SUPPLY CHAIN MANAGEMENT EXAM #2 SOLVED
Procurement - correct answer Tactical aspect of the buy process; The purchase of
merchandise or services at the optimum total cost, the correct quantity, time and quality;
Day to day purchasing function
Strategic Sourcing - correct answer The institutional process that continuously
reevaluates and improves the purchasing activities of a company; focuses on improving
Supplier Scorecard - correct answer Monitor performance across multiple metrics over
extended time period; Categorize suppliers based on their scores; offer additional
business to best performers
Outsourcing - correct answer Purchasing a product, part, or component from an outside
supplier vs. Manufacturing it in-house; the act of moving a firm's internal activities and
decision responsibility to outside providers; requires a "make or buy" analysis
Costs and Challenges of Outsourcing - correct answer Insufficient supply, poor quality
supply, expensive supply, long lead-time of supply
Production - correct answer Process by which the inputs are combined and transformed
into outputs; we can produce both goods and services
3 Key Components of Production - correct answer How much output to make, which
transformation process to use, how much of each input is required
Lean Production - correct answer A business model that emphasizes eliminating waste
while delivering quality products at the least cost to the manufacturer and customers.
Objectives of Lean Production - correct answer Reduce production resource
requirements, increase manufacturing velocity and flexibility, improve quality and
eliminate defects
Mass Customization - correct answer Using specific details the customer gave to
produce their unique product
Project Layout - correct answer Fixed location layout where the product remains in
place for the duration of production; typically used to build a one-of-a-kind product;
production activities revolve around a fixed location (ex: assembly of a cruise ship)
Factors of Project Layout - correct answer o Facility size: At customer site
O Process Flow: Independent activities
O Speed: Slow
O Run Length: Unique events
O Labor content: Very high
O Skill level: High
, O Material requirements: Somewhat predictable
O Scheduling: Uncertain, frequent changes
O Challenges: Estimating completion time, managing critical activities
Workcenters - correct answer Process-focused layout that groups together similar
equipment or functions
Factors of Workcenters - correct answer o Facility size: Usually small
O Process Flow: Many patterns
O Speed: Slow
O Run Length: Short
O Labor content: Very high
O Skill level: High
O Material requirements: Hard to predict
O Scheduling: Uncertain, frequent changes
O Challenges: Estimating labor utility, debottlenecking fast response
Manufacturing Cells (Plant within a Plant) - correct answer Process-focused layout that
dedicates production areas to a narrow range of products with similar requirements (ex:
factory that builds safety products for cars)
Factors of Manufacturing Cells - correct answer o Facility size: Moderate
O Process Flow: Dominant patterns
O Speed: Moderate
O Run Length: Moderate
O Labor content: Varies
O Skill level: Mixed
O Material requirements: More predictable
O Scheduling: Varies, frequent expediting
O Challenges: Balancing stages, responding to diverse needs
Assembly Line - correct answer Product-focused layout; machines and workers are
arranged according to the progressive sequence of operations needed to make high
quality products; benefits = cost efficient, eliminate cross-flows and backtracking, limit
work-in-process, streamline production time
Factors of Assembly Line - correct answer o Facility size: Often large
O Process Flow: Rigid pattern
O Speed: Fast
O Run Length: Long
O Labor content: Low
O Skill level: Low
O Material requirements: Predictable
O Scheduling: Fixed
O Challenges: Productivity improvement, occasional rebalancing
Procurement - correct answer Tactical aspect of the buy process; The purchase of
merchandise or services at the optimum total cost, the correct quantity, time and quality;
Day to day purchasing function
Strategic Sourcing - correct answer The institutional process that continuously
reevaluates and improves the purchasing activities of a company; focuses on improving
Supplier Scorecard - correct answer Monitor performance across multiple metrics over
extended time period; Categorize suppliers based on their scores; offer additional
business to best performers
Outsourcing - correct answer Purchasing a product, part, or component from an outside
supplier vs. Manufacturing it in-house; the act of moving a firm's internal activities and
decision responsibility to outside providers; requires a "make or buy" analysis
Costs and Challenges of Outsourcing - correct answer Insufficient supply, poor quality
supply, expensive supply, long lead-time of supply
Production - correct answer Process by which the inputs are combined and transformed
into outputs; we can produce both goods and services
3 Key Components of Production - correct answer How much output to make, which
transformation process to use, how much of each input is required
Lean Production - correct answer A business model that emphasizes eliminating waste
while delivering quality products at the least cost to the manufacturer and customers.
Objectives of Lean Production - correct answer Reduce production resource
requirements, increase manufacturing velocity and flexibility, improve quality and
eliminate defects
Mass Customization - correct answer Using specific details the customer gave to
produce their unique product
Project Layout - correct answer Fixed location layout where the product remains in
place for the duration of production; typically used to build a one-of-a-kind product;
production activities revolve around a fixed location (ex: assembly of a cruise ship)
Factors of Project Layout - correct answer o Facility size: At customer site
O Process Flow: Independent activities
O Speed: Slow
O Run Length: Unique events
O Labor content: Very high
O Skill level: High
, O Material requirements: Somewhat predictable
O Scheduling: Uncertain, frequent changes
O Challenges: Estimating completion time, managing critical activities
Workcenters - correct answer Process-focused layout that groups together similar
equipment or functions
Factors of Workcenters - correct answer o Facility size: Usually small
O Process Flow: Many patterns
O Speed: Slow
O Run Length: Short
O Labor content: Very high
O Skill level: High
O Material requirements: Hard to predict
O Scheduling: Uncertain, frequent changes
O Challenges: Estimating labor utility, debottlenecking fast response
Manufacturing Cells (Plant within a Plant) - correct answer Process-focused layout that
dedicates production areas to a narrow range of products with similar requirements (ex:
factory that builds safety products for cars)
Factors of Manufacturing Cells - correct answer o Facility size: Moderate
O Process Flow: Dominant patterns
O Speed: Moderate
O Run Length: Moderate
O Labor content: Varies
O Skill level: Mixed
O Material requirements: More predictable
O Scheduling: Varies, frequent expediting
O Challenges: Balancing stages, responding to diverse needs
Assembly Line - correct answer Product-focused layout; machines and workers are
arranged according to the progressive sequence of operations needed to make high
quality products; benefits = cost efficient, eliminate cross-flows and backtracking, limit
work-in-process, streamline production time
Factors of Assembly Line - correct answer o Facility size: Often large
O Process Flow: Rigid pattern
O Speed: Fast
O Run Length: Long
O Labor content: Low
O Skill level: Low
O Material requirements: Predictable
O Scheduling: Fixed
O Challenges: Productivity improvement, occasional rebalancing
