TEST BANK for Operations Management (Canadian Edition) 7th Edition by William Stevenson, Hydeh Motta by digitaldownload87

Chapter 1: Introduction to Operations Management 1)

Operations management encompasses all of the following EXCEPT:

A) buying materials. B) capacity planning. C) scheduling. D) motivating employees and training. E) preparing financial statements.

All of the following are reasons for studying operations management EXCEPT:

A) A large percentage of a company's expenses occur in the operations management activities that are at the core of all business organizations. B) Activities in all of the other areas of business organizations, such as accounting and marketing are interrelated with operations management activities. C) Many management jobs are in operations management-related areas, such as production planning, inventory management, and more. D) The study of operations management applies to manufacturing, however, it is of little use in service organizations. E) Operations innovations lead to marketplace and strategic benefits.

The three primary functions that exist in most business organizations are:

A) manufacturing, production, and operations. B) operations, marketing, and finance. C) operations, accounting, and marketing. D) operations, production, and finance. E) operations, sales and accounting

The three major functions of business organizations:

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A) perform differently but their functions and processes are similar. B) are related indirectly only. C) must work together, but not very closely. D) function independently of each other. E) perform similar and related activities.

Which of the following is not a type of service operations?

A) Retail trade B) Transportation and warehousing C) Fabrication of metals D) Banking E) Hotels and restaurants

6) Measurements taken at various points in the transformation process for control purposes are called:

A) plans. B) directions. C) controls. D) feedback. E) proposals.

7) Measuring process outputs at various points in order to compare outputs to previously established standards to determine if corrective action is needed is called:

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A) planning and directing. B) directing and conversion. C) feedback and control. D) controlling and leading. E) leading and transformation.

Value-added refers to:

A) the cost of inputs. B) the price of outputs. C) the difference between cost of inputs and the value or price of outputs. D) the extra profit obtained from increased productivity. E) the ratio of outputs compared to inputs.

9) Economic analysis of investment proposals, and provision of funds are activities associated with the:

A) operation function. B) marketing function. C) purchasing function. D) finance function. E) industrial engineering function.

10)

The marketing function's main concern is with:

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A) producing goods or providing services. B) assessing customer wants and needs. C) procuring materials, supplies, and equipment. D) performing economic analysis of investment proposals. E) securing monetary resources.

11)

Planning decisions are usually

and

term.

A) strategic; long B) tactical; medium C) forecasting; short D) strategic; short E) tactical; long

12)

Which of the following does not relate to system design?

A) Long term capacity B) Location of facilities C) Inventory management D) Process design E) Departmental layout

13) Tactical planning and control activities involve making decisions about all of the following EXCEPT:

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A) location of facilities. B) scheduling. C) material requirements planning. D) project management. E) inventory management.

14)

System capacity and location of facilities are examples of:

A) financial decisions. B) tactical decisions. C) systems design decisions. D) operational planning decisions. E) forecasting decisions.

15)

The responsibilities of operations managers classified as planning activities include:

A) inventory, production pace, quality, and costs. B) organizing departments, subcontracting, supplier contracts, and staffing. C) forecasting, planning, organizing, and directing. D) scheduling, job assignments, purchasing, and logistics. E) capacity, location, layout, and mix of products.

16) Which of the following responsibilities of operations managers is considered a directing activity rather than a planning or control activity?

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A) selecting production equipment B) product mix decisions C) scheduling workers D) inventory management E) layout of production facilities

17) Of the following, which aspect of the evolution of operations management is affiliated with Japanese manufacturing companies?

A) total quality management B) scientific management C) the human relations movement. D) the industrial revolution. E) craft production

18)

Which is not a significant difference between manufacturing and service operations?

A) Cost per unit B) Uniformity of output. C) Labour content of jobs. D) Amount of customer contact. E) Measurement of productivity.

19)

Which of the following is not a characteristic of service operations?

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A) Intangible output. B) High customer contact. C) High labour content. D) Easy measurement of productivity. E) Low uniformity of output.

20)

The responsibilities of operations managers classified as controlling activities are:

21)

Which of the following is not a general approach to decision-making?

A) Establishing priorities B) Subjective approach C) Analysis of trade-offs D) Systems approach E) Quantitative approaches

22) Which of the following is not a characteristic of models used to support decision making?

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A) They provide a simplified representation of a design problem. B) They ignore unimportant details, concentrating on the most important aspects of a situation. C) They may be based on mathematical representations or graphical schematics. D) They provide abstract representations of a design problem. E) They are limited to representations of objective quantitative factors.

23)

Which of the following is not true about the systems approach?

A) It recognizes the importance of taking into account the impact on all parts of the system. B) It emphasizes interrelationships among subsystems. C) It concentrates on efficiency within subsystems. D) It becomes essential whenever something is being redesigned or improved. E) The objectives of the whole take precedence over those of any one part.

24)

Which is not a quantitative technique to problem solving?

A) Linear programming B) Queuing techniques C) Statistical techniques D) Heuristic approach E) Forecasting techniques

25) Dealing with the fact that certain aspects of any management situation are more important than others is called:

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A) analysis of trade-offs. B) sensitivity analysis. C) establishing priorities. D) analysis of variance. E) decision analysis.

26) The fact that improvements in a few key areas of operations will have more impact than many improvements in less significant areas is referred to as the .

A) forecasting approach B) Pareto phenomenon C) productivity challenge D) analysis of trade-offs E) ethical dilemma

27) Which of the following developments related to the historical evolution of operations management is the oldest?

A) The human relations movement advocated by Mayo, Maslow, and Hertzberg. B) The introduction of the moving assembly line by Henry Ford. C) Scientific management principles espoused by Frederick Taylor. D) The principle of division of labour documented in Adam Smith's book The Wealth of Nations. E) The influence of Japanese management practices.

28)

Which of the following is not properly matched?

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A) Mathematical model for inventory management-Elton Mayo B) Division of labour-Adam Smith C) Scientific Management-F. W. Taylor D) Motion study-Frank and Lillian Gilbreth E) Moving assembly line-Henry Ford

29) Which of the following is not a major trend influencing the strategies of manufacturing organizations?

A) Globalization B) The Internet and e-commerce C) Introduction of mass production D) Supply chain management E) Technological advances

30)

Operating at minimum cost and time is referred to as

A) Value added B) Efficiency C) Effectiveness D) Trade-offs E) Economies of scale

31) Which of the following functions is mostly service based, as identified in the "goodsservice" continuum?

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A) Automotive assembly B) Automotive repair C) Restaurant meal D) Software development E) Teaching

32) The service industry in Canada has been growing. According to Statistics Canada, what percent of jobs are in services?

A) More than 29% B) More than 48% C) More than 58% D) More than 79% E) More than 84%

33)

A balance achieved between two incompatible features is referred to as (a)

A) Break even B) Quantitative technique C) Heuristic D) Trade-off E) Systems approach

34) In the Historical Evolution of Operations Management. Which of the following was emphasized during the Human Relations Movement era?

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A) Division of labour B) The importance of workers in work design. C) The use of economic incentives D) The transfer of control from workers to management E) The development of time and motion studies.

35) Many major trends affect operations. Disaster preparation and response falls under which major trend?

A) Technology B) Globalization C) Supply chains D) Internet and ecommerce E) Sustainability

36) The number of defective parts produced in a given time period would be measured and managed by which of the following performance metrics?

A) Forecast accuracy B) Quality C) Inventory D) Schedules E) Flexibility

37)

Moral principles that govern a person's behaviour are called what?

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A) Priorities B) Trade-Offs C) Work design D) Ethics E) Motivation

38)

The substitution of machine power for human power was an innovation specific to what?

A) The industrial revolution B) Scientific management C) The human relations movement D) The Japanese influence on manufacturing E) The division of labour

39) These software systems are used to coordinate sales, materials management, production and accounting/finance activities.

A) Material requirements planning (MRP) B) Electronic data interchange (EDI) C) Enterprise resource planning (ERP) D) Decision models (DM) E) Business analytics (BI)

40) This involves the sequencing of organizations involved in producing and delivering a product.

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A) Globalization B) Inventory control C) Logistics D) Supply chains E) Job assignments

41)

This refers to the reduced use of resources and harm to the environment.

A) Logistics B) Sustainability C) Material requirements planning D) Cost control E) Globalization

42)

Which of the following is NOT considered a Green initiative?

A) Reducing packaging B) Buying locally C) Expanding globalization D) Conserving water and energy use E) Recycling

43) As a service business, the operations management activities of an airline company have nothing in common with the operations management activities within a bicycle manufacturing company. ⊚ ⊚

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44) Operations managers are responsible for managing activities and resources that produce goods and/or provide services. ⊚ ⊚

true false

45) Effectiveness refers to achieving intended goals whereas efficiency refers to minimizing cost and time. ⊚ ⊚

true false

46) Operations, marketing, and finance function independently of each other in most organizations. ⊚ ⊚

47)

true false

The operations function exists only in firms that are goods-oriented. ⊚ ⊚

true false

48) Operations management pertains almost exclusively to the management of manufacturing operations. ⊚ ⊚

49)

true false

Value-added refers to the cost of the inputs required to produce goods and services.

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⊚ ⊚

true false

50) As long as a product is ready in advance of when customers demand it, the timing of when a product is manufactured does not influence the value-added. ⊚ ⊚

true false

51) Storing an item earlier than the scheduled delivery date is an example of a value adding activity. ⊚ ⊚

true false

52) Management information systems (MIS) are concerned with providing management with the information it needs to effectively manage. ⊚ ⊚

53)

Operations management involves both system design and planning/control decisions. ⊚ ⊚

54)

true false

System design decisions have very little impact on planning/control decisions. ⊚ ⊚

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55)

An example of an operations control decision is the choice of location. ⊚ ⊚

56)

true false

Scheduling jobs is a system design decision and not a planning decision. ⊚ ⊚

true false

57) Design decisions are usually strategic and long term, while planning decisions are tactical and medium term. ⊚ ⊚

58)

true false

Managing inventory levels is considered a planning/control operations decision area. ⊚ ⊚

true false

59) A basic difference between manufacturing and service organizations is that services are action-oriented and manufacturing is goods-oriented. ⊚ ⊚

60)

true false

Service involves a much higher degree of customer contact than the production of goods.

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⊚ ⊚

true false

61) Service often requires a higher labour content, whereas the production of goods is more capital intensive. ⊚ ⊚

true false

62) Measurement of productivity in service is more straightforward than in goods production due to the high degree of uniformity of inputs. ⊚ ⊚

true false

63) Models are simplified representations of something and thus ignore important aspects of a situation. ⊚ ⊚

64)

true false

Quantitative techniques are often quick and practical techniques for many decisions. ⊚ ⊚

true false

65) A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. ⊚ ⊚

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true false

66)

Queuing techniques are useful for analyzing situations in which waiting lines form. ⊚ ⊚

true false

67) It is essential to use the systems approach when something is being designed, redesigned, implemented, improved, or otherwise changed. ⊚ ⊚

true false

68) A systems approach is to concentrate on efficiency within a subsystem and thereby achieve overall efficiency. ⊚ ⊚

69)

true false

Many operations management decisions can be described as trade-offs. ⊚ ⊚

true false

70) The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. ⊚ ⊚

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true false

71) Operations managers, who usually use quantitative approaches, have no responsibility to make ethical decisions. ⊚ ⊚

true false

72) Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom made parts. ⊚ ⊚

73)

true false

Frederick Taylor spearheaded the scientific management movement in America. ⊚ ⊚

true false

74) The Human Relations Movement, which emphasized the importance of the human element in job design, was replaced by the more technical aspects of Scientific Management. ⊚ ⊚

true false

75) The moving assembly line introduced by Henry Ford is an example of the development of mass production based on large volumes of standardized goods produced using low or semiskilled workers and highly specialized equipment. ⊚ ⊚

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true false

76) The impact of globalization for manufacturing companies has seen reduced reliance on long international supply chains because of the increasing cost to ship components and finished goods to foreign markets. ⊚ ⊚

true false

77) The transformation process and feedback is useful in the control of manufacturing operations but does not apply to service operations. ⊚ ⊚

true false

78) One responsibility of marketing is to identify customer wants and needs and communication them to operations. ⊚ ⊚

true false

79) One important piece of information sales needs from operations is the manufacturing lead time in order to give customers realistic estimates of how long it will take to fill their orders. ⊚ ⊚

true false

80) Quality assurance is less challenging in services, as services primarily produce intangibles. ⊚ ⊚

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true false

81) The operations manager has the ultimate responsibility for the creation of goods or performance of services. ⊚ ⊚

82)

true false

Business analytics uses software to build models which in turn support decision making. ⊚ ⊚

true false

83) North American management practices have had a significant impact on Japanese manufacturers. ⊚ ⊚

true false

84) Lean production systems operate with lower amounts of inventory, so emphasis is placed on anticipating when problems might occur before they arise. ⊚ ⊚

true false

85) Major trends that affect operations are only taken into account once strategies and tactics are in place. ⊚ ⊚

true false

86) Concerns about global warming and pollution have caused governments to impose stricter environmental regulations on businesses.

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true false

87) The difference between goods and services is that goods are mostly intangible and services are mostly tangible. ⊚ ⊚

true false

88) There are only two professional associations involved in the field of operations management. ⊚ ⊚

89)

true false

Finance and operations cooperate by exchanging information and expertise. ⊚ ⊚

true false

90) Operations interfaces with supporting functions such as maintenance and human resources. ⊚ ⊚

91)

true false

Managers use performance metrics to manage and control operations. ⊚ ⊚

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true false

92)

Worker and product safety fall under an operations manager's ethical issues. ⊚ ⊚

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Answer Key Test name: Chap 01_7ce 1) E 2) D 3) B 4) A 5) C 6) D 7) C 8) C 9) D 10) B 11) B 12) C 13) A 14) C 15) E 16) C 17) A 18) A 19) D 20) A 21) B 22) E 23) C 24) D 25) C 26) B Version 1

27) D 28) A 29) C 30) B 31) E 32) D 33) D 34) B 35) E 36) B 37) D 38) A 39) C 40) D 41) B 42) C 43) FALSE 44) TRUE 45) TRUE 46) FALSE 47) FALSE 48) FALSE 49) FALSE 50) FALSE 51) FALSE 52) TRUE 53) TRUE 54) FALSE 55) FALSE 56) FALSE Version 1

57) TRUE 58) TRUE 59) TRUE 60) TRUE 61) TRUE 62) FALSE 63) FALSE 64) FALSE 65) TRUE 66) TRUE 67) TRUE 68) FALSE 69) TRUE 70) TRUE 71) FALSE 72) TRUE 73) TRUE 74) FALSE 75) TRUE 76) FALSE 77) FALSE 78) TRUE 79) TRUE 80) FALSE 81) TRUE 82) TRUE 83) FALSE 84) TRUE 85) FALSE 86) TRUE Version 1

87) FALSE 88) FALSE 89) TRUE 90) TRUE 91) TRUE 92) TRUE

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Chapter 2: Competitiveness, Strategy, and Productivity 1)

Which of the following is not typically considered a cure for poor competitiveness?

A) Improve quality B) Recognize labour as a valuable asset and act to develop it. C) Minimize attention to the operations function D) Put less emphasis on short-term financial results. E) Remove communications barriers within organizations.

The key to successfully competing is understanding what customers want and then satisfy those wants.

A) finding suppliers who can B) designing products and services that C) hiring enough workers to D) finding the best way to E) training production workers to

Product variety is an example of:

A) a generic operations strategy. B) operations infrastructure. C) a process type. D) a dimension of flexibility. E) a key purchasing criteria.

4) Which of the following is not one of the competitive priorities organizations emphasize as the basis of competing with one-another?

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A) Cost B) Quality C) Product duplication D) Flexibility E) Delivery reliability

Which of the following is not a key purchasing criterion?

A) Price B) Variety C) Quality D) Timeliness E) Vendor relations

Characteristics that customers perceive as minimum standards of acceptability are called:

A) order winners. B) order qualifiers. C) core competencies. D) distinctive competencies. E) minimum attributes.

Which of the following determines where the organization desires to be in the future?

A) Mission statement B) Values statement C) Goals statement D) Vision statement E) Action plans

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8) Strategies have a(n) company.

impact on the general direction and basic character of a

A) long-term. B) medium-term. C) short-term. D) insignificant. E) tactical.

9) A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more than a firm pursuing a strategy based on low cost and high volume.

A) variation B) quality C) capacity D) productivity E) streamlined flow

10) Of the following, which aspect of strategic planning involves medium or short-term projects to accomplish specific objectives?

A) Goals and objectives B) Functional strategies C) Action plans D) Forecasts E) Mission/vision statements

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11) Which of the following is a set of well-coordinated policies, objectives, and action plans, directly affecting the operations function, which is aimed at securing a long-term sustainable advantage over the competition?

A) Generic strategy B) Operations strategy C) Action plans D) Strategic planning E) Functional strategy

12) Which of the following is not a major decision-making category for operations policies and action plans?

A) Facility B) Capacity C) Process types and technology D) Human Resources E) Productivity

13)

What is the major difference between vertical integration and outsourcing?

A) Vertical integration is ownership of a part of the supply chain, outsourcing has no ownership. B) Outsourcing is ownership of a part of the supply chain, vertical integration has no ownership. C) Outsourcing uses external suppliers to perform some production/service functions while production/service functions through vertical integration are strictly in-house. D) Outsourcing is a long-term operations strategy where vertical integration is short term. E) Vertical integration is usually limited to services, where as outsourcing usually deals with production of goods.

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14)

Which of the following is not a step for formulating an operations strategy?

A) Link the organizational goals to the operations strategy. B) Conduct an audit to determine the strengths/weaknesses of the current operations strategy. C) Define the mission and values of the organization. D) Assess the degree of focus at each plant. E) Segment the customers into types.

15) Segmenting customers into types is part of formulating an Operations Strategy. Which of the following is not one of the four competitive priorities used in segmentation?

A) Cost B) Quality C) Delivery D) Location E) Flexibility

16) The generic operations strategy that reduces the time needed to add new product and process designs and allows volume and design changes and product variety is referred to as .

A) low labour cost strategy B) scale-based strategy C) focused factories strategy D) outsourcing E) flexible factories strategy

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17) The generic operations strategy that emphasizes capital-intensive methods to achieve higher labour productivity and lower unit costs is referred to as .

A) low labour cost strategy B) scale-based strategy C) focused factories strategy D) outsourcing E) flexible factories strategy

18) Radical process redesign based on process re-orientation, breaking down functional silos and integrating operations into customer-focused processes are tactics associated with what generic operations strategy?

A) Low labour cost strategy B) Scale-based strategy C) Focused factories strategy D) Business process reengineering E) Flexible factories strategy

19)

Time-Based strategies do not focus on:

A) the time to deliver a product. B) maintaining quality. C) planning time. D) production design time. E) changeover time.

20) Which of the following is not one of the major components of the Balanced Scorecard framework?

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A) Financial B) Human resources C) Internal business processes D) Learning and growth E) Customer

21)

Which of these factors would be least likely to affect productivity?

A) workers B) management C) product mix D) advertising E) methods and technology

22) What is the productivity for a production line where 10 workers assembled 320 products in 8 hours?

A) 0.25 B) 4 C) 32 D) 40 E) 320

23) A measure of productivity which reflects a combination of some, or all of the resources used to obtain a certain output is:

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A) labour productivity. B) machine productivity. C) multifactor productivity. D) materials productivity. E) overhead productivity.

24) Canvalves Company produces cast bronze valves on an assembly line. It currently produces 800 valves each 8-hour shift. If the production is increased to 1,200 valves each shift, the productivity increases by:

A) 50% B) 33% C) 25% D) 67% E) 75%

25) In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per 5-day week. What is the labour productivity of this operation?

A) 90 chairs/worker/day B) 20 chairs/worker/day C) 15 chairs/worker/day D) 75 chairs/worker/day E) 50 chairs/worker/day

26) The weekly output of a fabrication process is shown below together with data for labour and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labour cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per linear foot. What is the average multifactor productivity? Week

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Output

# Workers

Material (feet)

392

2720

408

2790

A) 1.463 B) 1.457 C) 1.431 D) 1.422 E) 1.475

27)

Which of the following is not true of productivity measures?

A) Productivity is mainly used for manufacturing and not used for services. B) Productivity measures can track performance over time. C) Labour productivity is used in labour wage negotiations. D) Productivity measures can be used to measure the performance of an organization or an entire country. E) Productivity contributes to organizational competitiveness.

28)

Which of the following is not a factor that affects productivity?

A) Use of computers in an office. B) Design of the workspace. C) Use of Internet and e-mail. D) Standardizing work process. E) Analysis of competitors.

29)

Which of these factors does not affect productivity?

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A) Methods and management B) Capital equipment C) Technology D) Labour E) Hiring policies

30)

Which of the following is not a general factor that affects productivity?

A) B) C) D)

31)

Methods and management Equipment and technology Competitors Labour

Which of the following is not a measure of labour productivity?

A) Units of output per labour hour B) Value-added per labour hour C) Units of output per shift D) Units of output per machine hour E) Dollar value of output per labour hour

32) Service productivity measurement is more problematic than manufacturing due to which of the following issues?

A) Output is tangible B) Low degree of variability C) Involves intellectual activities D) Inputs are consistent E) Output has a low degree of variability

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33) A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 25% with less material, but one additional worker required. Under the old process, five workers could produce 60 units per hour. Labour costs are $12/hour, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead is charged at 1.6 times direct labour cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement?

34) The manager of a carpet store is trying to determine optimal installation crew size. He has tried various crew sizes with the results shown below. Compute the average labour productivity for each crew size. Which crew size do you recommend? Before:

60(31) 5(12) + 60(16) + 1.6(5)(12)

1,860/hr 1,116/hr

= 1.667

After:

60(1.25)(31) 6(12) + 75(10) + 1.6(6)(12)

2,325/hr 937.2/hr

= 2.481

Productivity increase = (2.481 – 1.667) × 100 1.667

= 48.83%

35) The weekly output of a production process is shown below, together with data for labour and material inputs. The standard inventory value of the output is $125 per unit. Overhead is charged weekly at the rate of $1500 plus .5 times direct labour cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per running foot. Compute the average multifactor productivity for this process. Week

Output

# Workers

Material (ft.)

412

2840

364

2550

392

2720

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408

2790

36) The variety of models and options available to customers is an example of key purchasing criteria that establishes the basis of competition. ⊚ ⊚

37)

true false

Competitiveness relates to the profitability of an organization in the marketplace. ⊚ ⊚

true false

38) Competitiveness means how effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services, which depends on its capabilities and performance in its market. ⊚ ⊚

true false

39) The purchasing criteria of quality and timeliness of delivery are order winners for all companies. ⊚ ⊚

true false

40) Flexibility or the ability to produce a variety of goods and services is one of the factors of competitive priorities.

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41) Order qualifiers are defined as the characteristics that distinguish the product or service from others to be more competitive and better for a customer and win the customer's purchase. ⊚ ⊚

true false

42) A mission statement should provide a guide for the formulation of strategies for the organization. ⊚ ⊚

43)

true false

Mission is where the organization desires to be in the future. ⊚ ⊚

true false

44) Focus on environmentally friendly and energy-efficient operations is an example of a strategy in an organization. ⊚ ⊚

45)

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Goals are the methods and actions used to accomplish strategies. ⊚ ⊚

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46) An example of a tactical operations management decision is determining employment levels. ⊚ ⊚

true false

47) The hierarchy of planning and decision-making is: mission/vision, goals, strategies, tactics, and action plans. ⊚ ⊚

true false

48) Visions are more specific than strategies, and they provide guidance and direction for carrying out actual operations, which need the most specific and detailed plans and decision making in an organization. ⊚ ⊚

true false

49) Operations strategy is a set of well-coordinated policies, objectives, and action plans, directly affecting the operations function, which is aimed at securing a long-term sustainable advantage over the competition. ⊚ ⊚

true false

50) Vertical integration is defined as letting a supplier perform some of the production/service function, by buying goods or services instead of producing or providing them in-house

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⊚ ⊚

true false

51) Expanding a business by acquiring of a major part or the whole of a supply chain is called "Outsourcing". ⊚ ⊚

true false

52) The major difference between productivity and efficiency is: Productivity is a narrower concept that means getting the most out of a fixed set of resources; however, efficiency is a broader concept that means better use of overall resources. ⊚ ⊚

true false

53) Time-based strategies focus on reducing the time required to accomplish certain activities, such as new product development or delivery to the customer. ⊚ ⊚

true false

54) Typically, a manufacturing firm would not consider Enterprise Resource Planning (ERP) software as part of the organization's operations strategy. ⊚ ⊚

true false

55) A sustainability strategy specifies how to cooperate with the organization's supply chain (including suppliers, distributors, and customers) to achieve supply chain goals and to be competitive.

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true false

56) A global strategy moves the company toward standardization of its products around the world to take advantage of economies of scale with efficient operations. ⊚ ⊚

57)

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Vision and strategy are at the centre of the Balanced Scorecard framework. ⊚ ⊚

true false

58) Even though labour cost as a proportion of total cost has been decreasing in manufacturing companies, labour productivity is still the main measure being used to gauge the performance of individuals and plants. ⊚ ⊚

59)

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Productivity is defined as the ratio of input to output. ⊚ ⊚

true false

60) Tracking productivity measures over time enables managers to judge organizational performance and to decide where improvements are needed. ⊚ ⊚

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61)

Productivity is directly related to competitiveness. ⊚ ⊚

62)

Machine productivity can be measured by units of output per machine hour ⊚ ⊚

63)

true false

Labour costs are included as one of the inputs in all productivity measures. ⊚ ⊚

true false

64) Variability of the output of services makes it more difficult to measure service productivity. ⊚ ⊚

true false

65) Service productivity is easier to measure than manufacturing productivity because it is more labour intensive. ⊚ ⊚

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true false

Answer Key Test name: Chap 02_7ce 1) C 2) D 3) E 4) C 5) E 6) B 7) D 8) A 9) A 10) C 11) B 12) E 13) A 14) C 15) D 16) E 17) B 18) D 19) B 20) B 21) D 22) B 23) C 24) A 25) C 26) B Version 1

27) A 28) E 29) E 30) C 31) D 32) C 36) TRUE 37) FALSE 38) TRUE 39) FALSE 40) TRUE 41) FALSE 42) TRUE 43) FALSE 44) TRUE 45) FALSE 46) TRUE 47) TRUE 48) FALSE 49) TRUE 50) FALSE 51) FALSE 52) FALSE 53) TRUE 54) FALSE 55) FALSE 56) TRUE 57) TRUE 58) TRUE 59) FALSE Version 1

60) TRUE 61) TRUE 62) TRUE 63) FALSE 64) TRUE 65) FALSE

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Chapter 3; Demand Forecasting 1)

Forecasts can help a manager to do all of the following EXCEPT:

A) reduce uncertainty in planning. B) design the system. C) plan the medium-term use of the system. D) schedule the short-term use of the system. E) predict the future precisely.

In operations, forecasts are the basis for all of the following EXCEPT:

A) capacity planning B) project management C) inventory planning D) work assignments and workloads E) pricing and promotion

All of the following are true about forecasts EXCEPT:

A) become less accurate with longer time horizons. B) are less accurate for individual items than for groups of items. C) are always perfect. D) managers must be alert to the business environment and be ready to override forecasts. E) assume the same underlying causal system in the future as the past.

Which would not generally be considered a feature common to all forecasts?

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A) B) C) D)

An assumption of a stable underlying causal system. Actual results will differ somewhat from predicted values. Historical data is available on which to base the forecast. Forecasts for groups of items tend to be more accurate than forecasts for individual

items. E) Accuracy decreases as the time horizon increases.

Which of the following is not a step in the forecasting process?

A) Determine the purpose of the purpose. B) Eliminate any assumptions and rely solely on verifiable factual data. C) Establish a forecasting horizon. D) Select a forecasting technique. E) Monitor the forecast.

Which of the following is not part of determining the purpose of the forecast?

A) The level of detail required in the forecast B) The amount of personnel that can be justified C) The level of accuracy required D) The forecasting time interval E) The amount of dollars that can be justified

The two general approaches to forecasting are:

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A) mathematical and statistical. B) qualitative and mathematical C) judgmental and quantitative. D) historical and associative. E) judgmental and associative.

Which of the following is not necessarily an element of a good forecast?

A) The degree of accuracy is stated. B) Time horizon long enough so forecast results can be used. C) Expressed in meaningful units. D) Low cost to complete. E) Technique is simple to understand and use.

Which of the following is not a requirement of a properly prepared forecast?

A) Timely B) Accurate C) Reliable D) Simple to understand and use E) Inexpensive

10)

Which of the following is not a type of judgmental forecasting?

A) Executive opinions B) Sales force opinions C) Consumer surveys D) Expert opinions E) Time series analysis

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11)

Which of the following steps is considered the last step in the forecasting process?

A) Gather and analyze relevant historical data. B) Determine the purpose of the forecast. C) Monitor the forecast. D) Prepare the forecast. E) Establish a time horizon.

12) Which of the following would be an advantage of using opinions of a sales force to develop a demand forecast?

A) The sales staff is least affected by changing customer needs. B) The sales force can easily distinguish between customer desires and probable actions. C) The sales staff is often aware of customers' future plans. D) Salespeople are least likely to be influenced by recent events. E) Salespeople are least likely to be biased by sales quotas.

13)

Which phrase most closely describes the Delphi technique?

A) Associative forecast B) Consumer survey C) Series of questionnaires D) Double smoothing E) Historical data

14) A network security company is securing input from information technology managers trying to anticipate when Wi Fi networks might be available in at least half of their client's businesses. Which method are they most likely to use?

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A) The Delphi method B) Consumer surveys C) Regression models D) Naive method E) Trend models

15) The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:

A) sales force opinions. B) consumer surveys. C) the Delphi method. D) time series analysis. E) executive opinions.

16)

One reason for using the Delphi method in forecasting is:

A) responses are anonymous. B) to achieve a high degree of accuracy. C) to maintain accountability and responsibility. D) to be able to replicate results. E) the ability to directly meet with customers

17)

Time series data may exhibit all but which of the following behaviours?

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A) Trend B) Seasonality C) Cycles D) Irregularities E) Identification of variables.

18)

Persistent upward or downward movement in time series data is called:

A) seasonal variation. B) cycles. C) irregular variation. D) trend. E) random variation.

19)

The primary difference between seasonality and cycles is:

A) the duration of the repeating patterns. B) the magnitude of the variation. C) the ability to attribute the pattern to a cause. D) There is more forecasting "noise" in a cycle. E) There is less forecasting "noise" in a cycle.

20)

Averaging forecasting techniques are useful for:

A) distinguishing between random and non-random variations B) forecasting cyclical time series C) smoothing out fluctuations in data D) forecasting seasonal indexes E) identifying variables in the demand

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21)

Disadvantages of naive forecasts include:

A) time-consuming to prepare B) it is expensive to use C) the technique is difficult to understand D) inability to provide highly accurate forecasts E) time to develop a forecast is lengthy

22)

Which of the following is not a characteristic of Naive forecasting methods

A) are quick and easy to prepare. B) are easy for users to understand. C) can serve as an accuracy standard for other techniques. D) able to quickly identify changes in demand. E) have virtually no cost.

23)

Using the latest observation in a sequence of data to forecast the next period is:

A) a moving average forecast. B) a naive forecast. C) an exponentially smoothed forecast. D) an associative forecast. E) a judgmental forecast.

24) For the data given below, if the time series was assumed to be stable, what would the naive forecast be for the next period?

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Period

Demand

A) 58 B) 62 C) 59.5 D) 61 E) 60.5

25) Given the following historical data, what is the simple three-period moving average forecast for period 6? Period

Value

Period

Value

A) 67 B) 115 C) 69 D) 68 E) 68.67

26) Given the following historical data and weights of .5 for the most recent period, .3 for the next most recent, and .2 for the next after that, what is the weighted three-period moving average forecast for period 5?

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Period

Value

Period

Value

138

148

142

144

A) 144.20 B) 144.80 C) 144.67 D) 143.00 E) 144.00

27)

Moving average forecasting techniques:

A) immediately reflect changing patterns in the time series. B) lead changes in the time series. C) smooth variations in the time series. D) exhibit more variability than the original data. E) are best used when demand shows a steady increase.

28)

Which is not a characteristic of simple moving averages applied to time series data?

A) Smooths random variations in the data B) Weights each historical value equally C) Lags changes in the data D) Has minimal reliance on historical data E) Smooths real variations in the data

29) In order to increase the responsiveness of a forecast made using the moving average technique, the number of data points in the average should be:

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A) decreased. B) increased. C) multiplied by a larger alpha. D) multiplied by a smaller alpha. E) divided by alpha.

30)

As compared to a simple moving average, the weighted moving average is:

A) easier to compute. B) more reflective of the most recent periods. C) smoother. D) less reflective of the most recent periods. E) more readily able to identify random variations.

31)

A forecast based on the previous forecast plus a percentage of the forecast error is:

A) a naive forecast. B) a simple moving average forecast. C) a centred moving average forecast. D) an exponentially smoothed forecast. E) an associative forecast.

32)

Which is not a characteristic of exponential smoothing?

A) Smooths random variations in the data B) Weights each historical value equally C) Provides an easily altered weighting scheme D) Directly accounts for forecast error E) Smooths real variations in the data

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33) Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

A) 0 B) .01 C) 1 D) 5 E) 1.0

34) Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be 3 units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to:

A) 0.01 B) 0.10 C) 0.15 D) 0.20 E) 0.60

35) Given an actual demand of 57, a previous forecast of 62, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

A) 36.9 B) 57.5 C) 60.5 D) 62.5 E) 65.5

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36) Given an actual demand of 105, a predicted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be:

A) 80.8 B) 93.8 C) 100.2 D) 101.8 E) 108.2

37) Which of the following possible values of alpha would cause exponential smoothing to respond the most quickly to forecast errors?

A) 0 B) .01 C) .05 D) .10 E) .15

38) A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150 t. What is the forecast for December if t = 0 for the month of April?

A) 40,050 B) 41,050 C) 41,200 D) 41,300 E) 41,500

39)

In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of:

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A) an exponentially smoothed forecast and a smoothed trend factor. B) an exponentially smoothed forecast and an estimated trend value. C) the old forecast adjusted by a trend factor. D) the old forecast and a smoothed trend factor. E) a moving average and a trend factor.

40) In the "additive" model for seasonality, seasonality is expressed as a adjustment to the average; in the multiplicative model, seasonality is expressed as a adjustment to the average.

A) quantity; proportion B) proportion; quantity C) quantity; quantity D) proportion; proportion E) index; quantity

41)

Which technique is useful in computing seasonal relatives?

A) Double smoothing B) Delphi technique C) MSE D) Centred moving average E) Exponential smoothing

The following equation is used to predict quarterly demand: Y t = 350 - 2.5 t, where t 42) = 0 in the second quarter of last year. Quarter relatives are Q1 = 1.5; Q2 = 0.8; Q3 = 1.1; and Q4 = 0.6. What is the forecast for the last quarter of this year?

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A) 201 B) 335 C) 268 D) 199.5 E) 266

43)

Which of the following might be used to forecast the cyclical component of a time series?

A) An associated leading variable B) Centred moving average (CMA) C) Delphi technique D) Exponential smoothing E) Seasonal relatives

44)

The primary method for associative forecasting is:

A) Naïve method B) Regression analysis C) Simple moving averages D) Centred moving averages E) Exponential smoothing

45)

Which term most closely describes what associative forecasting techniques are based on?

A) Time series data B) Linear relationships C) The Delphi technique D) Consumer survey E) Predictor variables

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46)

Which of the following corresponds to the predictor variable in simple linear regression?

A) Regression coefficient B) Dependent variable C) Independent variable D) Predicted variable E) Demand

47)

Use of simple linear regression analysis assumes that:

A) Variations around the line are non-random. B) Deviations around the line are not normally distributed. C) Predictions can be made outside the range of observed values of the predictor variable. D) A straight line will be determined that maximizes the sum of deviations of the data points. E) Predictions are to be made only within the range of observed values of the predictor variable.

48)

The mean absolute deviation (MAD) is used to:

A) estimate the trend line. B) eliminate forecast errors. C) measure forecast accuracy. D) seasonally adjust the forecast. E) measure average data.

49)

All of the following are used to measure forecast errors EXCEPT?

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A) B) C) D)

50)

Mean absolute difference (MAD) Mean weighted moving average (MWMA) Mean absolute percentage error (MAPE) Mean squared error (MSE)

MAPE measures the:

A) mean actual produced error. B) mean absolute percent error. C) main accuracy percent evaluation. D) mean absolute produced error. E) mean average percent error.

51)

Positive forecast errors mean that the forecast:

A) was too high. B) was too low. C) was accurate. D) was irregular. E) is where the predictor variable indicated.

52)

Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?

A) 4 B) 3 C) 5 D) 6 E) 12

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53)

MSE weighs errors according to .

and MAPE weighs according to

A) squared values; mean absolute values B) absolute values; absolute percentage error C) absolute percentage error; squared values D) squared values; their actual values E) absolute error; average error

54)

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation (MAD)?

A) 4 B) 3 C) 2.5 D) 2 E) 1

55)

Given forecast errors of -5, -10, and +15, what is the mean absolute deviation (MAD)?

A) 0 B) 10 C) 30 D) 175 E) 7.5

56)

The actual demand and the forecasted demand for a product were as follows:

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period:

actual:

286

255

275

forecast:

280

290

295

Compute the MAPE.

A) 0.77% B) 7.7% C) 0.23 D) 23 E) 6.9%

57)

Which of the following is used for constructing a control chart for forecast errors?

A) Mean absolute deviation (MAD) B) Mean absolute percentage error (MAPE) C) Tracking signal (TS) D) Actual - forecast E) None of the choices are correct.

58)

The two most important factors in choosing a forecasting technique are:

A) cost and time horizon. B) accuracy and time horizon. C) cost and accuracy. D) accuracy and buy-in. E) cost and ease of use.

59) Which of the following factors is generally not a consideration at the time of selecting an appropriate forecasting method to use?

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A) Amount of historical data available B) Forecast horizon C) Mean square error in the forecast D) Evidence of a pattern in time series data E) Preparation time (cost)

60) Sales for a product have been fairly consistent over several years, although showing a steady upward trend. The company wants to understand what drives sales. The best forecasting technique would be:

A) trend models. B) judgmental methods. C) moving averages. D) regression models. E) exponential smoothing techniques.

61) Which of the following techniques are most likely to be used for forecasting demand for new products and services?

A) Trend models B) Judgmental methods C) Moving averages D) Regression models E) Exponential smoothing techniques

62) Which of the following are most likely to be used for forecasting demand for the longer term?

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A) Regression trend models B) Judgmental methods C) Delphi method D) Simple exponential smoothing E) Naïve method

63) An automobile company is trying to forecast demand for minivans over the next 10 years. Which method of forecasting are they most likely to use?

A) Regression trend models B) Moving averages C) Delphi method D) Simple exponential smoothing E) Naïve method

64) A company is conducting long-term planning of which types of services they should offer. Which of the following forecasting techniques are they most likely to use?

A) Trend models B) Executive opinion C) Regression models D) Simple exponential smoothing E) Naïve method

65)

A managerial approach toward forecasting which seeks to actively influence demand is:

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A) reactive. B) proactive. C) reflexive. D) protracted. E) retroactive.

66)

Which of the following is not an accurate statement concerning bias in forecasts?

A) Bias is calculated based on the mean absolute percent error (MAPE). B) Persistent negative bias implies forecasting frequently overstating actual values. C) Bias is the sum of forecast errors. D) Persistent positive bias implies frequently underestimating actual values. E) Bias may indicate a shift in the demand pattern.

67) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using a four-year simple moving average?

A) 18,750 B) 19,500 C) 21,000 D) 22,650 E) 22,800

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68) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using exponential smoothing with alpha = 0.5, if the forecast for two years ago was 16,000?

A) 18,750 B) 19,500 C) 21,000 D) 22,650 E) 22,800

69) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using trend adjusted (double) smoothing with alpha(1) =.05 and alpha(2) = 0.3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate for last year's forecast was 1,500?

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A) 18,750 B) 19,500 C) 21,000 D) 22,650 E) 22,800

70) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using the least squares trend line for these data?

A) 18,750 B) 19,500 C) 21,000 D) 22,650 E) 22,800

71) The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data:

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TIME PERIOD

DEMAND

5 years ago

900

4 years ago

700

3 years ago

600

2 years ago

500

Last year

300

What is the forecast for this year using the naive approach?

A) 163 B) 180 C) 100 D) 420 E) 510

72) The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data: TIME PERIOD

DEMAND

5 years ago

900

4 years ago

700

3 years ago

600

2 years ago

500

Last year

300

What is the forecast for this year using a three-year weighted moving average with weights of .5, .3, and .2?

A) 163 B) 180 C) 300 D) 420 E) 510

73) The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data:

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TIME PERIOD

DEMAND

5 years ago

900

4 years ago

700

3 years ago

600

2 years ago

500

Last year

300

What is the forecast for this year using exponential smoothing with alpha = .4, if the forecast for TWO years ago was 750?

A) 16.6 B) 180 C) 300 D) 420 E) 510

74) The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data: TIME PERIOD

DEMAND

5 years ago

900

4 years ago

700

3 years ago

600

2 years ago

500

Last year

300

What is the forecast for this year using trend adjusted (double) smoothing with alpha(1) = .03 and alpha(2) = 0.2, if the forecast for last year was 518.40, the forecast for two years ago was 560.00, and the trend estimate for last year's forecast was -23.6?

A) 416.18 B) 542.00 C) 100.00 D) 200.00 E) 426.12

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75) The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data: TIME PERIOD

DEMAND

5 years ago

900

4 years ago

700

3 years ago

600

2 years ago

500

Last year

300

What is the forecast for this year using the least squares trend line for these data?

