Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
1. Projects have certain characteristics that make them unique compared with other forms of work.
a.
True
b.
False
True
Easy
Analytic
2. Because a project usually has a defined scope with agreed-upon tasks, responsibilities, and deliverables, it is often more
difficult to measure project success compared with other types of work.
a.
True
b.
False
False
Moderate
Analytic
3. The planning phase of a project is particularly critical because there is a strong correlation between effective planning
and successful project outcomes.
a.
True
b.
False
True
Easy
Analytic
4. The advantage of a Gantt chart is that for larger projects, it can be easy to use and keep up to date.
a.
True
b.
False
False
Moderate
Analytic
5. Each activity in PERT has three time estimates: (1) most likely, (2) pessimistic, and (3) optimistic.
a.
True
b.
False
6. In a CPM or PERT project, a network is a graphical representation that shows how each individual activity relates in
time and sequence to all other activities.
a.
True
b.
False
7. The longest path (in time) through a PERT network is the critical path.
a.
True
b.
False
True
Moderate
Analytic
8. Activities without any slack in a PERT network are by definition on the critical path.
a.
True
b.
False
9. Activities on the critical path in a PERT network will have slack.
a.
True
b.
False
False
Easy
Analytic
10. If learning occurs at a supplier during the performance of a purchase contract, and the buyer does not take that into
account, then the supplier will not reap the financial benefits that result from learning.
a.
True
b.
False
False
Moderate
11. In collaborative relationships, buyers and suppliers can work together to mutually share the benefits of learning curves
and productivity improvements.
a.
True
b.
False
True
Easy
Analytic
12. The work force factor of the learning curve refers to the ability of the worker on the job to learn and improve through
repetitive effort and increased efficiency, but not the effort by management to pursue productivity gains.
a.
True
b.
False
False
Moderate
Analytic
13. Offering a supplier a longer-term contract with guaranteed volumes encourages investment in equipment that results in
lower production costs.
a.
True
b.
False
True
Easy
Analytic
14. All processes or items can benefit from, or exhibit improvement from, learning.
a.
True
b.
False
False
Easy
Analytic
15. Learning curve analysis is appropriate when a supplier uses a new production process or produces an item for the first
time.
a.
True
Analytic
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
b.
False
True
Easy
Analytic
16. Learning curves require the accurate collection of cost and labor data, particularly during the latter stages of
production.
a.
True
b.
False
False
Easy
Analytic
17. Learning-curve analysis highlights a key reason why many purchasers consolidate purchase volumes with fewer
suppliers.
a.
True
b.
False
True
Easy
Analytic
18. Value analysis traditionally applies to tangible products, and there are many reasons why companies cannot VA
techniques to services.
a.
True
b.
False
False
Easy
Analytic
19. The primary objective of value analysis is to increase the value of an item or service at the lowest cost without
sacrificing quality.
a.
True
b.
False
True
Easy
Analytic
20. When using quantity discount analysis, the key calculation is the incremental cost of each additional unit at different
quantity levels.
a.
True
b.
False
True
Easy
Analytic
21. Most processes do not cross functional boundaries.
a.
True
b.
False
False
Easy
Analytic
22. When a process crosses functional boundaries, there is a risk that no one actually owns or takes responsibility for the
entire process.
a.
True
b.
False
True
Easy
Analytic
23. Organizations should not use process mapping to redesign or reengineer processes.
a.
True
b.
False
False
Easy
Analytic
24. Many organizations are attempting to develop new products concurrently rather than sequentially, which not only
saves time and money but also allows agreement on major issues early in the process.
a.
True
b.
False
True
25. Because so few processes move across functional boundaries, it is illogical to have those groups connected with the
process involved with mapping and improving the process.
a.
True
b.
False
False
Moderate
Analytic
26. By identifying unnecessary steps and resources, value stream mapping streamlines processes for greater efficiency.
a.
True
b.
False
True
Easy
Analytic
27. Non-value-adding actions and resources are those actions in a process that must be done to make the product but
create no value for the customer.
a.
True
b.
False
28. A/An _____ is a series of tasks that requires the completion of specific objectives within a certain time frame; has
defined start and stop dates; consumes resources, particularly time, personnel, and budget; and operates with limited
resources.
a.
process
b.
work order
c.
purchase order
d.
project
e.
team charter
Moderate
Analytic
29. All of the following are points that should be considered before initiating a project except _____.
a.
make sure the objectives and outcomes are championed by senior executive management
b.
measure subjectively
c.
place the program under the leadership of people with skill, credentials, and credibility
d.
establish an effective governance process with a cross-functional team
e.
break down the project into phased deliverables
Moderate
Analytic
30. Which of the following is not one of the six phases of a project?
a.
Precompletion.
b.
