Question 1

To give employees a sense of how the quality of their job fits into the big picture,many TQM companies engage in:

Accepted Answer

A) paying more to their employees. 
B) hiring more qualified employees with advanced degrees. 
C) offering cross-training. 
D) All of the above 
A) paying more to their employees. 
B) hiring more qualified employees with advanced degrees. 
C) offering cross-training. 
D) All of the above C

Question 2

Timing is a critical element of the purchasing process.Explain the various elements of the timing of purchases: usage rate,stockouts,safety stock,reorder points,and demand patterns.

Accepted Answer

Timing the purchase of merchandise and supplies is also a critical element of a purchasing plan.Entrepreneurs must schedule delivery dates so that their companies do not lose customer goodwill from stockouts.In addition,they must concentrate on maintaining proper control over the firm's inventory investment without tying up an excessive amount of working capital.There is a trade-off between the cost of running out of stock and the cost of carrying additional inventory.
Usage Rate: A business owner must estimate the speed at which the supply of merchandise will be depleted over a given time.The anticipated usage rate for a product determines how long the supply will last.
Lead Time: The time gap between placing an order with a vendor and actually receiving the goods.It may be as little as a few hours or as long as several weeks to process purchase requisitions and orders,contact the supplier,receive the goods,and add them to the company's inventory.
Safety Stock: Business owners must determine the minimum level of stock allowable.If a firm runs out of a particular item (i.e. ,incurs stockouts),customers will lose faith in the business and begin to shop elsewhere.To avoid stockouts,many firms establish a minimum level of inventory greater than zero.Simply said,they build a cushion,called safety stock.
Reorder Points: When planning delivery schedules for inventory and supplies,owners must consider the lead time for an order,the time gap between placing an order and receiving it.In general,business owners cannot expect instantaneous delivery of merchandise.As a result,managers must plan reorder points for inventory items with lead times in mind.

Question 3

To implement TQM successfully,a small business owner must rely on 10 fundamental principles.One principle states:

Accepted Answer

A) share information with everyone in the organization. 
B) information needs to be handled by only the top management. 
C) information needs to be handled by only the lower level workers who deal with the products every day. 
D) All of the above 
A) share information with everyone in the organization. 
B) information needs to be handled by only the top management. 
C) information needs to be handled by only the lower level workers who deal with the products every day. 
D) All of the above A

Question 4

Explain the philosophy of Total Quality Management,naming the ten things a small business owner should do to successfully implement a TQM program.

Accepted Answer

Under the total quality management (TQM)

Question 5

The advantages of developing close,cooperative relationships with a single supplier outweigh the risks of sole sourcing in most cases.

Accepted Answer

A) True 
 B)False

Question 6

One of the most important factors in making long-term,constant improvements in a company's processes is ________ the philosophy and the tools of TQM.

Accepted Answer

A) teaching customers 
B) teaching workers 
C) teaching vendors 
D) teaching manufacturers 
A) teaching customers 
B) teaching workers 
C) teaching vendors 
D) teaching manufacturers

Question 7

As a solution to a company's quality problems,managers will find that TQM:

Accepted Answer

A) may be implemented without significant training of employees. 
B) takes 3-4 years to bring about a significant change in quality. 
C) techniques can be implemented piecemeal,one at a time. 
D) creates little turmoil or change in the way a company does most of its business. 
A) may be implemented without significant training of employees. 
B) takes 3-4 years to bring about a significant change in quality. 
C) techniques can be implemented piecemeal,one at a time. 
D) creates little turmoil or change in the way a company does most of its business.

Question 8

"3/10,EOM" means a 3% discount can be taken if the bill is paid by the tenth day of the month after the purchase.

Accepted Answer

A) True 
 B)False

Question 9

Improving quality:

Accepted Answer

A) lowers the associated cost with scrap. 
B) reduces rework time. 
C) increases worker productivity. 
D) All of the above 
A) lowers the associated cost with scrap. 
B) reduces rework time. 
C) increases worker productivity. 
D) All of the above

Question 10

Deming's 14 Points include:

Accepted Answer

A) awarding business to suppliers on the basis of the best price. 
B) correcting defects at the end of the production process. 
C) establishing production quotas. 
D) adopting a total quality philosophy. 
A) awarding business to suppliers on the basis of the best price. 
B) correcting defects at the end of the production process. 
C) establishing production quotas. 
D) adopting a total quality philosophy.

Question 11

Proper control techniques in receiving merchandise prevent the small business owner from paying for suppliers' and shippers' mistakes.