A) 163 B) 180 C) 300 D) 420 E) 510

76) Professor Z needs to allocate time among several tasks next week to include time for students' appointments. Thus, he needs to forecast the number of students who will seek appointments. He has gathered the following data: a trend has been identified in the data series. WEEK

# STUDENTS

6 weeks ago

5 weeks ago

110

4 weeks ago

3 weeks ago

2 weeks ago

Last week

What is this week's forecast using the naive approach?

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A) 35 B) 50 C) 52 D) 65 E) 78

77) Professor Z needs to allocate time among several tasks next week to include time for students' appointments. Thus, he needs to forecast the number of students who will seek appointments. He has gathered the following data: WEEK

# STUDENTS

6 weeks ago

5 weeks ago

110

4 weeks ago

3 weeks ago

2 weeks ago

Last week

What is this week's forecast using a three-week simple moving average?

A) 49 B) 50 C) 52 D) 65 E) 78

78) Professor Z needs to allocate time among several tasks next week to include time for students' appointments. Thus, he needs to forecast the number of students who will seek appointments. He has gathered the following data:

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WEEK

# STUDENTS

6 weeks ago

5 weeks ago

110

4 weeks ago

95 27

3 weeks ago

2 weeks ago

Last week

What is this week's forecast using exponential smoothing with alpha = .2, if the forecast for two weeks ago was 90?

A) 49 B) 50 C) 52 D) 65 E) 78

79) Professor Z needs to allocate time among several tasks next week to include time for students' appointments. Thus, he needs to forecast the number of students who will seek appointments. He has gathered the following data: WEEK

# STUDENTS

6 weeks ago

5 weeks ago

110

4 weeks ago

3 weeks ago

2 weeks ago

Last week

What is this week's forecast using trend adjusted (double) smoothing with alpha(1) = 0.5 and alpha(2) = 0.1, if the forecast for last week was 65, the forecast for two weeks ago was 75, and the trend estimate for last week's forecast was -5?

A) 49 B) 50 C) 55 D) 65 E) 78

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80) Professor Z needs to allocate time among several tasks next week to include time for students' appointments. Thus, he needs to forecast the number of students who will seek appointments. He has gathered the following data: WEEK

# STUDENTS

6 weeks ago

5 weeks ago

110

4 weeks ago

3 weeks ago

2 weeks ago

Last week

What is this week's forecast using the least squares trend line for these data?

A) 49 B) 50 C) 52 D) 65 E) 78

81) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

What is this year's forecast using the naive approach?

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A) 22,000 B) 20,000 C) 18,000 D) 15,000 E) 12,000

82) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

What is this year's forecast using a two-year weighted moving average with weights of .7 and .3?

A) 19,400 B) 18,600 C) 19,000 D) 11,400 E) 10,600

83) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data:

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YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

What is this year's forecast using exponential smoothing with alpha = .2, if last year's smoothed forecast was 15,000?

A) 20,000 B) 19,000 C) 17,500 D) 16,000 E) 15,000

84) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

What is this year's forecast using the least squares trend line for these data?

A) 20,000 B) 21,000 C) 22,000 D) 23,000 E) 24,000

85) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data:

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YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year. What was the mean absolute deviation (MAD) for these forecasts?

A) 100 B) 200 C) 400 D) 500 E) 800

86) An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: YEAR

QUANTITY SOLD

Four years ago

10,000

Three years ago

12,000

Two years ago

18,000

Last year

20,000

The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year. What was the mean absolute percent error (MAPE) for these forecasts?

A) 0.21 B) 2.14 C) 4.28 D) 100 E) 400

87) The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data:

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YEAR

TOTAL ENROLMENT

Four years ago

2,000

Three years ago

2,200

Two years ago

2,800

Last year

3,000

What is this year's forecast using the naive approach?

A) 2,000 B) 2,200 C) 2,800 D) 3,200 E) 3,000

88) The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data: YEAR

TOTAL ENROLMENT

Four years ago

2,000

Three years ago

2,200

Two years ago

2,800

Last year

3,000

What is this year's forecast using a three-year simple moving average?

A) 2,667 B) 2,600 C) 2,500 D) 2,400 E) 2,333

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89) The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data: YEAR

TOTAL ENROLMENT

Four years ago

2,000

Three years ago

2,200

Two years ago

2,800

Last year

3,000

What is this year's forecast using exponential smoothing with alpha = .4, if last year's smoothed forecast was 2600?

A) 2,600 B) 2,760 C) 2,800 D) 3,840 E) 3,000

90) The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data: YEAR

TOTAL ENROLMENT

Four years ago

2,000

Three years ago

2,200

Two years ago

2,800

Last year

3,000

What is the annual rate of change (slope) of the least squares trend line for these data?

A) 0 B) 200 C) 400 D) 180 E) 360

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91) The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data: YEAR

TOTAL ENROLMENT

Four years ago

2,000

Three years ago

2,200

Two years ago

2,800

Last year

3,000

What is this year's forecast using the least squares trend line for these data?

A) 3,600 B) 3,500 C) 3,400 D) 3,300 E) 3,200

92) The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data: the series displays a trend. MONTH

QUANTITY SOLD

April

100

May

140

June

110

July

150

August

120

September

160

What is this month's forecast using the naive approach?

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A) 100 B) 200 C) 130 D) 140 E) 120

93) The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data: MONTH

QUANTITY SOLD

April

100

May

140

June

110

July

150

August

120

September

160

What is this month's forecast using a four-month weighted moving average with weights of .4, .3, .2, and .1?

A) 120 B) 129 C) 141 D) 135 E) 140

94) The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data:

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MONTH

QUANTITY SOLD

April

100

May

140

June

110

July

150

August

120

September

160

What is this month's forecast using exponential smoothing with alpha = .2, if August's forecast was 145?

A) 144 B) 140 C) 142 D) 148 E) 163

95) The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data: MONTH

QUANTITY SOLD

April

100

May

140

June

110

July

150

August

120

September

160

What is the monthly rate of change (slope) of the least squares trend line for these data?

A) 320 B) 102 C) 8 D) -0.4 E) -8

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96) The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data: MONTH

QUANTITY SOLD

April

100

May

140

June

110

July

150

August

120

September

160

What is this month's forecast using the least squares trend line for these data?

A) 1,250 B) 128.6 C) 102 D) 158 E) 164

97) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using the naive approach?

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A) 18,750 B) 19,500 C) 21,000 D) 22,000 E) 22,800

98) The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: YEAR

ENROLMENTS

5 years ago

15,000

4 years ago

16,000

3 years ago

18,000

2 years ago

20,000

Last year

21,000

What is the forecast for this year using a three period moving average?

A) 16,333 B) 17,250 C) 18,000 D) 19,667 E) 21,000

99)

When forecasting over the long-term what type of data is typically used?

A) Weekly B) Monthly C) Quarterly D) Semi-annual E) Annual

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100)

When forecasting over the medium-term what type of data is typically used?

A) Weekly B) Monthly C) Quarterly D) Semi-annual E) Annual

101)

Judgemental methods would be used in which of the following situations?

A) When there is data on past sales. B) When forecasting services. C) When introducing new products. D) Forecasting for established products. E) When an identifiable trend is present.

102)

Judgemental methods would NOT be used in which of the following situations?

A) When introducing new products. B) When redesigning existing products. C) Using sales promotions. D) When an identifiable trend is present. E) When redesigning existing services.

103)

Who is typically involved in the forecasting process when executive opinions are used?

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A) Upper-level managers B) All managers C) Sales staff D) Customers or potential customers E) Experts

104)

The use of consumer surveys enables organizations to

consumer opinions.

A) determine B) solidify C) sway D) sample E) question

105)

Historical analogies are best suited for which of the following?

A) When forecasting established products. B) When forecasting new services. C) When an identified trend is present. D) When there is seasonality in demand. E) When forecasting new but similar products.

106) The demand for cranberry-apply drink can be used to forecast the demand for cranberrygrape drink. Which judgemental method is this?

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A) Executive opinions. B) Historical analogies. C) Consumer surveys D) Expert opinions E) Time series analogy.

107)

Averaging methods seek to minimize variations in the data.

variations and tend to lag in identifying

A) old, new B) seasonal, cyclical C) random, real D) simple, complex E) inaccurate, accurate

108)

Which of the following averaging methods of forecasting utilizes a smoothing constant?

A) Naive B) Moving average C) Weighted moving average D) Exponential smoothing E) Trend

109)

When examining historical data, the Trend component may be

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A) rising, falling B) seasonal, cyclical C) averaged, multiplied D) linear, nonlinear E) dependant, independent

110)

A positive slope indicates the amount the forecast will

each time period.

A) increase B) decrease C) average D) predict E) yield

111)

When is it most appropriate to use a nonlinear trend to forecast?

A) When there is stable demand. B) When there is a steady decrease in demand. C) When there is a steady increase in demand. D) During the growth phase of a product life cycle. E) In the early or final phases of a product life cycle.

112)

Which of the following would be considered a seasonal variation?

A) Demand for products or services during the growth phase of the life cycle. B) When a leading variable can be identified. C) A restaurant that experiences higher demand on weekends. D) Demand during the maturity phase of the life cycle. E) Demand for products and services when a new government is elected.

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113) Linear regression uses a predictor and predicted variable. What is another name for these two terms?

A) Dependent, slope B) Independent, deviations C) Intercept, slope D) Independent, dependent E) Coefficients, indicators

114) The objective of linear regression is to obtain an equation of a straight line. That is this line called?

A) Trend line B) Life cycle line C) Line of slope D) Relationship line E) Least squares line

115)

In the least squares equation what does the a value represent?

A) relatives B) y intercept C) Average demand D) Slope E) coefficients

116)

In the least squares equation what does the b value represent?

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A) Slope B) Plot angle C) Average demand D) coefficients E) y intercept

117) When using correlation coefficient which of the following indicates a strong positive linear relationship?

A) +1.00 B) -1.00 C) +2.00 D) -2.00 E) 0.00

118) When using correlation coefficient which of the following indicates a strong negative linear relationship?

A) +1.00 B) +2.00 C) -1.00 D) -2.00 E) .000

119)

Which of the following is NOT a basic assumption of simple linear regression analysis?

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A) Variations around the line are random. B) Predictions are made only within the range of observed values. C) No patterns should be apparent. D) Predictions are made outside of the range of observed values. E) Deviations around the average line are normally distributed.

120)

Which forecasting model should be used when more than one predictor variable exists?

A) Linear regression B) Multiple correlation C) Simple linear regression D) Correlation coefficient E) Multiple regression

121) What is the term for the difference between the value that actually occurs and the value that was forecast?

A) Forecast deviation B) Forecast error C) Forecast delay D) Forecast variation E) Mean absolute deviation

122)

What is the best way to determine if a forecast is performing adequately?

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A) Contact customers to see if they are satisfied. B) Make multiple forecasts for the same product. C) Track forecast errors and analyse them. D) Use a variety of smoothing constants when forecasting. E) Compare sales from different periods of time.

123)

Which of the following would NOT be a source of forecast error?

A) The omission of an important variable. B) A change or shift in the variable. C) Random variations D) Variables that are known and stable. E) Severe weather or some type of natural phenomena.

124)

Values of the tracking signal can be either

A) statistical, nominal B) averaged, forecast C) statistical, averaged D) positive, negative E) cumulative, individual

125) A value falls outside of the acceptable range of the tracking signal. What does this indicate?

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A) Bias in the forecast B) The forecast is performing as expected C) The limits need to be adjusted D) The forecast model is correct E) Another method of determining error needs to be determined

126)

A manager can take either a

or a

approach to a forecast.

A) probable, statistic B) reactive, proactive, C) past, future D) averaging, trend E) regression, causal,

127)

What is the biggest benefit to using computers in preparing forecasts?

A) B) C) D)

To check the validity of manual forecast calculations. To be used as a back-up in case the manual system fails. The ability to develop and revise forecasts quickly. Computers are not widely used to create forecasts as the data required must be

timely. E) Computers will not identify forecasts that are inaccurate or misleading.

128) Develop a forecast for the next period, given the data below, using a 3-period moving average.

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Period

Demand

129)

Consider the data below: Period

Demand

(i) Determine a naive forecast for period 14. (ii) Using exponential smoothing with a = .2, and F 12 = 80, what would the forecast for period 14 be?

130) A company has been using exponential smoothing with an alpha of .2 to forecast weekly truck sales. Given the data below, would a naive forecast have provided greater accuracy? Explain. Assume an initial exponential forecast of 60 units in period 2 (i.e., no forecast for period 1).

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Period

Demand

131)

Demand for the last four months was: Month

Mar

Apr

May

Jun

Demand

(i) Predict demand for July using each of these methods: (1) a 3-period moving average (2) exponential smoothing with alpha equal to .20. Use the naïve approach to determine the forecast for April. (ii) If the naive approach had been used to predict demand for April through June, what would MAD have been for those months?

132) Given the data below, develop a forecast for the following period using a three-period weighted moving average and weights of .5, .3, and .2. Period

Demand

133) A manager is using exponential smoothing to predict merchandise returns at a suburban branch of a department store chain. Given a previous forecast of 140 items, an actual number of returns of 148 items, and a smoothing constant equal to .15, what is the forecast for the next period?

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134)

A manager is using the equation below to forecast quarterly demand for a product:

Y t = 6,000 + 80t where t = 0 at Q2 of last year Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2. What forecasts are appropriate for the last quarter of this year and the first quarter of next year?

135) Develop a linear trend equation for the data on bread deliveries shown below. Forecast deliveries for period 11 through 14. Period

Dozen deliveries

648

590

631

769

745

856

760

962

990

1100

136) A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past 8 periods, demand has been as follows. Are the results acceptable? Explain. Period, t

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Demand

137) Over the past five years, a firm's sales have averaged 250 units in the first quarter of each year, 100 units in the second quarter, 150 units in the third quarter, and 300 units in the fourth quarter. What are appropriate quarter relatives for this firm's sales? Hint: Only minimal computations are necessary.

138)

A firm has been using the following equation to predict annual demand for helix gears:

Y t = 55 + 4t Demand for the past few years is shown below. Is the forecast performing as well as it might? Explain. Year

Demand

139) Use linear regression to develop a predictive model for demand for ironing board covers based on sales of irons. Year

Sales of Irons (000)

Demand for Covers (000)

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(i) Develop the equation. (ii) What is the coefficient of correlation for this data?

140)

141)

Given the following data, develop a linear regression model for y as a function of x. X

142) A manager has been using a certain technique to forecast demand for units of web publishing software for the past six periods. Actual and predicted amounts are shown below. Would a naive forecast have produced better results? Version 1

Period

Demand

Forecast

143) A manager wants to choose one of two forecasting alternatives. Each alternative was tested using historical data. The resulting forecast errors for the two are shown in the table. Analyze the data and recommend a course of action to the manager. Period, t

Alt. #1

-2

-1

Alt. #2

-3

-1

144) Time Period

Demand

7 years ago

6 years ago

5 years ago

4 years ago

3 years ago

2 years ago

Last year

What is this year's forecast using a four-year simple moving average?

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145) Time Period

Demand

7 years ago

6 years ago

5 years ago

4 years ago

3 years ago

2 years ago

Last year

What is this year's forecast using exponential smoothing with alpha = .25, if last year's smoothed forecast was 45?

146)

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Time Period

Demand

7 years ago

6 years ago

5 years ago

4 years ago

3 years ago

2 years ago

Last year

What is this year's forecast using trend adjusted (double) smoothing with alpha(1) = 0.2 and alpha(2) = 0.1, if the forecast for last year was 56, the forecast for two years ago was 46, and the trend estimate for last year's forecast was 7?

147) Time Period

Demand

7 years ago

6 years ago

5 years ago

4 years ago

3 years ago

2 years ago

Last year

What are this and next year's forecasts using the least squares trend line for these data?

148) Season YEAR

SPRING

SUMMER

FALL

WINTER

Three years ago

Two years ago

Last year

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What is the linear regression trend line for these data (t = 1 for spring, three years ago)?

149) Season YEAR

SPRING

SUMMER

FALL

WINTER

Three years ago

Two years ago

Last year

What is the centred moving average for each season?

150) Season YEAR

SPRING

SUMMER

FALL

WINTER

Three years ago

Two years ago

Last year

What is the seasonal relative for each season?

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151) Season YEAR

SPRING

SUMMER

FALL

WINTER

Three years ago

Two years ago

Last year

What is this year's seasonally adjusted forecast for each season?

152) Since a primary goal of operations management is to match supply to demand, forecasts become a basic input to the decision process because they provide information on past demand. ⊚ ⊚

true false

153) Forecasting techniques generally assume that the same causal system that existed in the past will continue to exist in the future. ⊚ ⊚

154)

true false

Forecasts are rarely perfect. ⊚ ⊚

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true false

155) Generally the responsibility for preparing demand forecasts for finished goods or services lies with operations rather than marketing or sales departments. ⊚ ⊚

true false

156) Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items are not subject to as many influencing factors. ⊚ ⊚

true false

157) Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts. ⊚ ⊚

158)

true false

Forecast accuracy tends to increase as the time horizon increases. ⊚ ⊚

true false

159) The purpose of the forecast should be established first so that the level of detail, amount of resources, and accuracy level can be indicated. ⊚ ⊚

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true false

160) Time series techniques involve identification of explanatory variables that can be used to predict future demand. ⊚ ⊚

true false

161) A consumer survey is an easy and sure way to obtain direct, in person, input from existing customers. ⊚ ⊚

true false

162) The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast. ⊚ ⊚

163)

Forecasts based on time series (historical) data are referred to as associative forecasts. ⊚ ⊚

164)

true false

As a forecasting technique, the Delphi technique is useful for technological forecasting. ⊚ ⊚

true false

165) One weakness of the Delphi method is that there is a high risk that one person's opinion will prevail.

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⊚ ⊚

true false

166) Forecasting techniques that are based on time series data assume that future values of the series will duplicate past values. ⊚ ⊚

true false

167) The primary difference between irregular and random variations is the ability to attribute variations to a specific cause. ⊚ ⊚

true false

168) Increasing the number of data points included in a moving average will result in a forecast that is smoother but less responsive to changes. ⊚ ⊚

169)

The naive approach to forecasting requires a linear trend line. ⊚ ⊚

170)

true false

The naive forecast is limited in its application to series that reflect no trend or seasonality. ⊚ ⊚

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true false

171) The naive forecast can serve as a standard of comparison against which to judge the cost and accuracy of other techniques. ⊚ ⊚

true false

172) A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average. ⊚ ⊚

true false

173) In order to update a moving average forecast, the values of each data point in the average must be known. ⊚ ⊚

true false

174) A simple moving average assigns equal weight to each data point that is represented by the average. ⊚ ⊚

true false

175) An advantage of a weighted moving average is that more recent experience is given more weight than less recent experience. ⊚ ⊚

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true false

176)

Exponential smoothing is a form of weighted averaging. ⊚ ⊚

true false

177) A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a sudden change than a value of .3 will. ⊚ ⊚

true false

178) In exponential smoothing, an alpha of .30 will cause a forecast to react more quickly to a large error than will an alpha of .20. ⊚ ⊚

179)

Trend-Adjusted Exponential Smoothing is also called double exponential smoothing. ⊚ ⊚

180)

true false

Trend adjusted exponential smoothing requires selection of two smoothing constants. ⊚ ⊚

true false

181) An advantage of "trend adjusted exponential smoothing" over the "linear trend equation" is its ability to adjust over time to changes in the trend.

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⊚ ⊚

true false

182) A seasonal relative (or seasonal indexes) is expressed as a percentage of the average or trend in a time series. ⊚ ⊚

183)

true false

In order to compute seasonal relatives, the trend of past data must be computed or known. ⊚ ⊚

true false

184) Removing the seasonal component from a data series (deseasonalizing) can be accomplished by dividing each data point by its appropriate seasonal relative. ⊚ ⊚

true false

185) Centred moving averages (CMA) is a better way to compute seasonal relatives than using a simple moving average if there is a linear trend in a time series. ⊚ ⊚

186)

true false

Correlation measures the strength and direction of a relationship between variables. ⊚ ⊚

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true false

187) Multiple regression procedures permit us to extend associative models to relationships that involve more than one predictor variable. ⊚ ⊚

true false

188) The forecast error is the difference between the actual value and the forecast value for a given period. ⊚ ⊚

true false

189) Positive forecast errors, the case when the forecast is low relative to the actual value, are preferable to negative forecast errors, the case when the forecast is higher than the actual value ⊚ ⊚

190)

true false

MAD is equal to the square root of MSE. ⊚ ⊚

true false

191) The MSE is the best measure to use in a control chart to monitor if forecast error is randomly distributed around a mean value of 0. ⊚ ⊚

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true false

192) The square root of MSE is used to estimate the sample standard deviation of forecast errors. ⊚ ⊚

193)

A control chart involves setting control limits to monitor cumulative forecast error. ⊚ ⊚

194) zero.

true false

The use of a control chart assumes that errors are normally distributed about a mean of

⊚ ⊚

true false

195) When error values fall outside the limits of a control chart, this signals a need for corrective action ⊚ ⊚

true false

196) Using control charts to monitor forecast error are best suited for forecasting applications involving a single forecast rather than applications involving a series of forecasts (e.g. monthly sales). ⊚ ⊚

true false

197) A random pattern of errors within the limits of a control chart signals a need for corrective action.

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⊚ ⊚

true false

198) When all the forecast errors plotted on a control chart are either all positive, or all negative, this shows that the forecasting technique is performing adequately. ⊚ ⊚

199)

true false

The best forecast is always the one that is the most accurate. ⊚ ⊚

true false

200) Moving average and exponential smoothing forecasting techniques are used for long range forecasts. ⊚ ⊚

true false

201) A proactive approach to forecasting views forecasts as probable descriptions of future demand, assuming actions can be taken to meet that demand. ⊚ ⊚

true false

202) A proactive approach to forecasts might involve advertising or other attempts to influence the demand level. ⊚ ⊚

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true false

203)

For production planners to utilize a forecast it should be expressed in sales dollars. ⊚ ⊚

true false

204) Forecasts over the medium-term typically involve a mix of judgemental and quantitative methods. ⊚ ⊚

true false

205) When forecasting using executive opinions there is a risk that one person's view will prevail. ⊚ ⊚

true false

206) The current level of customer inventory can be useful when a sales force opinion forecast is being used. ⊚ ⊚

207)

Analysis of a trend involves developing an equation that will describe the trend. ⊚ ⊚

208)

true false

The slope is the amount the forecast will change each time period.

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⊚ ⊚

true false

209) A nonlinear trend is not appropriate for products during the early or final phases of the product life cycle. ⊚ ⊚

210)

true false

Seasonal variations are regularly repeating wavelike movements in time series data. ⊚ ⊚

true false

211) Cycles are wavelike movements in demand that are similar to seasonal variations but over a shorter duration. ⊚ ⊚

true false

212) When using linear regression analysis the dependent variable should be plotted versus time to determine if a pattern is present. ⊚ ⊚

true false

213) It is possible to use two forecasts. One to predict what will happen under expected conditions and one based on a "what-if" approach. ⊚ ⊚

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true false

214) The use of computers in forecasting does NOT allow managers to revise forecasts quickly. ⊚ ⊚

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true false

Answer Key Test name: Chap 03_7ce 1) E 2) E 3) C 4) C 5) B 6) D 7) C 8) D 9) E 10) E 11) C 12) C 13) C 14) A 15) C 16) A 17) E 18) D 19) A 20) C 21) D 22) D 23) B 24) D 25) D 26) B Version 1

27) C 28) D 29) A 30) B 31) D 32) B 33) E 34) D 35) C 36) C 37) E 38) C 39) A 40) A 41) D 42) A 43) A 44) B 45) E 46) C 47) E 48) C 49) B 50) B 51) B 52) C 53) D 54) B 55) B 56) B Version 1

57) D 58) C 59) C 60) D 61) B 62) A 63) A 64) B 65) B 66) A 67) A 68) B 69) D 70) E 71) C 72) D 73) E 74) A 75) B 76) A 77) D 78) E 79) C 80) A 81) A 82) A 83) D 84) E 85) C 86) B Version 1

87) D 88) A 89) B 90) E 91) C 92) B 93) C 94) A 95) C 96) D 97) D 98) D 99) E 100) B 101) C 102) D 103) A 104) D 105) E 106) B 107) C 108) D 109) D 110) A 111) E 112) C 113) D 114) E 115) B 116) A Version 1

117) A 118) C 119) D 120) E 121) B 122) C 123) D 124) D 125) A 126) B 127) C 152) FALSE 153) TRUE 154) TRUE 155) FALSE 156) FALSE 157) TRUE 158) FALSE 159) TRUE 160) FALSE 161) FALSE 162) TRUE 163) FALSE 164) TRUE 165) FALSE 166) FALSE 167) TRUE 168) TRUE 169) FALSE 170) FALSE Version 1

171) TRUE 172) FALSE 173) TRUE 174) TRUE 175) TRUE 176) TRUE 177) FALSE 178) TRUE 179) TRUE 180) TRUE 181) TRUE 182) TRUE 183) TRUE 184) TRUE 185) TRUE 186) TRUE 187) TRUE 188) TRUE 189) FALSE 190) FALSE 191) FALSE 192) TRUE 193) FALSE 194) TRUE 195) TRUE 196) FALSE 197) FALSE 198) FALSE 199) FALSE 200) FALSE Version 1

201) FALSE 202) TRUE 203) FALSE 204) TRUE 205) TRUE 206) TRUE 207) TRUE 208) TRUE 209) FALSE 210) TRUE 211) FALSE 212) TRUE 213) TRUE 214) FALSE

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Chapter 4S: Reliability 1) The probability that a product will perform its intended function under prescribed conditions is:

A) reliability. B) failure. C) functionality. D) redundancy. E) manufacturability.

2) A system is comprised of two separate units which must both function in order for the system to perform as intended. The reliability of one is .4, and the reliability of the other is .5. The overall system reliability is:

A) .90 B) .30 C) .20 D) .10 E) .02

3) An electronic product consists of three components in a series design. One component has a reliability of .90. The two others each has a reliability of .98. What is the overall product reliability?

A) 0.8644 B) 0.882 C) 0.945 D) 0.97 E) 0.998

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4) A product comprised of two components whose failure probabilities are .9 each, has a reliability of:

A) 1.80 B) 90 C) 81 D) 80 E) 20

5) An early warning security fence has three major components which must each perform in order for the system to perform. Their reliabilities are .4, .3, and .2. The system reliability is equal to:

A) .024 B) .076 C) .100 D) .336 E) .900

6) One of the solar instruments on a satellite has three major parts which must all operate. Two have reliabilities of .7, and the other has a reliability of .9. In case the system fails, there is an identical backup system for each component which kicks on automatically. The overall reliability of the system, including the backups, is closest to:

A) .40 B) .50 C) .60 D) .70 E) .80

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What is the reliability of the following system?

A) 0.504 B) 0.70 C) .7207 D) 0.8 E) .9901

What is the probability of failure of the following system?

A) .2793 B) .3152 C) .496 D) .4550 E) .5

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What is the probability of success of the following system?

A) 0.994 B) 0.96 C) 0.7611 D) 0.6012 E) 0.4536

10)

What is the probability of failure of the following system?

A) 0.7613 B) 0.6012 C) 0.5464 D) 0.4389 E) 0.3988

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11) A garage door opener has three sections, which have reliabilities of .9, .8, and .9. The lowest of these has an identical backup which automatically goes on if the original fails. All three parts must operate to perform its intended function. The system reliability is closest to:

A) .40 B) .50 C) .60 D) .70 E) .80

12) A system is composed of two parts which must both operate in order for the system to perform as intended. The parts have reliabilities of .6 and .5. There is an identical backup for each part. The backup system is connected to the main system by a switch which has a reliability of .9. The probability that the overall system will operate is closest to:

A) .30 B) .40 C) .50 D) .60 E) .70

13) A system is comprised of three separate components A, B, and C which must all function in order for the system to perform as intended. The reliability of A is .7, the reliability of B is .9 and the reliability of the C is .8. What is the probability of failure of the overall system?

A) .2793 B) .3152 C) .496 D) .4550 E) .5

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14) A system is comprised of three separate components A, B, and C which must all function in order for the system to perform as intended. The reliability of A is .7, the reliability of B is .9 and the reliability of the C is .8. In case the system fails, there is an identical backup for component A and an identical backup for component B which kick on automatically. What is the reliability of the overall system including the backups?

A) 0.504 B) 0.70 C) .7207 D) 0.8 E) .9901

15) A system is comprised of three separate components A, B, and C which must all function in order for the system to perform as intended. The reliability of A is .7, the reliability of B is .9 and the reliability of the C is .8. In case the system fails, there is an identical backup for component A and an identical backup for component B which kick on automatically. What is the probability of failure of the overall system including the backups?

A) .2793 B) .3152 C) .496 D) .4550 E) .5

16) An electrical appliance will not work unless component QK does. Component QK's reliability is 0.95. Every other part of the appliance is 100 percent reliable. What would the reliability of the appliance be if a backup QK were added?

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A) .95 B) .9975 C) .9025 D) .9205 E) .9795

17) A new missile is comprised of three components: a gyroscope, which has a random failure rate of 3 in every 10 launches; a computer, which has a random failure rate of 2 in every 10 launches; and a rocket motor, which has a random failure of 1 in every 10 launches. What is the probability that the gyroscope will perform reliably during a launch?

A) 0.300 B) 0.504 C) 0.700 D) 0.889 E) 0.910

18) A new missile is comprised of three components: a gyroscope, which has a random failure rate of 3 in every 10 launches; a computer, which has a random failure rate of 2 in every 10 launches; and a rocket motor, which has a random failure of 1 in every 10 launches. What is the probability of success during a launch?

A) 0.300 B) 0.504 C) 0.700 D) 0.889 E) 0.910

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19) A new missile is comprised of three components: a gyroscope, which has a random failure rate of 3 in every 10 launches; a computer, which has a random failure rate of 2 in every 10 launches; and a rocket motor, which has a random failure of 1 in every 10 launches. If they were to connect an identical, backup gyroscope with a perfectly reliable switch to the primary gyroscope, what would be the reliability of the gyroscope function during a launch?

A) 0.3 B) 0.504 C) 0.7 D) 0.889 E) 0.91

20) A calculator is perfectly reliable except for two parts: its microchip, which has a failure rate of one in every twenty hours of operation; and its battery, which has a failure rate of one in every ten hours of operation. Assuming that a new battery has just been installed, what is the probability that the battery will perform reliably during one-hour of operation?

A) 0.05 B) 0.10 C) 0.20 D) 0.90 E) 0.95

21) A calculator is perfectly reliable except for two parts: its microchip, which has a failure rate of one in every twenty hours of operation; and its battery, which has a failure rate of one in every ten hours of operation. Assuming that a new battery has just been installed, what is the probability that the calculator will perform reliably during one-hour of operation?

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A) 0.800 B) 0.855 C) 0.900 D) 0.950 E) 1.850

22) A calculator is perfectly reliable except for two parts: its microchip, which has a failure rate of one in every twenty hours of operation; and its battery, which has a failure rate of one in every ten hours of operation. Assuming that a new battery has just been installed and one spare battery is available, what is the probability that the calculator will perform reliably during onehour of operation?

A) 0.89775 B) 0.9405 C) 0.987525 D) 0.99 E) 0.9975

23) A calculator is perfectly reliable except for two parts: its microchip, which has a failure rate of one in every twenty hours of operation; and its battery, which has a failure rate of one in every ten hours of operation. Also, on average the battery will fail in five hours, with a standard deviation of 30 minutes. What is the probability that a new battery will fail within six hours?

A) 0.0228 B) 0.4772 C) 0.5 D) 0.9544 E) 0.9772

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24) A calculator is perfectly reliable except for two parts: its microchip, which has a failure rate of one in every twenty hours of operation; and its battery, which has a failure rate of one in every ten hours of operation. Also, on average the battery will fail in five hours, with a standard deviation of 30 minutes. What service life should the manufacturer specify in order to have a .8413 probability that a battery will not fail within that amount of time?

A) 3.5 hours B) 4 hours C) 4.5 hours D) 5 hours E) 5.5 hours

25) The plant manager for the local electric utility company wants to know the reliability of one of his small hydroelectric power generating systems. This system is comprised of two components: a generator which has a random failure rate of one in every two years of operation; and a transformer which has a random failure rate of one in every five years of operation. What is the probability that this system will perform reliably for a period of one year?

A) 0.4 B) 0.5 C) 0.8 D) 0.9 E) 1.3

26) The plant manager for the local electric utility company wants to know the reliability of one of his small hydroelectric power generating systems. This system is comprised of two components: a generator which has a random failure rate of one in every two years of operation; and a transformer which has a random failure rate of one in every five years of operation. If he were to add just a backup generator, with the same failure rate, what would be the probability that this system would perform reliably for a period of one year?

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A) 0.48 B) 0.60 C) 0.72 D) 0.75 E) 0.96

27) The plant manager for the local electric utility company wants to know the reliability of one of his small hydroelectric power generating systems. This system is comprised of two components: a generator which has a random failure rate of one in every two years of operation; and a transformer which has a random failure rate of one in every five years of operation. If he were to add both a backup generator and a backup transformer, with the same failure rates, what would be the probability that this system would perform reliably for a period of one year?

A) 0.48 B) 0.60 C) 0.72 D) 0.75 E) 0.96

28) The plant manager for the local electric utility company wants to know the reliability of one of his small hydroelectric power generating systems. This system is comprised of two components: a generator which has a random failure rate of one in every two years of operation; and a transformer which has a random failure rate of one in every five years of operation. If the transformer has a mean time to wear-out of 20 years with a standard deviation of 2 years, what is the probability that it will fail within 19 years?

A) 0.1915 B) 0.3085 C) 0.383 D) 0.5 E) 0.6915

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29) The plant manager for the local electric utility company wants to know the reliability of one of his small hydroelectric power generating systems. This system is comprised of two components: a generator which has a random failure rate of one in every two years of operation; and a transformer which has a random failure rate of one in every five years of operation. If the transformer has a mean time to wear-out of 20 years with a standard deviation of 2 years, what service life should the manufacturer specify in order to have a. 9332 probability that it will last at least that long before failing?

A) 17 years B) 18 years C) 19 years D) 20 years E) 21 years

30) A company produces a flashlight which is perfectly reliable except for two components: the battery, which has a random failure rate of one in every five hours of operation; and the light bulb, which has a random failure rate of three in every ten hours. What is the probability that the battery will perform reliably for one hour?

A) 0.2 B) 0.3 C) 0.5 D) 0.7 E) 0.8

31) A company produces a flashlight which is perfectly reliable except for two components: the battery, which has a random failure rate of one in every five hours of operation; and the light bulb, which has a random failure rate of three in every ten hours. What is the probability that the flashlight will perform reliably for one hour?

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A) 0.50 B) 0.56 C) 0.70 D) 0.80 E) 0.95

32) A company produces a flashlight which is perfectly reliable except for two components: the battery, which has a random failure rate of one in every five hours of operation; and the light bulb, which has a random failure rate of three in every ten hours. If the company includes a backup light bulb with each flashlight, what is the probability that the flashlight will perform reliably for one hour (excluding light bulb replacement time, if any)?

A) 0.6720 B) 0.7280 C) 0.8736 D) 0.9100 E) 0.9600

33) A company produces a flashlight which is perfectly reliable except for two components: the battery, which has a random failure rate of one in every five hours of operation; and the light bulb, which has a random failure rate of three in every ten hours. If the company includes both a backup light bulb and a backup battery with each flashlight, what is the probability that the flashlight will perform reliably for one hour (excluding replacement time)?

A) 0.6720 B) 0.7280 C) 0.8736 D) 0.9100 E) 0.9600

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34) A company produces a flashlight which is perfectly reliable except for two components: the battery, which has a random failure rate of one in every five hours of operation; and the light bulb, which has a random failure rate of three in every ten hours. Devices, Inc. supplies this company with the on-off switch for this flashlight. These switches, on average, fail in fifty hours with a standard deviation of four hours. What service life should Devices specify to have a .8944 probability that a switch will last at least that long before failing?

A) 43 hours B) 45 hours C) 46 hours D) 50 hours E) 54 hours

35) The time between failures for an electrical appliance is exponentially distributed with a mean of 25 months. What is the probability that the next failure will not occur before 30 months have elapsed?

A) not in excess of .2 B) in excess of .2 but not in excess of .3 C) in excess of .3 but not in excess of .4 D) in excess of .4 but not in excess of .6 E) in excess of .6

36) A new missile is comprised of three components: a gyroscope, which has a random failure rate of 3 in every 10 launches; a computer, which has a random failure rate of 2 in every 10 launches; and a rocket motor, which has a random failure of 1 in every 10 launches. If the battery used to power the computer has a mean time to fail of 60 minutes with a standard deviation of 20 minutes, what is the probability that it will last for a launch of 30 minutes duration without failing?

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A) 0.9332 B) 0.8664 C) 0.5668 D) 0.4332 E) 0.0668

37) The design engineer for Colonial Warning Systems wants to know the reliability of a two-lamp device intended to warn the operator of potential problems with a commercial steam kettle. One (either) lamp is to be lit if steam pressure drops below the desired level, and two (both) are to be lit if temperature drops below a desired level. His supplier estimates that a lamp has a failure rate of .2 per hour of operation, and a mean wear-out time of seven years with a standard deviation of eight months. What is the probability that a lamp will perform reliably for one hour?

A) 0 B) .2 C) .8 D) .9 E) 1

38) The failure rate for a component is 2 failures for every 75 hours of operating time. Therefore, the mean time to failure (MTTF) is:

A) 0.027 B) 4.0 C) 75 D) 37.5 E) 150

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39) The failure rate for a product is 3 failures for every 175 hours of operating time. Therefore, the mean time to failure (MTTF) is:

A) 0.017 B) 58.33 C) 0514 D) 175 E) 525

40) Usually, a number of products or parts fail shortly after they are put into service, because they are defective to begin with. This relationship is depicted in which of the following?

A) Reliability curve B) Bathtub curve C) MTBF chart D) Exponential distribution E) Normal curve

41)

The average length of time before failure of a product or component is called:

A) Mean time between failures B) Mean time to failure C) Failure rate D) Reliability E) Average time to failure

42) An Internet modem works well but is sensitive to power-line fluctuations. On average, this product hangs up and needs resetting every 200 hours. On average about 45 minutes is needed to reset this product. What is this product's availability?

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A) in excess of .95 B) in excess of .9 but not in excess of .95 C) in excess of .8 but not in excess of .9 D) in excess of .75 but not in excess of .8 E) not in excess of .75

43) A control unit fails, on average, every 12,000 hours. It takes an average of 900 minutes to repair and reboot this unit. What is the availability of the unit?

A) not in excess of .75 B) in excess of .75 but not in excess of .8 C) in excess of .8 but not in excess of .9 D) in excess of .9 but not in excess of .95 E) in excess of .95

44) An air purification system is expected to operate for 510 hours after changing the filters, general cleaning and maintenance. If it takes 3 hours to perform the maintenance what is the availability of the system?

A) .875 B) .922 C) .994 D) .956 E) 960

45) An automatic beverage dispensing machine is expected to operate for 40 hours after changing the filters and replenishing the drink mixes. If it takes 1.5 hours to perform the maintenance what is the availability of the system?

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A) .875 B) .925 C) .940 D) .953 E) .964

46) A component of a research instrument has a probability of .98 of operating. It has a backup component that has a probability of .95 of operating. The instrument will function if either component operates. Determine the overall reliability of this subsystem under these conditions: (i) The backup and the main component are connected by a switch which is certain to function should the main component fail. (ii) The switch to the backup has a probability of .99 of operating.

47) A computer has three main modules which have individual reliabilities of .80, .90, and .90. Because of recent failures, management is now considering adding redundancy. Determine the reliability of the system with backups under these conditions: (i) Each module has a backup with reliability equal to its own and a backup switch with a reliability of 1.00. (ii) The backup consists of an identical computer which operates as a whole rather than backing up individual sections. The single switch for the backup computer has a reliability of .96.

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48) A cathode ray tube has a mean time between failures of 80 weeks. Determine these probabilities: (i) The unit will not last 64 weeks. (ii) The unit will last for at least 88 weeks. (iii) Neither of the choices occurs.

49) A life monitoring system can operate an average of 15 months between failures. Determine these probabilities: (i) a failure within 12 months of the previous failure (ii) a failure between 12 and 18 months after the previous failure

50) The average time between failures for a solenoid is 36 months. Determine the following probabilities: (i) probability of failure before 36 months(ii) the probability that a system which is composed of two such solenoids will fail within 36 months if both must work for the system to work

51) A pumping station is normally distributed with a mean of 48 months and a standard deviation of five months. Determine these probabilities: (i) The valve will fail within 44 months of its installation. (ii) The valve will last at least 40 months, before failing.

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52) The estimated service life of a part is normally distributed with a mean of 500 hours and a standard deviation of 40 hours. Determine the probability of failing in these intervals :(i) before its mean life(ii) after 450 hours of operation(iii) between 540 hours and 600 hours

53) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What is the probability that component Y will fail during a year of operation?

54) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What is the probability that component X will perform reliably for a year?

55) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What is the probability that component Y will perform reliably for a year?

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56) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. This product has a mean time to wear-out of eight years with a standard deviation of one year. What is the probability that this product will perform reliably for a year?

57) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What would be the reliability of this product if component X were backed up with an identical component?

58) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What would be the reliability of this product if component Y were backed up with an identical component?

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59) A certain product is comprised of two components: X and Y. Component X has a random failure rate of one in every ten years, while component Y's random failure rate is one in every five years. What would be the reliability of this product if both components were backed up with an identical component?

60) A product is comprised of two parts: A and B. Component A has a random failure rate of one in every ten years, while component B's random failure rate is one in every five years. This product has a mean time to wear-out of eight years with a standard deviation of one year. What is the probability that this product will fail within eight years? Nine years? Six years?

