Capacity planning involves answering all of the following questions EXCEPT What kind of capacity is needed?
How much is needed? When is it needed?
Who is going to decide?
Which one of the following refers to the volume of output at which total cost equals total revenue?
Optimal operating rate
Break even point
Feasible volume Utilization
A technique that averages the number of recent actual values and forms a new value is called: Exponential smoothing
Weighted moving average
Moving average
None of the above
The advantages of specialization to management include all of the following EXCEPT: Rapid training of the workforce
Ease in recruiting new workers Fewer turnovers
Less boredom for workers
The forecasting model that is based upon estimates of salesperson's expected sales is likely to be called ________.
Delphi method
Sales force combination
Consumer market survey Panel of executive opinion
Which of the following is not an attribute to classify services?
Tangibility
Perishability Simultaneity
Degree of Customer Contact
Most of the organizations adopt a defensive design R&D Strategy in an attempt to prolong the life of the product by employing new packaging, redesigning it, improving its reliability. This is __________ phase in product life cycle.
Growth Maturity Saturation
Decline
Which method of forecasting is most widely used? Regression analysis
Adaptive forecasting
Weighted moving average
Exponential smoothing
Which of the following influences on the sales of a product is the most difficult to forecast? Seasonal
Trend
Nonlinear trend
Cyclical
All of the following are steps in forecasting process EXCEPT: Determine the purpose of the forecast
Establish a time horizon
Assigning weights to the criteria
Monitor the forecastThe method that considers several variables related to the variable being predicted is:
Exponential smoothing Weighted moving average
Multiple regressions
Moving average
__________ is central to the philosophy of continuous improvement: Management involvement
Employee involvement
Organization’s operations
Employee involvement is central to the philosophy of continuous improvement. Employee retention rates.
Sales force
Consumer surveys
Delphi method
Executive opinions
The total weight assigned to actual occurrences should be equal to: 0
1
2 3
Which of the following is not the true representation the concept of time series model? Exponential smoothing Moving averages Naïve approach Linear regression
In statistical process control, some tools are used primarily to detect production of defective products / services or process changes. What those tools are known as? Regression charts
Pareto charts
Control charts
If the final inspector at an automobile paint shop discovers that the paint on the car has a poor finish, the car may have to be completely rescinded and repainted. This would result in ________ incurred.
Internal failure cost
External failure cost Appraisal cost Prevention cost (zh,vuzs,may2011)
___ costs are incurred in assessing the level of quality attained by the operating system. Prevention Appraisal Operating Failure (zh,vuzs,may2011) Question # 1 of 15
Productivity refers to the ratio of output to input, in your views what are the measures by which productivity can be increased?
Inputs increase while outputs remain the same Outputs decrease while inputs remain the same Inputs and outputs increase proportionately
Inputs decrease while outputs remain the same
Productivity is a measure of output from a production process, per unit of input. Total productivity = Output quality and quantity / Input quality and quantity
Question # 2 of 15
The technical aspect of Six Sigma includes all of the following Except:
Improving process performance Use of statistical methods
Top management commitment
Reduction in variations
The Technical aspects of Six Sigma include: 1. Improving process performance
2. Reducing variation
3. Utilizing statistical models
4. Designing a structured improvement strategy www.vuzs.net Question # 3 of 15
Which one of the following statements is NOT correct about cycle time?
It represents daily operating time divided by desired production It is the maximum allowable time at each work station
It is the time required to complete a product from start to finish
Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit.
Question # 4 of 15
A double sampling plan specifies all of the following Except
Size of the initial sample Size of second sample Lot size
Double acceptance number
A double sampling plan specifies the lot size, the size of the initial sample, accept/reject criteria for the initial sample, the size of the second sample and a single acceptance number.
www.vuzs.net
Which one of the following layout type is also called line layout?
Fixed Position layout Process layout
Product layout
Cellular layout
Product layout: These layouts are also known as the line layouts or the layout by sequence. In such layouts, the manufacturing cycle is small with minimum material handling. The space required is small and quality control is easy to exercise.
Which one of the following is an example of site related factors that affect location decision?
Transportation
Quality of life
Location of new markets Location of raw materials Site Related Factors:
Land
Transportation Environmental Legal
In decision making theory the next step after implementing the best possible alternative is to:
Develop Alternatives Develop results
Monitor the results
Implementation
The decision making process involves the following six important steps 1. Specify Objectives and the Criteria for decision making
2. Develop Alternatives
3. Analyze and compare alternatives. 4. Select the best alternative.
5. Implement the chosen Alternative
6. Monitor the results to ensure the desired results are achieved.
In exponential smoothing model, a denotes:
Smoothing constant
Previous forecast Forecast error Actual forecast
α = Alpha smoothing constant
Which one of the following is a productivity measure based on all inputs?
Capital productivity
Multifactor productivity
Partial productivity Total productivity
Multifactor productivity (MFP) measures the changes in output per unit of combined inputs.
___________ is a philosophy of continually seeking ways to improve operations
Poke – yoke
Kaizen
Robustness
Quality deployment
Kaizen is the Japanese word for continuous improvement. www.vuzs.net
Which one of the following factors provides a basis for comparing alternative forecasting techniques? Time dimension Reliability factor Degree of accuracy Measuring units
Accuracy: Forecasts should be accurate. In fact it should carry the degree of accuracy, so the users are aware of the limitations of the forecast.
Which one of the following is NOT the input in the transformation process?
Informations
Services Facilities Materials
Information is the output of any input.
ABC Freight Company is overflowed with customer complaints of poor quality services. To achieve quality in the services being provided, managers can make use of which of the following strategy?
Cost leadership strategy
Statistical process control strategy
Service differentiation strategy
Conditional service guarantee strategy
Statistical Process Control is one important tool to ensure that Service Quality is achieved before a defect is introduced in the service being offered or product being manufactured.
www.vuzs.net
Which of the following is NOT an emerging trend in the workplace?
