SCM

1. A key benefit of an effective sales and operations planning (S&OP) process is that it
provides a:
A. direct and consistent dialogue between operations and senior management.
B. means to evaluate the feasibility of business plans.
C. procedure for defining product family priorities.
D. statement of production required to meet unconstrained demand.
2. Since introducing distribution requirements planning, management at a company has had increased
complaints from staff at satellite warehouses that the variances of local demand are being ignored,
and they often are unable to meet demand. An effective response from management would be to:
A. allow adjustments to the forecast based on input relating to local sales activity.
B. permit last-minute changes to the production schedule.
C. increase safety stock at the central warehouse of items that are repeatedly out of stock.
D. implement an ABC inventory management strategy.
3. Which of the following statements about both econometric models and market research is true?
A. They are examples of intrinsic forecasting techniques.
B. They are useful in forecasting at the stockkeeping unit level.
C. They are useful in aggregate planning.
D. They can be used in place of adaptive smoothing.
4. A single-level, centralized distribution network would be most appropriate for a firm whose
products are:
A. small, inexpensive, and distributed throughout the world.
B. heavy, inexpensive, and with a short required delivery time.
C. large, expensive, and with a high level of demand.
D. large, and with a long required delivery time.
5. If the master production schedule is overstated, which of the following short-term actions is most
appropriate?
A. The demand time fence should be moved out.
B. Lot sizes should be decreased.
C. Safety stocks should be decreased.
D. Firm planned orders should be rescheduled
6. Which of the following factors has the greatest effect on the length of the forecast horizon?
A. Cumulative product lead time
B. Purpose of the forecast
C. Frequency of forecast revision
D. Size of forecast period
7. Which of the following actions is best for a company to take when a 2-week plant shutdown for
retooling is planned for the next year?
A. Increase planned production.
B. Increase material requirements planning safety-stock levels.
C. Decrease the planned sales level during the shutdown.
D. Alter the strategic plan.
8. Which of the following is typically an output of the master scheduling process?
A. Sales forecasts
B. Resource requirements plans
C. Interplant demands
D. Projected available balances
9. An intensive distribution channel strategy would be most appropriate for which of the
following types of product?
A. Special tools
B. Capital equipment
C. Designer clothing
D. Carbonated beverages
10. The greatest risk of aggregating product families at too high of a level for sales and
operations planning is that:

A. it will be more difficult to reconcile the sales plans with the business plan.
B. imbalances between the demand plan and resources may not be visible.
C. the resource planning process will be more complicated.
D. the sales forecasts will not be as accurate for the larger product families
11. A tailor shop is shifting its main business from assemble-to-order to make-to-order. The
customer order decoupling point will shift:
A. from raw material to WIP.
B. from WIP to raw material.
C. from finished goods to WIP.
D. from WIP to suppliers.
12. From a management perspective, the choice of transportation mode and routing primarily will
affect the:
A. forecasted demand.
B. safety stock level.
C. manufacturing system.
D. planning horizon.
13. Which of the following considerations is valid when selecting a mode of transportation?
A. Financial viability of the supplier
B. Transit time consistency
C. Ownership of equipment
D. Age of equipment
14. In an assemble-to-order environment, which of the following factors is most significant in
determining which items should be master scheduled?
A. Length of the master schedule horizon
B. Number of levels in the bill of material
C. Number of product options
D. Size of the forecast error
15. The question below is based on the following distribution requirements plan:
D. Weeks 3,4,5

16. A company has an effective sales and operations planning (S&OP) process with monthly plans
over a 24 month horizon. The sales and marketing functions have requested that a new product
introduction be moved from the tenth month to the sixth month of the current plans which would
require a 10% increase in production for months six through nine.
Which of the following actions would be the most appropriate next step in response to the request?
A. Reject the request to move the new product release in.
B. Request reduction in other demand plans to offset the request.
C. Incorporate the request into the current plan
D. Refer the request to the Executive S&OP meeting

17. The forecast tracking signal is the ratio of the:

A. forecast to the MAD.
B. cumulative error to the MAD.
C. cumulative error to the forecast.
D. standard deviation to the MAD.

18. An outcome of top management's participation in sales and operations planning involves the:

A. delegation of trade-off resolutions to middle management.

B. investigation of detailed trade-offs by top management.
C. definition of trade-offs by top management.
D. resolution of broad trade-offs by top management.

19. The question below is based on the following production environment information:
20. In which facility would product unit costs most likely be reduced through a setup reduction
program?
A. Facility A
B. Facility B
C. Facility C
D. Facility D

21. In a make-to-order environment, if cumulative production exceeds cumulative demand, which

of the following outcomes will result?
A. Excess capacity will exist.
B. Inventory will increase.
C. The backlog will increase.
D. The backlog will decrease.

22. Which of the following techniques typically uses the bills of material for master schedule items
in determining the capacity required?
A. Advanced production scheduling (APS)
B. Bill of resources
C. Finite forward scheduling
D. Critical path method (CPM)

23. Jupiter Company produces 3,000 cars per month. It offers five different models with over 1,000
different model/option/color packages. Jupiter has established a collaborative relationship and
electronic link with its supplier of door trim. Suppliers are given 5 days' notice of requirements and
are expected to deliver directly to the final assembly area in the actual sequence in which each
specific car is to be assembled.
Jupiter needs which of the following pieces of information from its supplier of door trim?
A. Production plan
B. Sales plan
C. Availability of resources
D. Bills of material

24. The production plan relates to a firm's financial planning because it is used to:
A. calculate standard product costs.

B. determine variable costs.

C. project payroll costs.
D. identify future cash needs.

25. Which of the following would typically be a consideration in a distribution requirements

planning (DRP) environment?
A. Where to carry safety stock
B. How to monitor forecast error at central warehouse
C. Whether to use safety lead time or safety stock
D. Whether to aggregate distribution forecasts

26. Which of the following communicates in-transit inventories to a warehouse?

A. Bill of distribution
B. Master schedule
C. Order acknowledgment to warehouse
D. Distribution requirements planning

27. The resource profile approach to rough-cut capacity planning is desirable in the
manufacture of parts with lengthy lead times because the approach:
A. uses detailed data about time standards for each product at the key resources.
B. assumes that all components are built in the same period as the end item.
C. considers the historical portion of the total plant time required.