61) One operational definition of reliability is the probability that a product or system will function when activated. ⊚ ⊚

62)

true false

The reliability of the system shown below is 0.9504.

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true false

63)

"Independent components" cannot exist in the same product. ⊚ ⊚

true false

64) A component in a product can be considered an "independent" component if it has no relation to whether any other component in the product functions or not. ⊚ ⊚

65)

true false

Redundancy in product design refers to backup parts or systems. ⊚ ⊚

true false

66) Availability measures the fraction of time a piece of equipment or a repairable product is expected to be available for operation. ⊚ ⊚

67)

Mean time between failure is the average length of time to repair a failed item. ⊚ ⊚

68)

true false

Availability cannot be increased by improving the time between breakdowns.

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⊚ ⊚

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true false

Answer Key Test name: Chap 04S_7ce 1) A 2) C 3) A 4) C 5) A 6) E 7) C 8) A 9) D 10) E 11) E 12) D 13) C 14) C 15) A 16) B 17) C 18) B 19) E 20) D 21) B 22) B 23) E 24) C 25) A 26) B Version 1

27) C 28) B 29) A 30) E 31) B 32) B 33) C 34) B 35) C 36) A 37) C 38) D 39) B 40) B 41) B 42) A 43) D 44) C 45) E 61) TRUE 62) TRUE 63) FALSE 64) TRUE 65) TRUE 66) TRUE 67) FALSE 68) FALSE

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Chapter 4: Product and Service Design 1)

The usual phases for product design do not include which of the following?

A) Mass customization B) Idea generation and preliminary assessment C) Building a business case D) Development of product and processes E) Launch

2) Which of the following is not an element to create new products and services and bring them to consumers?

A) Product approval committees B) Core marketing team C) Phase reviews D) Structured development processes E) Trial and error

What does the product design process not usually involve?

A) Building a business case. B) Building product prototypes, testing and redesigning if necessary. C) Testing and validation D) Designing for mass-customization. E) Translating the "voice of the customer" into technical product specifications.

Which step in the stage-gate model involves performing a complete financial analysis.

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A) Scoping B) Building Business Case C) Development D) Testing and Validation E) Launch

5) Which step in the stage-gate model involves making and testing prototypes, and operations process development?

A) Scoping B) Building Business Case C) Development D) Testing and Validation E) Product Definition and Operations Assessment

6) Gillette, found it could satisfy customers complaining about white residue from its deodorants by creating the Clear Stick. This was an example of which approach to finding new product ideas?

A) Listening to market complaints B) Gaps in the market C) Exploring niche markets D) Using new technology E) Creating new market space

Which of the following is not a reason for redesigning a product or service?

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A) to reduce labor or material cost B) to increase the level of employee satisfaction C) to increase the level of customer satisfaction D) to attract and increase customer demand E) to increase quality

Which of the following is not a typical source of ideas for new or redesigned products?

A) Front-line employees B) Marketing research C) Inventory records D) Reverse engineering E) Research and development

9) The process of dismantling and inspecting a competitor's new or revised product for the purpose of gleaning design ideas is called:

A) design by imitation. B) product analysis. C) reverse engineering. D) benchmarking. E) R&D

10)

Which of the following is not a stage in the life cycle of products and services?

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A) Incubation B) Growth C) Adolescence D) Saturation E) Decline

11) In this phase of the product life cycle, most consumers of the product only demand its replacement, and competitors supply the superior product with the lower price.

A) Incubation B) Growth C) Maturity D) Saturation E) Decline

12) The stage in the product life cycle where companies attempt to prolong a product's useful life by improving its reliability or reducing costs is:

A) incubation. B) growth. C) maturity. D) saturation. E) decline.

13) Which of the following is not an action likely to be taken in the last phase of a product life cycle to prolong the product's life?

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A) B) C) D)

Improve the reliability of the product Reduce production costs (and therefore the price) Redesign the product Increase production volume to reduce costs

14) Which of the following is a disadvantage of standardization in product and service design?

A) Increased number of items held in inventory B) Increased training costs C) Decreased expenditures on perfecting designs D) Decreased product variety E) Economies of scale

15)

The term "standardization" is closely associated with:

A) customization. B) high cost. C) longer lead times. D) variety. E) interchangeability.

16)

The advantages of standardization do not include which of the following?

A) Extending the product life cycle B) Fewer parts to deal with in inventory C) Reduced time and cost to train employees D) Purchasing is more routine E) Products are made in large quantities

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17)

Which of the following is not an advantage of standardization?

A) Fewer parts to deal with in inventory. B) The opportunity to freeze design at a very early stage. C) Reduced training cost and time. D) Purchasing is more routine. E) Inventory management is less complex.

18) Producing basically standardized goods or services but incorporation some degree of customization refers to ;

A) modular design B) robust design C) delayed differentiation D) mass customization E) standardization

19)

One way to increase reliability is to:

A) reduce production capacity. B) increase the number of dependent components. C) increase mean repair time. D) increase the number of service stations. E) Use backup components.

20)

One way to increase reliability is to:

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A) eliminate backup components. B) improve preventive maintenance procedures. C) increase mean repair time. D) increase the number of series components. E) use a global supply chain.

21) The ability of a product, part or system to perform its intended function under normal conditions refers to;

A) robust design B) standardization C) mitigated failure D) design for use E) reliability

22)

This term is used to describe a situation in which an item does not perform as intended.

A) mitigated failure B) failure C) un-capable D) recovery E) occurrence

23)

Remanufacturing means:

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A) recovering materials from old products to be used in producing new products. B) designing products so they can be easily taken apart. C) a product has to meet the standards of government regulations. D) standardized products whose design does not change over time. E) refurbishing used products by replacing worn-out or defective components.

24)

Which of the following is not a practice that is common to Design for Environment?

A) Remanufacturing B) Concurrent engineering C) Design for disassembly D) Recycling E) Cradle-to-Grave assessment

25)

Which one of the following is not a common design for environment (DFE) practice?

A) Design for disassembly B) Design to minimize use of hazardous materials C) Design for re-use D) Design for mass customization E) design for energy efficiency

26) Which of the following is not one of the 3 Rs in Designing a product for environment (DFE)?

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A) reuse B) reduce C) recycle D) reposition E) redesign

27) and sequence.

focuses on reducing the number of parts in a product and on assembly methods

A) Design for manufacturing B) Concurrent engineering C) Design for assembly D) Design for disassembly E) Component commonality

28)

Which is not a key advantage of concurrent engineering?

A) It allows consideration of production capabilities. B) It decreases the number of conflicts and challenges for manufacturing. C) Cost and quality are taken into consideration in selecting suitable materials. D) It allows for early procurement of key machinery. E) It allows designers to work independently from manufacturing personnel.

29)

In the area of product and service design the acronym CAD refers to:

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A) conceptually appropriate design. B) computer aided design. C) commercial applications design. D) competitive advantage design. E) completely automated design.

30)

The term "House of Quality" is associated with:

A) service blueprinting. B) quality function deployment. C) concurrent engineering. D) robust design. E) the Taguchi approach.

31)

The term that pertains to incorporating customer ideas in product design is:

A) Total quality management (TQM). B) Computer aided design (CAD). C) Quality function deployment (QFD). D) Robust design. E) Reverse engineering.

32) A structured approach for integrating customer requirements into every aspect of product development is known as:

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A) total quality management. B) customer satisfaction. C) quality function deployment. D) customer integration. E) a product development team.

33) The Kano model is a theory of product and service design that focuses on which three definitions of quality?

A) Product, process, and design B) Basic, attribute and characteristic C) Unsatisfied, neutral and satisfied D) Basic, performance and excitement E) Basic, modified and enhanced

34) The portion of FMEA refers to studying the results of failures, and asks: "What would be the consequences of failure for the customer?

A) Failure mode B) Failure analysis C) Effects analysis D) Effects mode E) Failure effects

35)

What do the letters FMEA refer to?

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A) Failure methods and environmental analysis B) Failure modes and effects analysis C) Feasibility methods and economic assembly D) Feasibility models and error analysis E) Frequent mitigation for error analysis

36)

Which of the following is not true about services?

A) Service design tends to focus on tangible factors. B) Services are often created and delivered at the same time. C) Most services involve some degree of customization. D) Many services have low barriers to entry and exit. E) The convenience of location is a major factor in service design.

37) In the financial services sector design process, which of the following activities differentiates high and low performers?

A) Speed to market B) Peace of mind C) Ambience and convenience D) Preliminary market assessment E) Customized service delivery

38)

Which of the following is not a key rule used to guide the design of services?

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A) Have a unifying theme to support personnel working together. B) Make sure the service delivery system can handle variability in requirements. C) Include features and checks to ensure reliability. D) Design the system to be user-friendly. E) Minimize points of customer contact to reduce variability.

39) What is the term for the method used to conceptualizing a service delivery system, which describes and analyzes a service process?

A) Quality function deployment B) Service development C) Service blueprint D) Kano model E) FMEA analysis

40) The introduction of new products, or changes to product designs, can have impacts throughout the organization and the entire supply chain. ⊚ ⊚

true false

41) Designing production processes includes building prototypes of processes and revising the process if necessary. ⊚ ⊚

true false

42) Phase reviews are only performed at the beginning of the design process to determine the viability of a design project.

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true false

43) The cost of changes multiplies with each phase of the product design/development process. This is called as the escalator effect. ⊚ ⊚

true false

44) The process of dismantling and inspecting a competitor's product to discover opportunities for product improvement is called "prototyping". ⊚ ⊚

true false

45) The process of dismantling and inspecting a competitor's product to discover opportunities for product improvement is called "reverse engineering". ⊚ ⊚

true false

46) In the incubation phase of the product life cycle, production costs are low, and productivity is high ⊚ ⊚

true false

47) In the saturation phase of the product life cycle, if there is no attempt to prolong the useful life of a product by improving its quality, reducing production costs and redesigning it, or introducing a new substitute product, it leads to a decline in demand.

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⊚ ⊚

true false

48) Producing different versions of the product is considered in the growth phase of the product life cycle. ⊚ ⊚

true false

49) In the saturation phase of product life cycle, many potential buyers may recognize the bugs of the product. ⊚ ⊚

true false

50) In the decline phase of product life cycle, decisions must be made on whether to discontinue a product or service and replace it with new ones or abandon the market, or to attempt to find new uses or new users for the existing product or service. ⊚ ⊚

51)

true false

A disadvantage of standardization is the possibility to freeze design at a very early stage. ⊚ ⊚

true false

52) Standardization is beneficial for manufactured products but not for computer software applications. ⊚ ⊚

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true false

53)

A major factor in reducing costs and increasing reliability is the standardization of parts. ⊚ ⊚

true false

54) One of the main advantages of standardization is that it increases the potential variety of products. ⊚ ⊚

true false

55) Lack of standardization can at times lead to serious difficulties and competitive struggles, particularly when systems are incompatible. ⊚ ⊚

true false

56) A disadvantage of standardization is that a manufacturer may lock in obsolescence and resist modification of a part. ⊚ ⊚

true false

57) An automatic car wash is an example of service standardization, because each car receives the same service regardless of how clean or dirty it is. ⊚ ⊚

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true false

58)

Modular design is a form of standardization. ⊚ ⊚

true false

59) Modular design increases the costs of purchasing and controlling inventory compared to nonmodular design. ⊚ ⊚

true false

60) Modular design supports mass customization by enabling quick assembly of modules to provide customized configurations for individual customers. ⊚ ⊚

true false

61) An advantage of modular design is that product failures can be easier to diagnose and remedy than non-modular design. ⊚ ⊚

62)

true false

Delayed differentiation and modular design are tactics for mass customization. ⊚ ⊚

true false

63) Mass customization is defined as a strategy of producing standardized goods or services but incorporating some degree of customization in the final product.

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⊚ ⊚

true false

64) The process of producing but not quite completing a product until customer preferences or specifications are known as Delay Differentiation. ⊚ ⊚

true false

65) An advantage of modular design is that failures are often easier to diagnose and remedy because modules can be tested individually. ⊚ ⊚

true false

66) Reliability refers to the ability of a product to perform its intended function under extreme, abnormal conditions. ⊚ ⊚

true false

67) The term failure as applied to reliability means that a part or item does not perform as intended. ⊚ ⊚

true false

68) Robust design is defined as grouping of parts into modules that are easily interchanged or replaced. ⊚ ⊚

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true false

69) The central feature of Taguchi's approach is parameter design. This involves determining the specification settings for the product that will result in robust design in terms of manufacturing variations, product deterioration, and conditions during use. ⊚ ⊚

true false

70) Product liability means that a manufacturer is liable for any injuries or damages caused by a faulty product because of poor workmanship or design. ⊚ ⊚

true false

71) The practice of designing products so that they can easily be taken apart after use is not consistent with Design for Environment (DFE). ⊚ ⊚

true false

72) The assessment of the environmental impact of a product or service throughout its useful life is called cradle-to-grave assessment ⊚ ⊚

true false

73) Design for Manufacturing (DFM) refers to design a product in such a way to increase the ability to disassemble a used product to recover the recyclable parts. ⊚ ⊚

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true false

74) Value Engineering (VE) is an examination of the function of parts and materials in an effort to reduce the cost and/or improve the performance of an existing product. ⊚ ⊚

true false

75) Value analysis (VA) is an examination of the function of parts and materials in an effort to reduce the cost and/or improve the performance of an existing product. ⊚ ⊚

true false

76) Manufacturability, or ease of fabrication/assembly, is a key concern in product design because of its impact on cost, productivity, and quality. ⊚ ⊚

true false

77) Design for assembly means focusing on reducing the number of parts in a product and the methods for putting it together. ⊚ ⊚

true false

78) Careful consideration for material selection is always important for achieving the performance and cost objectives of any product. ⊚ ⊚

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true false

79)

Concurrent engineering is another name for sequential development. ⊚ ⊚

true false

80) "Concurrent engineering" brings people concerned with manufacturing into the design phase earlier than in the "throw-over-the-wall" approach. ⊚ ⊚

true false

81) "Concurrent engineering" refers to having newly trained engineers involved in product design. ⊚ ⊚

true false

82) Concurrent engineering reduces the level of communication required among engineering design, marketing staff, and manufacturing. ⊚ ⊚

83)

true false

A major benefit of CAD is increased productivity of designers. ⊚ ⊚

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true false

84) Computer-Aided Design slows the design process due to frequent changes to drawings and products. ⊚ ⊚

true false

85) Production process design involves translating the "voice of the customer" into technical product or service specifications. ⊚ ⊚

true false

86) "Quality Function Deployment" is a structured approach for ensuring that customer requirements are factored into every aspect of product planning and production. ⊚ ⊚

true false

87) Quality function deployment (QFD) is a structured approach for diagnosing sources of technical problems in production processes. ⊚ ⊚

true false

88) Quality function deployment (QFD) is based on a set of matrices which relate customer requirements (what) to corresponding technical requirements (how). ⊚ ⊚

true false

89) Materials, dimensions of product and equipment used for processing in a manufacturing system are some examples of technical requirements for Quality Function Deployment (QFD).

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⊚ ⊚

true false

90) Listening to and understanding the customer is the central feature of Quality Function Deployment (QFD). ⊚ ⊚

91)

true false

The Kano model is a theory of product and service design that focuses on "more is better" ⊚ ⊚

true false

92) In the Kano Model, over time, quality features that excited become performance features, and performance features soon become basic quality features. ⊚ ⊚

true false

93) The failure modes portion of FMEA refers to the various ways in which failures can occur. ⊚ ⊚

true false

94) Failure modes and effects analysis (FMEA) is a structured method for identifying possible failures in a product or process and then assessing their effects in order to find opportunities for improvement. ⊚ ⊚

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true false

95)

Products are generally intangible; services are generally tangible. ⊚ ⊚

true false

96) Most services involve some degree of customization which may cause more variability in length of services. ⊚ ⊚

97)

true false

The quality of services can be measured by measuring customer satisfaction. ⊚ ⊚

true false

98) Service can be designed much more standardized when there is little or no contact, whereas high contact service needs to be customized based on the needs of individual customers. ⊚ ⊚

true false

99) Service design often must take into account the degree of customer contact as it affects the degree of customization (variability). ⊚ ⊚

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true false

100) Services should be designed to minimize variability in service requirements, thereby increasing the efficiency of service delivery processes. ⊚ ⊚

101)

true false

A useful tool for conceptualizing a service delivery system is the service blueprint. ⊚ ⊚

true false

102) A service blueprint shows the basic customer and service actions involved in a service operation. ⊚ ⊚

true false

103) Using globally diverse design teams increases the risks of conflicts and miscommunication. ⊚ ⊚

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true false

Answer Key Test name: Chap 04_7ce 1) A 2) E 3) D 4) B 5) C 6) A 7) B 8) C 9) C 10) C 11) D 12) E 13) D 14) D 15) E 16) A 17) B 18) D 19) E 20) B 21) E 22) B 23) E 24) B 25) D 26) D Version 1

27) C 28) E 29) B 30) B 31) C 32) C 33) D 34) C 35) B 36) A 37) D 38) E 39) C 40) TRUE 41) TRUE 42) FALSE 43) TRUE 44) FALSE 45) TRUE 46) FALSE 47) TRUE 48) TRUE 49) FALSE 50) TRUE 51) TRUE 52) FALSE 53) TRUE 54) FALSE 55) TRUE 56) TRUE Version 1

57) TRUE 58) TRUE 59) FALSE 60) TRUE 61) TRUE 62) TRUE 63) TRUE 64) TRUE 65) TRUE 66) FALSE 67) TRUE 68) FALSE 69) TRUE 70) TRUE 71) FALSE 72) TRUE 73) FALSE 74) FALSE 75) TRUE 76) TRUE 77) TRUE 78) TRUE 79) FALSE 80) TRUE 81) FALSE 82) FALSE 83) TRUE 84) FALSE 85) TRUE 86) TRUE Version 1

87) FALSE 88) TRUE 89) TRUE 90) TRUE 91) FALSE 92) TRUE 93) TRUE 94) TRUE 95) FALSE 96) TRUE 97) TRUE 98) TRUE 99) TRUE 100) FALSE 101) TRUE 102) TRUE 103) TRUE

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Chapter 5S: Decision Analysis 1) A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called:

A) a payoff table. B) a feasible region. C) an isoquant table. D) a decision tree. E) a payback period matrix.

A decision tree is:

A) an algebraic representation of alternatives. B) a behavioural representation of alternatives. C) a matrix representation of alternatives. D) a graphical representation of alternatives. E) a horticultural representation of alternatives.

3) the:

The difference between expected payoff under certainty and expected payoff under risk is

A) expected monetary value. B) expected value of perfect information. C) expected net present value. D) expected rate of return. E) incremental rate of return

Which of the following is not true about influence diagrams?

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A) They represent complex situations with many variables. B) They show the alternatives at the decision nodes. C) Chance events are shown in circles. D) They are more concise than decision trees. E) They are compact graphical representations.

A sensitivity analysis graph:

A) provides the exact values of the range of probability for the optimal alternative. B) is useful for a maximum of three alternatives. C) is useful when the probabilities of payoffs are known. D) provides a visual indication of the range of probability for the best alternative. E) determines the average probability of a payoff.

6) Testing how a problem solution reacts to changes in one or more of the model parameters in a decision problem is called:

A) analysis of trade-offs. B) sensitivity analysis. C) priority recognition. D) analysis of variance. E) decision analysis.

An outcome over which the decision maker has no control is called:

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A) Condition B) Random variable C) Alternative D) State of nature E) Consequence

8) The sum over the states of nature of the payoff multiplied by probability of each state of nature is called what?

A) Payoff table B) Expected monetary value C) Decision tree D) Expected value of perfect information E) Bayes' rule

9) What is the method used for calculating EMVs in a decision tree and identifying the best alternative?

A) Expected monetary value B) Expected value of perfect information C) Folding back D) Growing forward E) Payoff

10)

Determining the probability distribution which results in the best alternative is called:

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A) B) C) D)

Risk profile Expected value of perfect information Folding back Expected probability value

11) Decision maker's values, preferences and attitudes toward risk can be modelled. What is this called?

A) Risk profile B) Sensitivity to a probability C) Sensitivity to an input D) Utility E) Certainty equivalent

12) A former politician, who is now the owner of an Ottawa consulting firm, is trying to decide whether to hire one, two, or three consultants. The owner estimates that profits next year (in thousands of dollars) will vary with demand for his consulting services as follows: NUMBER OF CONSULTANTS

DEMAND LOW

MEDIUM

HIGH

One

100

Two

100

Three

-100

300

If he feels the chances of low, medium, and high demand are 50%, 20%, and 30%, respectively, what are the expected annual profits for the number of consultants decided to be hired?

A) $54,000 B) $55,000 C) $70,000 D) $80,000 E) $135,000

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13) A former politician, who is now the owner of an Ottawa consulting firm, is trying to decide whether to hire one, two, or three consultants. The owner estimates that profits next year (in thousands of dollars) will vary with demand for his consulting services as follows: NUMBER OF CONSULTANTS

DEMAND LOW

MEDIUM

HIGH

One

100

Two

100

Three

-100

300

If he feels the chances of low, medium, and high demand are 50%, 20%, and 30%, respectively, what is the expected value of perfect information?

A) $54,000 B) $65,000 C) $70,000 D) $80,000 E) $135,000

14) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. The manager estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE

PRECIPITATION LOW

NORMAL

HIGH

Do Nothing

-100

100

300

Expand

350

500

200

Build New

750

300

If the chances of low, normal, and high precipitation are 30%, 20%, and 50%, respectively, what are expected long-run profits for the alternative selected?

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A) $140,000 B) $170,000 C) $285,000 D) $305,000 E) $475,000

15) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. The manager estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE

PRECIPITATION LOW

NORMAL

HIGH

Do Nothing

-100

100

300

Expand

350

500

200

Build New

750

300

If the chances of low, normal, and high precipitation are 30%, 20%, and 50%, respectively, what is the expected value of perfect information?

A) $140,000 B) $170,000 C) $285,000 D) $305,000 E) $475,000

16) The local operations manager for the Canada Revenue Agency must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. The manager estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Parliament, as follows: NUMBER OF EXAMINERS

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COMPLIANCE LOW

NORMAL

HIGH

One

Two

100

Three

150

-10

If the chances of low, medium, and high compliance are 20%, 30%, and 50%, respectively, what are the expected net revenues for the number of assistants decided to be hired?

A) $26,000 B) $46,000 C) $48,000 D) $50,000 E) $76,000

17) The local operations manager for the Canada Revenue Agency decides whether to hire one, two, or three temporary tax examiners for the upcoming tax season. The manager estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Parliament, as follows: NUMBER OF EXAMINERS

COMPLIANCE LOW

NORMAL

HIGH

One

Two

100

Three

150

-10

If the chances of low, medium, and high compliance are 20%, 30%, and 50%, respectively, what is the expected value of perfect information?

A) $16,000 B) $26,000 C) $46,000 D) $48,000 E) $50,000

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18) The construction manager for Acme Construction, Inc. must decide whether to build single-family homes, apartments, or condominiums. The manager estimates annual profits (in $000) will vary with the population trend as follows: Type

POPULATION TREND Declining

Stable

Growing

Single Family

200

Apartments

170

Condos

-20

100

220

If the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, which kind of houses should be build?

A) Single family B) Apartments C) Condos D) Either single family or apartments E) Either apartments or condos

19) The construction manager for Acme Construction, Inc. must decide whether to build single-family homes, apartments, or condominiums. The manager estimates annual profits (in $000) will vary with the population trend as follows: Type

POPULATION TREND Declining

Stable

Growing

Single Family

200

Apartments

170

Condos

-20

100

220

If the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, what is the expected value of perfect information?

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A) $187,000 B) $132,000 C) $123,000 D) $65,000 E) $55,000

20) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows: SIZE OF OUTLET

DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

If there is a 30% chance that demand will be high, what are the expected monthly profits for the outlet that will be leased?

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

21) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows: SIZE OF OUTLET

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DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

If there is a 30% chance that demand will be high, what is the expected payoff with perfect information?

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

22) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows: SIZE OF OUTLET

DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

If there is a 30% chance that demand will be high, what is the expected value of perfect information?

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

23) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows:

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SIZE OF OUTLET

DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will the decision be to lease the small facility?

A) 0 - .25 B) 0 - .33 C) .25 - .5 D) .33 - 1 E) .5 - 1

24) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows: SIZE OF OUTLET

DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will the decision be to lease the medium facility?

A) 0 - .25 B) 0 - .33 C) .25 - .5 D) .33 - 1 E) .5 - 1

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25) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. The owner estimates that monthly profits will vary with demand for cookies as follows: SIZE OF OUTLET

DEMAND LOW

HIGH

Small

$1,000

1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will the decision be lease the large facility?

A) 0 - .25 B) 0 - .33 C) .25 - .5 D) .33 - 1 E) .5 - 1

26) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

Cable Network Successful

Failure

$10

Mixed

Television

If there is a 60% chance that the new cable network will be successful, what is the expected cost (per thousand "hits") for the strategy the manager will be selecting?

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A) $3.40 B) $4.60 C) $8.00 D) $9.00 E) $10.00

27) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

Cable Network Successful

Failure

$10

Mixed

Television

If there is a 60% chance that the new cable network will be successful, what is the expected cost (per thousand "hits") under certainty?

A) $3.40 B) $14.40 C) $8.00 D) $9.00 E) $10.00

28) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

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Cable Network

Successful

Failure

$10

Mixed

Television

If there is a 60% chance that the new cable network will be successful, what is the expected value (per thousand "hits") of perfect information?

A) $4.40 B) $4.60 C) $8.00 D) $9.00 E) $10.00

29) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

Cable Network Successful

Failure

$10

Mixed

Television

For what range of probability that the new cable network will be successful will the manager select the print media strategy?

A) 0 - .4 B) 0 - .55 C) .4 - .7 D) .55 - 1 E) .7 - 1

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30) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

Cable Network Successful

Failure

$10

Mixed

Television

For what range of probability that the new cable network will be successful will the manager select the mixed media strategy?

A) 0 - .4 B) 0 - .55 C) .4 - .7 D) .55 - 1 E) .7 - 1

31) The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. The goal is to minimize the costs associated with reaching the audience. The manager estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network the manager plans to use, as follows: Strategy

Version 1

Cable Network Successful

Failure

$10

Mixed

Television

For what range of probability that the new cable network will be successful will the manager select the television media strategy?

A) 0 - .4 B) 0 - .55 C) .4 - .7 D) .55 - 1 E) .7 - 1

32) The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) Script #1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, script #2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a "flop", then no sequel would be produced. What would be the total payoff if script #1 was a success, but its sequel was not?

A) $15,000,000 B) $10,000,000 C) $9,000,000 D) $5,000,000 E) $-1,000,000

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33) The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) Script #1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, script #2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a "flop", then no sequel would be produced. What is the probability that script #1 will be a success, but its sequel will not?

A) .8 B) .7 C) .56 D) .2 E) .14

34) The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) Script #1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, script #2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a "flop", then no sequel would be produced. What is the expected value of selecting script #1?

A) $15,000,000 B) $9,060,000 C) $8,400,000 D) $7,200,000 E) $6,000,000

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35) The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) Script #1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, script #2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a "flop", then no sequel would be produced. What is the expected value of selecting script #2?

A) $15,000,000 B) $9,060,000 C) $8,400,000 D) $7,200,000 E) $6,000,000

36) The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) Script #1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, script #2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a "flop", then no sequel would be produced. What is the expected value for the optimum decision alternative?

A) $15,000,000 B) $9,060,000 C) $8,400,000 D) $7,200,000 E) $6,000,000

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37) One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the Canadian Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there's a 50 percent chance of getting $50,000 in outside funding from the Canadian Heart and Stroke Foundation the first year, and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000, and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000, and a 40 percent chance of getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What would be the total payoff if the heart lab were funded in both the first and second years?

A) $100,000 B) $60,000 C) $50,000 D) $40,000 E) $20,000

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38) One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the Canadian Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there's a 50 percent chance of getting $50,000 in outside funding from the Canadian Heart and Stroke Foundation the first year, and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000, and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000, and a 40 percent chance of getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the probability that the heart lab will be funded in both the first and second years?

A) .4 B) .3 C) .2 D) .1 E) 0

39) One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the Canadian Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there's a 50 percent chance of getting $50,000 in outside funding from the Canadian Heart and Stroke Foundation the first year, and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000, and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000, and a 40 percent chance of getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the decision alternative to select the cancer lab?

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A) $100,000 B) $60,000 C) $50,000 D) $40,000 E) $20,000

40) One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the Canadian Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there's a 50 percent chance of getting $50,000 in outside funding from the Canadian Heart and Stroke Foundation the first year, and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000, and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000, and a 40 percent chance of getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the decision alternative to select the heart lab?

A) $100,000 B) $60,000 C) $50,000 D) $40,000 E) $20,000

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41) One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the Canadian Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there's a 50 percent chance of getting $50,000 in outside funding from the Canadian Heart and Stroke Foundation the first year, and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000, and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000, and a 40 percent chance of getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the optimum decision alternative?

A) $100,000 B) $60,000 C) $50,000 D) $40,000 E) $20,000

42) Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. What is the probability that the economics book would wind up being placed with a smaller publisher?

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A) .8 B) .5 C) .4 D) .2 E) .1

43) Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. What is the probability that the statistics book would wind up being placed with a smaller publisher?

A) .6 B) .5 C) .4 D) .3 E) 0

44) Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. What is the expected value for the decision alternative to write the economics book?

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A) 50,000 copies B) 40,000 copies C) 32,000 copies D) 30,500 copies E) 10,500 copies

45) Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. What is the expected value for the decision alternative to write the statistics book?

A) 50,000 copies B) 40,000 copies C) 32,000 copies D) 30,500 copies E) 10,500 copies

46) Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. What is the expected value for the optimum decision alternative?

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A) 50,000 copies B) 40,000 copies C) 32,000 copies D) 30,500 copies E) 10,500 copies

47)

What is the first step in the decision process?

A) Identify alternatives B) Identify states of nature C) Perform sensitivity analysis D) Identify the decision and objectives E) Identify all costs or payoffs

48)

What is the last step in the decision process?

A) Calculate payoffs B) Make a recommendation C) Determine if the model should be changed D) Identify the best alternative E) Perform sensitivity analysis

49)

Which of the following is NOT typically a component of influence diagrams?

A) Chance node B) Decision node C) Payoff node D) Formula node E) Calculation node

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50)

In influence diagrams, what does the nonexistence of an arrow indicate?

A) Lack of influence B) The relationship has not yet been determined C) The relationship is understood D) Direct influence E) The payoff has been determined

51)

Why are payoff tables helpful in the decision process?

A) They display the EMV calculations B) They show the result of EMV calculations C) They facilitate comparison of the alternatives. D) They display the final decision result E) They help to identify the decisions to be made.

52)

Which components of a decision tables have probabilities?

A) Alternatives B) Alternatives and states of nature C) The payoffs D) Payoffs and alternatives E) States of nature

53) What is the name of the mathematical formula used in determining conditional probability?

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A) Expected value B) Expected value of perfect information C) Sensitivity rule D) Bayes' rule E) Utility

54) This is used to determine the range of probability over which an alternative has the best expected payoff.

A) Sensitivity to an input B) Sensitivity to a probability C) Utility sensitivity D) Bayes' rule E) Risk tolerance

55)

What the two types of sensitivity that can be considered in decision problems?

A) Sensitivity to a decision and sensitivity to a state of nature B) Sensitivity to expected payoff and sensitivity to risk C) Sensitivity to a probability and sensitivity to an input D) Sensitivity to utility and sensitivity to risk tolerance E) Sensitivity to influence and sensitivity to acceptance.,

56) This is done to determine how a change in price or cost will impact the expected payoff of the best alternative.

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A) Risk assessment B) Sensitivity to a probability C) EMV utility D) Expected value of variable information E) Sensitivity to an input

57) This chart shows the range of expected payoff for the best alternative, in order of importance.

A) Tornado chart B) Utility diagram C) Risk profile D) EMV chart E) Decision tree

58) We plan to build a large plant that will cost $100,000 to build. The expected payoff per year with reduced prices and low demand is $40,000. It is believed, with a large plant and high demand we can expect payoff of either $30,000 or $45,000. Revenue per customer is $7.00. The probability of low demand is 0.4 and the probability of high demand is 0.6. What is the expected payoff of building a large plant?

A) $68,000, $98,000 B) $74,000, $109,000 C) $79,000, $126,000 D) $82,000, $145,000 E) $94,000, $150,000

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59) We plan to build a large plant that will cost $190,000 to build. The expected payoff per year with reduced prices and low demand is $30,000. It is believed, with a large plant and high demand we can expect payoff of either $40,000 or $56,000. Revenue per customer is $6.00. The probability of low demand is 0.6 and the probability of high demand is 0.4. What is the expected payoff of building a large plant?

A) $29,000, $56,000 B) $33,000, $68,000 C) $38,000, $76,400 D) $42,000, $81,000 E) $49,000, $87,000

60) Two units of utility have been calculated to be 0.45 with low demand and reduced prices and 0.65 with high demand and regular prices. If we construct a large facility there is a 0.35 probability demand will be low and a 0.65 probability demand will be high. What is the utility of build large?

A) 0.37 B) 0.48 C) 0.53 D) 0.58 E) 0.66

61) Two units of utility have been calculated to be 0.30 with low demand and reduced prices and 0.55 with high demand and regular prices. If we construct a large facility there is a 0.4 probability demand will be low and a 0.6 probability demand will be high. What is the utility of build large?

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A) 0.25 B) 0.33 C) 0.45 D) 0.55 E) 0.67

62) These occur when the value of a consequence or outcome cannot be measured by one unit such as dollars.

A) Variable utilities B) Problem sensitivities C) Input variances D) Multiple alternatives E) Multiple objectives

63) A decision is to be made based on the amount of rainfall and distance required to travel. What would be the best approach to this decision?

A) Variance analysis B) Multiple objectives C) Multiple states of nature D) Sensitivity analysis E) Multiple risk

64) A manager has developed a payoff table that indicates the profits associated with a set of alternatives under two possible states of nature. Answer the following questions. (i) Determine the expected payoff with perfect information if P(S2) = .40. (ii) Determine the range of P(S2) for which each alternative would be optimal. Alt.

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-2

65) A manager's staff has compiled the information below which pertains to four capacity alternatives. Values in the matrix are present value in thousands of dollars.

Alternative

If states of nature are equally likely and an expected value criterion of maximization is used, which alternative would be chosen?

66) A manager has learned that annual profits from four alternatives being considered for solving a capacity problem are projected to be $15,000 for A, $30,000 for B, $45,000 for C, and $60,000 for D if state of nature 1 occurs; and $60,000 for A, $80,000 for B, $90,000 for C, and $35,000 for D if state of nature 2 occurs. (i) If P(State of Nature 1) is .40, what alternative has the highest expected monetary value? (ii) Determine the range of P(S2) for which each alternative would be optimal.

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67)

Given the payoff matrix below, answer the following questions: Alternative

State of Nature #1

(a) If somehow you find out for certain that state of nature #4 is going to occur, which alternative will you select? (b) If you feel that P(#1) = .4, P(#2) = .3, P(#3) = .2, and P(#4) = .1, (i) What is your expected payoff under certainty? (ii) Which alternative has the highest expected monetary value? (iii) What is your expected value of perfect information?

68) A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses the firm's computer operations. According to the assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2. If condition I materializes, A will cost $12,000, B will cost $20,000, and C will cost $16,000. If condition II materializes, the costs will be $15,000 for A, $18,000 for B, and $14,000 for C. If condition III materializes, the costs will be $10,000 for A, $15,000 for B, and $19,000 for C. (i) Draw a decision tree for this problem. (ii) Using expected monetary value, which alternative should be chosen?

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69)

In decision theory, states of nature refer to a set of possible values for a random variable. ⊚ ⊚

true false

70) Typically the choice to "do nothing" based on a preference to stick with the status quo is not considered in the list of possible alternatives for a decision. ⊚ ⊚

true false

71) In order to use the expected value approach, one needs to determine the probabilities of future payoffs. ⊚ ⊚

true false

72) The probabilities assigned to each state of nature are taken from the appropriate probability distribution tables. ⊚ ⊚

true false

73) The expected monetary value approach is most appropriate when the decision-maker is risk-neutral. ⊚ ⊚

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true false

74) Expected monetary value gives the actual payoff one can expect in a given situation involving risk. ⊚ ⊚

true false

75) Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made. ⊚ ⊚

true false

76) The expected value approach is used for major, non-recurring decisions involving several decision variables. ⊚ ⊚

true false

77) An advantage of decision trees compared to payoff tables is that they permit us to analyze situations involving sequential or multistage decisions. ⊚ ⊚

78)

true false

Decision trees are useful when there is more than one decision variable. ⊚ ⊚

true false

79) In a decision tree, square nodes represent chance events, and circular nodes denote decision points.

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⊚ ⊚

80)

Decision trees are analyzed from left to right. ⊚ ⊚

81)

true false

Influence diagrams contain more detailed information than decision trees. ⊚ ⊚

true false

82) Influence diagrams represent complex situations with many random variables, but only one decision variable. ⊚ ⊚

83)

true false

In an influence diagram, the circles show chance events. ⊚ ⊚

true false

84) The EVPI indicates an upper limit on the amount a decision-maker should be willing to spend to obtain perfect information. ⊚ ⊚

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true false

85)

Graphical sensitivity analysis is limited to cases with no more than two alternatives. ⊚ ⊚

true false

86) Graphical sensitivity analysis is used when the payoffs and probabilities of decision alternatives are uncertain. ⊚ ⊚

true false

87) A structured approach to decision making is important because the intuitive quick approach does not consider all the relevant information and possible alternatives and can be biased. ⊚ ⊚

88)

true false

A utility is a quantification of a person's value for various payoffs. ⊚ ⊚

true false

89) The downside risk of payoff may be reduced by gathering more information on the random variable. ⊚ ⊚

true false

90) Sensitivity to an input is the range of the expected payoff of the best state of nature as a result of varying an input.

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⊚ ⊚

true false

91) Expected monetary payoffs always reflect the preference and attitude of the decision maker toward risk. ⊚ ⊚

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true false

Answer Key Test name: Chap 05S_7ce 1) A 2) D 3) B 4) B 5) D 6) B 7) D 8) B 9) C 10) A 11) D 12) C 13) B 14) D 15) B 16) D 17) B 18) A 19) E 20) B 21) A 22) E 23) A 24) C 25) E 26) C Version 1

27) B 28) A 29) A 30) C 31) E 32) C 33) E 34) B 35) D 36) B 37) A 38) C 39) B 40) C 41) B 42) C 43) D 44) C 45) D 46) C 47) D 48) B 49) D 50) A 51) C 52) E 53) D 54) B 55) C 56) E Version 1

57) A 58) D 59) C 60) D 61) C 62) E 63) B 69) TRUE 70) FALSE 71) TRUE 72) FALSE 73) TRUE 74) FALSE 75) TRUE 76) FALSE 77) TRUE 78) TRUE 79) FALSE 80) FALSE 81) FALSE 82) FALSE 83) TRUE 84) TRUE 85) FALSE 86) TRUE 87) TRUE 88) TRUE 89) TRUE 90) FALSE 91) FALSE Version 1

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Chapter 5: Strategic Capacity Planning 1)

Outsourcing some production is a means of

a capacity constraint.

A) identifying B) modifying C) supporting D) overcoming E) repeating

Which of the following is a key question in capacity planning?

A) Should we make the product in-house or outsource it? B) Where do we need the capacity? C) When do we need the capacity? D) Who will pay for the capacity change? E) Should we change capacity all at once, or through several small changes?

3) Allowances for which of these factors would be subtracted from design capacity when calculating effective capacity?

A) personal time B) equipment maintenance C) scheduling problems D) changing the mix of products E) all of the choices would be subtracted

Which of the following is NOT a reason why capacity decisions are so important?

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A) Capacity limits the rate of output possible. B) Capacity affects operating costs. C) Capacity is a major determinant of initial costs. D) Capacity is a long-term commitment of resources. E) Capacity chunks can be added or deleted quickly and inexpensively.

5) When producing items that are similar the ability of the system to produce those items is greater than if the items differed. Which factor influencing effective capacity does this relate to?

A) facilities and machines B) Product mix C) planning and operational factors D) supply chain factors E) external factors

Unbalanced systems are evidenced by:

A) top-heavy operations. B) labor unrest. C) bottleneck operations. D) increasing capacities. E) assembly lines.

Maximum capacity commonly refers to the upper limit on:

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A) utilization. B) the rate of demand. C) efficiency. D) the rate of output. E) finances.

The impact that a significant change in capacity will have on a key vendor is a:

A) supply chain factor. B) process limiting factor. C) internal factor. D) human resource factor. E) operational process factor.

9) The maximum possible output given a product mix, scheduling difficulties, personal time, and so on is:

A) utilization. B) design capacity. C) efficiency. D) effective capacity. E) available capacity.

10)

Efficiency is defined as the ratio of:

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A) actual output to effective capacity. B) actual output to design capacity. C) design capacity to effective capacity. D) effective capacity to actual output. E) design capacity to actual output.

11)

Utilization is defined as the ratio of:

A) actual output to effective capacity. B) actual output to design capacity. C) design capacity to effective capacity. D) effective capacity to actual output. E) design capacity to actual output.

12)

Which of the following would tend to reduce effective capacity?

A) suppliers that provide more reliable delivery performance B) reduced changeover times C) employees that are fully trained D) improved production quality E) greater variety in the product line

13)

The decision to outsource opens the firm up to certain risks, among them .