Increasing workplace diversity
Decreasing work schedule flexibility
Increasing number of part time jobs Increasing use of temporary labor
The concept of Agile organization refers to: Flexibility Quality Quick Response Profitability
Quick response aka also known as Agility and an organization on this basis is often known as Agile Organization.
TQM is being criticized on the basis of factors which show:
Weak implementation of TQM practices or strong management perspective Strong implementation of TQM practices or weak management perspective
Weak implementation of TQM practices or weak management perspective
Strong implementation of TQM practices or strong management perspective Which of the following factors are important for choosing a strategy for aggregate planning?
Select correct option:
Cost and company policy
Cost and layout decision
Company policy and layout decision Company policy and capacity options
Which of the following shows the quality and timing of specific end items for a scheduled horizon?
Select correct option: Simulation model
Master schedule
Aggregate plan Critical path model
In terms of operations management the forecast which projects a company’s sales is called:
Economic forecast
Technological forecast
Demand forecast
Associative model
Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. A demand forecast is the prediction of what will happen to your company's existing product sales.
In which one of the following techniques, the least squares method models uses one dependent and one or more independent variables?
Trend adjusted forecast Simple moving average
Regression analysis
Exponential smoothing
Regression analysis that uses two or more independent variables to forecast values of the dependent variable is called a multiple regression analysis.
The operational strategy must be in line with the:
Department goals
Organizational goals
Management goals
None of the above
Operational Strategy is:
Narrower in scope and in more detail
Prepared by middle management.
Should be in line with the Organization strategy.
Which one of the following strategies specifies how the firm will employ its production capabilities to support its corporate strategy?
Tactical
Operations
Manufacturing
Production
Operations Management is concerned with managing the operations strategy, which specifies how the firm will employ its production capabilities to support its corporate strategy.
The systematic processing of data to yield information is a part of __________.
Management science
Information sciences
Industrial engineering
Scientific management
Collaborative Planning, Forecasting, and Replenishment (CPFR) a Web based tool used to coordinate demand forecasting, ____________ and inventory replenishment between supply chain trading partners.
Production and purchase planning
Demand and supply planning
Quantitative forecasting
Demand management
Collaborative Planning, Forecasting, and Replenishment (CPFR) a Web-based tool used to coordinate demand forecasting, production and purchase planning, and inventory replenishment between supply chain trading partners. You will learn about this in your later part of the semester.
www.vuzs.net
Parabolic, exponential and growth are element of:
Linear trends
Non linear Trends
Forecast accuracy
None of the above
Which of the following ensures that the design meets the performance characteristics that are specified in the product concept?
Functional design
Production design
Service design
Product design
Functional design is ensuring that the design meets the performance characteristics that are specified in the product concept.
The forecasting time horizon that would typically be easiest to predict would be:
Medium-range
Long-range
Short-range
Intermediate range
Most of the organizations adopt a defensive design R&D Strategy in an attempt to prolong the life of the product by employing new packaging, redesigning it, improving its reliability. This is __________ phase in product life cycle.
Growth
Maturity
Saturation
Decline
DECLINE: In this phase, most of the organizations adopt a defensive design R&D Strategy in an attempt to prolong the life of the product by employing new packaging, redesigning it, improving its reliability.
www.vuzs.net
The three major business functions necessary to all organizations are:
Marketing, finance/accounting, operations
Marketing, accounting, personnel
Marketing, finance, operations
As the time horizon increases the accuracy of the forecast:
Decreases
Increases
Is not affected with time horizon
None of the above
Forecast accuracy decreases as time horizon increases indicating it is safe to make short range forecasts instead of long term forecasts.
Four important pillars capital, quality, ________ and technology. are responsible for positively as well as negatively affecting on the Productivity of the organization.
Customers
Process
System
Management
Productivity stands tall on four important pillars of Capital, Quality, Management and Technology. These pillars are also responsible for positively as well as negatively affecting the Productivity of the
Organization.
Releasing products with defects should be informed to the customers. This statement comes under ______ frame work.
Legal
Ethical
Environmental
None of the above
Ethical: Operations Manager should understand that he is under Contractual agreement not to exhibit unethical behavior. Releasing products with defects should be informed to the customers.
Sequence of data points that are measured typically at successive times at regular time intervals is known as:
Moving average
Weighted moving average
Time series
Forecasts
In statistics, signal processing, econometrics and mathematical finance, a time series is a sequence of data points, measured typically at successive times spaced at uniform time intervals.
www.vuzs.net
Planning workforce requirements, scheduling of the equipment and financial analysis are the major uses of__________.
Productivity ratios
Productivity Growth
Multifactor productivity
Operations strategy
Which one of the following is not a step of decision process:
Specify objectives
Determine the product of chance probabilities
Analyze and select alternative
Implement and monitor the result
The forecasting time horizon that would typically be easiest to predict would be:
Medium-range
Long-range
Short-range
Intermediate range
Risk
Certainty
Uncertainty
None of above
www.vuzs.net
The forecasting model that is based upon estimates of salesperson's expected sales is likely to be called ________.
Delphi method
Sales force combination
Consumer market survey
Panel of executive opinion
Completion of any operations depends upon the slowest process in the assembly line. What operations managers need to do in order to be successful?
Target and eliminate bottlenecks
Identify the bottlenecks
Make slowest process more slow
Non of the above
In forecasting, planning the use of system relates to the ______ plans. Long term
Short term
Both long and short term
None of the above
(zubair,vuzs,Jun2011)
Flexible operations comes under the example of: Select correct option:
Strategy Tactics
Mission Goals
(zubair, vuzs, Jun2011)
When using exponential smoothing how the smoothing constant can be determined?