Project definition.
c.
Preliminary studies.
d.
Performance.
e.
Post-completion.
31. All of the following are characteristics of the post-completion phase of a project except _____.
a.
confirm that the final project meets the expectations of management or customers
b.
reassign project personnel to other positions or other projects
c.
restore any used equipment and facilities to their original status
d.
conduct a post-implementation meeting to discuss the strengths and weaknesses of the project
e.
identify broad budget, personnel, and resource requirements for future projects
32. A _____ visually displays the tasks and times associated with a project and consists of a horizontal bar chart with
activities listed vertically and times or dates displayed horizontally.
a.
PERT tool
b.
Gantt chart
c.
CPM tool
d.
TCO chart
Analytic
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
e.
networking tool
33. Users apply _____ to projects where there is a single known time for each activity with no variance, while _____
applies to projects where time estimates are variable or uncertain.
a.
Make-buy analysis….CPM
b.
PERT….CPM
c.
Post-completion analysis….PERT
d.
CPM…PERT
e.
PERT….TCO
Moderate
Analytic
34. Which of the following is not one of the network rules for PERT/CPM?
a.
Networks start and finish at multiple events.
b.
Identify each unique activity within a project by a capital letter that corresponds only to that activity.
c.
Branch direction indicates the general progression in time from left to right.
d.
When a number of activities end at one event, no activity starting at that event may begin before all activities
ending at that event are complete.
e.
Two or more activities cannot share graphically the same beginning and ending events.
35. In a PERT network, which of the following is not one of the times shown on the chart?
a.
Early start.
b.
Late start.
c.
On time start.
d.
Early finish.
e.
Late finish.
36. In a PERT network, a/an _____ is the earliest point in time an activity can begin.
a.
late start
b.
on time start
c.
early finish
d.
early start
e.
late finish
37. In a PERT network, a/an _____ is the latest point in time an activity can begin without delaying the entire project.
a.
late start
b.
late finish
c.
early start
d.
early finish
e.
on time finish
38. In a PERT network, a/an _____ is the earliest time a project can finish given the expected activity time.
a.
late finish
b.
on time start
c.
on time finish
d.
early start
e.
early finish
39. In a PERT network, a/an _____ is the latest time an activity can finish without delaying the entire project.
a.
late start
b.
late finish
c.
on time finish
d.
early start
e.
late start
40. The _____ (in time) through a PERT network is the _____.
a.
longest path….critical path
b.
shortest path….critical path
c.
longest path….slack
d.
shortest path….slack
e.
None of the above.
Moderate
Analytic
41. In a PERT network, the difference between the _____ and the _____ is slack.
a.
early start….late finish
b.
late start….early finish
c.
early start….early finish
d.
late start….early start
e.
None of the above.
Analytic
42. In a PERT network, the difference between the _____ and the _____ is slack.
a.
late finish….early finish
b.
late start….late finish
c.
early finish….late start
d.
early start….early finish
e.
None of the above.
Moderate
Analytic
43. [A] _____ establishes the rate of improvement because of learning as producers realize direct-labor cost improvements
as production volumes increase.
a.
leverage
b.
learning curve
c.
knowledge curve
Analytic
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
d.
product life cycle
e.
short-term contract
44. When referring to learning improvement, the _____ represents a reduction in the cumulative average number of labor
hours as production doubles from a previous level.
a.
critical path
b.
slack path
c.
expected activity time
d.
learning rate
e.
early finish
45. Historically, the term _____ applies to the reduced direct-labor requirement per unit of output because of the effects of
learning, while the term _____ refers to the longer-term factors of production that systematically reduce production costs.
a.
learning curve….experience curve
b.
learning curve….infinity curve
c.
experience curve….Boeing curve
d.
experience curve….learning curve
e.
None of the above.
46. Which of the following is false regarding when to use the learning curve?
a.
Learning-curve analysis is appropriate when a supplier uses a new production process.
b.
Learning-curve analysis is appropriate when a supplier produces any item for the first time.
c.
The learning curve is appropriate when a supplier produces a technically complex item for the first time.
d.
All processes and items can benefit from or exhibit improvement from learning.
e.
The human factors present at the beginning of production must remain fairly constant over time to apply the
learning curve.
47. _____ techniques are primarily applied to existing products and services, while _____ is the application of value
principles during product or service design.
a.
Value analysis….total cost of ownership
b.
Value engineering….price analysis
c.
Value analysis….value engineering
d.
Price analysis….cost analysis
e.
Value engineering….value analysis
Moderate
Analytic
48. _____ is a way to achieve continuous performance improvement in an item, product, or service, but it is not a
technique for cheapening a product or service by lowering quality or other performance attributes below what customers
expect.
a.
Make-buy analysis
b.