Accepted Answer

A) True 
 B)False

Question 12

"F.O.B.buyer" means that:

Accepted Answer

A) title passes to the buyer when the seller delivers the goods to the shipper. 
B) risk of loss passes to the buyer when the seller delivers the goods to the buyer's place of business. 
C) the buyer pays all shipping and transportation costs. 
D) both title and risk of loss pass to the buyer immediately upon payment of the contract regardless of location of the goods. 
A) title passes to the buyer when the seller delivers the goods to the shipper. 
B) risk of loss passes to the buyer when the seller delivers the goods to the buyer's place of business. 
C) the buyer pays all shipping and transportation costs. 
D) both title and risk of loss pass to the buyer immediately upon payment of the contract regardless of location of the goods.

Question 13

A firm's reorder point for an item takes into consideration its ________,which is the difference between the time an order is placed and the time it is actually received.

Accepted Answer

A) minimum level of stock allowable 
B) EOQ 
C) usage rate 
D) lead time 
A) minimum level of stock allowable 
B) EOQ 
C) usage rate 
D) lead time

Question 14

The kaizen philosophy holds that:

Accepted Answer

A) once an improvement is implemented,no other improvements are necessary. 
B) small improvements made continuously over time accumulate into a radically reshaped and improved process. 
C) major improvements made continuously over time accumulate into a radically reshaped and improved process. 
D) None of the above 
A) once an improvement is implemented,no other improvements are necessary. 
B) small improvements made continuously over time accumulate into a radically reshaped and improved process. 
C) major improvements made continuously over time accumulate into a radically reshaped and improved process. 
D) None of the above

Question 15

Total Quality Management (TQM):

Accepted Answer

A) defines world-class quality as 95% defect-free products and services. 
B) has been implemented by about 90% of all American manufacturers and is now moving into the service industry. 
C) relies on an army of quality inspectors to ensure that products and services meet quality targets. 
D) is a lifelong process of continuous improvement that focuses on doing the job right the first time. 
A) defines world-class quality as 95% defect-free products and services. 
B) has been implemented by about 90% of all American manufacturers and is now moving into the service industry. 
C) relies on an army of quality inspectors to ensure that products and services meet quality targets. 
D) is a lifelong process of continuous improvement that focuses on doing the job right the first time.

Question 16

Albemarle Sprinkler Company purchases the sprinkler heads for its line of lawn sprinklers from a supplier. Albemarle's production manager wonders how many sprinkler heads she should order for the next six months. The company's marketing manager forecasts sales to be 29,400 units for the upcoming six months. The purchasing manager has negotiated a price of $6.47 per head. The production manager estimates that it costs $17.25 to place an order with the supplier and $2.97 to store a sprinkler head in inventory for six months.
-Approximately how many orders will Albemarle place over the next six months if it uses the EOQ point?

Accepted Answer

A) 28 
B) 50 
C) 74 
D) 82 
A) 28 
B) 50 
C) 74 
D) 82

Question 17

Trade discounts are offered within the distribution channel and are on a graduated scale.

Accepted Answer

A) True 
 B)False

Question 18

The time gap between placing an order and receiving is called lead time.

Accepted Answer

A) True 
 B)False

Question 19

Total inventory cost is maximized when carrying cost and ordering costs are balanced.

Accepted Answer

A) True 
 B)False

Question 20

How does the EOQ with usage differ from the standard EOQ? Why is this difference important to the small business owner?

Accepted Answer

The EOQ model assumes that orders are fi

Exam 19: Supply Chain Management

To give employees a sense of how the quality of their job fits into the big picture,many TQM companies engage in:

Timing is a critical element of the purchasing process.Explain the various elements of the timing of purchases: usage rate,stockouts,safety stock,reorder points,and demand patterns.

To implement TQM successfully,a small business owner must rely on 10 fundamental principles.One principle states:

Explain the philosophy of Total Quality Management,naming the ten things a small business owner should do to successfully implement a TQM program.

The advantages of developing close,cooperative relationships with a single supplier outweigh the risks of sole sourcing in most cases.

One of the most important factors in making long-term,constant improvements in a company's processes is ________ the philosophy and the tools of TQM.

As a solution to a company's quality problems,managers will find that TQM:

"3/10,EOM" means a 3% discount can be taken if the bill is paid by the tenth day of the month after the purchase.

Improving quality:

Deming's 14 Points include:

Proper control techniques in receiving merchandise prevent the small business owner from paying for suppliers' and shippers' mistakes.

"F.O.B.buyer" means that:

A firm's reorder point for an item takes into consideration its ________,which is the difference between the time an order is placed and the time it is actually received.

The kaizen philosophy holds that:

Total Quality Management (TQM):

Trade discounts are offered within the distribution channel and are on a graduated scale.

The time gap between placing an order and receiving is called lead time.

Total inventory cost is maximized when carrying cost and ordering costs are balanced.

How does the EOQ with usage differ from the standard EOQ? Why is this difference important to the small business owner?

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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