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Basics of

Supply Chain Management

Practice Questions

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Acknowledgments
APICS has developed these practice questions for the Basics of Supply Chain
Management examination program. This test is composed of questions that have
been developed with the help of two APICS chapters and subject matter experts.
It includes 60 questions similar to those found in the certification exam. The
questions were reviewed and edited to ensure accurate content and consistency
by the Basics of Supply Chain Management Committee of the Curricula and
Certification Council. The test is accompanied by an answer key as well as text
references with specific page numbers for further study.
APICS acknowledges those who put in the time and effort to make these practice
questions possible.

Basics of Supply Chain Management Committee


Steve Chapman, Ph.D., CPIM
Tony Arnold, CFPIM, CIRM
John H. Collins, CPIM
Daniel Steele, Ph.D., CPIM
Jim Caruso, CPIM
Eileen Game, CFPIM, CIRM
Nancy Ann Varney, CPIM
Richard L. Bragg, CPIM

Orange County Chapter


Jerry Wesserling, CPIM
Roly White, CFPIM
Toronto Chapter
Al Buckey, CFPIM, CIRM
Harry Pryer, CPIM, CIRM
CPIM Test Development Committee
Paul Bernard, CFPIM, CIRM

Basics of Supply Chain Management


Practice Questions
1.

Which of the following demand fulfillment approaches typically provides the


longest delivery time?
(a)
(b)
(c)
(d)

2.

Which of the following is generally a characteristic of a product-focused


layout?
(a)
(b)
(c)
(d)

3.

production activity control


production planning
packaging
bill of material

A forecast is typically more accurate for


(a)
(b)
(c)
(d)

5.

large queues at workstations


fixed flow of work
production to a work order
general purpose workstations

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


system?
(a)
(b)
(c)
(d)

4.

engineer-to-order
make-to-order
assemble-to-order
make-to-stock

groups of items rather than for individual items


daily rather than monthly periods of time
physical units rather than monetary units
far out in the future rather than nearer time periods

Which of the following is most likely to be a dependent demand item?

6.

(a) a manufactured subassembly


(b) an item in a grocery store
(c) a service part
(d) an office supply item
The master production schedule is generally a direct input to
(a)
(b)
(c)
(d)

production planning
material requirements planning (MRP)
purchasing planning
production activity control (PAC)

Item 7 is based on the following data.


Beginning inventory = 200 units
Ending inventory = 200 units
Sales forecast:
Month
1
2
3
4
Quantity 200 300 200 400
7.

What is the required monthly production to achieve level production?


(a)
(b)
(c)
(d)

8.

5
300

220 units
240 units
280 units
340 units

Which of the following identifies the demand for capacity at a work center in
a specific time period?
(a)
(b)
(c)
(d)

bill of labor
dispatch list
scheduled receipts
work center load

Items 9 and 10 are based on the following indented bill of material.


Level
0

Part
A

Quantity per
not applicable

1
2
2
1
1

9.

B
C
E
C
G

2
2
2
4
4

How many units of part C are required to produce one unit of part A?
(a)
(b)
(c)
(d)

2
4
6
8

10. Which of the items in the bill of material are parents?


(a)
(b)
(c)
(d)

A only
B, C, and G only
A and B only
A, B, C, and G only

11. The setup time for an operation is two hours and the run time is 10 minutes
per piece. The scheduled operation time for 100 units is
(a)
(b)
(c)
(d)

130 minutes
1,000 minutes
1,100 minutes
1,120 minutes

12. Material requirements planning (MRP) schedules a planned order receipt


when
(a)
(b)
(c)
(d)

a gross requirement exists


a net requirement exists
an exception is generated
safety stock is zero

13. Which of the following best describes scheduling of operations before a


bottleneck work center?
(a) Operations should be scheduled as early as possible.
(b) Work centers feeding the bottleneck should be scheduled to full
capacity.
(c) Operations should be scheduled to the rate of the bottleneck.
(d) Setup time should be reduced for operations before the bottleneck.