With the help of the accuracy of the previous forecasts
By using MAD (Mean Absolute deviation)
By choosing to maximize positive bias By using random variations
Decision Tree is read from:
Right to left
Left to right
Top to bottom Bottom to top
Decision Trees: The tree is read from left to right.
A strategy that is narrower in scope and in more detail is:
Organizational Strategy Time and Quality Strategy
Operational Strategy
Manufacturing/Service Strategy
More routine purchasing, handling and inspection is an example of:
Customization Mass Customization
Standardization
None of the above
Advantages of Standardization: More routine purchasing, handling, and inspection procedures (These indicate a decrease in cost and can improve reliability as well as over all design and manufacturing processes)
Forecasting or prediction for organizations will always be:
Failure Success
Sometimes failure and sometimes success
Complex
“Business forecasting is only used for predicting demand”. This statement is:
Totally right
Totally wrong
Partially right None of the above
Business forecasting pertains to more than predicting demand. Forecasts are also used to predict profits, revenues, costs, productivity changes & prices.
www.vuzs.net
Operational strategies mostly function on two dimensions that are: Quality management and Service/Manufacturing Strategy
Quality and Operation Management
Service/Manufacturing Strategy and Functional Management Operation and Functional Management
Operational strategies mostly function on two dimensions of quality management and service/manufacturing strategy.
The main constituents of the Quantitative methods of forecasting are?
Sales force composite Panel of executive opinion Consumer market survey
Exponential smoothing Exponential smoothing: 1. Quantitative forecasting
2. Weighted average of two variables.
The ratio of the real value of output to the combined input of labor and capital is called: Labor Productivity
Capital Productivity Energy Productivity Multifactor Productivity
A purchaser needs unique, low-money value part. This part is a critical component of a product manufactured by the purchaser. The part is patented and can only be obtained from two suppliers and is often on back order. The purchaser‟s company does not have expertise in the manufacturing of this particular component. In this scenario what is the most appropriate action for the purchaser?
To select a similar part from other reliable supplier and substitute the part To set up a cross-functional team to make the part internally
To seek other suppliers through seeking a quotation or proposal
To recommend a change in product design to remove the need for that unique part. ( Answer requsted).
www.vuzs.net
Increases in productivity are difficult to achieve if one of the following situation occurs
The task is more intellectual and personal
The task is more quantitative and repetitive The task is more physical and tangible
The systematic plan of action with defined resources is called: Competitiveness Strategy Productivity Flexibility
Strategy is an elaborate and systematic plan of action with defined resources.
In a Process layout, work stations are arranged
according to the general function they perform without
regard to any particular product.
True. A product layout is more suited to situations where
product demand is stable than when it is fluctuating.
True. Fixed position layouts are used in projects where
the product cannot be moved, and therefore equipment,
workers, and materials are brought to it.
False. In general, work-in-process inventory is large for a
process layout and small for a product layout.
Low Volume is associated with process layout.
problems for Inventory Management:
1. When developing inventory cost models, which of the following are not included as costs to place an order? A) Phone calls
B) Taxes C) Clerical
D) Calculating quantity to order E) Postage
2. Which of the following is not included as an inventory holding cost? A) Annualized cost of materials
B) Handling C) Insurance D) Pilferage E) Storage facilities Answer: A
3. Which of the following is not an assumption of the basic fixed-order quantity inventory model? A) Ordering or setup costs are constant
B) Inventory holding cost is based on average inventory C) Diminishing returns to scale of holding inventory D) Lead time is constant
E) Demand for the product is uniform throughout the period Answer: C
4. Assuming no safety stock, what is the re-order point (R) given an average daily demand of 50 units, a lead time of 10 days and 625 units on hand?
A) 550 B) 500 C) 715 D) 450 E) 475 Answer: B
5. If annual demand is 12,000 units, the ordering cost is $6 per order and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity?
A) 576 B) 240 C) 120.4 D) 60.56 E) 56.03 Answer: B
6. Using the economic order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80 and a holding cost per unit per year of $4? A) $849 B) $1,200 C) $1,889 D) $2,267 E) $2,400 Answer: E
7. A company has recorded the last five days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its
vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)?
A) 120 B) 126 C) 630 D) 950 E) 1,200 Answer: C
8. The Pareto principle is best applied to which of the following inventory systems? A) EOQ
B) Fixed-time period C) ABC classification D) Fixed-order quantity
E) Optional replenishment system Answer: C
9. Using the ABC classification system for inventory, which of the following is a true statement? A) The “C” items are of moderate dollar value
B) You should allocate about 15 % of the dollar volume to “B” items C) The “A” items are of low dollar value
D) The “A” items are of high dollar value
E) Inexpensive and low usage items are classified as “C” no matter how critical Answer: D
10.Which one of the following descriptions best defines the cycle-service level as a measure of customer service?
a. The preferred proportion of annual demand instantaneously filled from stock b. The number of stockouts tolerated per year
c. The preferred proportion of days in the year when an item is in stock
d. The desired probability of not running out of stock in any one inventory cycle Answer: d
11.Which one of the following statements is best?
a. A P system requires more safety stock than a Q system.
b. A P system lends itself more to quantity discounts than does a Q system.
c. A P system requires more administrative control and computer support than does a Q system. d. In a periodic review system, the value of Q is kept the same from one cycle to another.
Answer: a
12.Sark Incorporated is out of stock for a key item, which has a backorder of 200 units. An open order of 750 units is scheduled for arrival on the following Monday. What is the current inventory position at Sark? a. Less than or equal to 0 units
c. Greater than 500 but less than or equal to 750 units d. Greater than 750 units
Answer: c
13.For an item under continuous review, the on-hand inventory is only 20 units and the reorder point R is 100 units. There are no backorders, but there is one open order for 90 units. Which one of the following statements is TRUE?
a. There is no need to order at the present time. b. The current inventory position is 100 units. c. An order should be placed now for 20 units. d. An order should be placed now for 10 units.
