Question : Objective 20.4 1) Which of the following statements  true of just-in-time : 1211962

Objective 20.4

1) Which of the following statements  is true of just-in-time (JIT) purchasing?

A) In JIT purchasing, the optimal safety-stock level is the quantity of safety stock that minimizes the sum of annual relevant stockout and carrying costs.

B) JIT purchasing is guided solely by the EOQ model because that model emphasizes the tradeoff between relevant carrying and ordering costs.

C) In JIT purchasing, raw materials (or goods) are purchased so that products are delivered just as needed for production or sales.

D) Only disadvantage of JIT purchasing is the higher level carrying and inspection costs.

2) Just-in-time purchasing requires ________.

A) larger and less frequent purchase orders

B) smaller and less frequent purchase orders

C) smaller and more frequent purchase orders

D) larger and more frequent purchase orders

3) The ________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers.

A) customer list

B) enterprise requirements plan (ERP)

C) material requirements plan (MRP)

D) supply chain

4) Sharing sales information throughout the supply chain leads to ________.

A) larger stockouts

B) increased manufacturing of products not immediately needed by retailers

C) fewer manufacturing orders that had to be expedited

D) higher inventories held by each company in the supply chain

5) The only disadvantage of JIT purchasing is the higher levels of carrying and inspection costs.

6) Companies that implement JIT purchasing will emphasize developing short-term supplier relationships to attain flexibility.

7) Just-in-time purchasing describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

8) The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same company or in other companies.

9) The manufacturing manager of New Technology Company is concerned about the company’s newest plant. When the plant began operations three years ago, it had the best of everything. It had modern equipment, well-trained employees, engineered work and assembly stations, and a controlled environment. During the first two years, the evaluation results were very good with almost all cost variances being favorable. However, recently, things have turned negative.

In recent months, everything seems to be operating in a crisis management mode. Although most cost variances remain favorable, the plant’s segment contribution is declining and customers are complaining about poor quality and slow delivery. Several customers have suggested that they may take their business elsewhere if things do not improve.

The shop floor is in continual turmoil. In-process inventory is everywhere, production employees have difficulty finding jobs that need to be worked on, and scheduling has requested a larger computer to keep track of work in process.

The vice president of sales does not know where to begin with solving the customers’ problems. It seems that everyone is working very hard and the plant has the best facilities and trained employees in the industry.

Required:

What is the nature of the plant’s problems? What recommendation would you make to help improve the situation?