14. A purpose of holding extra inventory is to


(a)
(b)
(c)
(d)

allow production to select what to run


minimize the bill of material levels
reduce the number of purchased items
buffer production from demand variation

15. Which of the following provides a buffer for seasonal demand?


(a)
(b)
(c)
(d)

lot-size inventory
fluctuation inventory
anticipation inventory
decoupling inventory

16. Owners equity is


(a)
(b)
(c)
(d)

revenue less liabilities


revenue less expenses
assets less liabilities
assets less expenses

Item 17 is based on the following data.


Sales = $16 million
Cost of goods sold = $10 million
General and administrative expenses = $4 million
Average inventory = $2.5 million

17. The inventory turnover ratio is


(a)
(b)
(c)
(d)

1.5
1.6
4.0
6.4

18. An item has a lead time of six weeks and an average demand of 150 units
per week. The safety stock for the item is 300 units and the order quantity is
2,000 units. The order point for the item is
(a)
(b)
(c)
(d)

300 units
900 units
1,200 units
2,000 units

19. Which of the following is most consistent with ABC analysis and control?
(a) All items should have the same level of control.
(b) A small number of items account for a large portion of annual usage
value.
(c) Items need tight control.
(d) Perpetual inventory records are required for all items.

20. In a decentralized distribution system, the role of the central supply


organization is to
(a)
(b)
(c)
(d)

determine when to replenish stock at the distribution centers


respond to demands from the distribution centers
coordinate communications among distribution centers
forecast demand at each distribution center

21. The primary purpose of a cycle count program is to


(a) correct inventory errors
(b) result in fewer counts per year

(c) require less skilled counters


(d) identify causes of inventory errors

22. If a purchased part order is late, which of the following would be the most
likely source to determine which customer order would be affected?
(a)
(b)
(c)
(d)

where-used report
planning bill
routing
pegging report

23. Which of the following best describes the use of bills of material in planning
systems?
(a)
(b)
(c)
(d)

for the engineering design


for lot sizing
the process to make the item
how the product is built

Item 24 is based on the following data.


Periods:
Forecast:
Actual demand:

1
20
22

2
20
18

3
30
25

4
20
20

5
25
19

24. The mean absolute deviation (MAD) for the data given is
(a)
(b)
(c)
(d)

2.2
3
11
15

25. How many of what products are needed and when products are needed are
questions of which of the following?
(a) priority
(b) capacity
(c) revenue

(d) margins

26. The end items and quantities to be produced by period are defined by which
of the following?
(a)
(b)
(c)
(d)

strategic business plan


production plan
master production schedule
dispatch list

27. A primary advantage of electronic data interchange (EDI) with suppliers is


that it
(a)
(b)
(c)
(d)

reduces paperwork
bypasses the buyer
employs the latest technology
supports unlimited forms of communications

28. In most cases, the fastest way to increase capacity to meet a short-term
requirement is to
(a)
(b)
(c)
(d)

hire additional workers


use overtime
acquire more equipment
subcontract work

29. The demand at a workstation in a Just-in-Time system typically comes from


(a)
(b)
(c)
(d)

a pull signal
a dispatch list
the production plan
a control chart

30. Which of the following best describes a kanban system?


(a) a quality control system

(b) basically is a push production


(c) requires operator flexibility
(d) basically is a visual reorder point

31. The master production schedule (MPS) is


(a)
(b)
(c)
(d)

an anticipated build schedule


an input to the production plan
a statement of forecast demand
driven by material requirements planning

32. The balance sheet for a firm shows which of the following?
(a)
(b)
(c)
(d)

profit or loss for the period


sources and uses of funds
long- and short-term debt
cost of products sold

Item 33 is based on the following data.


Month
1
Projection 100
Demand
95

2
100
102

3
100
105

4
100
98

5
100
101

6
100
103

Total
600
604

33. The projection for the seventh month using a three-month moving average
would be
(a)
(b)
(c)
(d)

100
101
103
105

34. Which of the following links product family planning and component
planning?
(a) production planning

(b) master scheduling


(c) material requirements planning
(d) resource requirements planning

35. Which of the following production processes is most appropriate for highvolume bulk products?
(a)
(b)
(c)
(d)

project
jobbing
batch
continuous

36. Which of the following detects bias in a forecast model?


(a)
(b)
(c)
(d)

tracking signal
mean absolute deviation (MAD)
demand filter
standard deviation

Item 37 is based on the following data.