Answer: a
14.The Franklin County Hospital is currently using a continuous review system to control its inventory. One of the items in inventory is an elastic band. The average demand for this item is 200 boxes per week, and the standard deviation in weekly demand is 50 boxes. If the lead time is 3 weeks and the hospital wants a 99 percent cycle-service level, what is the reorder point for this item?
a. Less than 650 boxes
b. Greater than 650 boxes but less than 750 boxes c. Greater than 750 boxes but less than 850 boxes d. Greater than 850 boxes
Answer: c Table 1
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead time for the item is 6 weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year.
15.Use the information in Table 1. What is the economic order quantity (EOQ) for this item? a. Less than 175 units
b. Greater than 175 units but less than or equal to 200 units c. Greater than 200 units but less than or equal to 225 units d. Greater than 225 units
a
16.Use the information in Table 1. What is the desired safety stock level if the company has a policy of maintaining a 90 percent cycle-service level?
a. Less than 50 units
b. Between 50 units and 100 units c. Between 100 units and 150 units d. Greater than 150 units
b
17.Use the information in Table 1. What is the reorder point if the company finally decides to have a 95 percent cycle-service level?
a. Less than or equal to 300 units b. Between 300 and 325 units c. Between 325 and 350 units d. Greater than 350 units
d
18. A company has recorded the last five days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)?
A) 120 B) 126 C) 630 D) 950 E) 1,200 Answer: C
19. If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10, which of the following is the standard deviation of usage during lead time?
A) 10 B) 20 C) 40 D) 100 E) 400 Answer: B
20. A company wants to determine its reorder point (R). Demand is variable and they want to build a safety stock into R. If the average daily demand is 12, the lead time is 5 days, the desired “z” value is 1.96, and the standard deviation of usage during lead time is 3, which of the following is the desired value of R? A) About 6 B) About 16 C) About 61 D) About 66 E) About 79 Answer: D
21. A store has collected the following information on one of its products:
Demand = 10,000 units/year
Standard deviation of weekly demand = 25 units Ordering costs = $30/order
Holding costs = $4/unit/year Cycle-service level= 95% Lead time = 2 weeks
Number of weeks per year = 50 weeks
If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?
Answer:
= 387.30 387 units
258 units
22. Assuming no safety stock, what is the re-order point (R) given an average daily demand of 100 units and a lead time of 5 days?
Answer: 500
Which of the following is a function of inventory?
a. to decouple or separate parts of the production process
b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts
d. to hedge against inflation
2. Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process
b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts
d. to minimize holding costs
3. All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume
b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle
d. it states that all items require the same degree of control
e. it states that there are the critical few and the trivial many inventory items 4. ABC analysis is based upon the principle that
a. all items in inventory must be monitored very closely
b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high
d. the safety stock in terms of volume should be higher for A items than for C items 5. Which of the following statements about ABC analysis is false?
a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings.
b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers.
c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
6. ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality
b. unit price
c. the number of units on hand d. annual demand
e. annual dollar volume 7. Cycle counting
a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy
c. provides a measure of inventory turnover
d. assumes that all inventory records must be verified with the same frequency 2 8. Among the advantages of cycle counting is that it
a. does not need to be performed for less expensive items
b. does not require the detailed inventory records necessary when annual physical inventory is used c. does not require highly trained people
d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory
9. The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders
b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level
10. A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000
units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 70
b. 110 c. 250 d. 12,000
11. Most inventory models attempt to minimize a. the likelihood of a stockout
b. the number of items ordered c. total inventory based costs d. the number of orders placed
12. In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the
EOQ will
a. increase by about 41% b. increase by 100% c. increase by 200%
d. either increase or decrease
13. In the basic EOQ model, if D = 6,000 per year, S = $100, H = $5 per unit per month, the Economic Order Quantity is approximately a. 527 b. 100 c. 490 d. 142
14. Which of the following statements about the basic EOQ model is true? a. If the ordering cost were to double, the EOQ would rise.
b. If annual demand were to double, the EOQ would increase. c. If the carrying cost were to increase, the EOQ would fall. d. All of the above statements are true.
15. Which of the following statements about the basic EOQ model is false? a. If the setup cost were to decrease, the EOQ would fall.
b. If annual demand were to increase, the EOQ would increase. c. If the ordering cost were to increase, the EOQ would rise. d. If annual demand were to double, the EOQ would also double. 3
16. A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised
EOQ is
a. three times as large b. one-third as large c. nine times as large d. one-ninth as large
17. A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is a. unchanged
b. increased by less than 50% c. increased by 50%
d. increased by more than 50%
18. For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units
and the total annual inventory cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50
b. $3.00 c. $2.00 d. $6.00
19. A product has demand of 4,000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year.
The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total
annual inventory costs. a. $400
b. $800 c. $1,200 d. $16,000
20. A product has demand of 4,000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year.
The cost-minimizing solution for this product is to order a. all 4,000 units at one time
b. 200 units per order c. 1000 units per order d. 400 units per order
21. The EOQ model with quantity discounts attempts to determine
a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price
c. whether to use fixed-quantity or fixed period order policy d. how many units should be ordered
22. An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will
be ordered." Which of the following statements is true? a. 100 is the reorder point, and 14 is the order quantity. b. 14 is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. 14 is the safety stock, and 100 is the reorder point.