Total cost analysis
c.
Price analysis
d.
Cost analysis
e.
Value analysis
49. Which of the following is not a question that value analysis teams should ask to determine if opportunities exist for
item, product, or service improvement?
a.
Are there additional uses for this product?
b.
Can we use a different color of paint?
c.
Is there a better production method to produce the item or product?
d.
If we are making an item now, can we buy it for less (or vice versa)?
e.
Are packaging cost reductions possible?
Moderate
Analytic
50. _____ is a technique used to examine the incremental changes in cost between quantities within a supplier’s price
quotation.
a.
TCO
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
b.
Price analysis
c.
Market-share pricing
d.
Competition pricing
e.
Quantity discount analysis
51. _____ is a tool that reduces processes to their component parts or activities and helps identify and then eliminate non–
value-added activities (waste) or delays within a process.
a.
Process mapping
b.
TCO
c.
PERT/CPM
d.
QDA
e.
Productivity analysis
52. A _____ is one in which the set of steps or activities that make up the activity occur one after the other.
a.
continuous process
b.
sequential process
c.
concurrent process
d.
standardized process
e.
None of the above.
53. A/An _____ consists of activities or steps that can be performed at the same time during the main flow of work.
a.
intermittent process
b.
continuous process
c.
standardized process
d.
concurrent process
e.
None of the above.
54. Which of the following is not one of the critical steps to process mapping?
a.
Search for better ways and methods to perform the tasks comprising a process.
b.
Replace sequential activities with concurrent activities whenever possible.
c.
Identify those activities that contribute to waste or add minimal value to the process and target those for
elimination.
d.
Identify the time associated with each part of a process and identify how much of that time is waste.
e.
Utilize all sequential activities whenever possible as concurrent activities are wasteful.
55. _____ is a process of visually presenting the flow of materials and information to identify wasted time and actions in a
manufacturing or service process.
a.
Make-buy analysis
b.
QDA
c.
Value stream mapping
d.
TCO
e.
None of the above.
56. According to Ohno and Toyota, _____ is a category of waste that produces items for which there are no orders.
a.
excess inventory
b.
overproduction
c.
unnecessary movement
d.
waiting time
e.
defect
57. According to Ohno and Toyota, _____ is a category of waste that occurs when employees are standing about and
inventory is at a standstill.
a.
waiting time
b.
defect
Analytic
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
c.
overproduction
d.
unnecessary movement
e.
over-processing
58. According to Ohno and Toyota, _____ is a category of waste that moves material unnecessarily or long distances.
a.
unnecessary movement
b.
over-processing
c.
defect
d.
unnecessary transport
e.
overproduction
59. According to Ohno and Toyota, _____ is a category of waste that uses more steps to produce a product than necessary.
a.
excess inventory
b.
defect
c.
unnecessary movement
d.
unnecessary transport
e.
over-processing
60. According to Ohno and Toyota, _____ is a category of waste that retains unnecessary inventory between process
steps.
a.
excess inventory
b.
overproduction
c.
over-processing
d.
waiting time
e.
None of the above.
61. According to Ohno and Toyota, _____ is a category of waste that includes any wasted motion by man or machine.
a.
overproduction
b.
unnecessary transport
c.
unnecessary movement
d.
defect
e.
None of the above.
62. According to Ohno and Toyota, _____ is a category of waste that makes the wrong product.
a.
overproduction
b.
waiting time
c.
defect
d.
unnecessary movement
e.
over-processing
63. _____ actions and resources are those that create value for the customer.
a.
Extras
b.
Non-value-adding
c.
Necessary non-value-adding
d.
Value-adding
e.
None of the above.
Easy
Analytic
64. _____ actions and resources are everything done in the process, which contribute no value to the customer, but which
they are forced to pay for when they buy the product or service.
a.
Value-adding
b.
Excess inventory
c.
Necessary non-value-adding
d.
Waiting time
e.
Non-value-adding
Chapter 12 — Purchasing and Supply Chain Analysis: Tools and Techniques
Moderate
Analytic
65. _____ actions and resources are those actions in a process that must be done to make the product but create no value
for the customer.
a.
Non-value-adding
b.
Necessary non-value-adding
c.
Value-adding
d.
Inventory surplus
e.
None of the above.
Easy
Analytic
66. In value stream mapping, the flow diagram that depicts the process and shows the times and resources used at each
step and the time delay between each step is called a/an _____.
a.
anticipated state map
b.
future state map
c.
ideal state map
d.
current state map
e.
None of the above.
67. In value stream mapping, the flow diagram that depicts process improvements to optimize the value and minimize the
non-value-added streams is called a/an _____.
a.
current state map
b.
future/ideal state map
c.
variation map
d.
anticipated state map
e.
None of the above.