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and

A) lower costs; fewer task-specific investments B) loss of direct control over operations; natural disasters C) access to greater expertise; greater demand variability D) greater capacity rigidity; tight knowledge control E) higher marketing costs; small orders

14)

The ratio of actual output to effective capacity is:

A) design capacity. B) effective capacity. C) actual capacity. D) efficiency. E) utilization.

15)

The ratio of actual output to design capacity is:

A) design capacity. B) effective capacity. C) actual capacity. D) efficiency. E) utilization.

16)

Given the following information, what would efficiency be?

Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48 percent

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A) 20 percent B) 35 percent C) 48 percent D) 60 percent E) 80 percent

17)

Given the following information, what would efficiency be?

Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day

A) 40 percent B) 50 percent C) 60 percent D) 80 percent E) 90 percent

18)

Given the following information, what would utilization be?

Effective capacity = 20 units per day Design capacity = 60 units per day Actual output = 15 units per day

A) 25% B) 33% C) 50% D) 75% E) none of these

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19) Which of the following is NOT a strategy to manage service capacity or cope with service capacity limitations?

A) hiring extra workers B) storing inventories of the service C) pricing and promotion D) part-time workers E) subcontracting

20)

Which of the following is not a determinant of effective capacity?

A) facilities B) product mix C) actual output D) human factors E) external factors

21) Everything else being equal, a firm considering outsourcing would find all of the following desirable except:

A) total costs could l be lower for outsources goods or services. B) its supplier has more expertise in whatever is being outsourced. C) the firm can gain flexibility. D) the risks involved in product and service delivery. E) no need to create in-house capacity.

22)

Capacity in excess of expected demand that is intended to offset uncertainty is a:

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A) margin protect. B) line balance. C) capacity cushion. D) timing bubble. E) positioning hedge.

23)

Short-term considerations in determining capacity requirements include:

A) determining plant or facility size. B) number of machines and equipment. C) level of staffing and work shifts. D) accurate aggregate planning. E) new product development plans.

24)

Which of the following is not a criterion for developing capacity alternatives?

A) design structured, rigid systems B) take a big-picture approach to capacity changes C) prepare to deal with capacity in "chunks" D) attempt to smooth out capacity requirements E) identify the optimal operating level

25) Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be:

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A) smaller. B) larger. C) predictable. D) controllable. E) less frequent.

26)

Production units have an optimal rate of output where:

A) total costs are minimum. B) average unit costs are minimum. C) marginal costs are minimum. D) rate of output is maximum. E) total revenue is maximum.

27)

When the output is less than the optimal rate of output, the average unit cost will be:

A) lower. B) the same. C) higher. D) could be either higher or lower. E) could be either higher, lower or the same.

28) When capacity changes have the potential to impact suppliers, warehousing and transportation, which factor influencing effective capacity does this relate to?

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A) Facilities and machines B) Planning and operational factors. C) Product mix. D) Supply chain factors E) External factors

29)

At the break-even point:

A) output equals capacity. B) total cost equals total revenue. C) total cost equals profit. D) variable cost equals fixed cost. E) variable cost equals total revenue.

30)

What is the break-even quantity for the following situation?

FC = $1,200 per week VC = $2 per unit Rev = $6 per unit

A) 100 B) 200 C) 600 D) 1,200 E) 300

31) An alternative under consideration by a company will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is:

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A) 100. B) 2,000. C) 500. D) 1,000. E) 800.

32) For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

A) 1,000. B) 1,250. C) 2,250. D) 5,000. E) 3,000.

33)

Which of the following would not be a potential upside in a decision to outsource?

A) increased total production capacity B) potential to lower fixed costs C) supplier may have greater expertise to do the outsourced work D) disclosure of proprietary information to supplier E) supplier cost may be lower

34) If the output rate is increased but the average unit costs also increase, we are experiencing:

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A) market share erosion. B) economies of scale. C) diseconomies of scale. D) value-added accounting. E) step-function scaleup.

35) The method of financial analysis which focuses on the length of time it takes to recover the initial cost of an investment is:

A) payback. B) net present value. C) internal rate of return. D) queuing. E) cost-volume.

36)

Which of the following relates to worker impact on effective capacity?

A) Training and skill. B) Layout and floor space. C) Standardization of machines and methods. D) Differences in job requirements. E) Union contracts. That limit the type of work an employee can do.

37)

The method of financial analysis which results in an equivalent interest rate is:

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A) payback. B) net present value. C) internal rate of return. D) queuing. E) cost-volume.

38)

The first step in the strategic capacity planning process is to

A) improve current capacity. B) calculate current capacity. C) match the forecast to current capacity. D) make sure alternatives are feasible. E) forecast demand one to five years ahead.

39) in.

Capacity requirements are often closely linked to the stage of

that the product is

A) life cycle B) cash flow C) outsourcing D) advertising or price changes E) supplier development

40) A new nine-hole golf course is being built. Provisions have been made to obtain adjacent land to progress to an eighteen-hole course if necessary. What major consideration for developing capacity alternatives does this relate to?

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A) Life cycle B) Capacity timing. C) Capacity chunks. D) Design flexibility. E) Big picture approach.

41) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. The owner figures it will cost an additional $100 per cord to purchase and split wood with this machine, each cord of split wood sells for $125. What would the potential profit be if 4,000 cords of wood were split with this machine?

A) $0 B) $200,000 C) $100,000 D) $75,000 E) $50,000

42) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. The owner figures it will cost an additional $100 per cord to purchase and split wood with this machine, each cord of split wood sells for $125. How many cords of wood would have to be split with this machine to break even?

A) 5,000 B) 3,000 C) 2,000 D) 1,000 E) 0

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43) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. The owner figures it will cost an additional $100 per cord to purchase and split wood with this machine, each cord of split wood sells for $125. How many cords of wood would have to be split with this machine to make a profit of $30,000?

A) 3,200 B) 1,500 C) 2,000 D) 1,000 E) 500

44) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. The owner figures it will cost an additional $100 per cord to purchase and split wood with this machine, each cord of split wood sells for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day, what would be its utilization?

A) 100 percent B) 80 percent C) 75 percent D) 70 percent E) 0 percent

45) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. The owner figures it will cost an additional $100 per cord to purchase and split wood with this machine, each cord of split wood sells for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?

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A) 100 percent B) 80 percent C) 75 percent D) 70 percent E) 0 percent

46) The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which could be sold for $6 each. Per-unit variable cost would be $3. What would the profit be if 5,000 rosebushes were produced and sold?

A) $0 B) $9,000 C) $15,000 D) $10,000 E) $30,000

47) The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which could be sold for $6 each. Per-unit variable cost would be $3. How many rosebushes would need to be produced and sold in order to break even?

A) 1,600 B) 2,400 C) 2,000 D) 1,000 E) 1,500

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48) The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which could then be sold for $6 each. Perunit variable cost would be $3. How many rosebushes would need to be produced and sold in order to make a profit of $6,000?

A) 1,600 B) 2,400 C) 3,000 D) 1,000 E) 4,000

49) The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which could then be sold for $6 each. Perunit variable cost would be $3. If the available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and the plan is to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?

A) 0 percent B) 40 percent C) 60 percent D) 67 percent E) 100 percent

50) The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which could then be sold for $6 each. Perunit variable cost would be $3. If the available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and the greenhouse expects to be 80 percent efficient in the use of this land, how many rosebushes do they plan to grow each year on this land?

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A) 1,600 B) 2,400 C) 3,000 D) 2,000 E) 1,000

51) An Ontario county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Winnipeg., They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. What would be the county's annual profit if they were to process 4,000 prisoners per year at this new location?

A) $0 B) $75,000 C) $50,000 D) $100,000 E) $300,000

52) An Ontario county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Winnipeg., They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location?

A) 5,000 B) 8,000 C) 2,000 D) 4,000 E) 6,000

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53) An Ontario county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Winnipeg., They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to make a profit of $100,000 at this new location?

A) 5,000 B) 8,000 C) 2,000 D) 4,000 E) 6,000

54) An Ontario county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Winnipeg., They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. If the holding area at this new location has design and effective capacities of 10,000 and 7,500 prisoners processed annually, respectively, and 5,000 prisoners will be processed per year, what will be the utilization of the holding area?

A) 0 percent B) 30 percent C) 50 percent D) 60 percent E) 100 percent

55) An Ontario county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Winnipeg., They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. If their holding area at this new location has design and effective capacities of 10,000 and 7,500 prisoners processed annually, respectively, and they plan to be 80 percent efficient in their use of this space, how many prisoners does the county plan to process per year?

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A) 5,000 B) 8,000 C) 2,000 D) 4,000 E) 6,000

56) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. Patients would be charged $25.00 for an office visit to have their blood analyzed, while the actual cost of a blood analysis would be $5.00. What would the profit be if 5,000 HIV blood analyses were performed?

A) $0 B) $40,000 C) $60,000 D) $25,000 E) $100,000

57) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. Patients would be charged $25.00 for an office visit to have their blood analyzed, while the actual cost of a blood analysis would be $5.00. How many HIV blood analyses would need to be performed in order to break even?

A) 12,000 B) 2,400 C) 3,000 D) 1,000 E) 5,000

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58) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. Patients would be charged $25.00 for an office visit to have their blood analyzed, while the actual cost of a blood analysis would be $5.00. How many HIV blood analyses would need to be performed in order to make a profit of $15,000?

A) 3,000 B) 4,800 C) 5,000 D) 12,000 E) 3,750

59) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. Patients would be charged $25.00 for an office visit to have their blood analyzed, while the actual cost of a blood analysis would be $5.00. If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr. J. expects to perform 4,500 HIV blood analyses each year, what will be the utilization of this machine?

A) 0 percent B) 75 percent C) 83 percent D) 90 percent E) 100 percent

60) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. Patients would be charged $25.00 for an office visit to have their blood analyzed, while the actual cost of a blood analysis would be $5.00. If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr. J. expects to be 80 percent efficient in the use of this machine, how many HIV blood analyses are planned to be performed each year?

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A) 3,200 B) 4,800 C) 4,000 D) 1,000 E) 5,000

61) Operation X feeds into operation Y. Operation X has an effective capacity of 55 units per hour. Operation Y has an effective capacity of 50 units per hour. Increasing X's effective capacity to ensure that Y's utilization is maximized would be an example of a(n) .

A) flexible capacity management option. B) outsourcing option for capacity change. C) insourcing option for capacity change. D) cushioning capacity option. E) big picture approach to capacity changes.

62) Operation X feeds into operation Y. Operation X has an effective capacity of 55 units per hour. Operation Y has an effective capacity of 50 units per hour. Finding a way to increase Y's effective capacity would be an example of a constraint.

A) overcoming B) cushioning C) insourcing D) cycling E) repositioning

63) Which of the following is a common approach when using financial analysis to rank investment proposals?

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A) The discount rate of cash to account for inflation. B) The time value of money. C) The amount of capital required to increase capacity. D) Past period cash flow. E) Cash outflow at the outset followed by, possibly, net cash inflows.

64) Suppose operation X feeds directly into operation Y. All of X's output goes to Y, and Y has no other operations feeding into it. X has a design capacity of 80 units per hour and an effective capacity of 72 units per hour. Y has a design capacity of 100 units per hour. What is Y's maximum possible utilization?

A) 80 percent B) 72 percent C) 90 percent D) 70 percent E) 60 percent

65) Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the in the student registration process.

A) capacity cushion B) first station C) bottleneck D) economy of scale E) diseconomy of scale

66) Which of the following is NOT a planning and operational factor that influences effective capacity?

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A) The tasks that make up a job. B) Differences in equipment capabilities. C) Differences in job requirements. D) Bottleneck operations. E) Inventory decisions.

67) A department works one 8-hour shift and works 270 days per year. A new product is being introduced that requires 8,000 hours of processing time annually. How many machines are required?

A) 2.9 B) 3.1 C) 3.5 D) 3.7 E) 4.2

68) A department works one 7-hour shift and works 250 days per year. A new product is being introduced that requires 7,000 hours of processing time annually. How many machines are required?

A) 2.9 B) 3.4 C) 3.7 D) 4.0 E) 4.3

69) A processing centre that has three similar machines is available 8 hours per day. A new product is being introduced that requires 6,840 hours of processing time per year. How many days per year should the processing centre operate?

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A) 245 B) 266 C) 273 D) 280 E) 285

70) A processing centre that has four similar machines is available 8 hours per day. A new product is being introduced that requires 8,160 hours of processing time per year. How many days per year should the processing centre operate?

A) 244 B) 255 C) 263 D) 265 E) 270

71) Capacity of a resource is 175 units per week. Average demand on the resource is 150 units per week. What is the capacity cushion?

A) 125 percent B) 25 units per week. C) 175 units per week. D) 86 percent E) 14 units per week.

72) Capacity of a resource is 275 hours per week. Average demand on the resource is 220 hours per week. What is the capacity cushion

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A) 55 hours per week. B) 80 percent. C) 130 percent D) 75 percent. E) 220 hours per week.

73)

At the optimal operating level, average cost per unit will be

A) maximized B) marginal C) lowest D) increased E) averaged

74)

Which of the following is the best example of planning service capacity?

A) Capacity should exceed demand. B) Capacity must match demand. C) Capacity should be slightly less than demand. D) Inventory is used to offset higher than expected demand. E) Capacity is set at the average rate of demand.

75) When evaluating capacity alternatives, which of the following would NOT be considered?

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A) Economic considerations. B) Cost. Of additional capacity. C) The amount of revenue expected. D) Age of the workforce. E) Maintenance cost.

76) A manager is setting up a work cell. The work cell will have one or two or three machines. The annual fixed cost for each machine is $8,900, $12,500 and $22,000 respectively. With one machine the range of output is 0 to 200 units, with two machines the range of output is 201 to 600 units and with three machines the range of output is 601 to 1,200 units. Variable cost is $15 per unit and revenue is $35 per unit. If projected annual demand is between 580 and 660 units how many machines should the work cell have and what is the break-even quantity?

A) 2, 590 B) 2, 610 C) 3, 700 D) 3, 900 E) 3, 1,100

77) A manager is setting up a work cell. The work cell will have one or two or three machines. The annual fixed cost for each machine is $4,200, $7,500 and $12,000 respectively. Variable cost is $8 per unit and revenue is $20 per unit. What are the break-even quantities if the work cell has one, or two or three machines?

A) 200, 400, 700 B) 220, 550, 790 C) 350, 625, 1000 D) 380, 650, 1,100 E) 400, 700, 1,200

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78) The monthly cost to lease equipment is $7,500. Variable cost per unit is $2.00 and expected revenue per unit is $7.00. What is the break-even point in sales dollars?

A) $7,500 B) $8,200 C) $9,400 D) $10,500 E) $11,000

79) The monthly cost to lease equipment is $9,200. Variable cost per unit is $3.00 and expected revenue per unit is $9.00. What is the break-even point in sales dollars?

A) $9,200 B) $13,800 C) $8,500 D) $14,000 E) $9,300

80) The monthly cost to lease equipment is $9,200. Variable cost per unit is $3.00 and expected revenue per unit is $11.00. If monthly sales are $14,000 what is the profit/loss for the month?

A) Loss of $450 B) Profit of $4,800 C) Loss of $600 D) Profit of $1,350. E) Profit of $1,450

81) The monthly cost to lease equipment is $8,000. Variable cost per unit is $3.00 and expected revenue per unit is $7.00. If monthly sales are $12,000 what is the profit/loss for the month? Version 1

A) Profit of $1,000 B) Loss of $2,000 C) Profit of $2,000 D) Profit of $4,000 E) Loss of $3,200

82) The term capacity refers to the maximum quantity an operating unit can process over a given period of time. ⊚ ⊚

true false

83) Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations. ⊚ ⊚

true false

84) Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure. ⊚ ⊚

true false

85) Design capacity refers to the maximum output rate that can be achieved under ideal conditions. ⊚ ⊚

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true false

86) If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs. ⊚ ⊚

87)

Increasing productivity and also quality will result in increased effective capacity. ⊚ ⊚

88)

true false

Capacity utilization is defined as the ratio of effective capacity to design capacity. ⊚ ⊚

true false

89) Increasing capacity just before a bottleneck operation will improve the output of the process. ⊚ ⊚

true false

90) An example of an external factor that influences effective capacity would be pollution standards on products and equipment. ⊚ ⊚

91)

true false

Having excess capacity tends to keep operating costs low. ⊚ ⊚

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true false

92) Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments. ⊚ ⊚

true false

93) In cost-volume analysis, costs that vary directly with volume of output are referred to as fixed costs because they are a fixed percentage of output levels. ⊚ ⊚

true false

94) The break-even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit. ⊚ ⊚

true false

95) Outsourcing can help to ensure there is available capacity around the clock to manage peaks in demand. ⊚ ⊚

96)

true false

The more current capacity exceeds desired capacity, the greater the opportunity for profit. ⊚ ⊚

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true false

97) The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations. ⊚ ⊚

98)

Capacity planning requires an analysis of needs: what kind, how much, and when. ⊚ ⊚

99)

true false

Waiting line analysis can be useful for capacity design, especially for service systems. ⊚ ⊚

true false

100) Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs. ⊚ ⊚

101)

true false

Outsourcing some production is a means of supporting a constraint. ⊚ ⊚

true false

102) Outsourcing refers to the practice of delegating the production of a product or service to an external company. ⊚ ⊚

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true false

103) What kind of capacity is needed depends on the products and services that management intends to provide. ⊚ ⊚

true false

104) The design of facilities, including floor space and layout, does NOT have a direct influence on capacity. ⊚ ⊚

true false

105) Marketing can provide vital information to operations to establish more accurate forecasts. ⊚ ⊚

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true false

Answer Key Test name: Chap 05_7ce 1) D 2) C 3) E 4) E 5) B 6) C 7) D 8) A 9) D 10) A 11) B 12) E 13) B 14) D 15) E 16) D 17) C 18) A 19) B 20) C 21) D 22) C 23) C 24) A 25) C 26) B Version 1

27) C 28) D 29) B 30) E 31) C 32) D 33) D 34) C 35) A 36) A 37) C 38) E 39) A 40) D 41) E 42) C 43) A 44) D 45) B 46) B 47) C 48) E 49) B 50) A 51) C 52) C 53) E 54) C 55) E 56) B Version 1

57) C 58) E 59) B 60) C 61) E 62) A 63) B 64) B 65) C 66) A 67) D 68) D 69) E 70) B 71) B 72) A 73) C 74) B 75) D 76) E 77) C 78) D 79) B 80) D 81) B 82) TRUE 83) FALSE 84) FALSE 85) TRUE 86) FALSE Version 1

87) TRUE 88) FALSE 89) FALSE 90) TRUE 91) FALSE 92) TRUE 93) FALSE 94) TRUE 95) TRUE 96) FALSE 97) FALSE 98) TRUE 99) TRUE 100) TRUE 101) FALSE 102) TRUE 103) TRUE 104) FALSE 105) TRUE

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Chapter 6S: Linear Programming 1) The linear optimization technique for allocating constrained resources among different products is:

A) linear regression analysis. B) linear disaggregation. C) linear decomposition. D) linear programming. E) linear tracking analysis.

2) Which of the following is not a component of the structure of a linear programming model?

A) Constraints B) Decision variables C) Environment of certainty D) A goal or objective E) Parameters

The region which satisfies all of the constraints in linear programming is called the:

A) optimum solution space. B) region of optimality. C) profit maximization space. D) region of non-negativity. E) feasible solution space.

4) Which of the following is not a necessary assumption in order for a linear programming model to be used effectively?

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A) Linearity B) Exponentiality C) Divisibility D) Certainty E) Non-negativity

5) Which of the following is not written in the standard form of a linear programming problem constraint?

A) 1A + 2B ≥ 3 B) 1A + 2B ≤ 3 C) 1A + 2B = 3 D) 1A + 2B + 3C + 4D ≤ 5 E) 2A ≤ 3B

6) For the products A, B, C, and D, which of the following could be a linear programming objective function?

A) Z = 1A + 2B + 3C + 4D B) Z = 1A + 2BC + 3D C) Z = 1A + 2AB + 3ABC + 4ABCD D) Z = 1A + 2B/C + 3D

7) The logical approach, from beginning to end, for assembling a linear programming model begins with:

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A) identifying the decision variables. B) identifying the objective function. C) specifying the objective function parameters. D) identifying the constraints. E) specifying the constraint parameters.

8) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. What is the objective function?

A) Z = $1 A + $2 B B) Z = $12 A + $8 B C) Z = $2 A + $1 B D) Z = $8 A + $12 B E) Z = $4 A + $8 B

9) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Colombia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. What is the Colombian bean constraint?

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A) 1 A + 2 B ≤ 4,800 B) 12 A + 8 B ≤ 4,800 C) 2 A + 1 B ≤ 4,800 D) 8 A + 12 B ≤ 4,800 E) 4 A + 8 B ≤ 4,800

10) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. What is the Dominican bean constraint?

A) 12A + 8B ≤ 4,800 B) 8A + 12B ≤ 4,800 C) 4A + 8B ≤ 3,200 D) 8A + 4B ≤ 3,200 E) 4A + 8B ≤ 4,800

11) The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. What is the objective function?

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A) Z = $2 L + $3 D B) Z = $2 L + $4 D C) Z = $3 L + $2 D D) Z = $4 L + $2 D E) Z = $5 L + $3 D

12) The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. What is the time constraint?

A) 2 L + 3 D ≤ 480 B) 2 L + 4 D ≤ 480 C) 3 L + 2 D ≤ 480 D) 4 L + 2 D ≤ 480 E) 5 L + 3 D ≤ 480

13) The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. What is the objective function?

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A) Z = $4 R + $6 S B) Z = $2 R + $3 S C) Z = $6 R + $4 S D) Z = $3 R + $2 S E) Z = $5 R + $5 S

14) The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. What is the production time constraint (in minutes)?

A) 2 R + 3 S ≤ 720 B) 2 R + 5 S ≤ 720 C) 3 R + 2 S ≤ 720 D) 3 R + 5 S ≤ 720 E) 5 R + 5 S ≤ 720

15) An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What is the objective function?

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A) Z = $4.00 A + $1.00 B B) Z = $0.25 A + $1.00 B C) Z = $1.00 A + $4.00 B D) Z = $1.00 A + $1.00 B E) Z = $0.25 A + $0.50 B

16) An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What is the assembly time constraint (in hours)?

A) 1 A + 1 B ≤ 800 B) 0.25 A + 0.5 B ≤ 800 C) 0.5 A + 0.25 B ≤ 800 D) 1 A + 0.5 B ≤ 800 E) 0.25 A + 1 B ≤ 800

17) Aba's Bagel Company produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. What is the objective function?

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A) Z = $0.30 B + $0.20 C B) Z = $0.60 B + $0.30 C C) Z = $0.20 B + $0.30 C D) Z = $0.20 B + $0.40 C E) Z = $0.10 B + $0.10 C

18) Aba's Bagel Company produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. What is the sugar constraint (in tablespoons)?

A) 6 B + 3 C ≤ 4,800 B) 1 B + 1 C ≤ 4,800 C) 2 B + 4 C ≤ 4,800 D) 4 B + 2 C ≤ 4,800 E) 2 B + 3 C ≤ 4,800

19) The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. What is the objective function?

A) Z = $0.50 D + $0.40 C B) Z = $0.20 D + $0.30 C C) Z = $0.40 D + $0.50 C D) Z = $0.10 D + $0.20 C E) Z = $0.60 D + $0.80 C

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20) The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. What is the constraint for sugar?

A) 2 D + 3 C ≤ 4,800 B) 6 D + 8 C ≤ 4,800 C) 1 D + 2 C ≤ 4,800 D) 3 D + 2 C ≤ 4,800 E) 4 D + 5 C ≤ 4,800

21) The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. What is the objective function?

A) Z = $150K + $300Q B) Z = $500K + $300Q C) Z = $300K + $150Q D) Z = $300K + $500Q E) Z = $100K + $90Q

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22) The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. What is the storage space constraint?

A) 100K - 90Q ≤ 18,000 B) 90K + 100Q ≤ 18,000 C) 300K + 90Q ≤ 18,000 D) 500K + 100Q ≤ 18,000 E) 100K + 90Q ≤ 18,000

23) For the constraints given below, which point is in the feasible solution space of this maximization problem? (1) 14x + 6y ≤ 42 (2) x - y ≤ 3

A) x = 1, y = 5 B) x = -1, y = 1 C) x = 4, y = 4 D) x = 2, y = 1 E) x = 2, y = 8

24) Which of the choices below constitutes a simultaneous solution to these equations? (1) 3x + 4y = 10 and (2) 5x + 4y = 14

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A) x = 2, y = .5 B) x = 4, y = - .5 C) x = 2, y = 1 D) x = y E) y = 2x

25) Which of the choices below constitutes a simultaneous solution to these equations? (1) 3x + 2y = 6 and (2) 6x + 3y = 12

A) x = 1, y = 1.5 B) x = .5, y = 2 C) x = 0, y = 3 D) x = 2, y = 0 E) x = 0, y = 0

26) For the constraints given below, which point is in the feasible solution space of this minimization problem? (1) 14x + 6y > 42 (2) x + 3y > 6

A) x = 0.5, y = 5.0 B) x = 0.0, y = 4.0 C) x = 2.0, y = 5.0 D) x = 1.0, y = 2.0 E) x = 2.0, y = 1.0

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27) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. Which of the following is not a feasible production combination?

A) 0 A & 0 B B) 0 A & 400 B C) 200 A & 300 B D) 400 A & 0 B E) 400 A & 400 B

28) The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. Which of the following is not a feasible production combination?

A) 0 L & 0 D B) 0 L & 120 D C) 90 L & 75 D D) 135 L & 0 D E) 135 L & 120 D

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29) The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. Which of the following is not a feasible production combination?

A) 0 R & 0 S B) 0 R & 240 S C) 180 R & 120 S D) 300 R & 0 S E) 180 R & 240 S

30) An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. Which of the following is not a feasible production/sales combination?

A) 0 A & 0 B B) 0 A & 1,000 B C) 1,800 A & 700 B D) 2,500 A & 0 B E) 100 A & 1,600 B

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31) Aba's Bagel Company produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. Which of the following is not a feasible production combination?

A) 0 B & 0 C B) 0 B & 1,100 C C) 800 B & 600 C D) 1,100 B & 0 C E) 0 B & 1,400 C

32) The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. Which of the following is not a feasible production combination?

A) 0 D & 0 C B) 0 D & 1,000 C C) 800 D & 600 C D) 1,600 D & 0 C E) 0 D & 1,200 C

33) The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. Which of the following is not a feasible purchase combination?

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A) 0 King Beds and 0 Queen Beds B) 0 King Beds and 250 Queen Beds C) 150 King Beds and 0 Queen Beds D) 90 King Beds and 100 Queen Beds E) 0 King Beds and 200 Queen Beds

34)

Which objective function has the same slope as this one: $8x + $2y = $20?

A) $8x + $2y = $10 B) $2x + $8y = $20 C) $2x - $8y = $20 D) $8x - $2y = $20 E) $8x + $8y = $20

35) What combination of x and y will yield the optimum solution for this problem? Maximize Z = $3x + $15y; Subject to: (1) 2x + 4y ≤ 12 (2) 5x + 2y ≤ 10

A) x = 2, y = 0 B) x = 0, y = 0 C) x = 0, y = 3 D) x = 1, y = 5 E) x = 1, y = 3

36) What combination of x and y will provide a minimum for this problem? Minimize Z = $3x + $15y; Subject to: (1) 2x + 4y > 12 (2) 5x + 2y > 10

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A) x = 0, y = 0 B) x = 0, y = 3 C) x = 0, y = 5 D) x = 1, y = 2.5 E) x = 6, y = 0

37) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. Using the graphical method, what are optimal weekly profits?

A) $0 B) $400 C) $700 D) $800 E) $900

38) The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. What are optimal daily profits?

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A) $0 B) $240 C) $420 D) $405 E) $505

39) The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. Using the graphical method, what are optimal daily profits?

A) $960 B) $1,560 C) $1,800 D) $1,900 E) $2,520

40) An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What are optimal weekly profits?

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A) $10,000 B) $4,600 C) $2,500 D) $5,200 E) $6,400

41) Aba's Bagel Company produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. Using the graphical method, what are optimal profits for today's production run?

A) $580 B) $340 C) $220 D) $380 E) $420

42) The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. Using the graphical method, what are profits for the optimal production combination?

A) $800 B) $500 C) $640 D) $620 E) $600

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43) The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. What is the maximum profit?

A) $0 B) $30,000 C) $42,000 D) $45,000 E) $54,000

44)

A constraint that does not form a unique boundary of the feasible solution space is a:

A) redundant constraint. B) binding constraint. C) non-binding constraint. D) feasible solution constraint. E) variable constraint

45) In the graphical method of linear programming, when the objective function is parallel to one of the constraints, then:

A) the solution is suboptimal. B) multiple optimal solutions exist. C) a single corner point solution exists. D) no feasible solution exists. E) the constraints need to be changed

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46) What is the linear programming approach where substituting the coordinates of each corner point into the objective function determines the corner point which is optimal?

A) redundant constraints B) binding constraints C) surplus D) slack constraints E) enumeration

47) Which graphical solution method finds the optimal corner point by sliding the objective function line (which is an isocost line) toward the origin instead of away from it?

A) surplus B) slack C) maximization D) minimization E) simplex

48) The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans; while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. For the production combination of 0 American and 400 British, which resource is "slack" (not fully used)?

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A) Colombian beans (only) B) Dominican beans (only) C) Both Colombian beans and Dominican beans D) Neither Colombian beans nor Dominican beans E) Cannot be determined exactly

49) The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. For the production combination of 135 Lite and 0 Dark, which resource is "slack" (not fully used)?

A) Time (only) B) Malt extract (only) C) Both time and malt extract D) Neither time nor malt extract E) Cannot be determined exactly

50) The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. For the production combination of 180 Root beer and 0 Sassafras sodas, which resource is "slack" (not fully used)?

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A) Production time (only) B) Carbonated water (only) C) Both production time and carbonated water D) Neither production time nor carbonated water E) Cannot be determined exactly

51) An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. For the production combination of 1,400 A-100's and 900 B-200's, which resource is "slack" (not fully used)?

A) Circuit boards (only) B) Assembly time (only) C) Both circuit boards and assembly time D) Neither circuit boards nor assembly time E) Cannot be determined exactly

52) Aba's Bagel Company produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. For the production combination of 600 bagels and 800 croissants, which resource is "slack" (not fully used)?

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A) Flour (only) B) Sugar (only) C) Flour and yeast D) Flour and sugar E) Yeast and sugar

53) The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. For the production combination of 800 boxes of Deluxe and 600 boxes of Classic, which resource is slack (not fully used)?

A) Sugar (only) B) Flour (only) C) Salt (only) D) Sugar and flour E) Sugar and salt

54) The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. For the purchase combination 0 King Beds and 200 Queen Beds, which resource is "slack" (not fully used)?

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A) Investment money (only) B) Storage space (only) C) Both investment money and storage space D) Neither investment money nor storage space E) Cannot be determined exactly

55) The theoretical limit on the number of decision variables that can be handled by the simplex method in a single problem is:

A) 1 B) 2 C) 3 D) 4 E) unlimited.

56)

In linear programming, sensitivity analysis is associated with:

A) A constraint that forms the optimal corner point of the feasible solution space. B) Substituting the coordinates of each corner point into the objective function to determine which corner point is optimal. C) Assessing the impact of potential changes of the parameters (numerical values) of an LP model on its optimal solution. D) A constraint that does not form a unique boundary of the feasible solution space. E) Representing the requirements or limitations that restrict the available choices.

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57)

In a linear programming problem, the objective function was specified as follows:

Z = 2A + 4B + 3C The optimal solution calls for A to equal 4, B to equal 6, and C to equal 3. It has also been determined that the coefficient associated with A can range from 1.75 to 2.25 without the optimal solution changing. This range is called A's:

A) range of optimality B) range of feasibility C) shadow price D) slack. E) surplus.

58) An analyst, having solved a linear programming problem, determined that he had 10 more units of resource Q than previously believed. Upon modifying his program, he observed that the list of basic variables did not change, but the value of the objective function increased by $30. This means that resource's Q's shadow price was:

A) $1.50. B) $3.00. C) $6.00. D) $15.00 E) $30.00.

59)

A shadow price reflects which of the following in a maximization problem?

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A) The marginal cost of adding additional resources B) The marginal gain in the objective that would be realized by adding one unit of a resource C) The net gain in the objective that would be realized by adding one unit of a resource D) The marginal gain in the objective that would be realized by subtracting one unit of a resource E) Assessing the impact of potential changes of the parameters (numerical values) of an LP model on its optimal solution.

60) In the graphical approach to linear programming, finding values for the decision variables at the intersection of corners requires the solving of:

A) linear constraints. B) surplus variables. C) simultaneous equations. D) slack variables. E) binding constraints.

61)

A redundant constraint is one that

A) is parallel to the objective function. B) has no coefficient for at least one decision variable. C) has a zero coefficient for at least one decision variable. D) has multiple coefficients for at least one decision variable. E) does not form a unique boundary of the feasible solution space.

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62) Wood Specialties Company produces wall shelves, bookends, and shadow boxes. It is necessary to plan the production schedule for next week. The wall shelves, bookends, and shadow boxes are made of oak, of which the company has 600 board feet. A wall shelf requires 4 board feet, bookends require 2 board feet, and a shadow box requires 3 board feet. The company has a power saw for cutting the oak boards into the appropriate pieces; a wall shelf requires 30 minutes, bookends require 15 minutes, and a shadow box requires 15 minutes. The power saw is expected to be available for 36 hours next week. After cutting, the pieces of work in process are hand finished in the finishing department, which consists of 4 skilled and experienced craftsmen, each of whom can complete any of the products. A wall shelf requires 60 minutes of finishing, bookends require 30 minutes, and a shadow box requires 90 minutes. The finishing department is expected to operate for 40 hours next week. Wall shelves sell for $29.95 and have a unit variable cost of $17.95; bookends sell for $11.95 and have a unit variable cost of $4.95; a shadow box sells for $16.95 and has a unit variable cost of $8.95. (i) Is this a problem in maximization or minimization? (ii) What are the decision variables? Suggest symbols for them. (iii) What is the objective function? (iv) What are the constraints?

63) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the objective function?

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64) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the constraint for resource I?

65) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the constraint for resource II?

66) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the constraint for resource III?

67) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What are the corner points of the feasible solution space?

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68) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. Is the production combination 10 A's and 10 B's feasible?

69) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. Is the production combination 15 A's and 15 B's feasible?

70) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the optimum production combination and its profits?

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71) A company produces two products (A and B) using three resources (I, II, and III). Each product A requires 1 unit of resource I and 3 units of resource II; and has a profit of $1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of resource III; and has a profit of $3. Resource I is constrained to 40 units maximum per day; resource II, 90 units; and resource III, 60 units. What is the slack (unused amount) for each resource for the optimum production combination?

72) Consider the graphical linear programming problem below: Maximize Z = $15X + $20y Subject to: (i) 8x + 5y ≤ 40 (ii) .4x + y ≥ 4 Solve the values of x and y that will maximize revenue. What revenue will result?

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73) A manager must decide on the mix of products to produce for the coming week. Product A requires three minutes per unit for molding, two minutes per unit for painting, and one minute per unit for packing. Product B requires two minutes per unit for molding, four minutes per unit for painting, and three minutes per unit for packing. There will be 600 minutes available for molding, 600 minutes for painting, and 420 minutes for packing. Both products have profits of $1.50 per unit. (i) What combination of A and B will maximize profit? (ii) What is the maximum possible profit? (iii) How much of each resource will be unused for your solution?

74) A small firm makes three products, which all follow the same three step process, which consists of milling, inspection, and drilling. Product A requires 6 minutes of milling, 5 minutes of inspection, and 4 minutes of drilling; product B requires 2.5 minutes of milling, 2 minutes of inspection, and 2 minutes of drilling; and product C requires 5 minutes of milling, 4 minutes of inspection, and 8 minutes of drilling. The department has 20 hours available during the next period for milling, 15 hours for inspection, and 24 hours for drilling. Product A contributes $6.00 per unit to profit, product B contributes $4.00 per unit, and product C contributes $10.00 per unit. Determine the optimum mix of products in terms of maximizing contributions to profits for the next period.

75) An analyst, having solved a linear programming problem, determined that he had 10 more units of resource Q than previously believed. Upon modifying his program, he observed that the list of basic variables did not change, but the value of the objective function increased by $60. What was the resource's Q's shadow price?

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76) Linear programming techniques will always produce an optimal solution to an LP problem. ⊚ ⊚

77)

LP problems must have a single goal or objective specified. ⊚ ⊚

78)

true false

Constraints limit the alternatives available to a decision-maker. ⊚ ⊚

80)

true false

An example of a decision variable in an LP problem is profit maximization. ⊚ ⊚

79)

true false

The feasible solution space only contains points that satisfy all constraints. ⊚ ⊚

true false

81) Profit maximization could be an objective of an LP problem; but cost minimization cannot be the objective of an LP problem.

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⊚ ⊚

82)

Non-integer values of decision variables are acceptable in an LP problem. ⊚ ⊚

83)

true false

The equation 4xy = 16 is linear. ⊚ ⊚

86)

true false

The equation 7x + 8y = 20 is linear. ⊚ ⊚

85)

true false

Negative values of decision variables are acceptable in an LP problem. ⊚ ⊚

84)

true false

A maximization problem may be characterized by all greater than or equal to constraints. ⊚ ⊚

Version 1

true false

87) The enumeration approach is used to find the optimal solution by substituting the coordinates of each corner point into the objective function to determine which corner point is optimal. ⊚ ⊚

true false

88) The graphical Solution Method can handle problems that involve any number of decision variables. ⊚ ⊚

89)

An objective function represents a family of parallel lines. ⊚ ⊚

90)

true false

The value of an objective function decreases as it is moved away from the origin. ⊚ ⊚

92)

true false

The term "isoprofit" line means that all points on the line will yield the same profit. ⊚ ⊚

91)

true false

The removal of a redundant constraint does not affect the feasible solution space. ⊚ ⊚

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true false

93)

Using the enumeration approach, optimality is obtained by evaluating every coordinate. ⊚ ⊚

true false

94) If a single optimal solution exists to a graphical LP problem, it will exist at a corner point. ⊚ ⊚

95)

true false

A linear programming problem can have multiple optimal solutions. ⊚ ⊚

true false

96) If a constraint forms the optimal corner point of the feasible solution space, it is called a "nonbinding constraint". ⊚ ⊚

97)

Slack can occur only in a "≤" constraint. ⊚ ⊚

98)

true false

Every constraint in a maximization problem has a slack variable.

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⊚ ⊚

99)

true false

Nonzero slack or surplus is associated with a binding constraint ⊚ ⊚

true false

100) The simplex method is a general-purpose LP algorithm that can be used for solving only problems with more than six variables. ⊚ ⊚

101)

true false

The simplex method is an LP algorithm that can be used for solving large-scale problems ⊚ ⊚

true false

102) Shadow price can be defined as the amount by which the value of the objective function would change as a result of a one-unit change in the right-hand-side value of a constraint. ⊚ ⊚

true false

103) A change in the value of an objective function coefficient does not change the optimal solution. ⊚ ⊚

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true false

104) Every change in the value of an objective function coefficient will lead to a changed optimal solution. ⊚ ⊚

true false

105) When a change in the value of an objective function coefficient remains within the range of optimality, the optimal solution would also remain the same. ⊚ ⊚

106)

true false

The term "range of feasibility" refers to coefficients of the objective function. ⊚ ⊚

true false

107) A shadow price indicates how much a one-unit decrease/increase in the right-hand side value of a constraint will decrease/increase the optimal value of the objective function. ⊚ ⊚

108)

true false

In the range of feasibility, the value of the shadow price remains constant. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 06S_7ce 1) D 2) C 3) E 4) B 5) E 6) A 7) A 8) C 9) B 10) C 11) C 12) B 13) C 14) A 15) C 16) B 17) C 18) C 19) C 20) A 21) C 22) E 23) D 24) C 25) D 26) C Version 1

27) E 28) E 29) E 30) E 31) E 32) E 33) B 34) A 35) C 36) E 37) C 38) C 39) C 40) D 41) D 42) C 43) D 44) A 45) B 46) E 47) D 48) A 49) A 50) C 51) A 52) D 53) A 54) A 55) E 56) C Version 1

57) A 58) B 59) B 60) C 61) E 76) FALSE 77) TRUE 78) FALSE 79) TRUE 80) TRUE 81) FALSE 82) TRUE 83) FALSE 84) TRUE 85) FALSE 86) FALSE 87) TRUE 88) FALSE 89) TRUE 90) TRUE 91) FALSE 92) TRUE 93) FALSE 94) TRUE 95) TRUE 96) FALSE 97) TRUE 98) FALSE 99) FALSE 100) FALSE Version 1

101) TRUE 102) TRUE 103) FALSE 104) FALSE 105) TRUE 106) FALSE 107) TRUE 108) TRUE

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Chapter 6: Process Design and Facility Layout 1) A service organization such as a hospital is likely to use a(n) variability in customer processing requirements

layout because of

A) process B) flow C) product D) cellular E) flexible manufacturing system

Which of the following is not a factor considered in make-or-buy decisions?

A) Available capacity B) Core capabilities C) Pattern of demand (steady or temporary) D) Secrecy of technology E) Proximity to customers

3) In strategy, the manufacturer stocks up on sub-assembly parts and inventories and assembles the parts into the final product when a customer places an order.

A) Make-to-stock B) Computer integrated manufacturing C) Assemble-to-order D) Work cell E) Make to order

4) In which type of operations process are you likely to see products or services produced in low to moderate volumes, with some degree of standardization, and moderate flexibility of the processing equipment used? Version 1

A) A project B) A job shop C) Repetitive production D) Batch processing E) Continuous

5) Which of the following is not one of the types of process to make products or deliver services?