23. Which of the following statements regarding the Production Order Quantity model is true? a. It applies only to items produced in the firm's own production departments.
b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant.
d. It minimizes the total production costs. 4 24. The Production Order Quantity model
a. relaxes the assumption of known and constant demand b. uses Ordering Cost, not Setup Cost, in its formula
c. is appropriate when units are sold/used as they are produced d. results in larger average inventory than an equivalent EOQ model 25. When quantity discounts are allowed, the cost-minimizing order quantity a. minimizes the sum of holding and ordering costs
b. minimizes the unit purchase price
c. may be a quantity below that at which one qualifies for that price d. minimizes the sum of holding, ordering, and product costs
26. A specific product has expected demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level?
a. 41 b. 55 c. 133 d. 140
27. Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the
order lead time is four days. The service level is 95%. What should the reorder point be? a. about 18
b. about 24 c. about 32 d. about 33 e. more than 35
28. The purpose of safety stock is to a. replace failed units with good ones b. eliminate the possibility of a stockout
c. eliminate the likelihood of a stockout due to erroneous inventory tally
d. control the likelihood of a stockout due to the variability of demand during lead time 29. The proper quantity of safety stock is typically determined by
a. minimizing an expected stockout cost
c. meeting 95% of all demands
d. setting the level of safety stock so that a given stockout risk is not exceeded 30. If demand is not uniform and constant, then stockout risks can be controlled by a. increasing the EOQ
b. placing an extra order
c. raising the selling price to reduce demand d. adding safety stock
31. A disadvantage of the fixed-period inventory system is that
a. it involves higher ordering costs than the fixed quantity inventory system b. additional inventory records are required
c. the average inventory level is decreased
d. since there is no count of inventory during the review period, a stockout is possible 5 Chapter 12: Multiple Choice Answers
1. e 2. d 3. d 4. b 5. d 6. e 7. b 8. d 9. c 10. b 11. c 12. a 13. d 14. d 15. d 16. b 17. b 18. d 19. b 20. b 21. d 22. b 23. b 24. c 25. d 26. a 27. e 28. d 29. d 30. d 31. d
PROJECT MANAGEMENT
1. All of the following are advantages of the pure project organizational structure EXCEPT: A. the project manager has full authority over the project.
B. equipment and people are shared across projects. C. lines of communication are shortened.
D. high team pride and commitment. . E. team members report to one boss.
2. Which of the following is NOT an advantage of the matrix project structure? A. communication between functional divisions is enhanced
B. duplication of resources is minimized
C. policies of the parent organization are followed
D. there are two bosses - functional managers and project managers E. team members have a functional area after the project is completed
3. Which of the following factors are of concern in project management? I. time
II. cost
III. resource availability A. I only B. II only C. III only D. I and II only E. I, II and III
4. For critical path scheduling techniques to be most applicable, the jobs or tasks of a project must be:
A. well-defined. B. independent. C. ordered. D. a and b only. E. all of the above.
5. The early finish time equals:
A. the earliest possible time that the activity can begin.
B. the earliest start time plus the time needed to complete the activity. C. the latest time an activity can end without delaying the project. D. the earliest time an activity can start minus the activity time. E. the latest start time minus the activity time.
6. The critical path of a project can be characterized in the following way: A. The slack times for each task in the project are zero.
C. The early start date and early finish date are always the same for each activity on the critical path.
D. To reduce the project duration, you must reduce the slack time of a task on the critical path. E. None of the above are correct.
7. You have just been asked to oversee 100 people on a two-year project, to develop a new MRI machine similar to a current product, which will have twice the effectiveness and cost less to manufacture. You are uncertain about the time required to complete many of the activities. Which project management technique should you use?
A. CPM with a single time estimate B. MRP
C. CPM with three time estimates D. GANTT
E. Any of the above will work.
8. Which of the following is a major disadvantage of the Matrix method of project management? A. A single project manager is held responsible for the successful completion of the project. B. Team members must leave their functional "home" - jeopardizing their career path. C. Communication between functional disciplines is discouraged.
D. Team members report to two bosses - creating a potential conflict.
E. The combined functional knowledge of many similarly-trained employees can be used to create synergistic solutions to problems as they arise over the duration of the project
9. The early finish time for an activity equals:
A. The earliest possible time that the activity can begin.
B. The earliest start time plus the time needed to complete the activity. C. The latest time an activity can end without delaying the project. D. The earliest time an activity can start minus the activity time. E. The latest start time minus the activity time.
10. What is the expected duration of the path BCDEGH?
Activity Predecessors Optimistic Most Likely Pessimistic
A 2 3 4
B 2 4 6
C A, B 3 4 8
D C 2 3 7
F E 5 8 13 G E 4 4 4 H F, G 2 4 6 A. 17 B. 26 C. 25 D. 37.33 E. 39 ANSWERS: 1B, 2D, 3E, 4E, 5B, 6B, 7C, 8D, 9B, 10B
A supply chain is defined as the group of firms that provide all processes required to make a finished product available to the customer. A) True B) False
2
SCM can include having suppliers actually on site producing products or services in a manufacturers facility. A) True B) False
3
SCM suppliers should be viewed as "partners." A) True B) False
4
Wal-Mart's EDI system issues electronic purchase orders and receives electronic invoices from virtually all of Wal-Mart's suppliers. A) True B) False
5
Which of the following is NOT a reason that companies are depending more on their suppliers?
A) More focus on core competencies B) Need for more flexibilities C) Desire to share risks D) More control over their suppliers
6
The trend in organizations is to place the SCM function: A) Under the
manufacturing function B) Under the finance function C) Under the
engineering function D) At the same level as the other major functions
7
Which of the following is NOT a factor impacting the supply chain? A) Reduced
number of suppliers B) Increased competition C) Longer product life cycles D) Increased opportunities to strategically use technology
8
If two potential suppliers can deliver a part with the same quality and prices, the selection should be based on: A) Age of the firms B) A coin flip C)
Outside evaluation D) The capabilities and flexibilities of the firms
9
B) Short-term contracts C) Cooperation between purchasing and suppliers D) Continuous competitive bidding
10
The amount of inventory kept at each stock point in a warehouse network is usually based on:
A) Minimizing transportation costs B) Constant demand C)
Tradeoffs between warehousing, inventory, and transportation costs D)
Product pricing strategy
11
Which of the following is NOT a benefit of SCM/JIT Purchasing? A) Consistent
quality B) Savings on resources C) Lower costs D) Less dependence on suppliers
12
Purchased items account for approximately what % of costs of goods sold? A)
30-40% B) 40-50% C) 50-60% D) 60-70% E)
According to Total Quality Management approach, ____________ is responsible for process design. Design department Operations department Logistic department Logistic department
Operations Dept: A Design process that facilitates doing the job right the first time.
