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Submission #1:
| Submission Score: | 100 / 100 (100.00%) |
| Grade Time: | May 22 at 19:09 |
| Submitted On: | May 22 at 19:09 |
- At PlastiPharm, the operations group has analysts who work with the company’s sales team to forecast the amount of inventory needed in the warehouse to fill customer orders for medical device bags. In the past, the information provided by the sales team was not very accurate. However, the analysts can now access customer contracts through the company’s ERP system to forecast how many components to order. Which of the following statements best explains the benefits of this improved forecasting process for ordering inventory?
- Working with the sales team to improve the accuracy for inventory needs requires a great deal of coordination but improving the quality of forecasts is worth it to the company.
- Coordinating forecasting with accurate information from within the company and with customers reduces component overages and shortages and improves the quality of the forecast.
- Relying on accurate information will allow the company to design a better system for forecasting and will establish better relationships with its suppliers because they will know what to expect.
- A better forecasting system will ensure that no future overages or shortages will occur and will help the company develop a closer working relationship with its suppliers.
- Last year, the analysts responsible for forecasting sales at PlastiPharm forecasted an increase of 10 percent for the year. They used historical records as well as past economic growth rates to determine the forecast, but it was too low – by 8 percent. Why should the forecasters even bother to estimate if their predictions could still be off? Choose the best explanation.
- If the company does not place too much confidence in the forecast, it will be better able to adapt and change as needed.
- Forecasting is still worth the effort because the company needs to at least try to predict what their needs will be.
- Forecasting allows the company to set a baseline and then constantly evaluate to improve their process and reduce forecast error.
- Determining an acceptable percentage of forecast error will allow the company to identify improvements to the business to make up for forecast errors.
- One of PlastiPharm’s customers requested a new design for a medical device bag. Because this was something PlastiPharm had not produced before, it was difficult to forecast future sales of this unique design. In the absence of historical data, which of the following options is the best one to use?
- Company analysts could use data it already has and tweak the forecast to try to accommodate for the unique design.
- The company could use a qualitative approach, expert judgment of highly experienced employees and consultants, to provide insight into future outcomes for the product.
- The company could use economic data to determine if factors, such as interest rates or unemployment levels, would influence future demands or trends.
- Analysts could use relevant information from the customer about expectations they have for future sales.
- In a recent Sales & Operations Planning meeting at PlastiPharm, managers from the finance, sales, marketing, production, warehouse, and HR departments met to compare the forecasts to the demand and supply plans and look at the financial impacts. HR was especially concerned about having enough workers to meet the production demands and asked that the plans be updated regularly so their office could ensure an adequate labor supply. Why is it important to the company for all the business functions be aligned?
- Making sure that the business functions are aligned allows the company to better inform its employees about what is happening within the company.
- Aligning the business functions allows senior management to determine which forecasting method is best suited to the company’s needs.
- Aligning all the business functions ensures that the company’s business goals and targets are implemented successfully.
- Ensuring the business functions are aligned allows the managers to work to do a better job forecasting their portion of the plans.
- PlastiPharm has been in business for more than 40 years. Over those years, the company has developed strong relationships with several of its customers that allows them to work together to better forecast needs. The company wants to develop the same kind of relationship with its newer customers and has scheduled a number of kick-off meetings to plan and discuss future needs. How does this CPFR (collaborative planning, forecasting, and replenishment) effort benefit the company? Please select the best explanation.
- By working with customers, the company can improve its forecasts and be more efficient in its operations.
- Working with customers enables the company to determine costs and set prices before they potentially rise.
- How a customer responds during a kick-off meeting allows the company to determine if it is worthwhile developing a stronger relationship with them.
- Forecasting the needs of customers enables the company to adjust its capital expenses for future projects.
- The analysts in PlastiPharm’s operations division faced a problem forecasting demand for a customer’s new medical device bag for a new vaccine. Data was simply not available for forecasting. Therefore, the analysts talked with several industry experts to determine what the demand would be given an anticipated increased demand for this new vaccine. Which statement best explains why hiring an expert to provide expert advice is a valid component for the analyst’s forecasting?
- Utilizing experts who know how the industry works and are aware of newer influences impacting that market is useful when data is scarce.
- An expert often has better access to data and can utilize this data to assist in better predictions for the company.
- Relying on expert opinions allows the analysts to tap into independent advice that is not tainted by company loyalties or expectations.
- Hiring an expert allows the company to pay only for the services it needs, when it needs them. If expectations are not met, the company is not committed to employment.
- One of the accountants responsible for forecasting at PlastiPharm used data for labor and materials from the prototype of one of their new products – data that was two months old. Because changes were made to the final product, this resulted in a forecasting error that cost the company more than $250,000 in labor and materials. Thereafter, the company implemented the use of rolling horizons to help them reduce errors in the future. How will the rolling horizons help increase the accuracy of their forecasts?