On-hand
Week
Forecast
Projected Avail.
MPS Receipts

100
1
200

2
200

3
200

4
200

300

300

300

100

37. The projected available at the end of Week 4 is


(a)
(b)
(c)
(d)

zero units
100 units
200 units
300 units

38. Which of the following is the most likely impact of doubling the ordering costs
for an item?
(a)
(b)
(c)
(d)

The order quantity will increase.


The order point will increase.
The order quantity will decrease.
The order point will decrease.

39. Work-in-process inventory serves to decouple which of the following?


(a)
(b)
(c)
(d)

production from suppliers


finished good inventory from customer demand
an operation from succeeding operations
production from distribution channels

40. Which of the following defines the sequence of operations to be performed to


manufacture a part?
(a)
(b)
(c)
(d)

item master
bill of material
routing
shop calendar

Items 41 and 42 are based on the following information for a single work
center.
Number of machines = 4
Number of shifts = 1
Shift length = 40 hours
Efficiency = 90%
Utilization = 90%

Actual output
Week 1 = 160 hours
Week 2 = 140 hours
Week 3 = 150 hours
Week 4 = 150 hours

41. Which of the following is the rated capacity for the work center?
(a) 130 hours
(b) 144 hours
(c) 150 hours

(d) 160 hours

42. Which of the following is the demonstrated capacity for the work center?
(a)
(b)
(c)
(d)

130 hours
144 hours
150 hours
160 hours

43. Which of the following is used to manage queues and lead times?
(a)
(b)
(c)
(d)

forward scheduling
rough-cut capacity planning
material requirements planning
input/output control

44. Which of the following is used to rank the frequency of problems?


(a)
(b)
(c)
(d)

Pareto analysis
cause-and-effect diagram
process flow diagram
root cause analysis

45. The capacity of which of the following determines the throughput of a


manufacturing process?
(a)
(b)
(c)
(d)

initial work centers


finishing work centers
overloaded work centers
underloaded work centers

46. Which of the following is used to determine the feasibility of the material
requirements plan?
(a) resource requirements planning
(b) rough-cut capacity planning

(c) capacity requirements planning


(d) work center capacity control

47. Which of the following combinations is best suited for developing customer
promise dates in the make-to-order environment?
(a)
(b)
(c)
(d)

forward scheduling and infinite loading


forward scheduling and finite loading
backward scheduling and infinite loading
backward scheduling and finite loading

48. Which of the following is a benefit to the supplier of a long-term customersupplier relationship?
(a)
(b)
(c)
(d)

an improved ability to plan


improved product quality
more frequent shipments
reduced transportation costs

49. Manufacturing has primary responsibility for which of the following


dimensions of quality?
(a)
(b)
(c)
(d)

product performance
aesthetics
conformance
aftermarket service

50. Which of the following is an advantage of point-of-use inventory over central


storage?
(a)
(b)
(c)
(d)

the ease of control


reduced material handling
the ease of maintaining inventory records
reduced safety stock

51. An important measure of an effective quality measure should be which of


the following?

(a)
(b)
(c)
(d)

easy for the user to understand


based on accounting information
developed by the Quality Department
used to evaluate individual performance

52. Total employee involvement will result in an increase in which of the following
roles for first-line supervision?
(a)
(b)
(c)
(d)

controlling
coaching
disciplining
reporting

53. Which of the following groups should be the first to receive education on total
quality management concepts?
(a)
(b)
(c)
(d)

senior management
quality inspectors
production operators
production supervision

54. Which of the following is typically characterized as an element of the supply


chain?
(a)
(b)
(c)
(d)

finance
distribution
quality control
engineering

55. Which of the following would most likely serve as an effective measure of
supplier performance?
(a)
(b)
(c)
(d)

component price
internal scrap rate
transportation mode
delivery time

56. In projecting demand for a standard design commodity, which of the


following factors is typically most important?
(a)
(b)
(c)
(d)

post-sales service
product features
quality controls
competitive pricing

57. Providing customers with what they want at low cost describes the
relationship between which of the following?
(a)
(b)
(c)
(d)