Identify the time span covered by aggregate planning. 3-7 months
2-10 months
2-12 months
4-8 months
Aggregate planning: Intermediate-range capacity planning, usually covering 2 to 12 months.
ISO 14000 is a series of how many standards? Three
Five
Seven Ten
(Reference by Umeed-e-Subh)
ISO 14000 is a series of five standards that cover a number of areas. www.vuzs.net
Which one of the following is a characteristic of a continuous process? High lead times
The ability to handle high variety
The ability to handle high volumes
In manufacturing, a continuous process is a method that is used by manufacturing or production companies to churn out the greatest quantity of a product over the least time.
As preventive measures improve quality, _____ costs decreases. Failure
Appraisal
Operating Opportunity
As preventive measures improve quality, appraisal costs decrease, because fewer resources are needed for quality inspections and the subsequent search for the causes of any problems that are detected.
An organization has described its distinctive characteristics. So, what is the next step in formulating the strategy?
Productivity Measures
Environmental scanning
Selecting the market segment Competitor’s distinctiveness
Strategy Formulation: Service Organizations are no exceptions and work diligently to identify, nurture and protect their distinctive competencies. Service Organizations are busy carrying out detailed environmental scanning and also periodically carryout SWOT Analysis.
www.vuzs.net
Which of the following department is responsible for measuring costs of poor quality? Accounting department
Finance department
Quality control department
Operations department
Cost Of Poor Quality (COPQ): Cost of Poor Quality (COPQ) in Quality Control.
Qualitative
Quantitative
Associative Trend forecast
As a quantitative measure, the "forecast bias" can be specified as a probabilistic or statistical property of the forecast error. A typical measure of bias of forecasting procedure is the arithmetic mean or expected value of the forecast errors, but other measures of bias are possible.
Which one of the following is an example of an intermediate range plan? Machine loading
Backorder
Facilities layout Product design
Intermediate plans (General levels) 1. Employment
2. Finished Good inventories 3. Subcontracting, Backorders 4. Output
www.vuzs.net
Capacity options are usually of ________ range in nature Short
Long
Intermediate Periodical
Long-range plans 1. Long term capacity 2. Location / layout
Which one of the following formula can be used to compute break even point? Q = FC / (R + VC) Q = VC / (R + FC) Q = VC / (R - VC) Q = FC / (R - VC) QBEP = FC/ R-VC www.vuzs.net
Which of the following contributes in customer’s perception of Expected Service? Service features
Past experience
Reliability of service After service guarantee
All of the following are dimensions of service quality Except: Assurance
Responsiveness
Intangibles
Reliability
Service Quality Dimensions Reliability
Responsiveness Assurance
Empathy
Tangibles
G.S.Radford demonstrated the connections between:
High quality, decreased quality and higher cost High quality, increased quality and higher cost
High quality, decreased quality and lower cost
High quality, increased quality and lower cost
G.S. Radford introduced the concept of quality in the product design stage and linked high quality with increased productivity and lower costs.
www.vuzs.net
Reliability and safety of service is ensured through which of the following?
Quality in design
Quality in system Quality in equipment Quality in training
The thing to remember here is that Quality in design ensures the safe as well as reliable operations of the service.
Averages of accepted and rejected batches in operating curve is known as__________.
Average lot tolerance percent defective
Average outgoing quality
Average outgoing quality limit Average acceptance quality level
In SERVQUAL model, all of the following makes sure that no gap exists between the service provided and service demanded Except:
System design Service quality
Communication with customers
Well trained workforce
SERVQUAL measuring tool “remains the most complete attempt to conceptualize and measure service quality”. Gap 4 is the gap between the delivery of the customer experience and what is communicated to customers. Gap 5 is difference between perceived and expected services. The key to closing gap in thoughtful system design.
Which one of the following mathematical expressions can be used to compute output capacity?
OT/CT
CT/OT CT+OT CT-OT
OC = Output capacity = OT/CT
Total Quality Management stresses on all of the following principles except: Customer satisfaction
Employee involvement
Continuous improvement in quality Quality as competitive advantage
www.vuzs.net
Which one of the following is an example of a short range plan?
Machine loading
Back order Facilities layout Product design
Short-range plans (Detailed plans) 1. Machine loading
2. Job assignments
External failure cost also includes:
Litigation costs
Process redesigning costs Employee training costs Rework costs
Which of the following is NOT a dimension of quality that makes a company competitive? Performance Special features Leadership Reliability www.vuzs.net
______ method of evaluation of quality allows the inspectors to make decisions about
whether a product / service meets the specifications? Measuring attributes
Measuring variables Measuring dimensions
None of the above
Fitness for Purpose - Customer specification: It identifies quality in terms of the extent to which a product or service meets the specifications of the customer.
Seagate, a disk driver manufacturer advertises that its high performance disk drivers have a mean time failure of 1.2 million hours. If the disk lived upto that claim, it would come under which TQM customer driven dimension of quality?
Value
Fitness for use
Conformance to specification
Conformance - how well product/service conforms to customer’s expectations.
Ali got his mobile repaired from UNITED MOBILES which was situated very near to his home. Which dimension of service quality is referred in this example?