A) continuous B) batch C) repetitive D) job shop E) subcontracting

Which type of processing system tends to produce the most product variety?

A) Assembly B) Job Shop C) Batch D) Continuous E) Repetitive

Job shops tend to be

Version 1

while continuous processes tend to be

A) in services; in manufacturing B) short-term and capital intensive; long-term and labor intensive C) small scale and flexible; large-scale and inflexible D) standardized; customized E) low cost-per-unit; high cost-per-unit

8) When higher quantities of more standardized goods or services are needed and each unit follows the same production sequence a process is used.

A) continuous B) batch C) Job shop D) repetitive E) cellular

In which type of processing system would sugar refining be done?

A) Job Shop B) Batch C) Assembly D) Continuous E) Repetitive

10) The type of processing system which is used for high volume, highly standardized products is:

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A) Continuous. B) Intermittent. C) Job-shop. D) Batch. E) Unit.

11)

In which type of processing system would gasoline be produced from crude oil?

A) job shop B) batch C) assembly D) continuous E) project

12) The application of scientific discoveries to the development and innovation of goods and services and/or the processes that produce them is called:

A) automation B) technology C) Reverse engineering D) R & D E) Computer integrated manufacturing

13) The substitution of human labour with machinery that has sensing and control devices is best described by the term:

Version 1

A) automation. B) loss of jobs. C) computer-aided manufacturing. D) computer-integrated manufacturing. E) flexible manufacturing system.

14)

Which of the following is not an advantage of automation?

A) B) C) D)

Machines run automatically Reduced variable costs Machines are much more flexible than human labour Machines don't strike or file grievances.

15) Which type of automation is designed to achieve rapid changeover times when switching from one product to another?

A) B) C) D)

16)

Fixed automation Manual automation Robots designed for repetitive, standardized tasks Flexible manufacturing systems

N/C machines are best used in cases with all of the following characteristics EXCEPT:

A) B) C) D)

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mistakes are costly. changes in design are infrequent. parts are processed in small batches. close tolerances are required.

17)

"CIM" stands for which of the following?

A) Customer-integrated manufacturing B) Consumer-information manufacturing C) Computer-integrated manufacturing D) Computer-integrated monitoring E) Constantly-integrated manufacturing

18) uses an integrated computer system to control the entire production process, and is linked to engineering, design, and production planning and control.

A) automation B) computer-aided design (CAD) C) computer-aided manufacturing (CAM) D) computer-integrated manufacturing (CIM) E) a flexible manufacturing system (FMS)

19)

Computer-aided manufacturing refers to the use of computers in:

A) product design. B) decision making. C) data analysis. D) quality control. E) process control.

20)

Which of the following is not a component of green technology?

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A) Conserving energy B) Increasing the use of plastics in packaging C) Carbon footprint reduction D) Waste reduction E) Elimination of chemical hazards

21)

What is the process flow diagram for services called?

A) Process diagram B) Flow chart C) Service interaction diagram D) Service blueprint E) Product/process layout

22)

Which of the following is not one of the types of layout?

A) Product (line) layouts B) Process (functional) layouts C) Cellular layouts D) Standardized layouts E) Fixed Position Layout

23)

Which one of the following is not a characteristic of product layouts?

A) a high rate of output B) specialization of labor C) ability to adjust to changes in demand D) special-purpose technology E) low unit costs

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24)

Which one of the following is a type of product layout?

A) Assembly line B) Job shop C) Batch process D) Functional layout E) Retail layout

25) The type of layout which is used to achieve a smooth and rapid flow of large volumes of standardized goods or services is:

A) process. B) product. C) intermittent. D) cellular. E) continuous.

26)

Which one of the following is not common to product layouts?

A) A high rate of output B) Specialization of labour C) Low unit costs D) Ability to adjust to changes in the product mix demand E) High equipment costs

27) Which of the following is not true about process layouts when they are compared to product layouts?

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A) Lower maintenance costs B) Easier routing and scheduling C) Less investment in spare parts D) Less specialized equipment E) Common in services.

28) Which of the following is true about process layouts when they are compared to product layouts?

A) Lower in-process inventories B) Lower unit handling costs C) Lower variety of processing requirements D) Less vulnerable to shut down the entire system because of mechanical failure E) Lower skill levels among labour force

29) The type of layout which arranges production resources according to similarity of function is:

A) process. B) product. C) intermittent. D) cellular. E) continuous.

30)

Which of the following is not usually true about process layouts?

Version 1

A) They involve frequent adjustments to equipment. B) Less vulnerable to shut down the entire system because of mechanical failure. C) Variable-path material-handling equipment is used. D) Highly specialized equipment is used. E) Workers are usually skilled.

31)

A machine shop is an example of which type of layout?

A) Product layout B) Manufacturing cell layout C) Warehouse layout D) Standardized layout E) Process layout

32) The type of layout in which workers, materials, and equipment are moved to the product as needed is:

A) product. B) fixed-position C) cellular D) Flexible Manufacturing System E) process

33)

Which of these items would be most likely to be made with a fixed-position layout?

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A) a large, ocean-going cruise ship B) a computer chip C) toothpaste D) sugar E) applesauce

34) layouts are widely used in farming, firefighting, road building, home building, remodelling and repair, and drilling for oil.

A) Process. B) Product C) Fixed-position D) Hybrid E) Cellular

35) The grouping of equipment by the operations needed to perform similar work for part families is best described as a:

A) product layout. B) cellular layout. C) functional layout. D) standardized layout. E) process layout.

36)

Which term is most closely associated with cellular layout?

Version 1

A) Part families B) Assembly line C) Robotics D) CIM E) IDEF

37)

Which of the following is not a benefit of cellular layouts?

A) Faster processing time B) Less material handling C) More work-in-process inventory D) Reduced setup time E) All parts in the same family follow the same route.

38)

Which term is most closely associated with group technology?

A) Numerical control B) Robots C) Manufacturing characteristics D) CIM E) IDEF

39) Which of the following most closely describes how parts are arranged into part families in group technology?

Version 1

A) Primarily by design characteristics B) Primarily by manufacturing characteristics C) By both design and manufacturing characteristics D) Primarily by functional characteristics E) By both design and functional characteristics

40)

One disadvantage of a U-shaped production line is:

A) It is more compact. B) It permits better communication among employees. C) It facilitates teamwork among workers. D) It increases flexibility of work assignments. E) It is primarily for small batch sizes. Large batches favour line layout.

41) A group of machining centres including supervisory computer control, automatic material handling, and possibly robots is called:

A) B) C) D)

a flexible manufacturing system. a manufacturing cell. computer-aided manufacturing. computer-integrated manufacturing.

42) The benefits of flexible manufacturing systems (FMS) include all of the following EXCEPT:

Version 1

A) reduced labour costs. B) higher flexibility than fixed automation. C) quick changeover from part to part. D) less planning and development time required for new systems. E) more consistent quality.

43)

Which one of the following is not one of the steps used in manufacturing layout design?

A) Location of receiving and shipping B) Presence of customers C) Special requirements of equipment D) Allowing space for machines and material handling (e.g. forklifts) E) Determine expected workflow between departments.

44) In a product layout, the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements is referred to as:

A) process balancing. B) task allocation. C) line balancing. D) work allocation. E) station balancing.

45)

The cycle time (CT) necessary in a product layout is determined by:

Version 1

A) number of workstations/sum of task times. B) operating time per day/desired output per day. C) number of workstations multiplied by the sum of task times. D) operating time per day multiplied by desired output per day. E) sum of task times/number of workstations.

46) A production line is to be designed for a job with three tasks. The task times are 0.6 minutes, 1.8 minutes, and 1.2 minutes. If the necessary cycle time is 1.2 minutes per unit, what is the theoretical minimum number of workstations needed?

A) 2.0 B) 3.0 C) 3.6 D) 4.0 E) 4.2

47) A production line is to be designed for a job with three tasks. The task times are .4 minutes, 1.2 minutes, and .5 minutes. The maximum cycle time in minutes is:

A) 0.4 B) 0.5 C) 1.2 D) 2.1 E) 3

48) A production line is to be designed for a job with three sequential tasks. The task times are 1.5 minutes, 1.8 minutes, and 1.1 minutes. Based on the minimum cycle time, what is the actual minimum number of workstations possible?

Version 1

A) 1 B) 2 C) 3 D) 4 E) 5

49) The minimum cycle time is equal to the -------required to produce a product.

of a series of tasks

A) total task time B) per-unit setup time C) shortest task time D) longest task time E) average task time

50) A production line is to be designed for a job with three tasks. The task times are 0.6 minutes, 2.4 minutes, and 0.8 minutes. Based on the minimum cycle time in minutes, what the rate of output is for this line assuming a 480 minutes working day?

A) 600 B) 800 C) 200 D) 380 E) 420

51)

If a line is balanced with 90 percent efficiency, the percentage idle time would be:

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A) 10 percent. B) 90 percent. C) 100 percent. D) unknown, because balance delay isn't related to efficiency. E) 90

52) What is the percentage idle time for an assembly line that has 5 workstations, total idle time of 60 seconds and a cycle time of 30 seconds?

A) 10% B) 33% C) 40% D) 50% E) 60%

53)

Heuristic rules are usually applied when:

A) an optimum solution is necessary. B) a computer program isn't available. C) a problem has a small number of alternative solutions. D) a problem has a large number of alternative solutions. E) other approaches have failed.

54)

For line balancing, cycle time is computed as:

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A) daily operating time divided by the desired output. B) desired output divided by the daily operating time. C) daily operating time divided by the product of the desired output and the sum of job times. D) the product of desired output and the sum of job times divided by daily operating time. E) 1.00 minus station time.

55) A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

v, y

Without regard to demand, what is the minimum possible cycle time (in seconds) for this situation?

A) 162 B) 72 C) 54 D) 12 E) 60

56) A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product: TASK

Version 1

PREDECESSOR

TIME(seconds)

―

v, y

If the company desires that output rate equal demand, what is the desired cycle time (in seconds)?

A) 162 B) 72 C) 54 D) 12 E) 60

57) A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

v, y

If the company desires that output rate equal demand, what is the minimum number of workstations needed?

Version 1

A) 3 B) 4 C) 5 D) 6 E) 7

58) A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

v, y

If the company desires that output rate equal demand, what would the percentage idle time of this line be with the minimum number of workstations?

A) 0% B) 7.5% C) 1% D) 12.5% E) 10%

59) A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

Version 1

v, y

If the company desires that output rate equal demand, what is the last task performed in the first workstation in the balance which uses the minimum number of workstations? Hint: Use the heuristic rule "Assign the task with the most followers. "

A) u B) v C) w D) x E) y

60) A manufacturing system is designing a product layout for a new product. They plan to use this production line ten hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

D, E

Without considering forecasted demand, what is the minimum cycle time for this production line?

Version 1

A) 10 seconds B) 20 seconds C) 34 seconds D) 38 seconds E) 152 seconds

61) A manufacturing system is designing a product layout for a new product. They plan to use this production line ten hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

D, E

What cycle time will provide an output rate of 900 units per day?

A) 32 seconds B) 38 seconds C) 40 seconds D) 76 seconds E) 152 seconds

62) A manufacturing system is designing a product layout for a new product. They plan to use this production line ten hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

Version 1

D, E

If the output rate is to be 900 units per day, what is the minimum number of workstations needed?

A) 1 B) 2 C) 3 D) 4 E) 5

63) A manufacturing system is designing a product layout for a new product. They plan to use this production line ten hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

D, E

For output to equal forecasted demand, what will be the efficiency of the production line that uses the minimum number of workstations?

Version 1

A) 81% B) 90% C) 95% D) 85% E) 100%

64) A manufacturing system is designing a product layout for a new product. They plan to use this production line ten hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: TASK

PREDECESSOR

TIME(seconds)

―

D, E

For output to equal forecasted demand, what will be the second task performed at the second workstation of the production line that uses the minimum number of stations? Hint: Use the heuristic rule "Assign the task with the most followers. "

A) A B) B C) C D) D E) E

65) Widget Co. needs to design a product layout for a new product, the amazing "Thatsit". The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 units per day. The following table describes the tasks involved in the production of a "Thatsit". Version 1

TASK

PREDECESSOR

TIME(seconds)

―

X, Y

Without considering projected demands, what is the minimum possible cycle time for this production line?

A) 54 seconds B) 14 seconds C) 12 seconds D) 10 seconds E) 4 seconds

66) Widget Co. needs to design a product layout for a new product, the amazing "Thatsit". The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 units per day. The following table describes the tasks involved in the production of a "Thatsit". TASK

PREDECESSOR

TIME(seconds)

―

X, Y

For output to equal projected demand, what should be the actual cycle time for this production line?

Version 1

A) 54 seconds B) 27 seconds C) 20 seconds D) 18 seconds E) 14 seconds

67) Widget Co. needs to design a product layout for a new product, the amazing "Thatsit". The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 units per day. The following table describes the tasks involved in the production of a "Thatsit". TASK

PREDECESSOR

TIME(seconds)

―

X, Y

For output to equal projected demand, what is the minimum number of workstations needed?

A) 1 B) 2 C) 3 D) 4 E) 5

68) Widget Co. needs to design a product layout for a new product, the amazing "Thatsit". The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 units per day. The following table describes the tasks involved in the production of a "Thatsit". TASK

PREDECESSOR

TIME(seconds)

―

Version 1

X, Y

For output to equal projected demand, what will the percentage idleness be of the production line that uses the minimum number of workstations?

A) 10% B) 5% C) 3% D) 1% E) 0%

69) Widget Co. needs to design a product layout for a new product, the amazing "Thatsit". The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 units per day. The following table describes the tasks involved in the production of a "Thatsit". TASK

PREDECESSOR

TIME(seconds)

―

X, Y

For output to equal projected demand, what will be the last task performed at the second workstation of the production line which uses the minimum number of workstations? Hint: Use the heuristic rule "Assign the task with the most followers. "

Version 1

A) U B) V C) W D) X E) Y

70) A company needs to rebalance a product layout for producing a redesigned product. They plan to use the assembly line 6 hours in order to meet projected demand of 2,160 license plates each day. The following table describes the tasks involved in the production of this product: TASK

PREDECESSOR

TIME(seconds)

―

A, B

―

C, D

Without regard to projected demand, what is the minimum cycle time for this assembly line?

A) 0 seconds B) 3 seconds C) 9 seconds D) 10 seconds E) 28 seconds

71) The industrial engineering manager needs to assign tasks to workstations to achieve a daily output rate of 2,160 products. Assume that the assembly line works 6 hours in a day. The following table describes the tasks involved in the production of this product: TASK

PREDECESSOR

TIME(seconds)

―

A, B

―

Version 1

C, D

What cycle time will provide an output rate of 2,160 units per day?

A) 0 seconds B) 3 seconds C) 9 seconds D) 10 seconds E) 28 seconds

72) The industrial engineering manager needs to assign tasks to workstations to achieve a daily output rate of 2,160 products. Assume that the assembly line works 6 hours in a day. The following table describes the tasks involved in the production of this product: TASK

PREDECESSOR

TIME(seconds)

―

A, B

―

C, D

What is the minimum number of workstations needed if the output rate is to be 2,160 units per

A) 1 B) 2 C) 3 D) 4 E) 5

73) The industrial engineering manager needs to assign tasks to workstations to achieve a daily output rate of 2,160 products. Assume that the assembly line works 6 hours in a day. The following table describes the tasks involved in the production of this product:

Version 1

TASK

PREDECESSOR

TIME(seconds)

―

A, B

―

C, D

What will be the efficiency of the assembly line that uses the minimum number of workstations?

A) 0.0% B) 6.7% C) 70.0% D) 93.3% E) 100%

74) are useful in finding reasonable solutions when the number of possible options is overwhelming. The optimal solutions are not guaranteed.

A) CAD B) CIM C) CAM D) Heuristics E) FMS

75)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

D, E

Version 1

For eight hours of operating time per day, what is the minimum cycle time?

A) 20 seconds B) 28 seconds C) 30 seconds D) 42 seconds E) 60 seconds

76)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

D, E

For eight hours of operating time per day and a desired output rate of 480 units per day, what is the optimum cycle time?

A) 20 seconds B) 28 seconds C) 30 seconds D) 42 seconds E) 60 seconds

77)

Which of the following is not a strategy to deal with a bottleneck workstations?

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A) B) C) D)

78)

automation Offline work Increasing cycle time Parallel workstations

Which of the following is not true about design of process layouts?

A) Design Process layouts are influenced by physical factors such as location of entrances. B) Ideally the physical structure is designed around the process layout. C) There is a standardized approach to develop process layouts. D) The main issue in design of process layouts is the relative positioning of departments. E) Multilevel structures pose special problems for process layout planners.

79) Which of the following is not an information requirement for the design of a process layout?

A) A list of departments or work centres B) Current and projected work flows between the departments of work centres C) The distance between locations D) A list of special considerations E) A list of product cycle times

80)

One of the major objectives in process layout design is:

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A) Minimizing the number of workers. B) Maximizing transportation distances. C) Minimizing transportation costs. D) Maximizing work-station productive time. E) None of above

81) A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per metre moved. An analyst has prepared the following distances and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

160

110

140

II III

What is the distance (in metres) from area III to area I in this new facility?

A) 0 B) 10 C) 20 D) 30 E) 40

82) A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per metre moved. An analyst has prepared the following distances and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

Version 1

III

From/To

160

110

140

III

What is the total flow (loads per week) between department Y and department Z?

A) 140 B) 160 C) 200 D) 250 E) 300

83) A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per metre moved. An analyst has prepared the following distances and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

160

110

140

II III

If departments X, Y, and Z were to be located in areas I, II, and III, respectively, what would be the total distance (in metres) loads would be moved each week?

A) 4,000 B) 4,500 C) 7,000 D) 8,000 E) 9,000

Version 1

84) A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per metre moved. An analyst has prepared the following distances and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

160

110

140

II III

What are total weekly costs for the least costly process layout?

A) $2,800 B) $3,150 C) $3,500 D) $4,000 E) $4,500

85) A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per metre moved. An analyst has prepared the following distances and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

160

110

140

II III

How many least costly process layouts are there?

Version 1

A) 1 B) 2 C) 3 D) 4 E) 5

86) A company needs to locate three departments (X, Y, and Z) in the three areas (1, 2, and 3) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load metre moved. An analyst has prepared the following flow and distance matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

From/To

150

100

130

2 3

If the company were to locate departments X, Y, and Z in areas 1, 2, and 3, respectively, what would be the total distance (in metres) loads would be moved each week?

A) 3,100 B) 3,600 C) 6,200 D) 6,700 E) 8,200

87) A company needs to locate three departments (X, Y, and Z) in the three areas (1, 2, and 3) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load metre moved. An analyst has prepared the following flow and distance matrices: DISTANCES (metres)

Version 1

FLOW’s (loads per week)

From/To

150

100

130

2 3

What is the layout that will minimize the total distance loads will be moved each week?

A) X in 1; Y in 2; Z in 3 B) X in 1; Z in 2; Y in 3 C) Y in 1; X in 2; Z in 3 D) Z in 1; X in 2; Y in 3 E) Z in 1; Y in 2; X in 3

88) A company needs to locate three departments (X, Y, and Z) in the three areas (1, 2, and 3) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load metre moved. An analyst has prepared the following flow and distance matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

From/To

150

100

130

2 3

What are total weekly costs for an optimum layout?

A) $2,600 B) $3,600 C) $6,200 D) $7,200 E) $8,200

Version 1

89) A consultant needs to locate four departments-waiting room (W), checkup room (c), laboratory (L), and exercise room (E)-in four areas (I, II, III, IV) of a new facility. He wants to minimize interdepartmental transportation costs associated with the nurses escorting patients, which he expects to be $.10 per patient per metre. He has prepared the following distance and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

100

II III IV

What is the distance (in metres) from area IV to area II in this new facility?

A) 0 B) 5 C) 10 D) 15 E) 20

90) A consultant needs to locate four departments-waiting room (W), checkup room (c), laboratory (L), and exercise room (E)-in four areas (I, II, III, IV) of a new facility. He wants to minimize interdepartmental transportation costs associated with the nurses escorting patients, which he expects to be $.10 per patient per metre. He has prepared the following distance and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

100

II III

Version 1

What is the total flow (patients per week) between department W and department L?

A) 70 B) 80 C) 88 D) 130 E) 148

91) A consultant needs to locate four departments-waiting room (W), checkup room (c), laboratory (L), and exercise room (E)-in four areas (I, II, III, IV) of a new facility. He wants to minimize interdepartmental transportation costs associated with the nurses escorting patients, which he expects to be $.10 per patient per metre. He has prepared the following distance and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

100

II III IV

How many different process layouts are possible for this new facility?

A) 4 B) 6 C) 16 D) 24 E) 120

Version 1

92) A consultant needs to locate four departments-waiting room (W), checkup room (c), laboratory (L), and exercise room (E)-in four areas (I, II, III, IV) of a new facility. He wants to minimize interdepartmental transportation costs associated with the nurses escorting patients, which he expects to be $.10 per patient per metre. He has prepared the following distance and flow matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

III

From/To

100

II III IV

If the consultant were to locate departments W, C, L, and E in areas I, II, III, and IV, respectively, what would be total weekly costs?

A) $114 B) $217 C) $255 D) $322 E) $366

93) Using the method developed by Richard Muther, which closeness rating reflects the undesirability of having two departments located near each other?

A) A B) E C) R D) U E) X

Version 1

94) Using the method developed by Richard Muther, which closeness rating reflects the highest importance for two departments being close to each other?

A) A B) E C) I D) U E) X

95) A company needs to locate three departments (X, Y, and Z) in the three areas (1, 2, and 3) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load metre moved. An analyst has prepared the following flow and distance matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

From/To

150

100

130

2 3

What is the distance (in metres) from area 3 to area 1 of this new facility?

A) 0 B) 10 C) 20 D) 30 E) 40

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96) A company needs to locate three departments (X, Y, and Z) in the three areas (1, 2, and 3) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load metre moved. An analyst has prepared the following flow and distance matrices: FLOW’s (loads per week)

DISTANCES (metres) From/To

From/To

150

100

130

2 3

What is the total flow (loads per week) between department Y and department Z?

A) 130 B) 150 C) 180 D) 230 E) 280

97) In the use of closeness ratings for process layouts, the code E means the closeness between two departments is:

A) Very important. B) Undesirable. C) Usual important D) Unusually important. E) Absolutely necessary

98) Management wants to design an assembly line that will turn out 800 adult games per day. There will be eight working hours in each day. The industrial engineering staff has prepared the information below: Task

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Time (min.)

Immediate Predecessor

c,d

b,e

f,g

(i) Determine the maximum, minimum cycle times and the optimum cycle time. (ii) What is the minimum number of stations needed? (iii) Assign tasks to stations in order of most following tasks first based on the optimum cycle time.

99)

Determine the minimum number of workstations needed for this situation:

Operating time is 450 minutes per day. Desired output is 80 units per day. The sum of task times is 56 minutes.

100)

Given the following data: Station

StationTime (min)

4.2

4.7

4.4

4.8

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Cycle time = 5.1 min

Determine the percentage idle time.

101)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

(i) What is the minimum cycle time? (ii) Calculate the rate of output that could be expected for this line assuming a 420-minute working day.

102)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

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What is the maximum cycle time?

103)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

What is the cycle time for eight hours of operating time per day and a desired output rate of 960 units per day?

104)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

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For eight hours of operating time per day and a desired output rate of 960 units per day, what is the minimum number of stations needed?

105)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

For eight hours of operating time per day and a desired output rate of 960 units per day, assign tasks to stations in order of most following tasks first. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first.

106)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

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For eight hours of operating time per day and a desired output rate of 960 units per day, what is the percentage of idle time for the balance which uses the minimum number of stations?

107)

Given the following line balance data: TASK

PREDECESSOR

TIME(seconds)

―

W, X

For eight hours of operating time per day and a desired output rate of 960 units per day, what is the efficiency for the balance which uses the minimum number of stations?

108) Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): From/To

From/To

100

150

100

2 3

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What is the distance from area 3 to area 1?

109) Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): From/To

From/To

100

150

100

2 3 4

What is the total flow between departments B and D?

110) Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): From/To

From/To

100

150

100

2 3 4

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If departments A through D were to be located in areas 1 through 4, respectively, what would be the total daily distance loads?

111) Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): From/To

From/To

100

150

100

2 3 4

If department C must be located in area 1, what layout will minimize the total distance loads?

112) Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): From/To

From/To

100

150

100

2 3 4

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If transportation costs are $.25 per load per foot moved, and departments A through D were to be located in areas 1 through 4, respectively, what would be the total daily transportation costs?

113) Given the following process layout data for locating six departments in the six areas shown: Department

III

II III IV V

FACILITY

What process layout(s) satisfy(ies) these closeness ratings?

114)

Process design is required only when new products or services are planned. ⊚ ⊚

115)

true false

The first step in process design is to decide whether to make or buy a product or service.

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⊚ ⊚

true false

116) Process design determines the structure of a process—that is, the sequence of operations (the workflow), resources, and controls needed for a particular process. ⊚ ⊚

true false

117) A job shop processing system generally requires less skilled workers than a continuous processing system. ⊚ ⊚

true false

118) High flexibility of general-purpose equipment and skilled workers are some of the characteristics of a job shop process. ⊚ ⊚

true false

119) A job-shop process generally requires less-skilled workers than a continuous processing system. ⊚ ⊚

true false

120) Repetitive process systems are typically used to produce goods for specific customer orders rather than goods to be held as finished product inventory in anticipation of demand. ⊚ ⊚ Version 1

true false

121) Repetitive production processes produce a high volume of standardized products or services. ⊚ ⊚

122)

Flexible general-purpose equipment is used in a repetitive processing system. ⊚ ⊚

123)

true false

Continuous processing is employed when a customized output is required. ⊚ ⊚

true false

124) As a general rule, continuous processing systems produce products for a high volume of standardized output. ⊚ ⊚

true false

125) In general, continuous process systems require a more skilled and flexible workforce than job shops because continuous processes produce more varied goods and services. ⊚ ⊚

126)

true false

Continuous processes are typically not flexible and costly to change.

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⊚ ⊚

127)

Continuous processing is the best way to produce customized output ⊚ ⊚

128)

true false

The use of robots is an example of programmable automation in industry. ⊚ ⊚

true false

129) A disadvantage of automation is that it tends to increase variable costs for repetitive operational tasks. ⊚ ⊚

130)

true false

Programmable automation requires less changeover time than flexible automation. ⊚ ⊚

true false

131) Computer-integrated manufacturing (CIM) is a technology that mitigates or reverses the effects of human activity on the environment. ⊚ ⊚

Version 1

true false

132) Process design determines the structure of a process—that is, the sequence of operations (the workflow), resources, and controls needed for a particular process ⊚ ⊚

133)

true false

The production process is usually measured by the value it creates for the customer. ⊚ ⊚

true false

134) A swim lane diagram is used by the multi-functional process design/redesign team to display the activities/operations comprising the process. ⊚ ⊚

135)

The process flow diagram for services is called a service blueprint. ⊚ ⊚

136)

true false

Low flexibility is one of the disadvantages of a product layout. ⊚ ⊚

137)

true false

An automated carwash would be an example of a process layout. ⊚ ⊚

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true false

138) Product layouts can more easily adapt to variations in production schedule than process layouts. ⊚ ⊚

true false

139) A possible disadvantage of a product layout is an inflexible response to changes in product mix. ⊚ ⊚

140)

Product layouts achieve high utilization of labour and equipment. ⊚ ⊚

141)

true false

Product (line) layouts are not used in service environments. ⊚ ⊚

true false

142) The risk of shutdowns caused by equipment breakdowns in a process layout is higher than in a product layout (line). ⊚ ⊚

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true false

143) Process layouts tend to have lower in-process inventories, and higher equipment utilization rates than product layouts. ⊚ ⊚

true false

144) Either product layout or process layout or a combination of both are used in manufacturing system. ⊚ ⊚

true false

145) Process (functional) layouts allow greater flexibility in processing than product (line) layouts. ⊚ ⊚

146)

true false

High work-in-process inventory costs is one of the disadvantages of process layouts. ⊚ ⊚

true false

147) In process layouts, equipment and machines are arranged based on similarity of functions. ⊚ ⊚

148)

true false

The layout of a print shop would be categorized as a process layout.

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⊚ ⊚

149)

true false

Process layouts tend to have low in-process inventories. ⊚ ⊚

true false

150) In cellular layouts, machines and equipment are grouped according to their function, for instance, all drills in a machine shop would be grouped into a cell. ⊚ ⊚

151)

true false

Some of the benefits of cellular layouts are less material handling and reduced setup time. ⊚ ⊚

true false

152) With group technology items that are similar in either design or manufacturing requirements are grouped into part families. ⊚ ⊚

true false

153) Cellular layouts consist of a large number of computer-controlled machines that produce dissimilar parts. ⊚ ⊚

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true false

154) An advantage of a U-shaped production line is that it facilitates teamwork and flexibility in work assignments. ⊚ ⊚

true false

155) A fully automated version of cellular manufacturing is can be described as flexible manufacturing systems ⊚ ⊚

true false

156) In cellular manufacturing, machines and equipment are grouped by their functions. For example, all grinders are grouped into a cell. ⊚ ⊚

157)

true false

Less material handling and reduced setup time are some benefits of cellular layout. ⊚ ⊚

true false

158) Flexible manufacturing system consists of high-cost specialized equipment designed for a fixed sequence of operations. ⊚ ⊚

Version 1

true false

159) Flexible manufacturing systems (FMS) are intended to automate routine work tasks in high volume production with low variety. ⊚ ⊚

160)

One of the objectives of layout design is to use space and workers efficiently. ⊚ ⊚

161)

true false

In designing the layout of retail facilities, the primary objective is to maximize revenues. ⊚ ⊚

true false

162) The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time to do their jobs. ⊚ ⊚

true false

163) An assembly line that has a percentage idle time of zero means the line is perfectly balanced. ⊚ ⊚

164)

true false

The goal of line balancing is to assign equal allocations of idle time to all workstations. ⊚ ⊚

Version 1

true false

165) Cycle time is the maximum time allowed at each workstation to complete its assigned tasks on each unit of production before it moves on. ⊚ ⊚

true false

166) For a production line, daily capacity can be determined by dividing the daily operating time by the line's cycle time. ⊚ ⊚

true false

167) The theoretical minimum number of workstations for a production line is a function of the sum of task times and the cycle time. ⊚ ⊚

168)

None of the techniques for line balancing guarantee an optimal solution. ⊚ ⊚

169)

true false

Heuristic approaches to line balancing guarantee an optimal solution. ⊚ ⊚

Version 1

true false

170) The overall efficiency of a production line is equal to the percentage idle time multiplied by the number of workstations. ⊚ ⊚

171)

The percentage of idle time in an assembly line is called cycle time. ⊚ ⊚

172)

true false

Takt time is another name for cycle time. ⊚ ⊚

173)

true false

Departmental or functional grouping is an example of process layout. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 06_7ce 1) A 2) E 3) C 4) D 5) E 6) B 7) C 8) D 9) D 10) A 11) D 12) B 13) A 14) C 15) D 16) B 17) C 18) D 19) E 20) B 21) D 22) D 23) C 24) A 25) B 26) D Version 1

27) B 28) D 29) A 30) D 31) E 32) B 33) A 34) C 35) B 36) A 37) C 38) C 39) C 40) E 41) A 42) D 43) B 44) C 45) B 46) B 47) D 48) C 49) D 50) C 51) A 52) C 53) D 54) A 55) C 56) E Version 1

57) A 58) E 59) D 60) D 61) C 62) D 63) C 64) C 65) B 66) C 67) C 68) A 69) E 70) C 71) D 72) C 73) D 74) D 75) D 76) E 77) C 78) C 79) E 80) C 81) C 82) E 83) D 84) C 85) B 86) D Version 1

87) B 88) A 89) C 90) B 91) D 92) C 93) E 94) A 95) C 96) E 97) A 114) FALSE 115) TRUE 116) TRUE 117) FALSE 118) TRUE 119) FALSE 120) FALSE 121) TRUE 122) FALSE 123) FALSE 124) TRUE 125) FALSE 126) TRUE 127) FALSE 128) TRUE 129) FALSE 130) FALSE 131) FALSE 132) TRUE Version 1

133) FALSE 134) TRUE 135) TRUE 136) TRUE 137) FALSE 138) FALSE 139) TRUE 140) TRUE 141) FALSE 142) FALSE 143) FALSE 144) TRUE 145) TRUE 146) TRUE 147) TRUE 148) TRUE 149) FALSE 150) FALSE 151) TRUE 152) TRUE 153) FALSE 154) TRUE 155) TRUE 156) FALSE 157) TRUE 158) FALSE 159) FALSE 160) TRUE 161) TRUE 162) TRUE Version 1

163) TRUE 164) FALSE 165) TRUE 166) TRUE 167) TRUE 168) TRUE 169) FALSE 170) FALSE 171) FALSE 172) TRUE 173) TRUE

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Chapter 7S Learning Curves 1) The fact that human activities typically improve when they are done on a repetitive basis is described by a:

A) normal distribution curve. B) learning curve. C) binomial distribution curve. D) exponential curve. E) man-machine chart

2) Once production is underway and the learning curve effect is occurring, successive changes made to the production process will cause the time per unit to:

A) continue following the original learning curve without any impact. B) cause a scallop effect. C) increase the unit time and result in a higher percentage learning curve. D) decrease the unit time and result in a higher percentage learning curve. E) decrease the unit time and result in a lower percentage learning curve.

On a log-log graph, learning curves appear as:

A) upward-curving lines. B) downward-curving lines. C) straight lines. D) lines which increase at a decreasing rate. E) lines which decrease at a decreasing rate.

Which of the following conveys the essence of learning curves?

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A) As the number of units produced increase, time per unit increases. B) As the number of units produced decrease, time per unit increases. C) As the number of units produced increase, time per unit remains constant. D) As the number of units produced increase, time per unit doubles. E) As the number of units produced increase, time per unit decreases.

5) It took exactly 10 hours to produce the first widget on a 100 percent learning curve. The second widget will take how many hours to produce?

A) 8.0 hours B) 10.0 hours C) 12.0 hours D) A 100 percent learning curve cannot exist. E) 2 hours

6) A job is expected to have a 70 percent learning curve. The first unit has been completed in 20 hours. Accordingly, the second unit can be expected to take approximately how many hours?

A) 6 B) 9.8 C) 14 D) 20 E) 34

7) A job with a 70 percent learning curve required 20 hours for the initial unit. The fourth unit should require approximately how many hours?

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A) 6 B) 9.8 C) 14 D) 20 E) 34

8) How long would a job with a 70 percent learning curve and a time of 20 hours for the first unit require (approximately, in hours) for the third unit?

A) 14 B) 11.4 C) 10 D) 7 E) 4

9) A job is expected to have a learning curve of 90 percent. The third unit required 16 hours. The twelfth unit should take approximately how many hours?

A) 2 B) 4 C) 7 D) 10 E) 13

10) A job has an 80 percent learning curve. The second unit required 12 hours to complete. Approximately how many hours will be devoted to the first five units (including those already completed)?

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A) 26 B) 36 C) 46 D) 56 E) 66

11) A manager is trying to estimate the appropriate learning curve for a certain job. The manager notes that the first four units had a total time of 30 minutes. Which learning curve would yield approximately this result if the first unit took 10 minutes?

A) .70 B) .75 C) .80 D) .85 E) .90

12) A job has a 70% learning curve. If the first unit took 10 hours to complete, the third unit should take roughly how many hours?

A) 7 B) 5.7 C) 5 D) 3.5 E) 4.9

13) A job has an 80% learning curve. If the first unit took 40 hours to complete, the fourth unit should take roughly how many hours?

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A) 20 B) 26 C) 31 D) 35 E) 40

14) A job has an 80% learning curve. If the first unit took 50 hours to complete, the third unit should take roughly how many hours?

A) 40 B) 36 C) 35 D) 32 E) 10

15) Unit times for a job exhibit a learning effect. If the 2 nd unit took 30 hours, and the 4 unit took 21 hours, roughly how many hours would you estimate the 3 rd unit took?

A) 29 B) 27 C) 25 D) 24 E) 21

16) A manager is trying to estimate the learning rate for a new job. The first unit took 16 hours, and the fourth unit required about 13 hours. The learning rate is:

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A) 70% B) 75% C) 80% D) 85% E) 90%

17) A job will have a learning rate of 75 percent. If the 3 rd unit requires 10 hours, the 12 unit should require about this many hours:

A) 5.6 B) 6.5 C) 7.4 D) 8.3 E) 9.2

18)

To which worker would learning curves be most applicable?

A) Bus driver B) Punch press operator C) Assembly-line worker D) Auto service mechanic E) Laundromat operator

19)

Learning percentages can not be determined from:

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A) the estimates based on past experience B) fitting a power function to past data. C) fitting a linear function to the log of past data. D) the industry learning slope E) a 100% curve

20) In which of the following managerial activities would learning curves probably be the least useful?

A) Negotiated purchasing B) Manpower planning C) Location analysis D) Budgeting E) Pricing new products

21)

Which one of the following would learning curves probably affect the least?

A) Pricing new products B) Negotiated purchasing C) Layout analysis D) Scheduling E) Labour planning

22)

Which of the following is not a major caution or criticism of learning curves?

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A) Learning rates may differ between organizations. B) Projections should be regarded as approximations. C) The base time must be carefully determined. D) Cross-functional workers can affect the way learning curves may be applied. E) Carryover effects may alter the learning rate.

23) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. What is the appropriate learning curve?

A) 70 percent B) 75 percent C) 80 percent D) 85 percent E) 90 percent

24) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. What is the expected time required to produce the 40 th unit?

A) 3.2 hours B) 4.4 hours C) 5.9 hours D) 3.7 hours E) 2.2 hours

25) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. What is the average time per unit for the 40 units?

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A) 4.7 hours B) 6.9 hours C) 5.6 hours D) 4.5 hours E) 3.6 hours

26) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. If the contract is cancelled after the first 20 units, approximately how much of the expected total direct labour will have been expended to that point?

A) 58% B) 55% C) 61% D) 50% E) It is impossible to say without additional information.

27) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. Approximately how long will it take to produce the 15 th unit?

A) 4.3 hours B) 5.5 hours C) 4.7 hours D) 6.9 hours E) 3.4 hours

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28) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. Which unit, if any, will require approximately one-half the time of the first unit? A) 18 th unit B) 19 th unit C) 20 th unit D) 21 st unit E) 22 nd unit

29) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours, respectively. Approximately how long will it take to produce the last ten units?

A) 33 hours B) 69 hours C) 45 hours D) 38 hours E) It is impossible to say without additional information.

30) A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: UNIT PRODUCED

TIME REQUIRED

Second

5 hours

Fourth

4 hours

What is the learning curve percentage?

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A) 40%. B) 50%. C) 75%. D) 80%. E) 90%.

31) A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: UNIT PRODUCED

TIME REQUIRED

Second

5 hours

Fourth

4 hours

How long did it take to produce the first unit?

A) 5 hours B) 6 hours C) 6.25 hours D) 6.33 hours E) 6.5 hours

32) A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: UNIT PRODUCED

TIME REQUIRED

Second

5 hours

Fourth

4 hours

Approximately how long did it take to produce the first four units?

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A) 15 hours B) 16 hours C) 18 hours D) 20 hours E) 21 hours

33) A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: UNIT PRODUCED

TIME REQUIRED

Second

5 hours

Fourth

4 hours

Approximately how long will it take to produce the tenth unit?

A) 1 hour B) 2 hours C) 3 hours D) 4 hours E) 5 hours

34) A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: UNIT PRODUCED

TIME REQUIRED

Second

5 hours

Fourth

4 hours

Approximately how long will it take to produce the fifth through tenth units?

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A) 15 hours B) 16 hours C) 18 hours D) 20 hours E) 21 hours

35) The relationship to number of units and time required in a learning curve situation is referred to as what?

A) Linear relationship B) Improvement curve C) Scallop curve D) Work/time relationship E) Percentage curve

36)

When unit cost is used instead of unit time, the relationship is referred to as what?

A) Improvement curve B) Percentage curve C) Cost curve D) Experience curve E) Smooth curve

37) If a number of major changes are made during production, the learning curve may be a series of instead of a smooth curve.

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A) waves B) horizontal lines C) scallops D) progressions E) unit costs

38)

What two methods can be used to obtain unit times?

A) Use of tables and time studies B) Time studies and formulas C) Observations and tables D) Direct hours and time studies E) A formula and use of tables

39) The learning percentage of a task can be estimated by observing unit times and fitting what function to the equation?

A) learning B) percent C) slope D) power E) logarithm

40) How can the use of learning curves be used by buyers when negotiating follow-up orders?

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A) Follow-up orders will require higher unit prices. B) Increased learning on follow-up orders dictate unit cost increases. C) Learning gains can be used to negotiate a lower price per unit. D) Shorter processing times will require increases in unit cost to cover overhead. E) Unit cost on follow-up orders will remain constant as the learning rate has been maximized.

41) Worker performance can be compared to an expected rate of learning to determine worker;

A) placement B) qualification C) repetitions D) unit cost E) cycle time

42)

How could an overqualified worker be identified?

A) Training time would be above average. B) Their learning percentage would be above the average. C) Future improvements would not change. D) Time per unit would be greater than standard. E) Their learning percentage would be lower than the average.

43) Learning percentage may differ from organization and by type of work. Therefore it is best to base learning percentage on what?

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A) Empirical studies B) Assumed percentages C) Data tables D) Established curves E) Pre-determined time studies.

44)

How do the use of cross-functional workers and learning curves relate?

A) The learning curve will be the same. B) Unit time will decrease. C) Unit time could increase. D) Learning percentage will be lower. E) Tables will be required to determine unit time.

45)

From an organizational standpoint, what makes the learning curve interesting is its what?