- The accuracy of forecasting depends on retrieving accurate information; rolling horizons will allow the company to have immediate accurate information.
- Reducing errors is tantamount in any company striving for perfection, and rolling horizons will allow the company to identify errors immediately.
- The company’s adoption of rolling horizons will allow the company to fix its sights on certain time frames for forecasting.
- Rolling horizons allow the company to review and refine its analysis as the time for allocation of resources approaches.
- When new customers are brought on board at PlastiPharm, they meet not only with the sales team, which is responsible for explaining the features of the products the company sells, but also with the engineering design team, which is responsible for making suggestions for materials and production methods. Additionally, customers do an initial on-site audit (walk through) of the facility where they get to know the people and facility well. Which of the following statements best describes how PlastiPharm and the customer benefit from getting to know each other well?
- Knowing each other well allows both companies to engage in productive conversations about what they both want to achieve in the business relationship.
- The customer benefits from PlastiPharm’s expertise on best products for their needs, and PlastiPharm benefits by influencing customer expectations and tailoring its inventory strategies.
- PlastiPharm benefits from knowing its customers because it can then categorize them and more easily manage their products; the customer benefits from better management.
- Both organizations benefit from knowing who to call in case problems arise or questions about future endeavors need to be asked.
- The extruded film used in PlastiPharm’s medical device bags is by far the largest component in the company’s inventory. If the company ran out of film and production shut down, the company would lose millions of dollars a day. Developing a new supplier is a long and tedious process in which ISO certifications are reviewed, quality agreements with the supplier’s vendors are scrutinized, delivery records are examined, and audits of the supplier’s process are conducted to determine how at risk the supplier is. Why is it necessary for the company to go to all this trouble to have several suppliers for the film?
- Having different suppliers allows the company to purchase film in different parts of the country and support the economy there.
- Multiple suppliers allow the company to expand its network and potentially sell in multiple markets previously untapped.
- Having different suppliers lets the company reduce the need it has for a long-term relationship with any one of them.
- Having multiple suppliers increases flexibility in getting the film in case one of the suppliers cannot or does not meet the demand.
- All medical device bags produced by PlastiPharm include filters, although some kinds are used more than others. To proactively manage inventory of the filters, they are classified as A (critical), B (key), or C (standard). Great attention is paid to the level of A filters and less attention to the B and C filters. Why should the company differentiate in its attention to the inventory levels of the filters?
- The company monitors the A filters more because they are obviously not monitored closely enough in the inventory system.
- Paying close attention to the B and C filters is not important because they do not play an important enough role in the production of the medical device bags.
- Monitoring the filters allows the company to make accurate recommendations to meet its customers’ needs.
- If the company runs out of A filters, production will effectively shut down, and the company’s profit (and reputation) would be hugely impacted.
- In response to the development of a much-needed vaccine, several of PlastiPharm’s customers have tripled and even quadrupled their orders for medical device bags. The increased orders have created a high turnover in PlastiPharm’s inventory. Which of the following statements best explains why the high turnover could be financially beneficial for the company?
- High turnover in product allows the company to clear out stock that is close to expiration and reduces the financial loss associated with expired products.
- High turnover allows the company to expand its products to other markets where there is potential for increased sales.
- High turnover reduces the cash-to-cash cycle to free up cash and also reduces the company’s need for capital.
- High turnover increases the credibility of the company and makes it possible for the sales team to sell more product.
- At PlastiPharm, when a customer places an order, the system generates how many components are needed to make the product and then allocates what is in current inventory to fill that order. Why is it important for the system to know how many days of inventory are available?
- Knowing the number of days of inventory available informs the company about how long it has to clear out components that are about to expire.
- Knowing what inventory is on hand makes it possible for the company to look at market dynamics and hold onto inventory if it can sell later at a higher price.
- Knowing how much inventory is available informs the company on whether it can meet customer demands and deadlines.
- Knowing the levels of supplies available allows the company to know how much of its cash is tied up in inventory.
- PlastiPharm’s purchasing department is responsible for purchasing components when the warehouse needs to restock components. When purchasing makes decisions to order components, it takes into account the cost of the purchase as well as the cost of holding the inventory. Using the Economic Order Quantity (EOQ) model, purchasing can determine how much to order and how often to order. How does this help the company?
- The EOQ model helps minimize the level of inventory as well as the purchasing costs, and cash savings can be used for some other business purpose.
- The EOQ model determines the inventory needed to meet customer demand as well as projected future demand.
- The EOQ model allows the company to minimize the set-up costs for each new customer order and save money.
- Using the EOQ model helps maximize the number of supplies ordered so that customers’ demands are always met.
- In the last year, there has been a shortage of silicone used for tubing, and PlastiPharm’s major suppliers have increased their lead times for delivery of tubing. As its need for the silicone tubing increased, the company increased its inventory. But isn’t excess inventory bad? Why would the company want to build up inventory?
- Holding safety stock of silicone tubing allows the company to meet customer demand and keep its customers happy.
