University of Houston

MBA 6205

Chapter 5 The Order Fulfillment Process: Managing the Physical Flow Infrastructure

Multiple Choice

1)The three operation functions,                        ,                     , and                    , are responsible for the “order fulfillment” process.

17. purchasing, production and quality assurance
18. material control, production, quality assurance
19. material control, production, logistics
20. purchasing, production and logistics

2. The function of                     is to transport and store goods, assuring that inbound materials are available for operations and that outbound finished products are available to the customer.

1000. logistics
14. material planning
15. purchasing
16. production

3. The non-profit organization, Supply Chain Council proposes a supply chain reference model as a business standard. All of the following processes are key elements of this model except

                   . Q) plan

18. finance
19. deliver
20. return

4. All of the following are typical steps in the purchasing process except                       .
   1. ERP information system

10. supplier selection
11. transaction management

50. relationship management

5. “Transaction management” as a part of the purchasing process includes which of the following tasks?

16. monitoring supplier improvement
17. price determination
18. evaluation S) approval

6. “Relationship management” as a part of the purchasing process includes which of the following tasks?
   17. placement of the purchase order
   18. communication
   19. performance monitoring
   20. supplier payment

7. A                      is used to clearly describe and communicate needs to sourcing and includes vital information such as item description, purchase quantity, and delivery date.
   1. MRP

10. purchase order
11. purchase requisition

50. supplier selection form

8. The authors suggest that the most important step in the purchasing process is             .
   1. transaction management

10. supplier selection
11. relationship management

50. communication

9. One major purchasing objective achieved through the supplier selection process is to

                        .

9. 1. maximize use of the ERP system
10. establish the make cost of the purchased material
11. determine candidates for future purchased material

50. identify high quality supplier candidates

10. All of the following are major steps in the supplier selection process except                 .

17. identification
18. development
19. approval
20. monitoring

11.                      relies on market forces to get suppliers to offer a low price.

17. Competitive bidding
18. Supplier selection
19. Reverse auctions
20. Negotiation

12. A “PO” is a document that specifies the terms and condition of the purchase agreement and initiates supplier                                     .

9. 1. selection
10. notification of customer interest
11. bidding

50. action to proceed

13. A                      specifies the overall terms of agreement for a given time period, often 1 or more years and the total quantity purchased.

17. selection approval
18. expedite order
19. limited purchase order
20. blanket order

14. A                     is often used instead of a purchase order for small-dollar purchases that the endcustomer can use to purchase material and is similar to a credit card.

1. purchase index card
2. verbal authorization
3. p-card
4. MRP directive

15. In a well-managed purchasing department, expediting a purchase order occurs typically on a

                    percentage of material shipments.

1. 17. large
   18. small
   19. routine
   20.  

16. The purpose of penalty clauses in purchasing agreements is to                   .

1. assure the financial stability of the supplier
2. stock inventory at the supplier
3. require the supplier to comply with mandatory cost reduction efforts
4. avoid supplier delivery problems

17. Supplier certification suggests that the supplier                .
    • meets the requirements of an international standard
    • meets government regulations for the commodity
    • has achieved on-time delivery requirements

D) is capable of consistently shipping high quality material

18. Dock-to stock refers to                        . Q) a just-in-time material delivery process
    18. supplied material requires inspection than movement to the stockroom
    19. supplied material is directed to stock and not the manufacturing floor
    20. the normal process flow of procured material

19. The text refers to four practices that are elements of a strong supplier performance monitoring process. They include all of the following except                                     .
    1. 17. contract information
       18. technology improvements of the commodity
       19. part type or commodity information
       20. current status of the PO

20. Knowledge management is a purchasing skill that modern sourcing professionals require and would include one of the following                                   . I) new commodity technology

10. alternative designs
11. supplier capacity and capabilities

50. downstream processes

21. Process management is a purchasing skill that modern sourcing professionals require. All of the following are elements of supplier process management except                                  .

1. improvement of the sourcing process
2. manage collaborative processes
3. initiate supplier development efforts
4. minimize purchasing costs

22.                      creates value for customers by transforming capital, technology, labor, and materials into more highly valued products and services.

1. Operations management
2. Customer service management
3. Logistics management
4. Development management

23.                     design is a manufacturing activity that refers to the technology selection and work design that is based on production volumes, financial resources, and labor cost.

1. Process
2. Product
3. Facility
4. Material

24.                      determines how much and when to make specific products.

1. Inventory control
2. Forecasting
3. Scheduling
4. Quality control

25.                      provides an estimate of what products need to be produced and when they need to be produced.

1. Inventory control
2. Forecasting
3. Scheduling
4. Quality control

true/false

26. A major element of the Toyota production system is JIT.  

27. Usually a JIT manufacturing system improves productivity AND reduces waste.  

28. The principles of 5S prevented Toyota from achieving lean production.  

29. A major goal of lean operations is to identify and eliminate waste.  

30. Reduction of inventory often creates a risk to lean operations.  

31. The Japanese term, Jidoka suggests that only manufacturing management can stop the production line.  

32. The text suggests that lean practices and principles should be practiced upstream by its critical suppliers.  

33. A “pull” or “kanban” system of manufacturing is driven by the amount of received inventory.  

34. A “kanban” system is a visual system that triggers production only when parts are needed downstream.  

35. One of the benefits of outsourcing is that it permits a business to invest in a few specific skills while relying on outsource partners to perform other vital activities.  

36. Logistics is the art and science of moving things from one point to another and storing them along the way.  

37. Distribution management is concerned with the inbound movement and storage of raw materials, purchased components and subassemblies.  

38. Materials management focuses on the outbound transportation and storage of finished products from the point of manufacture to where customers wish to acquire them.  

39. Dwell time ratio evaluates the number of days inventory sits idle compared to the number of days the inventory is moving..  

40. Customer service in logistics focuses on understanding what customers want and measuring logistics performance against these customer requirements.  

41. The order fulfillment cycle consists of order entry, order picking, packaging, and shipment.  

42. Logistical managers can select from six general modes of transportation: rail, motor carrier, pipeline, airplane, ship, or cyberspace.  

43. The term LTL related to truck transportation is defined as a full truckload.  

44. Distribution centers are used when many different items from diverse production sites are to be stored in a single location.  

45. It is typical for warehouses and distribution centers to perform light manufacturing or assembly.  

46. Third-party logistics (3PL) is the insourcing of a business’s logistics operations.  

47. Logistics’ main role is to manage storage and transportation to achieve outstanding levels of order fulfillment.  

48. Purchasing converts sourced inputs into a product or service that customers value.  

49. Making and delivering a valued product or service is the responsibility of purchasing, customer service, and logistics.