Assurance Reliability
Convenience
Responsiveness
www.vuzs.net
The forecasting model that attempts to predict the future value based on the past data is known as:
Delphi Method
Time series Analysis
Associative Models Naïve Forecasting
Time series: It uses historical data assuming the future will be like the past and depend on developing relationships between variables that can be expressed to predict future values.
Which of the following is referred to as plans for achieving goals? Tactics
Strategies
Policies Mission
Strategies are plans for achieving goals.
Which one of the following refers to a team having representatives from different functional areas of the organization?
Traditional work group Self-directed team
Cross-functional team
These cross-functional benchmarking teams contain representatives from different functional areas of each company.
www.vuzs.net
XYZ organization is ISO 9000 certified. It now requires a plan to improve performance in resource use and pollutant output. For this, the organization requires certification
of ________. ISO 9003
ISO 14000
ISO 9004
None of the above
The ISO 14000 environmental management standards exist to help organizations (a) minimize how their operations (processes etc.) negatively affect the environment (i.e. cause adverse changes to air, water, or land); (b) comply with applicable laws, regulations, and other environmentally oriented requirements, and (c) continually improve in the above.
The role of a --- manager is to sustain, protect, and project the company’s operations side.
Project Manager
Operations Manager
Finance Manager Marketing Manager
Whether profit or non profit, the role of an OPERATIONS MANAGER is to sustain, protect, and project the company’s operations side.
All are six sigma teams except: "Black belts"
Master "black belts" "Green belts"
Master "green belts"
Six Sigma Teams are formed for implement of Six Sigma in true spirit keeping in mind both managerial as well as technical aspects.
2. Program champions 3. Master “black belts” 4. “Black belts”
Solved and Referenced by Zubair hussain
Which of the following terms reflects the notions of “do it right” and “if it
does not right, fix it”?
? Competitive benchmarking
? Quality at the source
? Continuous improvement
? Customer focus
(zh,vuzs,feb11)
Choose the correct value of alpha by solving the Kanban formula.
? 7.88
? 8.88
? 9.7
? 6.89
Find the value of alpha
Working
:-500 = 1:-500 (0.5 + 0.25) (1+ alpha) / 20
(1+ alpha) = 500 x 20 / 1500(0.5 + 0.25)
(1+ alpha) = 10,000 / 1500 (0.75)
(1+ alpha) = 10,000 / 1125
(1+ alpha) = 8.88
alpha = 8.88 – 1
alpha = 7.88
(huzifa, vuzs.net,feb11)
For 10 numbers of jobs, cumulative
flow time is 180. Under First Come First
Served (FCFS) rule of sequencing which of the following is average
flow time?
? 18 days
? 13 days
? 15 days
? 10 days
Which of the following is a time ordered diagram that is used to determine
whether observed variations are abnormal?
Select correct option:
Control charts
Scatter diagram
Histograms
Pareto charts
Control Chart: A time ordered plot representative sample statistics obtained from
an on going process purpose : to monitor process output to see if it is random
Q.2
In TQM, appearance, style, durability, reliability, craftsmanship and
serviceability comes under which determinant of quality?
Select correct option:
Quality of design
Quality of conformance
Quality of fitness for use
Quality of service after delivery
Fitness for use
· How well the product/service performs its intended purpose
· Based on mechanical features of the product, convenience of service,
appearance, style, durability, reliability, craftsmanship, and serviceability
· Example: quality = if it was easy to assemble a desk and if it served well
Which of the following terms are important for financial analysis?
Select correct option:
Cash flow and profit
Cash flow and present value
Present value and fixed cost
Cash flow and fixed cost
(vuzs.net,zh,jan10) stevenson’s book page 208
Which of the following does not enhance developing capacity alternatives?
Select correct option:
Designing flexibility into the system
Taking a big picture approach
Staying focused on quantitative factors
Smoothing capacity requirements
(Vuzs.net , zh, jan10, setvesons book page 199)
What are the chances of the batch containing defect exceeding LTPD will
be accepted is known as?
Select correct option:
Acceptance risk
Consumer risk
Producer risk
None of the above mentioned
(Vuzs.net , zh, jan10, setvesons book page 456)
Which one of the following is an example of a long range plan?
Select correct option:
Machine loading
Backorders
Facilities layout
Work schedule
Which method of forecasting is the most widely used?
Select correct option:
Regression analysis
Adaptive forecasting
Weighted moving average
Exponential smoothing
(Vuzs.net, vuzs,jan2010)
Stevenson’s book page 479
_________ is a set of standards governing documentation of a quality program
Select correct option:
ISO 9000
ISO 14000
ISO 9002
ISO 9004
“Respect for worker” is the basic principle of which of the following
management systems?
? American management system
? Japanese management system
? Asian management system
? European management system
Reference
Which of the following is a characteristic of linear regression?
It is superior to a moving average
It is a causal forecasting model
It compensates for both trend and seasonal variations in demand
It is superior to a exponential smoothing
If the goal is
prediction
, or
forecasting
, linear regression can be used to fit a
predictive model to an observed data set of y and X values. After developing such
a model, if an additional value of X is then given without its accompanying value
of y, the fitted model can be used to make a prediction of the value
Which of the following relates to estimating both the level and timing of
resourcesneeded over the project duration?
Project estimating
Project planning
Project control
Project crashing
Referenced by vuzs.net
Which of the following is referred to as plans for achieving goals?
Select correct option:
Tactics
Strategies
Policies
Mission
Mission is the reason for existence for an organization
Mission Statement answers the question “What business are we in?”
Goals provide detail and scope of mission
Tactics are the methods and actions taken to accomplish strategies
Which of the following statements is not true while comparing Quality
Assurance with Strategic Approach?