A) Doubling of unit time B) predictability C) Number of repetitions required D) Unit time comparison E) output

46) Assembly of a radar unit has a learning curve of 80 percent. Estimated time to assemble the second unit is 40 hours. Determine approximately how much time will be required for: (i) the eighth unit (ii) the first ten units

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47) Developing work assignments in a job shop in a certain firm has a learning curve of 80 percent. If the second set of assignments takes 12 minutes, determine the length of time required for the following: (i) the fifth set (ii) sets 3, 4, and 5 together

48) A job has a 90 percent learning curve associated with it. The second unit of a 25-unit job had a unit time of 36 minutes. What will the total time be for the entire job?

49) A student suspects strongly that there is a learning curve associated with solving problems assigned for operations management. The student notes that it took approximately 33 minutes to solve the first problem and 17 minutes to solve the fifth problem. (i) Estimate the students learning percentage. (ii) Using your answer from part a, estimate how long it will take the student to finish the three problems which remain.

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50) A student has noted that the first accounting problem completed in a set of similar problems took one hour, and the ninth problem took 24 minutes. (i) Estimate the students learning curve. (ii) About how long did it take the student to do his set of 10 problems?

51) It takes a worker with a 90 percent learning curve 72.9 minutes to complete the fourth unit of a seven-unit job. Estimate the amount of time the worker spent on the first two units.

52) The 3 rd unit of a ten-unit job required 7.3 hours to complete. The 4 th unit has been worked on for two hours, but it is not yet finished. Estimate the remaining amount of time that will be needed to finish this ten-unit job if the work has an 80% learning curve.

53) If the task is short and somewhat routine; a modest amount of improvement occurs during the first few repetitions. ⊚ ⊚

true false

54) When the task is fairly complex and has a longer duration, improvement will occur over a larger number of repetitions.

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⊚ ⊚

true false

55) Learning curves have little relevance for planning or scheduling of routine activities of short duration. ⊚ ⊚

true false

56) Learning curves generally apply to situations in which there is a high degree of human involvement, and tasks are fairly repetitive. ⊚ ⊚

57)

true false

Learning curves are mostly relevant for routine, repetitive activities. ⊚ ⊚

true false

58) According to learning curve theory, every doubling of total output will produce a constant percentage decrease in time per unit. ⊚ ⊚

59)

true false

A 95% learning curve indicates greater learning than a 90% learning curve. ⊚ ⊚

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true false

60)

A learning percentage of 98% implies 2% learning. ⊚ ⊚

true false

61) An 80 percent learning curve means that with each doubling of units there will be a 20 percent decrease in time per unit. ⊚ ⊚

62)

true false

A 98% learning curve implies an exceptionally rapid rate of improvement. ⊚ ⊚

true false

63) A 77% learning curve will produce relatively minor decreases in completion times of the first few repetitions. ⊚ ⊚

true false

64) A learning rate of 97% will produce minor decreases in completion times of the first few units. ⊚ ⊚

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true false

65) The decrease in time between the second and fourth units will be equal to the decrease in time between the first and second units. ⊚ ⊚

true false

66) According to learning curve theory, for certain kinds of tasks the indirect labour time or cost per unit decreases as the number of units increases. ⊚ ⊚

true false

67) According to learning curve theory, the time reduction per unit decreases as the number of units increases. ⊚ ⊚

true false

68) For an 80% learning curve, if the first unit requires 10 hours, the second unit will require 8 hours, and the third 6.4 hours. ⊚ ⊚

true false

69) If an 80% curve is appropriate for a task and the first unit takes ten hours, the average time for the first two units would be eight hours. ⊚ ⊚

70)

true false

Learning curves cannot be used if the labour time for the first unit is unknown.

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⊚ ⊚

71)

Learning curves are sometimes used for manpower planning and scheduling. ⊚ ⊚

72)

true false

For the same type of work, learning curves may differ from organization to organization. ⊚ ⊚

76)

true false

One use of learning curves is for negotiated purchasing. ⊚ ⊚

75)

true false

The learning percentage is the base of the power function that is fitted to the data. ⊚ ⊚

74)

true false

The learning percentage can be determined from a learning curve table. ⊚ ⊚

73)

true false

Projections based on learning curves should be treated as approximations.

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⊚ ⊚

true false

77) Learning curves can be used to understand how direct labour costs per unit can be expected to decrease as more units are produced. ⊚ ⊚

true false

78) The learning curve is a basic tool for mass production type activities because it can deal with large volumes of output. ⊚ ⊚

79)

Learning curves are used primarily for mass production applications. ⊚ ⊚

80)

true false

Improvement in worker performance can be traced to methods analysis. ⊚ ⊚

81)

true false

Management input is not a significant factor in increases in worker performance. ⊚ ⊚

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true false

82)

Major changes that are made once production is underway do not impact unit time. ⊚ ⊚

true false

83) Learning curves are useful in negotiating unit price increases for prematurely terminated contracts. ⊚ ⊚

84)

true false

Time for the first unit is unimportant as subsequent times will average errors. ⊚ ⊚

true false

85) Users of learning curves sometimes fail to include carryover effects and previous experience when determining unit times. ⊚ ⊚

true false

86) Experts agree that the learning effect is the result of other factors in addition to actual employee learning. ⊚ ⊚

87)

true false

Shorter product life cycles have no affect in the application of learning curves. ⊚ ⊚

Version 1

true false

88) It is sometimes necessary to estimate the time for the first unit of production when using learning curves. ⊚ ⊚

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true false

Answer Key Test name: Chap 07S_7ce 1) B 2) B 3) C 4) E 5) B 6) C 7) B 8) B 9) E 10) D 11) B 12) B 13) B 14) C 15) D 16) E 17) A 18) D 19) E 20) C 21) C 22) E 23) D 24) B 25) C 26) A Version 1

27) B 28) B 29) C 30) D 31) C 32) D 33) C 34) D 35) B 36) D 37) C 38) E 39) D 40) C 41) B 42) E 43) A 44) C 45) B 53) TRUE 54) TRUE 55) TRUE 56) TRUE 57) FALSE 58) TRUE 59) FALSE 60) TRUE 61) TRUE 62) FALSE 63) FALSE Version 1

64) TRUE 65) FALSE 66) FALSE 67) TRUE 68) TRUE 69) FALSE 70) FALSE 71) TRUE 72) FALSE 73) FALSE 74) TRUE 75) TRUE 76) TRUE 77) TRUE 78) FALSE 79) FALSE 80) TRUE 81) FALSE 82) FALSE 83) TRUE 84) FALSE 85) TRUE 86) TRUE 87) FALSE 88) TRUE

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Chapter 7: Work/Job Design 1)

Which of the following is NOT an objective of job design?

A) Productivity B) Safety C) Quality of work life D) Line balancing E) Determining work/job content.

Work/job design involves all EXCEPT which of the following?

A) Work content B) Job content C) Compensation D) Process analysis E) Work method

3) Which of the following is NOT a potential disadvantage of job specialization in business?

A) More difficult to motivate employees B) Limited opportunities for advancement C) Limited opportunities for self-fulfillment D) Little control over work E) Simplified training

Which of the following is NOT generally considered an advantage of specialization?

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A) High productivity B) Lower wage costs C) Ease of training employees D) Limited opportunities for advancement E) Minimal responsibilities

5) The behavioural approach to job design which involves giving the worker a larger portion of the total task is:

A) job enlargement. B) job rotation. C) job enrichment. D) job involvement. E) job enhancement.

Which of the following most closely describes job enlargement?

A) Horizontal loading B) Increasing the level of responsibility associated with a job C) Rotating workers through a series of jobs to increase their scope of experience D) Increasing the amount of workspace assigned to a worker E) Assigning two different jobs to the same worker

In order to make jobs more interesting, job designers use all of the following EXCEPT:

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A) job enlargement. B) job rotation. C) job enrichment. D) increase in wages. E) self-directed teams.

8) The behavioural approach to job design which involves an increase in responsibility for planning, execution and control of tasks is:

A) job enlargement. B) job rotation. C) job enrichment. D) job involvement. E) job enhancement.

Which of the following is NOT a potential benefit of the use of self-directed teams?

A) Improved responsiveness to problems B) Higher productivity C) Greater worker satisfaction D) Emphasis of manager's role shifts to command and control E) Higher employee engagement

10)

Focusing on how a job is done and attempting to make it more efficient describes:

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A) work measurement. B) Gantt charts. C) methods analysis. D) job evaluation. E) job enlargement.

11) The chart used to review the overall sequence of an operation by focusing on either the movements of the operator or the flow of materials is called a:

A) simo chart. B) worker-machine chart. C) worker-materials chart. D) flow process chart. E) multi-activity chart.

12) The methods analysis chart which describes the overall sequence of operations, including storages, delays, and inspections is a(n):

A) flow process chart. B) worker-machine chart. C) MTM table. D) simultaneous motion (simo) chart. E) efficiency/time-of-day chart.

13) Experienced methods analysts generate improvement ideas for the job by asking all of the following questions EXCEPT:

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A) can travel distances be shortened? B) can the job be outsourced? C) can similar activities be grouped? D) can additional equipment be helpful? E) can the sequence of operations be changed?

14)

Methods analysis focuses on which aspect of job design?

A) Behavioural aspects B) Efficiency aspects C) Pay levels D) Technological E) Unions and compensation

15)

All of the following are a part of the basic procedure for methods analysis EXCEPT:

A) identify the job to be studied. B) gather pertinent facts about the worker, tasks and administrative factors. C) negotiate wage for completing the work. D) question present method and propose a new method. E) document the present method.

16) The methods analysis chart which describes the interactions between operator and equipment is a(n):

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A) process chart. B) worker-machine chart. C) gang process chart. D) simultaneous motion (simo) chart. E) efficiency/time-of-day chart.

17)

Which of the following is NOT one of the techniques used in motion study analysis?

A) Motion economy principles B) Job enrichment technique C) Micro-motion (slow-motion video) study D) Analysis of elementary motions E) Simultaneous hands motion chart

18) The methods analysis chart which describes the movements of both hands at the same time is a(n):

A) process chart. B) worker-machine chart. C) gang process chart. D) simultaneous motion (simo) chart. E) efficiency/time-of-day chart.

19) Which of the following is NOT related to working conditions considered in work/job design?

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A) Ventilation B) Seniority and experience levels C) Noise and vibrations D) Illumination E) Work hours and breaks

20)

Which of the following is NOT true about illumination?

A) The more detailed the work, the higher the level required. B) The amount of glare and contrast are important considerations. C) High levels are preferable for all types of work. D) Natural daylight has both economic and psychological benefits. E) The optimal amount of lighting depends on the type of work being performed.

21)

Ergonomics tries to remove all of the following EXCEPT:

A) awkward reaching and bending. B) forceful gripping of tools. C) heavy lifting. D) endless repetition of motions. E) fitting the job to individual workers

22) Amendments to the Canadian Labour Code in 1978 added all the following rights EXCEPT:

A) B) C) D)

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to refuse dangerous work. to participate in improving safety and health problems. annual increases in wages linked to the cost of living to know about hazards in the workplace.

23) An increase in the desired confidence level has what effect on the number of observations necessary in a time study?

A) Increases B) Decreases C) Unaffected D) May increase or decrease, depending on the sample standard deviation E) Impossible to say without additional information

24) In a stopwatch time study, which of the following is NOT a determinant of the number of cycles that must be timed?

A) B) C) D)

the variability of observed times. the desired accuracy for the estimated job time. the desired level of confidence for the estimated job time. Worker speed and skill level.

25) In a stopwatch time study, the average time it takes a given worker to perform a task a certain number of times is the:

A) observed time. B) normal time. C) standard time. D) allowance time. E) performance rating time.

26) In a stopwatch time study, adjusting the observed time by the performance rating of the observed worker results in the:

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A) observed time. B) normal time. C) standard time. D) allowance time. E) performance rating time.

27) A job had an observed time of three minutes, a performance rating of 0.90, and an allowance factor that was 20 percent of job time. Standard time for the job in minutes is:

A) 0.54 B) 2.16 C) 2.70 D) 3.24 E) 3.60

28) When performing a time study, "normal time" is calculated by converting the observed time into the time an "average" worker would require working at an acceptable pace by using which of the following?

A) Allowance factors B) Methods-time measurements (MTM) C) Methods analysis D) Performance ratings E) Summing basic elementary motions

29) In a stopwatch time study, adjusting the normal time by an allowance factor for normal delays and interruptions results in the:

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A) observed time. B) normal time. C) standard time. D) allowance time. E) performance rating time.

30) A job had an observed time of 5 minutes, a performance rating of 0.80, and an allowance proportion of 10 percent of job time. Twenty-five cycles were timed. Normal time for the job in minutes is:

A) 3.6 B) 4.0 C) 4.4 D) 4.5

31) A job has a normal time of 12 minutes, a performance rating of 0.80, and an allowance proportion of 20 percent of the workday. The standard time for this job in minutes is:

A) 11.52 B) 12 C) 14.4 D) 15

32) Which of the following is NOT an accurate statement concerning the use of predetermined time standards for work measurement?

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A) Analysts need to break jobs down into their basic motions. B) They provide better accuracy than stopwatch time studies. C) They rely on published data of times for basic motions. D) MTM tables are based on extensive research.

33)

Predetermined time standards are derived from:

A) judgmental methods. B) research of basic motions. C) allowance factors multiplied by standard times. D) standard allowance proportions. E) recalibration of standard times.

34)

A technique for estimating the proportion of time a worker spends on various activities is:

A) stopwatch time study. B) standard (historical) time. C) simultaneous motion study. D) predetermined (published) time standard. E) work sampling.

35) The technique which can be used to estimate the percentage of time a worker or a piece of equipment is idle is:

A) MTM. B) work sampling. C) methods analysis. D) micro-motion study. E) none of these.

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36)

In work sampling, observations should be taken:

A) at the same time each day. B) within a short period of time. C) at randomly determined times. D) once every hour. E) once every day.

37) Which of the following is NOT an advantage of work sampling compared to stopwatch time study?

A) There is little or no disruption of work. B) It is less susceptible to short-term fluctuations. C) Workers are less resentful. D) It is less costly and less time-consuming. E) It is better suited for short, repetitive tasks.

38) The work measurement technique that counts the number of times a worker is working at various tasks or is idle is:

A) stop watch study. B) time and motion study. C) work sampling. D) piece rate study. E) predetermined time standards.

39) What will be the effect of increasing the maximum acceptance error proportion on sample size in work sampling?

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A) Increase in the number of observations needed B) Decrease in the number of observations needed C) No effect on sample size D) Sometimes increase and sometimes decrease in the sample size, depending on the analyst E) Impossible to say without additional information

40) Which of the following is NOT a characteristic of time-based compensation approaches?

A) Relatively stable labour costs B) Easier to administer than output-based plans C) Stable pay for employees D) Simpler wage computations than output-based plans E) More computations and paperwork than output-based plans

41) According to the Human Performance System, which of the following is NOT a job design and management factor?

A) Task support B) Consequences C) Feedback D) Technology E) Individual capacity

42)

Which of the following is NOT an example of Micowork?

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A) Micro-motion study B) Market research C) Data input D) Sentiment analysis E) Data verification

43) The criteria for the Healthy Workplace Award include four "drivers" of a healthy workplace. Which of the following is NOT one of the criteria?

A) Leadership B) Planning C) Worker involvement D) Compensation E) Process management

44) Research has shown that unmet human needs can result in psychological distress, and that these human needs can be addressed by how many workplace factors?

A) 9 B) 11 C) 12 D) 13 E) 15

45) Which of the following plans is based on compensation of an employee for being an employee?

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A) commission B) salary C) Time-based D) wage E) Skills/knowledge

46) Which of the following plans is based on compensation of an employee for length of time worked?

A) commission B) Output-based C) compensation D) Time-based E) Skills/knowledge

47) A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, one employee was observed performing this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the observed time (OT) for this task?

A) 80 seconds B) 84 seconds C) 160 seconds D) 240 seconds E) 400 seconds

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48) A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, one employee was observed performing this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the normal time (NT) for this task if the employee worked at a twenty-five percent faster pace than the average?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

49) A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, one employee was observed performing this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a twenty-five percent faster pace than the average and an allowance of twenty percent of job time is used?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

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50) A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, one employee was observed performing this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a twenty-five percent faster pace than the average and an allowance of twenty percent of the workday is used?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

51) A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, one employee was observed performing this task five times, with the following results: OBSERVATION

TIME (SECONDS)

How many observations should be made if the analyst wants to be 99.74 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of task times is 4 seconds.

A) 5 B) 6 C) 25 D) 36 E) 49

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52) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, the owner observed one of the employees perform this task six times, with the following results: OBSERVATION

TIME (SECONDS)

What is the observed time (OT) for this task?

A) 81 seconds B) 90 seconds C) 99 seconds D) 108 seconds E) 540 seconds

53) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, the owner observed one of the employees perform this task six times, with the following results: OBSERVATION

TIME (SECONDS)

What is the normal time (NT) for this task if the employee worked at a fifty percent faster pace than the average?

A) 45 seconds B) 60 seconds C) 90 seconds D) 135 seconds E) 180 seconds

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54) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, the owner observed one of the employees perform this task six times, with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a fifty percent faster pace than the average, and an allowance of twenty percent of job time is used?

A) 90 seconds B) 99 seconds C) 100 seconds D) 162 seconds E) 150 seconds

55) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, the owner observed one of the employees perform this task six times, with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a fifty percent faster pace than is average, and an allowance of ten percent of the workday is used?

A) 90 seconds B) 99 seconds C) 100 seconds D) 168.8 seconds E) 150 seconds

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56) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, the owner observed one of the employees perform this task six times, with the following results: OBSERVATION

TIME (SECONDS)

How many observations should be made if the owner wants to be 95.44 percent confident that the maximum error in the observed time is two seconds? The standard deviation of task times is 6 seconds.

A) 5 B) 6 C) 30 D) 36 E) 49

57) A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, one of the employees was observed to perform this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the observed time (OT) for this task?

A) 20 seconds B) 27 seconds C) 46 seconds D) 66 seconds E) 100 seconds

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58) A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, one of the employees was observed to perform this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the normal time (NT) for this task if the employee worked at a twenty percent faster pace than the average?

A) 16.7 seconds B) 20 seconds C) 24 seconds D) 25 seconds E) 100 seconds

59) A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, one of the employees was observed to perform this task five times, with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than the average, and an allowance of twenty percent of the workday is used?

A) 20 seconds B) 24 seconds C) 25 seconds D) 28.8 seconds E) 30 seconds

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60) A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, one of the employees was observed perform this task five times, with the following results OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than is average, and an allowance of twenty percent of job time is used?

A) 4.5 seconds B) 5 seconds C) 20 seconds D) 28.8 seconds E) 100 seconds

61) A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, one of the employees was observed perform this task five times, with the following results OBSERVATION

TIME (SECONDS)

How many observations should be made to be 95.44 percent confident that the maximum error in the observed time is one second? The standard deviation of task times is 5 seconds.

A) 5 B) 10 C) 25 D) 100 E) 121

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62) A Methods and Measurement Analyst wants to develop a time standard for a certain task. In a preliminary study, the employee was observed performing the task six times with an average of 20 seconds and a standard deviation of 2 seconds. What is the normal time (NT) for this task if the employee worked at a twenty percent faster pace than is average?

A) 4 seconds B) 16.7 seconds C) 20 seconds D) 24 seconds E) 100 seconds

63) A Methods and Measurement Analyst wants to develop a time standard for a certain task. In a preliminary study, the employee was observed performing the task six times with an average of 20 seconds and a standard deviation of 2 seconds. What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than is average, and an allowance of twenty-five percent of the workday is used?

A) 20 seconds B) 25 seconds C) 26.7 seconds D) 30 seconds E) 32 seconds

64) A Methods and Measurement Analyst wants to develop a time standard for a certain task. In a preliminary study, the employee was observed performing the task six times with an average of 20 seconds and a standard deviation of 2 seconds. What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than is average, and an allowance of twenty-five percent of job time is used?

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A) 20 seconds B) 25 seconds C) 26.7 seconds D) 30 seconds E) 32 seconds

65) A Methods and Measurement Analyst wants to develop a time standard for a certain task. In a preliminary study, the employee was observed performing the task six times with an average of 20 seconds and a standard deviation of 2 seconds. How many observations should be made to be 95.44 percent confident that the maximum error in the observed time is one second?

A) 3 B) 4 C) 13.3 D) 16 E) 25

66) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, one of the bartenders was observed to perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the normal time (NT) for this task if the bartender worked at a twenty percent faster pace than is average?

A) 75 seconds B) 90 seconds C) 108 seconds D) 110 seconds E) 112.5 seconds

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67) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, one of the bartenders was observed to perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the standard time (ST) for this task if the bartender worked at a twenty percent faster pace than is average, and an allowance of twenty percent of the workday is used?

A) 112.5 seconds B) 120 seconds C) 135 seconds D) 144 seconds E) 150 seconds

68) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, one of the bartenders was observed to perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the standard time (ST) for this task if the bartender worked at a twenty percent faster pace than is average, and an allowance of ten percent of job time is used?

A) 135 seconds B) 123.8 seconds C) 118.8 seconds D) 120 seconds E) 112.5 seconds

69) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, one of the bartenders was observed to perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. How many observations should be made if the owner wants to be 95.44 percent confident that the maximum error in the observed time is one second? Version 1

A) 64 B) 86 C) 100 D) 144 E) 169

70) A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, one of the employees was observed to perform this task six times with the following results: OBSERVATION

TIME (SECONDS)

What is the observed time (OT) for this task?

A) 34 seconds B) 40 seconds C) 46 seconds D) 48 seconds E) 240 seconds

71) A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, one of the employees was observed to perform this task six times with the following results: OBSERVATION

TIME (SECONDS)

What is the normal time (NT) for this task if the employee worked at a 20% faster pace than is average?

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A) 8 seconds B) 32 seconds C) 40 seconds D) 48 seconds E) 200 seconds

72) A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, one of the employees was observed to perform this task six times with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a 20% faster pace than is average and an allowance of 25% of the workday is used?

A) 40 seconds B) 50 seconds C) 53.3 seconds D) 60 seconds E) 64 seconds

73) A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, one of the employees was observed to perform this task six times with the following results: OBSERVATION

TIME (SECONDS)

What is the standard time (ST) for this task if the employee worked at a 20% faster pace than is average and an allowance of 25% of job time is used?

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A) 40 seconds B) 50 seconds C) 53.3 seconds D) 60 seconds E) 64 seconds

74) A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, one of the employees was observed to perform this task six times with the following results: OBSERVATION

TIME (SECONDS)

How many observations should be made to be 95.44 percent confident that the maximum error in the observed time is 0.5 second? Assume that the standard deviation of the task time is 4 seconds.

A) 155 B) 196 C) 212 D) 256 E) 315

75) The manager of Lawn and Garden Services would like to estimate the proportion of employees' times spent performing various gardening or lawn care activities. The manager has made 400 random observations of a typical worker, with the following results: ACTIVITY

NO. OF TIMES OBSERVED

Mowing

200

Trimming

Raking

Miscellaneous

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What is the most likely true proportion of time spent mowing?

A) 0.15 B) 0.25 C) 0.40 D) 0.50 E) 0.80

76) The manager of Lawn and Garden Services would like to estimate the proportion of employees' times spent performing various gardening or lawn care activities. The manager has made 400 random observations of a typical worker, with the following results: ACTIVITY

NO. OF TIMES OBSERVED

Mowing

200

Trimming

Raking

Miscellaneous

What is the probability that the true proportion of time spent mowing is exactly equal to the sample proportion?

A) 0.0 B) 0.1 C) 0.2 D) 0.5 E) 1.0

77) The manager of Lawn and Garden Services would like to estimate the proportion of employees' times spent performing various gardening or lawn care activities. The manager has made 400 random observations of a typical worker, with the following results: ACTIVITY

Version 1

NO. OF TIMES OBSERVED

Mowing

200

Trimming

Raking

Miscellaneous

How confident can the manager be that the true proportion of time spent mowing is between .45 and .55?

A) 90 percent B) 95 percent C) 95.44 percent D) 99 percent E) 99.7 percent

78) The manager of Lawn and Garden Services would like to estimate the proportion of employees' times spent performing various gardening or lawn care activities. The manager has made 400 random observations of a typical worker, with the following results: ACTIVITY

NO. OF TIMES OBSERVED

Mowing

200

Trimming

Raking

Miscellaneous

Between what limits can the manager be 68.26 percent confident the true proportion of time spent mowing is?

A) 0 and.683 B) .475 and .525 C) .45 and .55 D) .425 and .575 E) 4 and.6

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79) The manager of Lawn and Garden Services would like to estimate the proportion of employees' times spent performing various gardening or lawn care activities. The manager has made 400 random observations of a typical worker, with the following results: ACTIVITY

NO. OF TIMES OBSERVED

Mowing

200

Trimming

Raking

Miscellaneous

If the manager wants to be 95.44 percent confident that the true proportion of time spent mowing is within.02 (plus or minus) of the sample proportion, what should be the revised sample size?

A) 400 B) 1,000 C) 1,600 D) 2,000 E) 2,500

80)

Which of the following is NOT an effect of information technologies in the workplace?

A) Office work is paperless. B) Employee compensation is deposited directly into their bank accounts. C) Flexible work hours. D) Increasing use of accounting clerks to track transactions. E) Irregular work hours.

81)

What is the first step that should be completed when conducting a motion study?

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A) Determining the wage rate of the task. B) Breaking the task into motions. C) Determining the distance the worker travels in performing the task. D) Identifying tasks that can be accomplished through technology or mechanization. E) Arranging the workplace.

82) Work performance tends to be adversely affected if very narrow comfort band.

and

are outside a

A) compensation, benefits B) ventilation, work hours C) air temperature, humidity D) regulations, compensation E) illumination, vibration

83)

Which of the working conditions would noxious odours, smoke and dust fall under?

A) Illumination B) Temperature and humidity C) Government regulations D) Ventilation E) Safety

84) This component of working conditions can be annoying or distraction and lead to workplace errors and accidents.

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A) Work hours B) Noise and vibrations C) Temperature and humidity D) Illumination E) Ventilation

85) Which of the following would directly relate to increases in workplace noise and vibrations?

A) Increases in illumination so work is easier to see. B) Increases in worker performance and productivity. C) Decreased work breaks. D) Decreased work hours to allow workers to rest. E) Increases in errors and accidents.

86)

Implementing

can provide a sense of freedom and control.

A) flexible work hours B) work breaks C) ergonomics D) output based pay E) motion studies

87)

What term is used when two employees take joint responsibility for one full-time job?

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A) Work sharing B) Part-time C) Job sharing D) Full-time, part-time E) Flexi-time

88) Workers cannot be motivated if they feel like they are in physical danger. What component of working conditions does this relate to?

A) Ventilation B) Noise and vibrations C) Temperature and humidity D) Safety E) Ergonomics

89)

From an employer standpoint, why are employee accidents undesirable?

A) Fines and hiring costs B) Productivity and additional work breaks C) Cost and bad publicity D) Increases to flexible work hours and job sharing E) Publicity and perception.

90) What is the term for the scientific discipline concerned with understanding interactions among humans and other elements of a system?

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A) Safety B) Ergonomics C) System design D) Output-based system design E) Work measurement

91)

Which of the following is NOT included in the science of ergonomics?

A) Layout B) Mental workload C) Human-computer interaction D) Compensation E) Teamwork

92) Most workplace injuries related to ergonomics, are a direct result of which of the following?

A) The work was not designed properly. B) Lack of illumination. C) Insufficient work breaks. D) Excessive hours of work. E) The lack of specific government regulations.

93) Many organizations have begun to realize that the productivity of their employees directly relates to;

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A) levels of compensation. B) socio-economic issues. C) the ability to have flexible work schedules. D) governmental policies and procedures. E) their general health and well-being.

94)

Which of the following is NOT a "driver" of a healthy workplace?

A) Compensation B) Leadership C) Planning D) Worker involvement E) Process management

95) Which of the following is NOT included as an objective in a Psychological Health and Safety management system?

A) Identification of psychological hazards B) Control of risks that cannot be eliminated C) Elimination of psychological hazards D) Recognition and reward. E) Promotion of psychological health.

96)

Which of the following is NOT a typical use of time study data?

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A) Personnel planning. B) Duration of work breaks. C) Estimating labour costs. D) Assembly-line balancing. E) Designing performance-based compensation.

97)

What is the name of the form used to record the observations in a stopwatch time study?

A) Stopwatch record B) Work-study observation form C) Time-study observation sheet D) Observation count form E) Work-record observation form

98) What would typically happen if an abnormally short time was recorded when conducting a stopwatch time study?

A) It would be included in the study. B) It would be discarded. C) It would be factored by the performance rating. D) Inform the supervisor of the abnormality. E) Investigate the observation.

99) What would typically happen if an abnormally long time was recorded when conducting a stopwatch time study?

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A) Inform the supervisor of the abnormality. B) The task being observed would not be included in the study. C) Investigate the observation. D) It would be discarded. E) It would be included in the study.

100)

Skills/knowledge-based bonus pay has three dimensions which are;

A) horizontal skills, task skills, depth skills B) horizontal skills, vertical skills, knowledge skills C) knowledge skills, transferable skills, trained skills D) horizontal skills, vertical skills, depth skills E) transferable skills, vocational skills, depth skills5

101) A compensation plan which rewards workers who undergo training is an example of what type of bonus pay plan?

A) Performance based. B) Group bonus. C) Training based. D) Incentive based. E) Skills/knowledge based.

102)

These plans stress sharing profit and productivity gains with employees.

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A) Group bonus. B) Collective sharing. C) Output-based. D) E-based. E) Performance bonus based.

103) The increasing cost of employee health benefits is causing organizations to rethink overall compensation packages and place more emphasis on .

A) management B) incentive based plans. C) skills and knowledge. D) quality of work life. E) a combination of hourly and salary compensation.

104)

What is the length of time for one time measurement unit (TMU)?

A) 1/1,000 of an hour B) 0.056 seconds C) 0.036 seconds D) distance × weight E) dynamic factor × TMU

105) Based on using predetermined time standards the predetermined time for a task is 18.75 TMU's. How long does the task take?

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A) 3.2 minutes B) 1.875 seconds C) 0.313 seconds D) 8.7 minutes E) 0.675 seconds

106) Based on using predetermined time standards the predetermined time for a job is 47.6 TMU's. How long does the task take?

A) 22.04 seconds B) 1.71 seconds C) 1.26 seconds D) 0.79 minutes E) 1.33 minutes

107)

This is the final step in process design.

A) Job assignment B) Work/job design C) Element identification D) Task consolidation E) Compensation rate

108) According to the Human Performance System which factor does bonus, recognition and disciplinary action fall under?

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A) performance B) consequences C) feedback D) Task support E) Skills/knowledge

109) According to the Human Performance System which factor does physical strength and mental accuracy fall under?

A) Task support B) Performance specification C) Individual capacity D) Shills/knowledge E) consequences

110)

Specialized jobs are characterized by which traits?

A) Narrow scope B) Complex training requirements C) Low productivity D) High skill level E) Workers are easily motivated

111) In an ideal work environment what must be present for positive changes and organizational loyalty?

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A) High levels of compensation B) Required training C) responsibility D) trust E) authority

112)

This determines wages, benefits and security of jobs.

A) management B) Work/job design C) Job enrichment D) Horizontal loading E) Collective agreement

113) An effective way to deal with management of safety is to incorporate this into the company.

A) Discipline for safety offenders B) A safety management system C) ISO9001 D) Extended breaks and rest periods E) Job sharing

114) An analyst has observed 28 work cycles, for which the average cycle time was five minutes and the performance rating was 1.05. Allowances for the department are 25 percent of job time. What standard time is appropriate for this job?

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115) A time study of a job produced the following: average cycle time = 1.5 minutes, performance rating = 1.15. Allowances are 18 percent of the work day (480 minutes). Determine the standard time for this job.

116) What number of observations would be required in a time study in order to obtain a 95 percent confidence that the average time observed was no more than 0.6 minutes from the true mean, assuming a standard deviation of cycle time of 1.8 minutes?

117) An initial time study resulted in an average observed time of 2.2 minutes per cycle, and a standard deviation of 0.3 minutes per cycle. The performance rating was 1.20. What sample size, including the 20 observations in the initial study, would be necessary to have a confidence of 95.44 percent that the observed time was within 4 percent of the true value?

118) A work sampling study is needed that will estimate the percentage of time a postal clerk spends selling stamps as opposed to other duties. Determine the necessary sample size to estimate that proportion with a confidence of 99.74 percent to within 3 percent, for these cases: (i) No information is currently available concerning that proportion. (ii) The proportion is probably no more than 15 percent.

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119) A work sampling study of kitchen help is to be designed. The study will be conducted over a nine-day period. The kitchen help works a seven-hour shift. Determine the day, hour, and minute of the observations using the random digits listed below. Day:

Hour:

Minute:

Arrange observations chronologically.

120) A work sampling study of dockworkers must be set up. There will be a large number of random observations. However, for this exercise, determine an observation schedule (arranged chronologically). Assume workers are on the docks for eight hours a day, and that the study will be done over a 60-day period. Use the random digits listed below. Day:

Hour:

Minute:

121)

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OBSERVATION

TIME (SECONDS)

OBSERVATION

TIME (SECONDS)

What is the observed time for this task?

122)

If the person observed worked at a pace that is 80 percent of normal, what should be the normal time for this task?

123) OBSERVATION

TIME (SECONDS)

If the person observed worked at a pace that is 80 percent of normal, and if the appropriate allowance for this task is 25 percent of job time, what should be the standard time?

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124) OBSERVATION

TIME (SECONDS)

If the person observed worked at a pace that is 20 percent faster than average, what should be the normal time for this task?

125) OBSERVATION

TIME (SECONDS)

If the person observed worked at a pace that is 20 percent faster than average, and if the appropriate allowance for this task is 25 percent of the workday, what should be the standard time?

126) OBSERVATION

TIME (SECONDS)

How many observations would be needed to be 95.44% confident that the maximum error in the observed time is 1 second? Assume that the standard deviation of the task time is 2 seconds.

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127) OBSERVATION

TIME (SECONDS)

How many observations would be needed to be 99.74% confident that the maximum error is 5% of the observed time? Assume that the standard deviation of the task time is 2 seconds.

128) Given the following work sampling data, based upon 100 random observations of a particular worker: ACTIVITY

NO OF TIMES OBSERVED

Others

What is the estimated proportion of time this worker spends performing activity A? B? C?

129) Given the following work sampling data, based upon 100 random observations of a particular worker: ACTIVITY

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NO OF TIMES OBSERVED

Others

For a confidence level of 86.64%, what is the maximum error of the estimate for activity A? B? C?

130) Given the following work sampling data, based upon 100 random observations of a particular worker: ACTIVITY

NO OF TIMES OBSERVED

Others

For a confidence level of 95.44% and a maximum error of.04, what should be the sample size for estimating the proportion of time spent performing activity A? B? C?

131) Working conditions, such as noise and safety, are important aspects of work system design. ⊚ ⊚

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true false

132) The name Frederick Winslow Taylor is associated with the scientific management approach to work/job design. ⊚ ⊚

133)

true false

The primary objective of work/job design is to improve efficiency. ⊚ ⊚

true false

134) Specialization is a primary point of disagreement between the efficiency and behavioural approaches to job design. ⊚ ⊚

true false

135) Job enlargement involves an increase in the level of employee responsibility for planning and coordinating tasks. ⊚ ⊚

true false

136) Job enlargement represents vertical loading of a job, increasing the level of skills and responsibilities associated with the original job. ⊚ ⊚

true false

137) Job enrichment involves giving a worker a greater share of the total task, which is sometimes referred to as horizontal loading.

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⊚ ⊚

true false

138) Job enrichment involves an increase in the level of employee responsibility for planning, execution, and control of a job. ⊚ ⊚

true false

139) The focus of the efficiency approach to work/job design is to improve quality of work life and employee empowerment. ⊚ ⊚

true false

140) "Self-directed teams" are allowed to make changes in the work processes under their control. ⊚ ⊚

true false

141) "Self-directed teams" are formed to give them broad authority to make decisions concerning all issues in the organization that have an impact on their work unit. ⊚ ⊚

true false

142) Potential benefits of "self-directed teams" include higher productivity and greater worker satisfaction. ⊚ ⊚

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true false

143) The role of labour unions typically does not involve issues of work/job design, focusing instead on compensation issues. ⊚ ⊚

144)

Methods analysis focuses on how a job can be made more efficient. ⊚ ⊚

145)

true false

Methods analysis cannot be done for jobs that do not yet exist. ⊚ ⊚

146)

true false

Flow process charts can be useful for analyzing and improving methods. ⊚ ⊚

true false

147) A worker-machine process chart is helpful to visualize portions of a work cycle during which an operator and equipment are busy or idle. ⊚ ⊚

148)

true false

Methods analysis techniques do not directly consider behavioural aspects of jobs.

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⊚ ⊚

true false

149) A worker-machine chart can be used to determine how many machines an operator can manage. ⊚ ⊚

true false

150) Frank and Lillian Gilbreth's primary contribution to the design of work systems involved the development of motion study techniques. ⊚ ⊚

151)

Task specialization is one of the three categories of motion economy principles. ⊚ ⊚

152)

true false

Slow motion studies are useful for training workers as well as athletes. ⊚ ⊚

true false

153) The establishment of a Workplace Hazardous Materials Information System (WHMIS) gives workers the right to refuse dangerous work. ⊚ ⊚

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true false

154)

More strenuous work typically leads to a wider comfort band for temperature. ⊚ ⊚

155)

true false

Efficiency generally declines after a work break. ⊚ ⊚

true false

156) The Canadian Labour Code focuses on laws concerning wages and the right to form unions, not the safety and welfare of workers. ⊚ ⊚

true false

157) Ergonomics is important for preventing common workplace injuries such as back injuries and repetitive motion injuries. ⊚ ⊚

158)

true false

Work measurement concentrates on how long it takes to complete a job. ⊚ ⊚

true false

159) Standard times are determined by taking the average time one worker takes to complete the same task many times.

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⊚ ⊚

true false

160) For purposes of obtaining good time standards using a stopwatch time study, the analyst should try to avoid having the worker discover that they are being observed. ⊚ ⊚

true false

161) One factor in determining how many cycles to time in a stopwatch time study is the variability of observed times. ⊚ ⊚

true false

162) The normal time in stopwatch time study is obtained by multiplying the observed time by the performance rating. ⊚ ⊚

true false

163) A performance rating of less than 1.00 means that the observed worker was judged to be working faster than the normal rate. ⊚ ⊚

true false

164) A performance rating of greater than 1.00 means that the observed worker was judged to be working faster than the normal rate. ⊚ ⊚

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true false

165) The normal time for a job is multiplied by the performance rating to obtain the standard time for the job. ⊚ ⊚

true false

166) The standard time for a job is determined based on the observed time, a performance rating, and an allowance factor. ⊚ ⊚

true false

167) The standard time for a job can be obtained by multiplying the normal time by an appropriate allowance factor. ⊚ ⊚

168) files.

Predetermined time standards are based on historical data from individual company's

⊚ ⊚

169)

true false

Predetermined time standards involve the use of published data. ⊚ ⊚

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true false

170)

Tables of predetermined time standards make work measurement studies straightforward. ⊚ ⊚

true false

171) Methods-time measurement (MTM) requires analysts to collect multiple observations of the times to complete every basic motion in a job task. ⊚ ⊚

172)

true false

Work sampling involves the use of some method of randomizing the observations. ⊚ ⊚

true false

173) An advantage of work sampling, compared to a stopwatch time study is that, the observations can be spread out over a period of time in work sampling. ⊚ ⊚

true false

174) A work sampling study does not involve measuring the amount of time to complete different categories of work activities. ⊚ ⊚

true false

175) Work sampling provides a detailed elemental breakdown of a task for purposes of establishing reliable time standards.

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⊚ ⊚

true false

176) Time-based pay compensates employees according to the combination of the time the employee has worked and the amount of output they produce. ⊚ ⊚

true false

177) Output-based pay compensates employees according to the amount of output they produce during a pay period, thereby tying pay directly to performance. ⊚ ⊚

true false

178) Output-based compensation approaches are more widely used by factories than are timebased approaches. ⊚ ⊚

179)

Piece rate pays are a common type of time-based compensation approach. ⊚ ⊚

180)

true false

Although quality may be considered in compensation, quantity is always more important. ⊚ ⊚

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true false

181) A pay system that rewards workers who undergo training to increase their skills is called a "skill/knowledge based plan". ⊚ ⊚

true false

182) "Gain sharing" and "profit sharing" are equivalent types of bonus/incentive plans that focus exclusively on individual output. ⊚ ⊚

true false

183) Minimum wage legislation makes piece-rate compensation plans somewhat challenging to implement. ⊚ ⊚

true false

184) Information and communication technologies (ICTs) have had a significant effect on all aspects of work/job design and how work is accomplished. ⊚ ⊚

true false

185) Many organizations have begun to realize that the productivity of their employees does not necessarily depend on their general health and well-being. ⊚ ⊚

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true false

186) Non-unionized organizations typically have higher wages due to lower administration costs. ⊚ ⊚

true false

187) Information and communication technologies have contributed to both flexible and irregular work hours. ⊚ ⊚

188)

Motion study is the systematic study of the human and work interface. ⊚ ⊚

189)

true false

Ventilation is not one of the factors to consider when evaluating working conditions. ⊚ ⊚

true false

190) Because illumination is inexpensive it is desirable to have high levels of illumination in all areas. ⊚ ⊚

191)

true false

Research has shown that unmet human needs can result in psychological distress.