JIT and TQM


TQM and production planning
MRP II and JIT
TQM and CRP

58. Which of the following is a good measure of customer focus?


(a)
(b)
(c)
(d)

high organizational turnover


high quality levels
many performance measures
many supplier contacts

59. Which of the following is a major consideration when selecting a supplier?


(a)
(b)
(c)
(d)

supplier employee benefits


supplier forecast accuracy
supplier manufacturing reliability
supplier pre-sales marketing success

60. Which of the following is typically the largest element of physical distribution
costs?
(a)
(b)
(c)
(d)

order processing
material handling
transportation
protective packaging

Answer Key and References


Note: The content code refers to the appropriate section of the outline in the
2000 Exam
Content Manual.
Question

Answer

Content Code

Reference

IB4

2
3
4
5

b
c
a
a

III A 1
IV C
II D 2
II D 1

Introduction to Materials
Management, J.R.
Tony Arnold, 3rd edition,
Prentice Hall,
1997, pp. 3-4
APICS Dictionary, ninth edition
Arnold, pp. 328-329
Arnold, p. 195
Arnold, pp. 194-195

6
7
8
9
10

b
c
d
d
c

ID
III C 2
III B 3
III A 3
III A 3

Arnold, pp. 19-20


Arnold, pp. 30-32
Arnold, pp. 125-127
Arnold, pp. 72-79
Arnold, pp. 72-79

11
12
13
14
15

d
b
c
d
c

III D 3
III C 4
III B 4
IV A 2
IV A 2

Arnold, pp. 124-125


Arnold, p. 82
Arnold, p. 154
Arnold, p. 226
Arnold, pp. 226-228

16
17
18

c
c
c

IC1
IC3
IV A 5

Arnold, pp. 234-236


Arnold, pp. 237-238
Arnold, pp. 272-275

19
20

b
b

IV A 4
IV C

Arnold, pp. 239-242


Arnold, pp. 290-292

21
22
23
24
25

d
d
d
b
a

IV A 4
III C 4
III A 2 a
II D 2
ID1

Arnold, pp. 316-320


Arnold, p. 79
Arnold, p. 73
Arnold, pp. 209-211
Arnold, p. 16

26
27
28
29
30

c
a
b
a
d

ID2
IV B 4
III B 1
IE2
IE2

Arnold, p. 19
Arnold, p. 187
Arnold, p. 130
Arnold, pp. 401-402
Arnold, p. 402

31
32
33
34
35

a
c
b
b
d

III C 3
IC1
II D 2
ID
III A 1

APICS Dictionary, ninth edition


Arnold, pp. 234-239
Arnold, pp. 199-201
Arnold, pp. 16-25
Arnold, pp. 365-367

36
37
38
39
40

a
c
a
c
c

II D 2
III C 3
IV A 6
IV A 2
III A 3

Arnold, pp. 207-209


Arnold, pp. 48-49
Arnold, pp. 251-257
Arnold, pp. 224-226
Arnold, pp. 117-120

41
42
43
44
45

a
c
d
a
c

III B 2
III B 2
III D 4
IF2
III B 4

Arnold, pp. 120-123


Arnold, pp. 120-123
Arnold, pp. 157-159
Arnold, pp. 374-376
Arnold, pp. 151-155

46
47
48
49
50

c
b
a
c
b

III C 4
III D 1 b
IE2
IF2
IV A 4

Arnold, pp. 116-117


Arnold, pp. 146-148
Arnold, pp. 404-406
Arnold, pp. 415-416
Arnold, pp. 309-310

51
52
53
54
55

a
b
a
b
d

III D 5
IE2
IF2
IA
III E

Arnold, pp. 419-420


Arnold, pp. 405-406
Arnold, pp. 416-418
Arnold, p. 5
Arnold, pp. 419-420

56

II A

Arnold, p. 185

57
58
59
60

a
b
c
c

IG
II C
IV B
IV C 1

Arnold, p. 439
Arnold, p. 418
Arnold, p. 405
Arnold, pp. 328-330