to carry finished goods safety stock, and option b would be compromised by both of these options.



26. The critical chain method would be most applicable to which of the following processes?

a. Financial management b. Project Management c. Supply chain management d. Demand Management

b. Critical Chain method—In the theory of constraints, a network planning technique for the analysis of a project’s completion time, used for planning and controlling project activities.

27. All of the following are aspects of green manufacturing EXCEPT

a. Design for disassembly b. Design for maintainability c. Design for remanufacture d. Design for reuse

b. Design for Maintainability is not one of the listed aspects of green manufacturing.

28. Which production environment is most appropriate for a company whose products are in the decline phase?

a. Make to stock b. Make to order c. Assemble to order d. Engineer to order

b. Since demand is declining, making products only when there is a customer order avoids the risk of obsolete inventory.

29. An “engineer to order” environment would be most appropriate for a company with products in which product lifecycle phase?

a. Introduction b. Growth c. Maturity d. Phase‐out

a. in the introduction phase, future demand is uncertain and engineering changes are likely, so the risk of obsolete inventory is high.

30. In a make or buy analysis, the cost to make the product should be compared to

a. The purchased cost b. The product cost c. The landed cost d. The standard cost

c. landed cost includes product cost, logistics cost & duties or fees incurred.

31. Which of the 4 P’s would marketing management use to make decisions about the most appropriate delivery channels?

a. Product b. Price c. Promotion d. Place

d. Place refers to placing the product in the correct delivery channels. For example, will the products be sold online, through a catalogue, or from a retailer? What delivery speed does the market demand? What delivery modes are available and appropriate? e.g., some products may need to be offered through more than one channel – books online and bookstores – different market segments.



32. Mean absolute deviation can be used to analyze forecast error and plan safety stock by

a. Evaluating the minimum and maximum forecast error

b. Determining how closely the distribution of error is concentrated around the average

c. Comparing the number of stockouts to total sales

d. Tracking the bias of the forecast error

b. MAD is not used to address the other three issues.

33. Which of the following is NOT true about exponential smoothing forecasts

a. It is a type of weighted moving average forecast

b. It uses a smoothing constant to provide weighting to the most recent period’s results

c. It requires a relatively small amount of historical data

d. A smaller smoothing constant would make the forecast more responsive to recent changes

d. A larger smoothing constant applies more weight to the most recent demand. New forecast = α(latest demand) + (1‐α)(previous forecast)

34. Which capacity management technique is used to validate the Master Schedule?

a. Resource Planning b. Rough Cut Capacity Planning c. Capacity Requirements Planning d. Input/Output Control

b. RCCP is used to validate the Master Schedule.

35. Which priority management technique is concerned with product groups or families?

a. Sales & Operations Planning b. Master Scheduling c. Material Requirements Planning d. Production Activity Control

a. The other three techniques are used for increasing detail of the product structure.

36. Which of the following is NOT an output of MRP?

a. Planned Purchase Releases b. Planned Shop Releases c. Planning Parameters d. Action Notices

c. Planning parameters are an input to the MRP.



37. The category of inventory management that is concerned with business level impacts is

a. Item inventory b. Distribution inventory c. Work in process inventory d. Aggregate inventory

d. The other options are operational level issues.

38. A company has 1,000 units on hand, and annual usage is 24,000. There are 240 work days in the year. The inventory days of supply on hand is

a. 10 b. 24 c. 42 d. 100

a. Average daily usage = 24,000/240=100 DoS = 1000/100 = 10 days of supply

39. The sequence of customers who in turn consume the output of each other is called the

a. Supply Chain b. Supply Network c. Customer Chain d. Customer Network

c. Per the APICS Dictionary definition.

40. All of the following are reasons for using public warehouses EXCEPT

a. Accommodating seasonal demand b. Servicing regional requirements c. Adjusting warehouse capacity

quickly to handle new product introductions

d. Servicing high‐volume, mature markets

d. This option would most commonly use private warehouses.

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BSM Practice Quetions & Answers