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⊚ ⊚

192)

true false

Executive pay in many companies is being tied to performance rather than position. ⊚ ⊚

true false

193) Many organizations are moving from a service and quality based compensation structure for managers to a more easily managed system based on output. ⊚ ⊚

true false

194) Recent trends in compensation systems are seeing a move toward variable pay based on performance. ⊚ ⊚

195)

The standard time for many tasks may be slightly inaccurate. ⊚ ⊚

196)

true false

Employee share purchase plans are a form of group bonus plans. ⊚ ⊚

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true false

197)

Minor changes in the nature of a job do not justify restudying the task. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 07_7ce 1) D 2) D 3) E 4) D 5) A 6) A 7) D 8) C 9) D 10) C 11) D 12) A 13) B 14) B 15) C 16) B 17) B 18) D 19) B 20) C 21) E 22) C 23) A 24) D 25) A 26) B Version 1

27) D 28) D 29) C 30) B 31) B 32) B 33) B 34) E 35) B 36) C 37) E 38) C 39) B 40) E 41) D 42) A 43) D 44) D 45) B 46) D 47) A 48) C 49) D 50) E 51) D 52) B 53) D 54) D 55) E 56) D Version 1

57) A 58) C 59) E 60) D 61) D 62) D 63) E 64) D 65) D 66) C 67) C 68) C 69) C 70) B 71) D 72) E 73) D 74) D 75) D 76) A 77) C 78) B 79) E 80) D 81) B 82) C 83) D 84) B 85) E 86) A Version 1

87) C 88) D 89) C 90) B 91) D 92) A 93) E 94) A 95) D 96) B 97) C 98) B 99) C 100) D 101) E 102) A 103) D 104) C 105) E 106) B 107) B 108) B 109) C 110) A 111) D 112) E 113) B 131) TRUE 132) TRUE 133) FALSE Version 1

134) TRUE 135) FALSE 136) FALSE 137) FALSE 138) TRUE 139) FALSE 140) TRUE 141) FALSE 142) TRUE 143) FALSE 144) TRUE 145) FALSE 146) TRUE 147) TRUE 148) TRUE 149) TRUE 150) TRUE 151) FALSE 152) TRUE 153) FALSE 154) FALSE 155) FALSE 156) FALSE 157) TRUE 158) TRUE 159) FALSE 160) FALSE 161) TRUE 162) TRUE 163) FALSE Version 1

164) TRUE 165) FALSE 166) TRUE 167) TRUE 168) FALSE 169) TRUE 170) FALSE 171) FALSE 172) TRUE 173) TRUE 174) TRUE 175) FALSE 176) FALSE 177) TRUE 178) FALSE 179) FALSE 180) FALSE 181) TRUE 182) FALSE 183) TRUE 184) TRUE 185) FALSE 186) FALSE 187) TRUE 188) TRUE 189) FALSE 190) FALSE 191) TRUE 192) TRUE 193) FALSE Version 1

194) TRUE 195) TRUE 196) TRUE 197) TRUE

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Chapter 8S The Transportation Model 1)

Which of the following information is not needed to use the transportation model?

A) Capacity of the sources B) Demand of the destinations C) Unit shipping costs D) Unit shipping distances E) Supply quantity per period

2) from

The Transportation Problem involves finding the lowest-cost plan for distributing goods to .

A) single source, single destinations B) single source, multiple destinations C) multiple source, single destinations D) one supply chain, another supply chain E) multiple sources, multiple destinations

The transportation model method for evaluating location alternatives minimizes:

A) the number of sources. B) the number of destinations. C) the number of alternatives. D) the total demand. E) the total distribution cost.

4) The transportation model can be used to determine how to allocate the supplies available from the to the in such a way that total transportation cost is minimized.

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A) supplier, customer B) supplier, warehouses C) factories, warehouses D) manufacturer, supplier E) customer, end user

Which of the following is not an assumption of the transportation model?

A) Actual supply and demand must be equal. B) Shipping costs per unit are constant. C) Items to be shipped are homogeneous. D) There is one transportation route between each source and destination. E) There is one transportation mode between each source and destination.

6) An automobile manufacturer who has eight assembly plants and thousands of dealers throughout Canada can find the optimal distribution plan by using:

A) linear programming model. B) transportation model. C) location model. D) linear programming model and transportation model. E) delivery algorithms.

7) To formulate a transshipment problem as a linear program similar to the transportation problem, transshipment points must:

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A) equate the total input into each of them to the total output from them. B) equate (balance) total cost of shipping to each of them to the total cost of shipping output from them. C) ensure total input to all of them is less than the total supply available. D) ensure total input to all of them is sufficient for the total demand of destinations. E) balance shipments so that each transshipment point receives and ships an equal quantity.

8) When there are multiple units of a resource that are slightly different in terms of capability and jobs requiring one unit of the resource, the assignment problem of units to jobs can be done by the transportation method. The only change is to use for each demand and supply quantity.

A) 0 B) 1 C) 2 D) 3 E) 4

9) A transshipment problem is a special type of transportation problem with major distribution centres that in turn to smaller market destinations

A) sell B) allocate C) assign D) redistribute E) Find the lowest cost route

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10) A campaign manager for a political candidate must arrange the shipment of 150 cartons of campaign buttons from three button producers to three campaign headquarters. The supplies and demands, and the per-carton transportation costs, are shown below: DESTINATION CAMPAIGN HEADQUARTERS 1

Supply

SOURCE:

BUTTON

PRODUCERS

Demand:

Which of the following is an objective function for the problem?

A) Min 50X11 + 50X12 + 50X13 + 20X31 + 70X32 + 60X33 B) Min 2X11 + 5X12 + 6X13 + 9X21 + 3X22 + 7X23 + X31 + 8X32 + 4X33 C) Max 2X11 + 5X12 + 6X13 + 9X21 + 3X22 + 7X23 + X31 + 8X32 + 4X33 D) Max 20X11 + 70X12 + 60X13 + 50X31 + 50X32 + 50X33

11) A campaign manager for a political candidate must arrange the shipment of 150 cartons of campaign buttons from three button producers to three campaign headquarters. The supplies and demands, and the per-carton transportation costs, are shown below: DESTINATION CAMPAIGN HEADQUARTERS 1

Supply

SOURCE:

BUTTON

PRODUCERS

Demand:

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Which of the following is a constraint for the suppliers (button producers)?

A) 2X11 + 5X12 + 6X13 ≤ 50 B) 9X11 + 3X12 + 7X13 = 50 C) X11 + X12 + X13 ≤ 50 D) X11 + X21 + X31 = 20

12) A campaign manager for a political candidate must arrange the shipment of 150 cartons of campaign buttons from three button producers to three campaign headquarters. The supplies and demands, and the per-carton transportation costs, are shown below: DESTINATION CAMPAIGN HEADQUARTERS 1

Supply

SOURCE:

BUTTON

PRODUCERS

Demand:

Which of the following is a constraint for the customer (campaign headquarters)?

A) 2X11 + 9X21 + X31 = 20 B) 5X12 + 3X22 + 8X32 = 70 C) X11 + X12 + X13 = 50 D) X12 + X22 + X32 = 70

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13) A campaign manager for a political candidate must arrange the shipment of 150 cartons of campaign buttons from three button producers to three campaign headquarters. The supplies and demands, and the per-carton transportation costs, are shown below: DESTINATION CAMPAIGN HEADQUARTERS 1

Supply

SOURCE:

BUTTON

PRODUCERS

Demand:

What is the optimal cost?

A) $440 B) $470 C) $520 D) $550 E) $590

14) A campaign manager for a political candidate must arrange the shipment of 240 cartons of campaign buttons from three button producers to three campaign headquarters. The supplies and demands, and the per-carton transportation costs, are shown below: DESTINATION CAMPAIGN HEADQUARTERS 1

Supply

SOURCE:

BUTTON

PRODUCERS

120

Demand:

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What is the optimal cost?

A) $980 B) $1,160 C) $1,230 D) $1,270 E) $1,300

15)

Which of the following would NOT be a use of the transportation model?

A) Aggregate planning B) Assignment of resources to jobs C) Transshipment problems D) Location decisions E) Productivity analysis

16) A track coach needs to determine who will run which part of a four stage relay race. The times for each runner through each stage are below. Time in each stage 1

Supply

Runner A

39.3

44.1

36.1

32.1

Runner B

34.1

35.2

29.2

27.1

Runner C

35.1

44.5

40.5

31.9

Runner D

38.1

35.7

31.1

29.4

Runner E

35.6

34.6

32.4

Demand:

Which runner should be assigned to run stage 2?

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A) Runner A B) Runner B C) Runner C D) Runner D E) Runner E

17) A track coach needs to determine who will run which part of a four stage relay race. The times for each runner through each stage are below. Time in each stage 1

Supply

Runner A

39.3

44.1

36.1

32.1

Runner B

34.1

35.2

29.2

27.1

Runner C

35.1

44.5

40.5

31.9

Runner D

38.1

35.7

31.1

29.4

Runner E

35.6

34.6

32.4

Demand:

Which runner would not be selected to run?

A) Runner A B) Runner B C) Runner C D) Runner D E) Runner E

18) If production costs per location differ, what would need to be added to the unit transportation cost for each location?

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A) Total cost B) Unit production cost C) Transportation cost × units produced D) Per unit transportation cost E) Total cost / units produced

19)

The transportation model assumes homogeneous goods. ⊚ ⊚

true false

20) The transportation model assumes transportation cost per unit is the same regardless of the number of units shipped. ⊚ ⊚

21)

true false

The transportation model can be used for capacity planning. ⊚ ⊚

true false

22) The transportation model assumes one mode of transport between each origin and destination. ⊚ ⊚

23)

true false

The transportation model is a special type of linear programming model.

Version 1

⊚ ⊚

24)

true false

The decision variables for a transportation model are the quantities to be shipped. ⊚ ⊚

true false

25) Uses of the transportation model lend themselves to aggregate operations planning but not to location decisions. ⊚ ⊚

26)

true false

The transportation method could be used to determine the order of runners in a relay race. ⊚ ⊚

true false

27) The assignment problem method applies when resources have different capability and jobs require multiple units of the resource. ⊚ ⊚

true false

28) The transportation model can be used to compare location alternatives in terms of their impact on total distribution cost. ⊚ ⊚

Version 1

true false

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Answer Key Test name: Chap 08S_7ce 1) D 2) E 3) E 4) C 5) A 6) D 7) A 8) B 9) D 10) B 11) C 12) D 13) D 14) B 15) E 16) D 17) E 18) B 19) TRUE 20) TRUE 21) TRUE 22) TRUE 23) TRUE 24) TRUE 25) TRUE 26) TRUE Version 1

27) FALSE 28) TRUE

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Chapter 8: Location Planning and Analysis 1)

Location decisions are a highly important part of production system design because:

A) typically, they are made rather frequently B) they impact operating costs C) they entail a high-cost, short-term commitment D) mistakes can be easily overcome E) they are usually based on one single factor

Which of the following is NOT a basic step in the location decision process?

A) Identify important search parameters and factors B) Gather information on appropriate sites C) Visit short-listed sites D) Evaluate the alternatives and make a selection E) Evaluate access to available technology.

3) Which statement is NOT associated with the basic steps in the location decision process?

A) Eliminate some sites to develop a short list of three or four sites. B) Identify important search parameters and factors. C) Maximize the number of sites considered. D) Visit short-listed sites. E) Gather information on appropriate sites.

Which of the following is NOT an accurate statement concerning location decisions?

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A) Location decisions are influenced by the availability of labour. B) The starting point for location decision process is developing a list of potential locations. C) Location decisions generally involve long-term commitments. D) Visiting a number of potential sites is typically part of the location decision process. E) An organization's position in the supply chain influences location decisions.

5) Which of the following statements concerning location analysis best typifies the situation for most location decisions?

A) Regional and country level factors are more important than local community factors. B) Local community factors are more important than regional and country level factors. C) Availability of raw materials tends to be the dominant factor. D) Labour costs tend to emerge as the dominant factor. E) One or more factors stated can dominate the decision.

6) In location planning, the location of raw materials, the location of markets and labour factors are considered:

A) regional factors. B) community factors. C) site-related factors. D) the basis of negotiating government subsidies. E) Break-even components.

7) Which of the following is LEAST likely to be a country (national) factor in location decisions?

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A) Location of raw materials B) Markets C) Government subsidies D) Zoning/regulations E) Labour factors

8) is:

A factor that has caused problems for Canadian companies operating in foreign countries

A) tax laws. B) raw materials. C) corruption. D) labour cost. E) lack of markets.

9) Which of the following is NOT categorized as a community/site-related consideration in location planning?

A) Labour laws B) Recreation facilities C) Education facilities D) Transportation systems E) Medical facilities

10)

In location planning, land and building costs are considered:

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A) regional factors. B) community/site-related factors. C) raw material considerations. D) regional/country factors. E) community

11) Which of the following are Community/Site-Related Considerations in location decisions?

A) Location of raw materials. B) Labour laws. C) Room for expansion D) location of markets E) Labour productivity

12) Which of the following is NOT considered a reason for foreign firms to locate in Canada?

A) Decreased delivery time to Canadian customers B) Access to Canadian natural resources C) Canadian workers are well educated D) Political stability E) Lack of government involvement in location decisions

13) The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is:

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A) break-even analysis. B) transportation method. C) factor rating analysis. D) linear regression. E) a Voronoi polygon.

14) The method for evaluating location alternatives based on comparing composite (weighted-average) scores of both quantitative and qualitative criteria is:

A) break-even analysis. B) transportation method. C) factor rating analysis. D) linear regression. E) a Voronoi polygon.

15) An approach to locational analysis that includes both qualitative and quantitative considerations is:

A) break-even analysis. B) factor rating. C) transportation method. D) expected value. E) a Voronoi polygon.

16)

Which of the following is NOT a Regional/Country labour factor in location decisions?

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A) Availability of workers B) Wage rates C) Labour productivity D) Attitudes toward work E) Local infrastructure

17) What is the computer-based tool used for collecting, storing, retrieving, and displaying location-dependent demographic data on maps?

A) Centre of Gravity method B) Break-Even C) Geographic information system D) Factor Rating E) Location Analysis software

18) What is the primary reason a retailer would want to gather data utilizing GIS information?

A) To plan delivery routes and schedules B) To attract advertisers C) To map out local businesses D) To link customers with location E) To balance supply and demand

19) A location analysis has been narrowed down to two locations, A and B. The main factors in the decision will be supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labour cost, which has a weight of .10. The ratings for raw materials, transportation, and labour are for A-60, 80, and 70, respectively; for B-70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:

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A) B) C) D)

20)

be indifferent between these locations. choose location A. choose location B. reject both locations.

The method for determining location alternatives which minimizes distribution costs is:

A) break-even analysis. B) transportation method. C) factor rating analysis. D) linear regression. E) centre of gravity method.

21) Phi Upsilon Nu, a student social organization, has two different locations under consideration for constructing a new chapter house. PhUN's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: ANNUAL OPERATING COSTS LOCATION

FIXED

VARIABLE

Alpha Avenue

$10,000

$300 per person

Beta Blvd.

$16,000

$200 per person

What would be total annual costs for the Alpha Ave. location with 20 persons living there?

A) $4,000 B) $10,000 C) $16,000 D) $20,000 E) $26,000

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22) Phi Upsilon Nu, a student social organization, has two different locations under consideration for constructing a new chapter house. PhUN's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: ANNUAL OPERATING COSTS LOCATION

FIXED

VARIABLE

Alpha Avenue

$10,000

$300 per person

Beta Blvd.

$16,000

$200 per person

What would be total annual costs for either location at the point of indifference?

A) $26,000 B) $28,000 C) $30,000 D) $32,000 E) $34,000

23) Phi Upsilon Nu, a student social organization, has two different locations under consideration for constructing a new chapter house. PhUN's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: ANNUAL OPERATING COSTS LOCATION

FIXED

VARIABLE

Alpha Avenue

$10,000

$300 per person

Beta Blvd.

$16,000

$200 per person

If it is estimated that thirty persons will be living in this new chapter house, which location should PhUN select?

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A) B) C) D)

Alpha Ave. Beta Blvd. Either Alpha Ave. or Beta Blvd. Neither Alpha Ave. nor Beta Blvd.

24) Phi Upsilon Nu, a student social organization, has two different locations under consideration for constructing a new chapter house. PhUN's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: ANNUAL OPERATING COSTS LOCATION

FIXED

VARIABLE

Alpha Avenue

$10,000

$300 per person

Beta Blvd.

$16,000

$200 per person

How many people would be living in the new chapter house at the point of indifference?

A) 20 B) 30 C) 40 D) 50 E) 60

25) A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location

Fixed Costs

Variable Costs

Atlanta

$80,000/yr

$20/unit

Phoenix

$140,000/yr

$16/unit

At what annual output would the company be indifferent between the two locations?

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A) 60,000 units B) 15,000 units C) 10,000 units D) 20,000 units E) 4,000 units

26) A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location

Fixed Costs

Variable Costs

Atlanta

$80,000/yr

$20/unit

Phoenix

$140,000/yr

$16/unit

What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?

A) $280,000 B) $140,000 C) $220,000 D) $300,000 E) $156,000

27) A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location

Fixed Costs

Variable Costs

Atlanta

$80,000/yr

$20/unit

Phoenix

$140,000/yr

$16/unit

What would be the total annual costs at the point of indifference?

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A) $300,000 B) $240,000 C) $380,000 D) $220,000 E) $760,000

28) A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location

Fixed Costs

Variable Costs

Atlanta

$80,000/yr

$20/unit

Phoenix

$140,000/yr

$16/unit

If annual demand is estimated to be 20,000 units, which location should the company select?

A) B) C) D)

Atlanta. Phoenix Either Atlanta or Phoenix. Neither Atlanta nor Phoenix.

29) A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location

Fixed Costs

Variable Costs

Atlanta

$80,000/yr

$20/unit

Phoenix

$140,000/yr

$16/unit

If the annual demand is 20,000 units, what would be the cost advantage of the better location?

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A) $20,000 B) $460,000 C) $480,000 D) $80,000 E) $60,000

30) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: LOCATION FACTOR

Weight

Labour Cost

0.3

Transportation Cost

0.25

Market Access

0.20

Raw Material Access

0.20

Utility Cost

0.05

What is the composite score for location A?

A) 69 B) 72 C) 75 D) 79 E) 82

31) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: LOCATION

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FACTOR

Weight

Labour Cost

0.3

Transportation Cost

0.25

Market Access

0.20

Raw Material Access

0.20

Utility Cost

0.05

What is the composite score for location B?

A) 69 B) 72 C) 75 D) 79 E) 82

32) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: LOCATION FACTOR

Weight

Labour Cost

0.3

Transportation Cost

0.25

Market Access

0.20

Raw Material Access

0.20

Utility Cost

0.05

What is the composite score for location C?

A) 69 B) 72 C) 75 D) 79 E) 82

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33) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: LOCATION FACTOR

Weight

Labour Cost

0.3

Transportation Cost

0.25

Market Access

0.20

Raw Material Access

0.20

Utility Cost

0.05

If the selection criterion is the greatest composite score, management should:

A) choose location A. B) choose location B. C) choose location C. D) be indifferent between B and C. E) reject all locations.

34) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: LOCATION FACTOR

Weight

Labour Cost

0.3

Transportation Cost

0.25

Market Access

0.20

Raw Material Access

0.20

Utility Cost

0.05

If the selection criterion is the greatest composite score exceeding 70, management should:

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A) reject location A. B) reject location B. C) reject location C. D) be indifferent between locations B and C. E) reject all locations.

35) A clothing manufacturer produces clothing in five locations in the U.S. In a move to vertical integration, the company is planning a new fabric production plant which will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows: Location

(X, Y)

7,2

4,7

5,5

6,2

8,4

If the shipments of fabric to each plant are equal, what is the optimal location for the fabric plant?

A) 5, 5 B) 6, 4 C) 4, 6 D) 6, 2 E) 5, 4

36) A clothing manufacturer produces clothing in five locations in the U.S. In a move to vertical integration, the company is planning a new fabric production plant which will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows:

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Location

(X, Y)

7,2

4,7

5,5

6,2

8,4

Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units. What is the optimal location for the fabric plant?

A) 6.2, 3.0 B) 6.0, 4.0 C) 6.5, 5.3 D) 5.6, 4.4 E) 5.0, 3.0

37) A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution centre to serve this warehouse network. Location

(X, Y)

2,3

3,7

5,5

7,3

8,7

If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution centre?

A) 5,5 B) 5,4 C) 4,5 D) 5,6 E) 6,5

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38) A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution centre to serve this warehouse network. Location

(X, Y)

2,3

3,7

5,5

7,3

8,7

Weekly shipments to each warehouse will be: WH1, 100; WH2, 150; WH3, 120; WH4, 150; and WH5, 120. What is the optimal location of the distribution centre?

A) 5.1, 4.2 B) 5.2, 4.0 C) 5.1, 5.1 D) 4.2, 5.1 E) 4.9, 5.2

39)

Which of the following would be a labour consideration in location decisions?

A) Worker attitudes toward absenteeism. B) Tax rates. C) Level of corruption. D) Stability of government. E) Proximity to markets.

40)

Which of the following is NOT a labour consideration in location decisions?

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A) Wage rates. B) Business tax rates. C) Labour productivity. D) Unemployment rates. E) Worker attitude.

41) Which of the following is NOT categorized as a foreign location related consideration in location planning?

A) Natural resources. B) Market expansion. C) Wage rates. D) Worker proximity to place of work. E) Level of skill in workforce.

42) Which of the following is NOT categorized as a service and retail location related consideration in location planning?

A) Proximity to raw materials. B) Customer access. C) Traffic volume. D) Proximity to other retailers. E) Good transportation and or parking facilities.

43)

What term is used when businesses choose to locate near similar businesses?

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A) bunching B) grouping C) maximizing D) Proximity2 E) clustering

44) According to a recent study, Canada is one of the cheapest of countries in which to operate a plant.

major industrialized

A) six B) seven C) nine D) eleven E) fourteen

45)

According to country competitiveness rankings, Canada ranks

in the world.

A) eighth B) tenth C) eleventh D) fourteenth E) sixteenth

46)

Which of the following is NOT a method used to evaluate location alternatives?

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A) Break-even analysis B) Geographic information system. C) Transportation method D) Factor rating E) Centre of gravity.

47) This is an integrated computer-based model used for collecting, storing, retrieving and displaying location-dependent data.

A) Geographic information system. B) Market analysis software. C) Factor rating system. D) Modelling/optimization software. E) Linear/mixed integer programs.

48)

Retailers use GISs to develop

and for

A) resources, provision of adequate coverage where needed B) supply lines, balancing demand. C) population distribution, identification of potential buyers D) delivery routes, delivery schedules E) marketing strategies, customer mapping

49)

Companies such as banks and fast-food chains view location as part what strategy?

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A) sales B) growth C) distribution D) marketing E) demographic

50)

The way an organization approaches location decisions depends on its size and:

A) financial resources. B) the nature and scope of its operations. C) available technologies. D) time available to make the decision. E) cost to relocate.

51) Determine the centre of gravity location for the destinations and shipping quantities shown below: Destination

(x,y)

Quantity

3,5

600

5,1

400

6,7

300

8,4

500

52) Determine the optimum location for a distribution centre to serve the following locations. Shipments to each location will be approximately equal.

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Location

(x,y)

2,2

5,6

6,3

7,5

53) A manager must decide between two location alternatives, Montreal and Toronto. Montreal would have annual fixed costs of $80,000, transportation costs of $80 per unit, and labour and material costs of $70 per unit. Toronto would have annual fixed costs of $150,000, transportation costs of $20 per unit, and labour and material costs of $80 per unit. Revenue will be $250 per unit. (i) Which alternative would yield the higher profit for an annual demand of 2,000 units? (ii) At what volume (quantity) would the manager be indifferent in terms of which of the two locations were chosen? What would the profit be at that volume?

54) A firm is trying to decide between two location alternatives, A and B. A would result in annual fixed costs of $60,000, labour costs of $7 per unit, material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit of $50. Location B would have annual fixed costs of $80,000, labour costs of $6 per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48. (i) At an annual volume of 9,000, which would yield the higher profit? (ii) At what annual volume would management be indifferent between the two alternatives in terms of annual profits?

55)

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SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

What are total costs for site A for a quantity of 5,000 units per year?

56) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

What are total costs for site B for a quantity of 5,000 units per year?

57) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

What are total costs for site C for a quantity of 5,000 units per year?

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58) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For what quantity would you be indifferent between selecting site A or site B?

59) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For what quantity would you be indifferent between selecting site B or site C?

60) SITE

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FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For what range of output would you prefer site A?

61) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For what range of output would you prefer site B?

62) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For what range of output would you prefer site C?

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63) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

Which site would you prefer for a quantity of 20,000 units per year?

64) SITE

FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For the preferred site for 20,000 units per year, what would be your total costs?

65) SITE

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FIXED COST

VARIABLE COST

$100,000 per year

$10 per unit

120,000 per year

8 per unit

150,000 per year

7 per unit

For the preferred site for 20,000 units per year, what would be your cost savings compared to each of the other two sites?

66) Given, the information below on scores of three location alternatives, which alternative would you recommend? Why? Location Factor

Wt.

Raw materials

Market

Transportation cost

Labour cost

Construction cost

67) Location decisions are basically one-time decisions that only pertain to newly formed organizations. ⊚ ⊚

true false

68) The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are NOT overly important.

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⊚ ⊚

69)

true false

New or small organizations often adopt an informal approach to location decisions. ⊚ ⊚

true false

70) One of the factors affecting location decisions is the company's position in the supply chain. ⊚ ⊚

true false

71) The first step in the location decision process is to determine a short list of approximately 3 or 4 potential sites. ⊚ ⊚

true false

72) For manufacturing firms, two dominating factors in location analysis are abundance of energy and proximity to raw materials. ⊚ ⊚

true false

73) For service organizations, the dominant factor in location analysis is usually marketrelated. ⊚ ⊚

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true false

74) Large national and international retailers such as Walmart, Sears, and Future Shop typically avoid locating in the same area as their competitors when opening a new store in a particular city. ⊚ ⊚

75)

true false

For agricultural companies, locating close to raw materials is typically a necessity. ⊚ ⊚

true false

76) Since they can almost always be secured, government subsidies are NOT a significant factor in location decisions. ⊚ ⊚

true false

77) Corruption in foreign locations can generally be viewed as an advantage in attracting companies to Canada. ⊚ ⊚

78)

true false

In site selection, land costs may be secondary to other factors. ⊚ ⊚

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true false

79)

Locating near customers is a primary factor for web-based businesses. ⊚ ⊚

80)

Taxes are an example of a regional/country-related factor in location decisions. ⊚ ⊚

81)

true false

For service and retail stores, a prime factor in location analysis is customer access. ⊚ ⊚

true false

82) Relative to manufacturing firms, location decisions for service businesses tend to be focused on revenue potential rather than being cost focused. ⊚ ⊚

83)

true false

Factor rating is limited to quantitative information concerning location decisions. ⊚ ⊚

true false

84) As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives under consideration when the composite scores of all the alternatives are below the minimum threshold value. ⊚ ⊚

Version 1

true false

85) The centre of gravity method is a location planning technique that determines a composite score from factor evaluation. ⊚ ⊚

true false

86) The factor rating method of location planning uses a coordinate overlay to determine relative locations. ⊚ ⊚

true false

87) The centre of gravity method is useful in location planning for the location of a distribution centre. ⊚ ⊚

true false

88) The centre of gravity method of location planning can only be used when the quantities to be shipped to each location are equal. ⊚ ⊚

true false

89) Companies locate near or at the source of their raw materials for three primary reasons: necessity, perishability, and transportation costs. ⊚ ⊚

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true false

90) A trend in location strategies is the possibility that the future will see larger factories located in central locations. ⊚ ⊚

true false

91) The Centre of Gravity Method is a computer-based tool for collecting, storing, retrieving, and displaying location-dependent demographic data on maps. ⊚ ⊚

true false

92) Labour considerations in location decisions can be related to population levels and unemployment rates. ⊚ ⊚

93)

One reason that foreign companies locate in Canada is to reduce costs to markets. ⊚ ⊚

94)

true false

Transportation costs are not of primary concern when determining location. ⊚ ⊚

95)

true false

A choice of location might result in a shortage of required employee skill levels.

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⊚ ⊚

96)

Often only one or two factors will determine location decisions. ⊚ ⊚

97)

true false

The type of product or service being offered will often dictate location. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 08_7ce 1) B 2) E 3) C 4) B 5) E 6) A 7) D 8) C 9) A 10) D 11) C 12) E 13) B 14) C 15) B 16) E 17) C 18) D 19) D 20) E 21) C 22) B 23) A 24) E 25) B 26) D Version 1

27) C 28) B 29) A 30) A 31) D 32) C 33) B 34) A 35) B 36) D 37) A 38) C 39) A 40) B 41) D 42) A 43) E 44) C 45) D 46) B 47) A 48) E 49) D 50) B 67) FALSE 68) FALSE 69) TRUE 70) TRUE 71) FALSE 72) TRUE Version 1

73) TRUE 74) FALSE 75) TRUE 76) FALSE 77) FALSE 78) TRUE 79) FALSE 80) TRUE 81) TRUE 82) TRUE 83) FALSE 84) TRUE 85) FALSE 86) FALSE 87) TRUE 88) FALSE 89) TRUE 90) FALSE 91) FALSE 92) TRUE 93) TRUE 94) TRUE 95) TRUE 96) TRUE 97) TRUE

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Chapter 9: Management of Quality 1)

Monitoring, testing, and correcting quality of products after they produced is known as:

A) quality control B) quality control circles C) continuous improvement D) jidoka E) perceived quality

2) Which of the following is a structured and documented management system describing the policy, responsibilities, and implementation plan for ensuring quality?

A) Continuous improvement B) Quality assurance C) Quality at the source D) Quality management system E) ISO 9000

Which of the following is an accurate match of quality gurus and their contribution?

A) Ohno and Shingo-Cause-and-effect diagrams; quality control circles B) Crosby -Control charts; variance reduction C) Ishikawa- Plan-Do-Study-Act ( PDSA) D) Shewhart - Quality is free; zero defects E) Deming-statistical process control (SPC)

Which of the following is not an accurate match of quality gurus and their contribution?

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A) B) C) D)

Deming - distinguishing between special and common causes of variation Crosby - zero defects Feigenbaum - statistical process control (SPC) Juran - fitness-for-use and measuring the cost of quality

5) Which of the following does not match well between quality gurus and their contribution?

A) B) C) D)

Juran - quality is fitness for use Crosby - quality is free Deming - quality costs Feigenbaum - quality at the source

Which of the following is not one of Deming's 14 points?

A) Eliminate suppliers that cannot qualify with statistical evidence of quality. B) Detect defects rather than prevent defects. C) Institute modern methods of training on the job. D) Drive out fear, so that everyone may work effectively for the company. E) Eliminate work standards that prescribe numerical quotas.

Which of the following is not a dimension of the quality of goods?

A) performance B) conformance C) durability D) timeliness E) service after sale

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Which of the following is not a dimension of service quality?

A) convenience B) tangibles C) responsiveness D) assurance E) conformance

Which of the following statement regarding the dimension of quality is not correct?

A) Performance means how well a product corresponds to its design specification. B) Perceived quality is a subjective evaluation of quality (e.g., reputation, image). C) Responsiveness is the ability of the server to help customers in unusual situations and to deal with problems. D) Timeliness is the speed with which service is delivered. E) Assurance is the ability of the server to convey trust and confidence; service guarantee.

10)

Which of the following is not an example of an external failure cost?

A) Warranty claims B) Handling complaints C) Loss of customer goodwill D) Scrap and rework during production E) Price discounts to offset inferior quality

11)

Defective material from suppliers and lost production time are examples of:

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A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

12)

Warranty service, handling complaints, and costs of litigation are examples of:

A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

13)

Costs related to inspections, testing, test equipment, and labs are examples of:

A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

14) Quality planning and administration, quality training, and quality control procedures are examples of:

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A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

15) A methodology to determine the resources used to prevent poor quality, appraise the quality of the products, and deal with internal and external failures is called as .

A) Statistical Quality Control (SPC) B) Cost of Quality (COQ) C) Quality Control Circles (QCCs) D) Continuous Improvement (Kaizen) E) Quality of Conformance (QOC)

16)

Which one is not the key feature of TQM?

A) A never-ending push to improve quality, which is referred to as continuous improvement B) Detect defects rather than prevent defects. C) Everyone is involved in quality management in the organization D) The goal of ever-increasing customer satisfaction.

17) Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem .

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A) just before shipping our product to the customer. B) immediately after we complete the last operation. C) during the design phase. D) just before we begin the first production operation. E) Regardless of when you fix the problem, costs are about the same.

18)

TQM stands for:

A) Taguchi Quality Methods. B) Tactical Quality Measurements. C) Total Quality Management D) Total Quantity Measurement. E) The Quality Matrix.

19)

The "5W2H approach" involves problem solving based on:

A) quantifying problems based on "weight" (impact) and "how" (solutions). B) using teams of 5 keyworkers, and 2 helpers. C) a five step problem solving process followed by a two stage implementation. D) examining 5 "wants" and 2 "haves." E) asking questions about a problem.

20) A program designed to reduce the occurrence of defects to achieve lower costs and improved customer satisfaction is called:

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A) Quality Control Circle B) Six Sigma C) Continuous Improvement D) Pareto Analysis E) Shewhart cycle

21) The process of measuring products, services, processes, and performance against those of organizations known to be best in one or more aspects of their operations and identifying a model for learning how to improve is known as:

A) continuous improvement B) employee empowerment C) benchmarking D) copycatting E) industrial espionage

22) the process of measuring an organization's performance against the best organization in the same or another industry is called:

A) continuous improvement. B) employee empowerment. C) benchmarking. D) Jidoka E) Taguchi quality loss function

23) Which of the following is a graphical representation of how an increase in deviation from the target value leads to a faster rate of increase in customer dissatisfaction?

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A) Control chart B) Scatter Diagram C) Run chart D) Process map E) Taguchi quality loss function

24) A small and volunteer group of workers of workers who meet informally to discuss ways to improve products or processes is called:

A) brainstorming team. B) quality control circle. C) benchmarking team. D) continuous improvement team. E) quality team.

25)

A quality circle control (QCC) is:

A) responsible for quality. B) an inspection stamp found on product C) a volunteer group of employees who meet to discuss ways of improving products or processes. D) a team of customers and their contacts within the company who meet to discuss ways of improving products or processes. E) usually more structured and more formal than quality improvement team.

26)

The basic steps in the PDSA cycle do not include:

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A) plan B) delegate C) study D) act E) do

27) Pareto charts, cause-and-effect diagrams and design of experiments are used in which step of the problem solving process for quality improvement?

A) Defining the problem B) Data collection C) Problem analysis D) Implementing solutions E) Monitoring solutions to see if they accomplish goals.

28)

Which of the following is not one of the specific tools for solving quality problems?

A) Control charts B) Check sheets C) Pareto analysis D) Cause-and-effect diagrams E) Process design

29)

A tool that is not used for quality management is a:

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A) Run chart B) Check sheet C) Fishbone D) Control chart E) Break Even Point chart

30) The tool that is useful in documenting the current process to identify possible points for improvement is:

A) a control chart. B) a Pareto analysis. C) a check sheet. D) a process flow diagram. E) a cause-and-effect diagram.

31)

Focusing attention on the most important problem areas is referred to as:

A) 5W2H approach. B) quality assurance. C) benchmarking. D) Pareto analysis. E) cause-and-effect analysis.

32)

A chart showing the number of occurrences by category would be used in:

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A) a Pareto analysis. B) interviewing. C) cause-and-effect diagrams. D) benchmarking. E) none of the choices.

33)

The tool that is useful to investigate the relationship between two variables is:

A) a control chart. B) a Pareto analysis. C) a scatter diagram. D) a flow chart. E) a cause-and-effect diagram.

34)

The quality control improvement tool which resembles a "fishbone" is:

A) run charts. B) check sheets. C) a Pareto analysis. D) cause-and-effect diagrams. E) scatter diagrams.

35)

Cause-and-effect diagrams are sometimes called:

A) scatter diagrams B) flow diagrams C) control charts D) Ishikawa diagrams and or fishbone diagrams E) histogram

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36)

A fishbone diagram would be used to:

A) categorize potential causes of a problem. B) diagram the key steps, or "bones" in a process. C) plot the frequency of problems. D) plot the relationship between two causes of a problem. E) plot the effects of problems over time.

37)

A run chart is used to:

A) track the values of a variable over time. B) list the potential causes of a problem. C) identify the primary source of a problem. D) collect and organize data by categories. E) none of the choices.

38) A quality improvement technique that involves the sharing of thoughts and ideas in a way that encourages unrestrained collective thinking is:

A) a Pareto analysis. B) benchmarking. C) brainstorming. D) a control chart. E) a check sheet.

39) Excellence Canada has divided its quality certification into stages or levels? What is the top level for the award?

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A) Copper B) Bronze C) Silver D) Gold E) Platinum

40) Which of the following is an international standard for assessing a company's environmental performance?

A) ISO 9000 B) ISO 14001 C) HACCP D) Taguchi quality function E) PDSA Cycle

41)

Which of the following is not associated with the HACCP quality control system?

A) Identifying potential hazards B) Enforced by the Canadian Food Inspection Agency C) Designed for companies in the food processing industry D) Identifying all regulatory action points E) Feedback of food quality based on customer surveys

42) Broadly defined, quality refers to the ability of a product or service to consistently meet or exceed design specifications. ⊚ ⊚

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true false

43)

An organization achieves quality by consistently meeting its competitors' standards. ⊚ ⊚

44)

true false

Quality control and quality assurance are equivalent approaches to managing quality. ⊚ ⊚

true false

45) A quality management system is a structured and documented management system describing the policy, responsibilities, and implementation plan for ensuring quality. ⊚ ⊚

true false

46) Genichi Taguchi is best known for the Cause-and-effect diagram (fishbone diagram) for problem solving and the implementation of quality control circles, which involve workers in quality improvement. ⊚ ⊚

true false

47) Deming insisted on retaining barriers between departments in the organization to improve quality. ⊚ ⊚

true false

48) One of Deming's 14 points of quality is motivating workers by using numerical quotas based on work standards.

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⊚ ⊚

true false

49) One of the key elements of Deming's beliefs is implementing mass inspection whereby all output is checked for quality problems ⊚ ⊚

true false

50) Juran describes quality management as a trilogy that consists of quality planning, quality control, and quality improvement. ⊚ ⊚

true false

51) Taguchi describes quality management as a trilogy that consists of quality planning, control of quality costs, and quality improvement. ⊚ ⊚

true false

52) Design processes of producing the products which can facilitate doing the job right the first time is called "quality at the source" or jidoka. ⊚ ⊚

true false

53) Crosby advocates "zero defects", which requires massive inspection efforts to ensure detection of defective products prior to delivery to a customer. ⊚ ⊚

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true false

54) In sum, Crosby's concept of "quality is free" means any level of defects is too high so there should always be an effort towards improving quality. ⊚ ⊚

true false

55) Ensuring that a product's quality will be good by preventing defects before they occur is called Quality Control Circles (QCCs). ⊚ ⊚

true false

56) Performance and special features are both considered to be dimensions of product quality. ⊚ ⊚

true false

57) Reliability and durability are different terms used to describe the same dimensions of product quality. ⊚ ⊚

58)

true false

Conformance and price are both considered to be dimensions of product quality. ⊚ ⊚

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true false

59) The term fitness for use is used as an alternate way to describe the durability of a product. ⊚ ⊚

true false

60) Quality of conformance refers to the degree to which the produced good or service conforms to the intent of the designers. ⊚ ⊚

61)

Responsiveness is a dimension of quality that only applies to services, not products. ⊚ ⊚

62)

true false

All the dimensions of quality are equally important to the customer. ⊚ ⊚

true false

63) As a dimension of service quality, assurance refers to the knowledge exhibited by personnel working in service organizations and their ability to convey trust and confidence. ⊚ ⊚

true false

64) The degree to which a product satisfies its fitness for use is only determined by the durability, serviceability, and reliability dimensions of quality.

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⊚ ⊚

true false

65) As a dimension of service quality, tangibles refers to the availability and accessibility of the service. ⊚ ⊚

true false

66) As a dimension of service quality courtesy refers to the ability of the server to help customers in unusual situations and to deal with problems. ⊚ ⊚

67)

true false

Aesthetics is one of the aspects or dimensions of quality of goods. ⊚ ⊚

true false

68) The determination of product quality stops once the product has been delivered to customers. ⊚ ⊚

69)

true false

The cost of quality includes appraisal costs, failure costs, and prevention costs. ⊚ ⊚

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true false

70) The primary difference between internal failures and external failures is the time and place of discovery of the failure. ⊚ ⊚

71)

Cost of inspectors, testing, test equipment, and labs are examples of prevention costs. ⊚ ⊚

72)

true false

Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs. ⊚ ⊚

true false

73) TQM has three key features: (1) a never-ending push to improve quality (continuous improvement) (2) the involvement of everyone in the organization in quality management; and (3) the goal of ever-increasing customer satisfaction. ⊚ ⊚

true false

74) Under Total Quality Management (TQM) approach, quality control department is responsible for quality and workers are only responsible to produce. ⊚ ⊚

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true false

75) Three key philosophies of TQM are continuous improvement, involvement of everyone in the organization, and customer satisfaction. ⊚ ⊚

true false

76) TQM expands the traditional view of quality which is looking only at the quality of the final product or service to looking at every aspect of an organization that affects quality and customer satisfaction. ⊚ ⊚

true false

77) Total quality management attempts to involve everyone in an organization in the effort to improve quality. ⊚ ⊚

true false

78) A company that commits to TQM adopts a process-oriented focus rather than the product-oriented focus which traditional organizations typically have. ⊚ ⊚

79)

true false

Suppliers are not included in quality assurance and quality improvement efforts in TQM. ⊚ ⊚

true false

80) Total quality management explicitly recognizes that management is primarily responsible for quality, not the workers with direct responsibility for completing work tasks.