Select correct option:
Strategic Approach is reactive while Quality Assurance is a proactive
approach
Strategic Approach is the superlative form of Quality Assurance
Quality Assurance places emphasis on finding and correcting defects
before reaching market
Strategic Approach is proactive rather than reactive
Quality Assurance vs. Strategic Approach
Strategic Approach is the SUPERLATIVE form of Quality Assurance
Quality Assurance places emphasis on finding and correcting defects before
reaching
market
Strategic Approach is Proactive, focusing on preventing mistakes from occurring
and places
greater emphasis on customer satisfaction
.
________costs are incurred in assessing the level of quality attained by the
operating system.
Multiple-Choice Quiz (See related pages)
Please answer the following questions.
1 The advantages of standardization include: I. early freezing of the design. II. Fewer parts to deal with in inventory. III. Reduced training cost and time. IV. More routine purchasing.
A) I, II B) I, IV C) I, II, III
D) II, III, IV
E) I, II, III, IV
2 The term that pertains to incorporating customer ideas in product design is:
A) TQM
B) CAD
C) QFD
D) Robust design. E) Reverse engineering
3 Product designs that use computers is referred to as: A) QFD
B) CED C) RFD
D) CAD
E) TQM
4 Taking apart a competitor's product to better understand how it operates is: A) Remanufacturing
B) Concurrent engineering C) Robust design
D) Illegal
E) None of the above.
5 Which of these is a stage in the life cycle of a product or service? A) Incubation.
B) Growth. C) Maturity. D) Saturation.
E) All of the above are stages.
6 The Taguchi Approach is most closely associated with: A) Total Quality Management
B) Standardization.
C) Quality function deployment.
D) Robust design.
E) Concurrent engineering.
7 Which one of these is not related to mass customization? A) Standardization B) Reverse engineering C) Delayed differentiation D) Modular design E) Manufacturability 8 Remanufacturing means:
A) Reassembling a defective product. B) Redesigning the layout of the factory.
C) Refurbishing used products.
D) Redesigning the product. E) Retraining the workers.
9 Basic research, applied research and development are all part of the product life cycle. A) True
B) False
10 The Uniform Commercial Code specified that a product must be suitable for its intended purpose.
A) True
B) False
11 The term robust design refers to a product that has exceptional strength. A) True
B) False
12 The term concurrent engineering refers to bringing engineering and manufacturing personnel together early in the design phase.
A) True
B) False
13 Modular design is a form of standardization.
A) True
B) False
14 CAD uses computer graphics for product design.
B) False
15 Quality function deployment is a method of integrating the "voice of the customer" into the design process.
A) True
B) False
16 Equipment breakdowns is a frequent cause of delayed differentiation. A) True
B) False
17 Standardized parts are interchangeable parts.
A) True
B) False
18 Designing for disassembly and designing for recycling are nearly synonymous terms.
A) True
B) False
19 The name Taguchi is associated with robust design.
A) True
B) False
20 Recycling is essentially remanufacturing. A) True
B) False
21 A major consideration in product design is manufacturability.
A) True
22 Environmental scanning refers to checking environmental regulations before proceeding with product design.
A) True
B) False
23 The term concurrent engineering refers to bringing engineering and manufacturing personnel together early in the design phase.
A) True
B) False
24 Delayed differentiation and modular design are two tactics useful for mass customization.
A) True
B) False
25 Quality function deployment is a method of integrating the "voice of the customer" into the design process.
A) True
B) False
26 Product designs that use computers is referred to as: A) QFD
B) CAM
C) RFD
D) CAD
E) TQM
27 Which of the following may be a dimension of quality? A) Performance.
B) Conformance. C) Reliability.
D) Durability.
E) All may be dimensions of quality.
28 Remanufacturing means:
A) Reassembling a defective product. B) Redesigning the layout of the factory.
C) Replacing worn out components in products and reselling the products.
D) Redesigning the product. E) Retraining the workers.
29 One possible disadvantage of modular design is that: A) Replacement and repair is more difficult. B) Failure diagnosis is more complex.
C) Number of configurations of modules decreases.
D) Individual parts lose their identities. E) Inventory problems arise.
30 As part of a strategy for improving competitiveness, a manager may have to initially sacrifice: A) Research and development
B) Short-term performance
C) Employee pay rises D) Product or service quality E) all of the above
31 Service design generally differs from product design in which of the following ways? A) Service design tends to focus on tangible factors.
C) There is a lesser requirement to be aware of competitors' offerings. D) There is less visibility to customers.
1 Which one was not listed in the textbook as a reason that organizations fail? A) Not putting enough emphasis on short-term performance.
B) Neglecting operations strategy.
C) Neglecting investment in capital and human resources. D) Failure to consider customer wants and needs.
E) Failure to take advantage of strengths 2 Organizational strategies should support
A) the firm's mission B) functional strategies C) the firm's tactics D) operational procedures E) the firm's employees
3 Which strategies have the Japanese employed since World War II? A) Low labor cost
B) Scale based strategies C) Focused factories D) Flexible factories E) All of the above.
4 Which formula correctly describes productivity? A) (Output - Input)/Output
B) (Input - Output)/Input C) Output/Input
D) Input/Output
5 Which of these best relates to environmental scanning? A) Pollution control
B) Environmental legislation
C) Scanning the media for upcoming environmental protests D) Threats and opportunities
E) OSHA inspections 6 An order winner is:
A) the firm that got the order. B) a superior characteristic. C) a superior salesperson. D) a superior customer. E) the largest order.
7 If inputs decrease while output remains constant, what will happen to productivity? A) It will increase.
B) It will decrease.
C) It will remain the same. D) It is impossible to tell.
E) It depends on which input decreases. 8 Order qualifiers refer to:
A) distinctive competencies.
B) minimum standards of acceptability. C) value added in manufacturing D) environmental scanning.