- Increasing its silicone tubing supply allows the company to benefit from cost savings for buying in higher quantities.
- Having a plentiful supply of silicone tubing allows the company to be flexible to supplier demands.
- Building up a supply of silicone tubing does not hurt the company because it just sits in the warehouse, ready to be used when orders are placed.
- Gathering the data on lot record errors used to require days of intense effort on behalf of the entire quality assurance team at PlastiPharm. With their ERP system, this data can be gathered with a few clicks, and a report can be generated showing where the most common lot record errors are made. What benefit does the company gain from having this data at its fingertips?
- Identifying errors in the lot records allows the company to pass the information on to its customers and thus increase customer loyalty.
- Knowing where errors are made allows the company to better understand what needs to be corrected to eliminate mistakes.
- Finding errors allows the company to change the cost of implementation and the underestimation of time spent.
- Tracking down errors allows the company to reevaluate the products most at risk for failure and eliminate them from their portfolio.
- PlastiPharm’s ERP system has a quality management application that gathers information about non-conforming and deviant materials. On a daily basis, the application generates an investigative process report, which is then sent to different departments to review whether products using the materials can be fixed or need to be scrapped. On a weekly basis, the application generates another report that shares information about trending issues. For what purpose might the company use this weekly report? Please select the best explanation.
- Effectively managing the trends helps the company determine if it needs to improve its processes to meet its customers’ greatest needs at exactly the right price.
- Gathering information about trends allows the company to test the complexity of the ERP system.
- Watching the trends helps the company determine which people will best adapt to using the ERP to make decisions.
- Identifying trending issues allows the company to see if there is a systemic problem with materials from a certain supplier or if process changes need to be made.
- The engineering team at PlastiPharm recently identified a way to automate another of the processes in the clean room and requested a kaizen burst to test their idea. Several people from production were asked to participate in the event but did so with reluctance. Which of the following statements best explains why they would be hesitant to automate a process that would improve efficiency and accuracy?
- The employees could be reluctant because they’ve been through many kaizen bursts that have resulted in no improvements being made.
- Reluctance on the part of the employees could be evidence of frustration with someone who thinks they know how to do their jobs better than they do.
- The employees might be reluctant because they perceived the automation as an effort to reduce the number of employees needed in the clean room.
- The employees might be hesitant to participate because they recognized that the kaizen event would require more of their time—time better spent at their regular jobs.
- One of the uses of the ERP system at PlastiPharm is scheduling. Scheduling is reliant on the time standards entered in the system—how long it takes for a product to be built. However, time standards are not the same when different numbers of product are being produced. The higher the number produced, the lower the time needed to produce each single unit. The discrepancy in time results from the setup time being absorbed across the increasing number of units. If the time standards are incorrect in the ERP system, what kind of problems can result? Please select the best explanation.
- Having incorrect time standards in the system can lead people to make wrong decisions about how much inventory to use.
- When ERP information is inaccurate, it makes it difficult for employees to be engaged, provide feedback, and apply improvements.
- Incorrect information in the ERP system can affect decisions made about scheduling the number of people required to finish a job.
- Incorrect information can result in the sales team promising clients a delivery date or time that cannot be achieved, depending on the number of products ordered.
- PlastiPharm’s warehouse management system (WMS) allows for products to be located quickly – by lot number, part number, or location. However, just because the system says a product is in a certain location doesn’t mean that it’s 100 percent accurate. Therefore, the WMS generates a cycle count of locations, basically a manual audit to visually check what’s in the system against what’s on the shelf. The routine cycle counts conducted over the course of a year cover all locations where materials and products are located. They help mitigate any discrepancies found between the system and actual locations. Why is it important for the warehouse to have accurate information on its inventory in its system? Please select the best explanation.
- Information that is accurate in the WMS system allows the company to track inventory information from suppliers and compare quality.
- Accuracy in the WMS minimizes the need to move inventory around to accommodate the storage of new components and products.
- Accurate WMS information helps the company better manage a variety of functions, including forecasting, inventory placement, receiving, and shipping.
- A warehouse management system that is accurate promotes accuracy on the part of the employees—a place for everything and everything in its place.
- PlastiPharm’s CRM system allows the company to store data about its customers—what they produce, what processes they use PlastiPharm products in, and what results they achieve. Recently, a customer reported that cell deaths occurred during their processing for a new vaccine. PlastiPharm engineers easily pulled up customer product information in the CRM for reference and suggested using a different bag made out of different materials. This resulted in no more cell deaths. Which of the following statements best explains how the CRM assisted PlastiPharm engineers in helping their customer?
- The customer information in the CRM helped the engineers build customer loyalty because they could see past customer interactions.
- Knowing what product the customer used allowed the engineers to direct them to a different product to use.
- The CRM information on the customer allowed the engineers to better anticipate the needs of the customer.
- The CRM gave the engineers information on what the customer process was and allowed them to analyze the data more accurately.