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⊚ ⊚

true false

81) Implementing total quality management primarily involves a collection of techniques, such as quality control charts, ISO 9000, and quality function deployment. ⊚ ⊚

82)

true false

Suppliers are partners in TQM and should be included in quality improvement efforts. ⊚ ⊚

true false

83) Studying and documenting the current problem is an important step in continuous improvement. ⊚ ⊚

84)

To truly reap the benefits of TQM, the culture of an organization must change. ⊚ ⊚

85)

true false

An affinity diagram shows the relationships among large numbers of ideas. ⊚ ⊚

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true false

86) Six sigma is based on a more sophisticated statistical approach to quality management than the PDSA cycle. ⊚ ⊚

87)

Organizations committed to six-sigma programs have very capable and precise processes. ⊚ ⊚

88)

true false

The five stages of DMAIC are: Define, Motivate, Act, Improve, and Control. ⊚ ⊚

true false

89) Taguchi quality loss function is a graphical representation of how an increase in deviation from the target value leads to a faster rate of increase in customer dissatisfaction. ⊚ ⊚

true false

90) A benchmark organization must be chosen from the same industry in order for its methods to be applicable. ⊚ ⊚

true false

91) The purpose of benchmarking is to establish a standard against which the organization's performance can be judged, and to identify a model for possible improvement.

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⊚ ⊚

true false

92) Quality control circles (QCCs) are usually less structured and more informal than quality improvement teams. ⊚ ⊚

true false

93) The "plan" element of the PDSA cycle includes data collection and analysis to develop an improvement plan. ⊚ ⊚

94)

true false

The PDSA cycle forms the problem solving methodology for continuous improvement. ⊚ ⊚

true false

95) In the flow chart, the diamond shapes represent procedures, the rectangular shapes represent decision points in the process, and the arrows show the direction of "flow" of the steps in the process. ⊚ ⊚

true false

96) A check sheet provides a format for recording and organizing data in a way that facilitates collection and analysis. ⊚ ⊚

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true false

97)

a chart of the frequency distribution of observed values is called scatter diagram. ⊚ ⊚

98)

A control chart is a visual representation of the key steps in a process. ⊚ ⊚

99)

true false

The Baldrige award can only be won by manufacturing organizations. ⊚ ⊚

101)

true false

The Canada Awards for Excellence criteria apply only to profit oriented organizations. ⊚ ⊚

100)

true false

The Deming Prize is a prominent Japanese quality award. ⊚ ⊚

true false

102) The ISO 9000 is a quality standard developed by the Standards Council of Canada specifically for Canadian companies.

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⊚ ⊚

true false

103) ISO 9000 certification requires an ongoing series of audits and the need to be reregistered every three years. ⊚ ⊚

true false

104) The ISO 9000 certification refers to a process of 100 percent inspection to catch all defective products before they leave the company. ⊚ ⊚

105)

true false

ISO 9000 is the international standard for a quality management system. ⊚ ⊚

true false

106) ISO 9000 is an international standard for assessing a company's environmental performance. ⊚ ⊚

true false

107) HACCP is a quality control system designed exclusively for restaurants and other food service providers. ⊚ ⊚

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true false

108) In Canada, the Hazard Analysis Critical Control Point (HACCP) certification system is administered by the Canadian Standards Association to limit the hazards in all industrial plants in the country. ⊚ ⊚

true false

109) The Hazard Analysis Critical Control Point (HACCP) system is a quality management system that deals with food safety. ⊚ ⊚

true false

110) With the HACCP quality management system, the point at which processed food is sealed in packaging is considered a critical control point. ⊚ ⊚

true false

111) Implementing the HACCP quality management system is mandatory for all food processing companies in Canada. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 09_7ce 1) A 2) D 3) E 4) C 5) C 6) B 7) D 8) E 9) A 10) D 11) A 12) B 13) C 14) D 15) B 16) B 17) C 18) C 19) E 20) B 21) C 22) C 23) E 24) B 25) C 26) B Version 1

27) C 28) E 29) E 30) D 31) D 32) A 33) C 34) D 35) D 36) A 37) A 38) C 39) E 40) B 41) E 42) FALSE 43) FALSE 44) FALSE 45) TRUE 46) FALSE 47) FALSE 48) FALSE 49) FALSE 50) TRUE 51) FALSE 52) TRUE 53) FALSE 54) TRUE 55) FALSE 56) TRUE Version 1

57) FALSE 58) FALSE 59) FALSE 60) TRUE 61) TRUE 62) FALSE 63) TRUE 64) FALSE 65) FALSE 66) FALSE 67) TRUE 68) FALSE 69) TRUE 70) TRUE 71) FALSE 72) TRUE 73) TRUE 74) FALSE 75) TRUE 76) TRUE 77) TRUE 78) TRUE 79) FALSE 80) FALSE 81) FALSE 82) TRUE 83) TRUE 84) TRUE 85) TRUE 86) TRUE Version 1

87) TRUE 88) FALSE 89) TRUE 90) FALSE 91) TRUE 92) TRUE 93) TRUE 94) TRUE 95) FALSE 96) TRUE 97) FALSE 98) FALSE 99) FALSE 100) FALSE 101) TRUE 102) FALSE 103) TRUE 104) FALSE 105) TRUE 106) FALSE 107) FALSE 108) FALSE 109) TRUE 110) TRUE 111) FALSE

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Chapter 10S Acceptance Sampling 1)

The purpose of acceptance sampling is to:

A) estimate process quality. B) estimate lot quality. C) detect and eliminate defectives. D) decide if a lot meets predetermined standards. E) accept samples of products.

Acceptance sampling plans might call for selection of all of the following except:

A) a single sample. B) two samples. C) several samples. D) 100% inspection plan E) multiple samples

Which one of the following would NOT be a reason for using acceptance sampling?

A) B) C) D)

High cost of passing defectives Large number of items Destructive testing Boredom and fatigue that would accompany complete inspection

Sampling plans typically specify:

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A) lot size. B) sample size. C) number of samples to be taken. D) acceptance/rejection criteria. E) sample size, number of samples to be taken, and acceptance/rejection criteria.

5) or

A lot can be "accepted" or "rejected" in a double-sampling plan after one sample is taken .

A) after one sample is checked twice. B) the sample does not conform to the quality curve. C) the customer requests another check D) after two samples are taken E) the producer feels the lot is a "bad" lot

A lot can be "accepted" or "rejected" in a multiple-sampling plan:

A) after one sample is checked multiple times B) after two samples are taken C) after one or more samples are taken. D) if the customer rejects the lot E) if the producer rejects the lot

An OC curve shows:

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A) average outgoing quality. B) the average outgoing quality limit. C) out of control criteria. D) operating control. E) probability of acceptance versus lot quality.

8) The ability of a sampling plan to discriminate between lots of high quality and lots of low quality is described by:

A) a Gantt chart. B) an operating characteristic curve. C) an average outgoing quality curve. D) a process control chart. E) a range chart.

The AQL indicates:

A) acceptable quality level. B) average quality level. C) actual quality level. D) aggregate quality level. E) approximate quality level.

10)

A Type II (beta) error occurs when:

A) B) C) D)

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a bad lot is accepted. a good lot is rejected. a bad lot is rejected. a good lot is accepted.

11)

A Type I (alpha) error occurs when:

A) B) C) D)

12)

a bad lot is accepted. a good lot is rejected. a bad lot is rejected. a good lot is accepted.

The AOQ shows:

A) the maximum quality. B) how well a sampling plan can discriminate between good and bad lots. C) the actual quality level. D) "good" quality. E) average percentage defective of accepted lots.

13) In acceptance sampling, the level of inspection automatically adjusts to the quality of lots being inspected, assuming that:

A) B) C) D)

a single-sampling plan is used. double-sampling plans are used. multiple-sampling plans are used. "rejected" lots are subjected to 100 percent inspection.

14) A Quality Inspector for Alpha-Beta Co. is concerned about the quality of the batch of several thousand Gizmos which the company produced this week and is preparing to ship. If, based on the acceptance sample, the inspector decides to ship this batch without inspection, which type of error would be possible?

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A) None would be possible B) Producer's error C) Type I error D) Type II error E) Both Type I and Type II error

15) In the MIL-STD-105E sampling plan there are three general inspection levels. How many special inspection levels are there?

A) 1 B) 2 C) 3 D) 4 E) 5

16) In the MIL-STD-105E sampling plan inspection level III requires about how much inspection compared to level II?

A) The same amount B) Half as much C) Twice as much D) It depends on lot size E) Three times as much

17) A Quality Inspector for Alpha-Beta Co. is concerned about the quality of the batch of several thousand Gizmos which the company produced this week and is preparing to ship. If the cost of replacing a defective Gizmo once it has been shipped is $2.00, while the cost of 100% inspection prior to shipment is $.40 each, at what point is the inspector indifferent between 100% inspection or shipment without inspection?

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A) 0% defectives B) 2% defectives C) 5% defectives D) 20% defectives E) 30% defectives

18) A Quality Inspector for Alpha-Beta Co. is concerned about the quality of the batch of several thousand Gizmos which the company produced this week and is preparing to ship. If the inspector uses an acceptance sampling plan of n = 5 and c = 2, what is the probability that, if this batch is 40% defective, it will be rejected and receive 100% inspection prior to shipment?

A) 0.1270 B) 0.2730 C) 0.3174 D) 0.6826 E) 0.7270

19) A Quality Inspector for Alpha-Beta Co. is concerned about the quality of the batch of several thousand Gizmos which the company produced this week and is preparing to ship. If the inspector uses an acceptance sampling plan of n = 5 and c = 2, what will be the average outgoing quality (AOQ) for batches with 40% defectives?

A) 0.1270 B) 0.2730 C) 0.3174 D) 0.6826 E) 0.7270

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20) The Quality Manager for Graphics, Inc. is concerned about the quality of the lot of several thousand posters which the company printed this week and is now preparing to ship. If, based on the acceptance sample, the manager decides to ship this lot without inspection, which type error would be possible?

A) Type I B) Type II C) Both Type I and Type II error D) Neither Type I nor Type II error E) Cannot be determined exactly

21) The Quality Manager for Graphics, Inc. is concerned about the quality of the lot of several thousand posters which the company printed this week and is now preparing to ship. If the cost of replacing a defective poster once it has been shipped is $10.00, while the cost of complete 100% inspection prior to shipment is $.50 per poster, at what point is the manager indifferent between complete inspection or shipment without inspection?

A) 5% B) 10% C) 12% D) 20% E) 25%

22) The Quality Manager for Graphics, Inc. is concerned about the quality of the lot of several thousand posters which the company printed this week and is now preparing to ship. If they use an acceptance sampling plan of n = 10 and c = 2, what is the probability that, if this lot is 10% defective, it will be accepted for shipment without inspection?

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A) 0.9298 B) 0.0702 C) 0.8189 D) 0.2198 E) 0.5995

23) The Quality Manager for Graphics, Inc. is concerned about the quality of the lot of several thousand posters which the company printed this week and is now preparing to ship. If the manager uses an acceptance sampling plan of n = 10 and c = 2, what will be the average outgoing quality (AOQ) for lots with 20% defectives?

A) 0.13556 B) 0.20000 C) 0.23630 D) 0.58434 E) 0.32484

24) The Quality Manager for Graphics, Inc. is concerned about the quality of the lot of several thousand posters which the company printed this week and is now preparing to ship. If the indifference point between complete inspection or shipment without inspection is 12% defectives, and the manager decides to sample 15 posters (n = 15), what is the maximum number of sample defectives (c) for which this lot would be accepted for shipment without further inspection?

A) 0 defectives B) 1 defective C) 2 defectives D) 3 defectives E) 4 defectives

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25) The Quality Manager for Widgets, Inc. is concerned about the quality of the lot of several thousand widgets which the company produced this week and is now ready to ship. If the cost of replacing a defective widget once it has been shipped is $5.00, while the cost of complete (100%) inspection prior to shipment is 30 cents per widget, what is the point of indifference between complete inspection and shipment without inspection?

A) 1.67% defectives B) 3% defectives C) 5% defectives D) 6% defectives E) 16.7% defectives

26) The Quality Manager for Widgets, Inc. is concerned about the quality of the lot of several thousand widgets which the company produced this week and is now ready to ship. If the manager uses an acceptance sampling plan of n = 8 and c = 1, what is the probability that, if this lot is 10% defective, it will be accepted for shipment without inspection?

A) .9619 B) .9428 C) .8131 D) .4305 E) .1869

27) The Quality Manager for Widgets, Inc. is concerned about the quality of the lot of several thousand widgets which the company produced this week and is now ready to ship. If the manager uses an acceptance sampling plan of n = 8 and c = 1, what is the probability that, if this lot is 15% defective, it will be rejected and completely inspected prior to shipment?

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A) .8948 B) .8131 C) .6572 D) .5033 E) .3428

28) The Quality Manager for Widgets, Inc. is concerned about the quality of the lot of several thousand widgets which the company produced this week and is now ready to ship. If the manager uses an acceptance sampling plan of n = 8 and c = 1, what will be the average outgoing quality (AOQ) for lots with 10% defectives?

A) .0813 B) .0962 C) .1869 D) .7318 E) .8131

29) The Quality Manager for Microelectronics, Inc. is concerned about the quality of the batch of several thousand IC's (integrated circuits) which the company is about to ship. If, based on the acceptance sample, the manager decides to ship this batch without inspection, which type error would be possible?

A) None would be possible B) Producer's error C) Type I error D) Type II error E) Both Type I and Type II error

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30) The Quality Manager for Microelectronics, Inc. is concerned about the quality of the batch of several thousand IC's (integrated circuits) which the company is about to ship. If the cost of replacing a defective IC once it has been shipped is $5.00, while the cost of complete (100%) inspection prior to shipment is $.20 each, at what point is the manager indifferent between complete inspection or shipment without inspection?

A) 0% defectives B) 4% defectives C) 5% defectives D) 9% defectives E) 22% defectives

31) The Quality Manager for Microelectronics, Inc. is concerned about the quality of the batch of several thousand IC's (integrated circuits) which the company is about to ship. If they use an acceptance sampling plan of n = 20 and c = 1, what is the probability that, if this batch is 15% defectives, it will be rejected and completely inspected prior to shipment?

A) 0.0263 B) 0.1237 C) 0.1756 D) 0.8244 E) 0.9737

32) The Quality Manager for Microelectronics, Inc. is concerned about the quality of the batch of several thousand IC's (integrated circuits) which the company is about to ship. If the indifference point between complete inspection and shipment without inspection is 9% defectives, and the manager decides to sample 40 IC's (n = 40), what is the maximum number of sample defectives (c) for which this batch would be accepted for shipment without inspection?

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A) 0 defectives B) 1 defective C) 2 defectives D) 3 defectives E) 4 defectives

33) The Quality Manager for Microelectronics, Inc. is concerned about the quality of the batch of several thousand IC's (integrated circuits) which the company is about to ship. If the manager uses an acceptance sampling plan of n = 20 and c = 1, what will be the average outgoing quality (AOQ) for batches with 15% defectives?

A) 0.0263 B) 0.1237 C) 0.1756 D) 0.8244 E) 0.9737

34) In a multiple sampling plan what is the next step if the cumulative number of defects is between the two limits?

A) The lot is accepted B) The lot is rejected C) The customer is notified D) Another sample is taken E) Production is notified

35)

What are two primary considerations when selecting a sample plan?

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A) Number of samples and cost of taking samples B) Number of samples and total number of observations required C) Cost of the plan and total number of observations required D) Time it takes to sample and cost of taking samples E) Level of producer and consumer risk

36) What type of sampling plan would be selected when the cost to obtain a sample is relatively high compared to the cost to analyze the observations?

A) Single sampling plan B) Double sampling plan C) Multiple sampling plan D) Random sampling plan E) Cost based sampling plan

37)

What type of sampling plan would be selected when the cost to inspect is relatively high?

A) Single sampling plan B) Multiple sampling plan C) Destructive testing plan D) Cost based inspection plan E) Random inspection plan

38) When the cost to inspect is relatively high, why is it better to use a double or multiple sampling plan?

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A) The AQL will be lower B) The LTPD will be determined based on inspection cost C) The total cost to inspect will be lower D) A double plan will negate the need for 100% inspection E) The number of items inspected per lot will be lower

39)

What two values are required in determining a sample plan's OC curve?

A) LTPD and AQL B) Inspection cost per unit and reject cost per unit C) Inspection level and cost D) Sample size and acceptance number E) Cost of a type I and type II error

40)

What are the three types pf inspection when using MIL-STD-105E?

A) Discontinue, reduced, re-do B) Tightened, double, multiple C) Normal, reduced, tightened D) MIL-1, 2, 3 E) Normal, double, triple

41)

What is required when the decision to discontinue inspection is reached?

A) Corrective action B) 100% inspection C) Accept the entire lot D) Destructive testing E) Introduction of a multiple sampling plan

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42) What will be the result if rejected lots are resubmitted for acceptance sampling without any improvement in quality?

A) They will be rejected again B) They will skew the results C) The LTPD will be changed D) They will eventually be accepted E) The entire lot will be rejected

43) A quantity of interest to the buyer of a lot is the maximum outgoing proportion defective. What is this also called?

A) Maximum acceptable quality percent B) Average outgoing quality limit C) Minimum acceptable portion defective D) Maximum portion defective allowed to ship E) Maximum cost risk of shipping a lot

44)

What does average outgoing quality limit measure?

A) The limit of defects the customer will accept B) The maximum number of defects a supplier will ship C) Average cost of defects D) The limit of a Type II error E) The worst quality of outgoing items

45) Shipments of bowling balls are sampled before delivery to a warehouse. Lots of 600 balls are checked, using 10 observations from each lot. Any lot with more than one defective is rejected. Calculate values for the operating characteristic curve for this sampling plan. Version 1

46) A firm that makes plastic wrapping material takes random samples of 50 items from each lot before it is sent to a customer. Lots contain 2,000 items each. Any lot with more than one defective is subjected to 100 percent inspection, and any defectives are replaced with good ones. (i) Construct the OC curve for this plan. (ii) Construct the AOQ curve for this plan. What is the approximate AOQ limit?

47) A manufacturer purchases large quantities of metal brackets from several suppliers. The brackets are shipped in lots of 8,000 each. Random samples of 40 brackets are taken from each lot, and the lot is rejected if any defectives are discovered. Rejected lots are subjected to 100 percent inspection, and any defectives are replaced with good brackets. Determine the average outgoing quality limit for this sampling plan.

48) Given the following acceptance sampling data for a lot of several thousand units of a finished good: Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

If this lot were 5% defective, what type error would be possible? For an acceptance sampling plan with c = 2, what would be the risk of this error?

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49) Given the following acceptance sampling data for a lot of several thousand units of a finished good: Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

If this lot were 20% defective, what type error would be possible? For an acceptance sampling plan with c = 2, what would be the risk of this error?

50) Given the following acceptance sampling data for a lot of several thousand units of a finished good: Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

What is the point of indifference between 100 percent inspection or shipment without inspection?

51) Given the following acceptance sampling data for a lot of several thousand units of a finished good:

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Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

If c = 2, what is the probability that, if this lot were 5% defective, it would be accepted for shipment without inspection? 10% defective? 15%? 20%?

52) Given the following acceptance sampling data for a lot of several thousand units of a finished good: Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

If c = 2, what is the probability that, if this lot were 5% defective, it would be rejected and completely inspected prior to shipment? 10% defective? 15%? 20%?

53) Given the following acceptance sampling data for a lot of several thousand units of a finished good: Per-unit cost of replacing a reject once it has been shipped

$5.00

Per-unit cost of 100 percent inspection prior to shipment:

$.60

Specified sample size

20 units

For an acceptance sampling plan with c = 2, what will be the average outgoing quality for lots with 5% defectives? 10%? 15%? 20%?

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54)

Acceptance sampling is applied to batches of items during the production process. ⊚ ⊚

55)

Inspection both before and after production involves acceptance sampling procedures. ⊚ ⊚

56)

true false

Inspection that occurs during the production process is known as acceptance sampling. ⊚ ⊚

true false

57) The purpose of acceptance sampling is to decide whether a batch of items satisfies predetermined standards. ⊚ ⊚

true false

58) If a lot, or batch, is "rejected" during acceptance sampling, the lot will usually be thrown away. ⊚ ⊚

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true false

59) low.

Acceptance sampling is most useful when the cost consequences of passing defectives are

⊚ ⊚

60)

true false

Acceptance sampling procedures can be applied to both attribute and variable inspection. ⊚ ⊚

true false

61) Acceptance sampling plans must specify the lot size, the sample size, and the acceptance/rejection criteria. ⊚ ⊚

true false

62) In a single-sampling plan, the entire lot, or batch of items, is accepted or rejected based upon only one specified sized sample. ⊚ ⊚

63)

true false

A double-sampling plan always requires a second sample. ⊚ ⊚

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true false

64) In a double-sampling plan, a second sample may not be taken if the results of the first sample are conclusive. ⊚ ⊚

true false

65) Acceptance sampling is a form of inspection applied to items that are part of an ongoing process. ⊚ ⊚

true false

66) In a double-sampling plan, a second sample is taken if the results of the first sample are inconclusive. ⊚ ⊚

true false

67) The ability of an acceptance sampling plan to discriminate between good and bad quality lots is described by its operating characteristic curve. ⊚ ⊚

68)

The steeper an OC curve is, the less it tends to discriminate between good and bad lots. ⊚ ⊚

69)

true false

The cost and time required for inspection dictate the type of sampling plan used.

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⊚ ⊚

70)

The LTPD is associated with a consumer's risk. ⊚ ⊚

71)

true false

The AQL is associated with a producer's risk. ⊚ ⊚

72)

true false

The terms "consumer's risk" and "alpha risk" both refer to a Type I error. ⊚ ⊚

true false

73) The average outgoing quality (AOQ) assumes that lots contain some given proportion defective. ⊚ ⊚

true false

74) "Average outgoing quality" will show the average quality level of inspected and uninspected lots for any given incoming proportion defective. ⊚ ⊚

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true false

75) In the MIL-STD-105E sampling plan the inspection level determines the relationship between lot size and sample size. ⊚ ⊚

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true false

Answer Key Test name: Chap 10S_7ce 1) D 2) D 3) A 4) E 5) D 6) C 7) E 8) B 9) A 10) A 11) B 12) E 13) D 14) D 15) D 16) C 17) D 18) C 19) B 20) B 21) A 22) A 23) A 24) B 25) D 26) C Version 1

27) E 28) A 29) D 30) B 31) D 32) C 33) A 34) D 35) B 36) A 37) B 38) E 39) D 40) C 41) A 42) D 43) B 44) E 54) FALSE 55) TRUE 56) FALSE 57) TRUE 58) FALSE 59) TRUE 60) TRUE 61) TRUE 62) TRUE 63) FALSE 64) TRUE 65) FALSE Version 1

66) TRUE 67) TRUE 68) FALSE 69) TRUE 70) TRUE 71) TRUE 72) FALSE 73) TRUE 74) FALSE 75) TRUE

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Chapter 10: Statistical Quality Control 1) As the sample size increases, the distribution of sample averages approaches a Normal distribution regardless of the shape of the sampled population. This is identified in which of the following?

A) Assignable variation B) Random variation C) Central limit theorem D) Type I errors E) Mean charts

The optimum level of inspection for quality control is where the:

A) cost of inspection is minimum. B) cost of passing defectives is minimum. C) total cost of inspection and passing defectives is maximum. D) total cost of inspection and passing defectives is minimum. E) difference in inspection and defectives costs is minimum.

The purpose of control charts is to:

A) estimate the proportion of output that is acceptable. B) inspect the quality of all outputs from a process. C) determine if the output of a process is within specifications. D) distinguish between random variation and assignable variation in a process. E) determine the amount of inspection required.

Which of the following is NOT a step in the quality control planning process?

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A) Define the quality characteristic to be controlled. B) Determine a quality control point in the process. C) Eliminate all defects found. D) Plan how inspection is to be done. E) Plan corrective action

The term "2 sigma limits" in the context of a control chart refers to the variability of the:

A) process. B) population. C) sample. D) sampling distribution. E) risk factor.

6) The probability of concluding that an assignable variation exists when only random variation is present is:

A) Statistical shift B) Specification variation C) Control limit error D) Type I error E) Type II error

7) Using three sigma control limits (rather than two sigma limits) tends to have what impact on error probabilities?

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A) Increase the Type II and decrease the Type I. B) Decrease the Type II and increase the Type I. C) Decrease the Type I and Type II. D) Increase the Type I and Type II. E) Have little or no impact.

A control chart used to monitor the process mean is the:

A) p-chart B) R-chart C) x-bar chart D) c-chart E) Gantt chart

Which of the following is NOT needed to calculate sample mean control charts?

A) B) C) D)

A choice for z, the standard normal deviate (usually 2 or 3). The standard deviation of the sampling distribution. The sample range. The average of sample means (grand mean).

10) A shift in the process mean for a measured quality characteristic would most likely be detected by a(n):

A) p-chart B) x-bar chart C) c-chart D) R-chart E) s-chart

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11)

A point which is outside of the lower control limit on an R-chart:

A) is an indication that no process variation is present. B) should be ignored because it signifies very low process variation. C) should be investigated because it could indicate improvements in the methods used in a process. D) should be ignored unless another point is outside that limit. E) is impossible because the lower limit is always zero.

12)

A point that plots below the lower control limit on the range chart:

A) should be ignored because lower variation is desirable. B) should be investigated for random variation. C) may be an indication that process variation has decreased D) is not possible E) is due to a shift in the process mean

13)

The range chart ( R-chart) is most likely to detect a change in:

A) proportion. B) mean. C) number defective. D) process variability. E) sample size.

14) Which of the following quality control sample statistics measures a quality characteristic which is an attribute?

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A) Mean B) Variance C) Standard deviation D) Range E) Proportion

15)

A control chart used to monitor the fraction of defectives generated by a process is the:

A) p-chart. B) R-chart. C) x-bar chart. D) c-chart. E) Gantt chart.

16)

For which of the following would a p-chart be used?

A) Monitor the process means for samples. B) Monitor dispersion in sample data. C) Monitor the proportion of defectives in a sample. D) Monitor the number of defects per unit. E) Monitor the range of values in samples.

17)

A c-chart is used for:

A) means. B) ranges. C) percent defective. D) fraction defective per unit. E) number of defects per unit.

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18)

A control chart used to monitor the number of defects per unit is the:

A) p-chart. B) R-chart. C) x-bar chart. D) c-chart. E) Gantt chart.

19)

Which statement is an accurate description of a process that is "capable"?

A) No random variation is evident, only assignable variation. B) Process variability is greater than variation allowed by design specifications. C) Process variability is less than variation allowed by design specifications. D) Assignable variation is less than random variation. E) Assignable variation is greater than random variation.

20) Studies on a bottle-filling machine indicates it fills bottles to a mean of 16 ounces with a standard deviation of 0.10 ounces. Assuming the Cpindex = 1.0, what is/are the process specification(s)?

A) B) C) D)

21)

0.10 ounces. 0.60 ounces. 16.0 ounces plus or minus 0.60 ounces. 16.0 ounces plus or minus 0.30 ounces.

The six sigma quality improvement methodology is called:

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A) PDSA B) DMAIC C) 5W2H D) continuous improvement system. E) ABCDE

22)

The DMAIC methodology involves all EXCEPT which of the following?

A) Define B) Model C) Analyse D) Improve E) Control

23) When a process is judged out of control for an important character-istic, what corrective action should be taken?

A) The process should be stopped and corrective action must be taken. B) The process should be investigated for Type I error. C) The process should be investigated for Type II error. D) The process should continue, however, 100% inspection is required. E) The process should continue until another sample is taken.

24) When using control charts sample size is important. Smaller samples are more likely to reveal a process change because a change is more likely to take place the large sample, rather than small samples.

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A) outside, outside B) outside, inside C) exclusive to, inside, D) between, outside E) within, between

25) When using control charts sample frequency is important Sampling frequency can be a function of the of a process and the to sample.

A) cost; cost B) frequency; cost C) frequency; time D) stability; cost E) stability; time

26) Too many observations on one side of the centre line on a run chart is an indication of what?

A) cycles B) trend C) bias D) level shift E) too much dispersion

27)

The charted values on a run chart display too much spread. This is an indication of what?

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A) bias B) cycles C) level shift D) Too much dispersion E) trend

28) Non random variation is indicated when a point is observed that is outside the control limits, or a run test produces a large z-value. What is this a sign of?

A) Excessive random variation B) Assignable variation C) The process is in control D) The control limit is incorrect E) More samples are required.

29) What should managers have in place if a point is observed that is outside the control limits, or a run test produces a large z-value?

A) Taking more samples B) Revised sample plan C) Revisions to the control chart D) Recall plans E) Response plans

30) For a process to be capable, it must have a capability ratio of at least 1.00. A ratio of 1.00 implies that what percent of the output of a process can be expected to be within the design specification limits?

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A) 66.67% B) 73.33% C) 95.54% D) 99.74% E) 100%

31)

When using a capability index which value determines the capability of the process?

A) The smaller of the two calculations B) The larger of the two calculations C) The average of the calculations D) The largest minus the smallest E) The largest divided by the smallest

32) This involves performing experiments by changing levels of factors to measure their influence on output and identifying best levels for each factor.

A) Process capability indexes B) Design of experiments C) Six sigma quality D) Assignable variation influence E) Run tests

33) A design engineer wants to construct a sample mean chart for controlling the service life of one of the types of light bulbs his company produces. The engineer knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, the engineer tested service life on random samples of four bulbs, with these results: Sample 1

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Service Life (hours) 495

500

505

500

525

515

505

515

470

480

460

470

What is the sample mean service life for sample 2?

A) 470 hours B) 495 hours C) 500 hours D) 515 hours E) 525 hours

34) A design engineer wants to construct a sample mean chart for controlling the service life of one of the types of light bulbs his company produces. The engineer knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, the engineer tested service life on random samples of four bulbs, with these results: Sample

Service Life (hours)

495

500

505

500

525

515

505

515

470

480

460

470

What value should be used as the mean of the sampling distribution of sample means?

A) 470 hours B) 495 hours C) 500 hours D) 515 hours E) 525 hours

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35) A design engineer wants to construct a sample mean chart for controlling the service life of one of the types of light bulbs his company produces. The engineer knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, the engineer tested service life on random samples of four bulbs, with these results: Sample

Service Life (hours)

495

500

505

500

525

515

505

515

470

480

460

470

What is the standard deviation of the sampling distribution of sample means?

A) 5 hours B) 6.67 hours C) 10 hours D) 11.55 hours E) 20 hours

36) A design engineer wants to construct a sample mean chart for controlling the service life of one of the types of light bulbs his company produces. The engineer knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, the engineer tested service life on random samples of four bulbs, with these results: Sample

Service Life (hours)

495

500

505

500

525

515

505

515

470

480

460

470

If upper and lower control limits of 520 and 480 hours are used, what is his risk (alpha) of concluding service life is out of control when it is actually under control (Type I error)?

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A) 0.0026 B) 0.0456 C) 0.3174 D) 0.6826 E) 0.9544

37) A design engineer wants to construct a sample mean chart for controlling the service life of one of the types of light bulbs his company produces. The engineer knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, the engineer tested service life on random samples of four bulbs, with these results: Sample

Service Life (hours)

495

500

505

500

525

515

505

515

470

480

460

470

If upper and lower control limits of 520 and 480 hours are used, on what sample(s) (if any) does service life appear to be out of control?

A) B) C) D)

Sample 1 Sample 2 Sample 3 Both samples 2 and 3.

38) A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. The analyst knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, the analyst randomly selected four packages and weighed each with the following results: Day

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Weight (ounces)

Monday

Tuesday

Wednesday

Thursday

Friday

What is the sample mean package weight for Thursday?

A) 19 ounces B) 20 ounces C) 20.6 ounces D) 21 ounces E) 23 ounces

39) A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. The analyst knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, the analyst randomly selected four packages and weighed each with the following results: Day

Weight (ounces)

Monday

Tuesday

Wednesday

Thursday

Friday

What value should be used as the mean of the sampling distribution of sample means?

A) 19 ounces B) 20 ounces C) 20.6 ounces D) 21 ounces E) 23 ounces

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40) A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. The analyst knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, the analyst randomly selected four packages and weighed each with the following results: Day

Weight (ounces)

Monday

Tuesday

Wednesday

Thursday

Friday

What is the standard deviation of the sampling distribution of sample means?

A) 0.1 ounces B) 0.4 ounces C) 0.5 ounces D) 1 ounce E) 2 ounces

41) A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. The analyst knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, the analyst randomly selected four packages and weighed each with the following results: Day

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Weight (ounces)

Monday

Tuesday

Wednesday

Thursday

Friday

If upper and lower control limits of 23 and 17 ounces are used, what is his risk of concluding this process is in control when it is actually out of control (Type II error)?

A) 0.0026 B) 0.0456 C) 0.3174 D) 0.6826 E) 0.9544

42) A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. The analyst knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, the analyst randomly selected four packages and weighed each with the following results: Day

Weight (ounces)

Monday

Tuesday

Wednesday

Thursday

Friday

If upper and lower control limits of 23 and 17 ounces are used, on what day(s), if any, does this process appear to be out of control?

A) Monday B) Tuesday C) Monday and Tuesday D) Monday, Tuesday, and Thursday E) The process is in control

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43) A Quality Analyst wants to construct a control chart for determining whether three machines, all producing the same product, are under control with regard to a particular quality variable. Accordingly, four units of output were sampled from each machine, with the following results: Machine

Measurements

What is the sample mean for machine #1?

A) 15 B) 16 C) 17 D) 21 E) 23

44) A Quality Analyst wants to construct a control chart for determining whether three machines, all producing the same product, are under control with regard to a particular quality variable. Accordingly, four units of output were sampled from each machine, with the following results: Machine

Measurements

What is the estimate of the process mean based on this limited number of samples?

A) 16 B) 19 C) 20 D) 21 E) 23

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45) A Quality Analyst wants to construct a control chart for determining whether three machines, all producing the same product, are under control with regard to a particular quality variable. Accordingly, four units of output were sampled from each machine, with the following results: Machine

Measurements

What is the sample average range based upon this limited sample?

A) 2.0 B) 4.33 C) 5.4 D) 6.0 E) 9.0

46) A Quality Analyst wants to construct a control chart for determining whether three machines, all producing the same product, are under control with regard to a particular quality variable. Accordingly, four units of output were sampled from each machine, with the following results: Machine

Measurements

Using the factors for three sigma control limits, what are the x-bar chart upper and lower control limits?

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A) 24.33 and 15.67 B) 23.29 and 16.71 C) 23.5 and 16.5 D) 23.16 and 16.84 E) 24.42 and 17.67

47) A Quality Analyst wants to construct a control chart for determining whether three machines, all producing the same product, are under control with regard to a particular quality variable. Accordingly, four units of output were sampled from each machine, with the following results: Machine

Measurements

Using the factors for three sigma control limits, what are the sample range (R) chart upper and lower control limits?

A) 11.14 and 0 B) 9.88 and 0 C) 8.66 and 0 D) 4.94 and 0 E) 4.33 and 0

48) The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four instructors teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, the Chair sampled 100 final grades from last year for each instructor, with the following results:

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Instructor

Number of Failures

Prof. A

Prof. B

Prof. C

Prof. D

What is the sample proportion of failures for Prof. D?

A) 0 B) .04 C) .11 D) .13 E) .16

49) The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four instructors teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, the Chair sampled 100 final grades from last year for each instructor, with the following results: Instructor

Number of Failures

Prof. A

Prof. B

Prof. C

Prof. D

What is the estimate of the mean proportion of failures, ( p̅ ) for these instructors? A) .10 B) .11 C) .13 D) .16 E) .40

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50) The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four instructors teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, the Chair sampled 100 final grades from last year for each instructor, with the following results: Instructor

Number of Failures

Prof. A

Prof. B

Prof. C

Prof. D

What is the estimate of the standard deviation of the sampling distribution for an instructor's sample proportion of failures?

A) .0075 B) .03 C) .075 D) .3 E) .75

51) The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four instructors teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, the Chair sampled 100 final grades from last year for each instructor, with the following results: Instructor

Number of Failures

Prof. A

Prof. B

Prof. C

Prof. D

What are the .95 (5% alpha risk) upper and lower control limits for the p-chart?

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A) .95 and .05 B) .13 and .07 C) .1588 and .0412 D) .16 and .04 E) .1774 and .0226

52) The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four instructors teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, the Chair sampled 100 final grades from last year for each instructor, with the following results: Instructor

Number of Failures

Prof. A

Prof. B

Prof. C

Prof. D

Using .95 control limits, (5% alpha risk), which instructor(s), if any, should the Chair conclude is (are) out of control?

A) Prof. A only B) Prof. B only C) Prof. C only D) Prof. D only E) Both Prof. B and Prof. D.

53) A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, the analyst inspected 1,000 units of output from each machine in random samples, with the following results:

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Machine

Total Defectives

What is the sample proportion of defectives for machine #1?

A) .023 B) .02 C) .0115 D) .0058 E) .005

54) A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, the analyst inspected 1,000 units of output from each machine in random samples, with the following results: Machine

Total Defectives

What is the estimate of the process proportion of defectives based on the samples for these four machines?

A) .08 B) .06 C) .04 D) .02 E) .01

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55) A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, the analyst inspected 1,000 units of output from each machine in random samples, with the following results: Machine

Total Defectives

What is the estimate of the standard deviation of the sampling distribution of the sample proportion based on the samples for these four machines?

A) .016 B) .00016 C) .04 D) .0044 E) .00002

56) A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, the analyst inspected 1,000 units of output from each machine in random samples, with the following results: Machine

Total Defectives

What are the control chart upper and lower control limits for an alpha risk of .05?

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A) .0272 and .0128 B) .0289 and .0111 C) .029 and .013 D) .0303 and .0097 E) .0332 and .0068

57) A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, the analyst inspected 1,000 units of output from each machine in random samples, with the following results: Machine

Total Defectives

If upper and lower control limits were set as 0.028 and 0.010, which machine(s), if any, appear(s) to be out-of-control for process proportion of defectives?

A) B) C) D)

Machine #3 only Machine #4 only Machines #3 and #4 Machines #2 and #3

58) Studies on a machine that molds plastic water pipe indicate that when it is injecting 25 mm diameter pipe, the process standard deviation is 0.50 mm. The 25 mm pipe has a specification of 25 mm plus or minus 1.0 mm. What is the process capability index ( Cp)?

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A) 0.50 B) 0.67 C) 1.00 D) 2.00

59) The specification limits for a product are 8 cm and 10 cm. A process that produces the product has a mean of 9.5 cm and a standard deviation of 0.2 cm. What is the process capability, Cpk?

A) 3.33 B) 1.67 C) 0.83 D) 2.50

60) The specifications for a product are 6 mm ±0.1 mm. The process is known to operate at a mean of 6.05 mm with a standard deviation of 0.01 mm. What is the Cpk for this process?

A) 3.33 B) 1.67 C) 5.00 D) 2.50

61)

What is the ultimate goal when it comes to process quality and inspection?

A) To inspect 100% of the process to ensure 100% quality. B) To only inspect at the end of the process so that only acceptable items are shipped. C) To achieve an inherent level of quality so that inspection can be avoided. D) Choose not to inspect, but instead, replace any defective items the customer finds. E) To inspect after costly processes so items can be repaired.

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62)

What is the first step in defining the quality characteristics?

A) Identify where to inspect. B) Define the cost of inspection. C) Identify the cost of poor quality. D) Define what is to be controlled. E) Define who is responsible to manage the process.

63)

Which of the following is NOT a quality control point in the service sector?

A) The service counter B) Building and parking lot C) Stock room D) Cashiers E) Shelf stock

64)

When a process is judged out of control, what is the ultimate goal of corrective action?

A) To find out what the problem is. B) To find out who is responsible. C) To notify the customer of the issue. D) To take corrective action. E) To eliminate the problem.

65)

A major part of statistical quality control is;

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A) determining assignable variation. B) determining random variation. C) determining inspection points. D) statistical process control. E) finding +/- 3 standard deviations.

66)

Variability in a process that is natural to the process is referred to as what?

A) Random B) Variable C) Assignable D) Stable E) Expected

67)

Variability in a process that is not natural to the process is referred to as what?

A) Variable B) Unstable C) Random D) Chance E) Assignable

68)

What do process control charts for means monitor?

A) The amount of standard deviation. B) Average quality. C) Central tendency D) Upper and lower control limits E) Dispersion

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69)

What do process control charts for range monitor?

A) Process control limits. B) Dispersion C) The process centre D) Central tendency E) Process width

70)

Control charts for attributes are used when process characteristics are

A) measured B) weighed C) observed D) counted E) assignable

71) What would be the most appropriate control chart to use when the number of defects are counted?

A) n-chart B) c-chart C) Range chart D) p-chart E) Mean chart

72) What would be the most appropriate control chart to use when the fraction of defects are counted?

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A) c-chart B) Range chart C) f-chart D) Mean chart2 E) p-chart

73) Which of the following is NOT a decision managers make concerning the use of control charts?

A) When to stop the process if it is out of control. B) Where in the process to use control charts. C) Sample size. D) Type of chart to use. E) Sampling frequency.

74)

Using two small samples instead of one large sample would be more likely able to detect and observations making detection of a change more likely.

A) large, small B) mean, range C) before, after D) attribute, variable E) assignable, random

75) When determining use of control charts managers must weigh the sampling against the information provided.

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and

A) risk, reward B) time, result C) cost, reward D) time, cost E) size, risk,

76)

Which of the following is NOT a typical pattern in a run test?

A) trend B) cycles C) bias D) level shift E) spike

77)

A run chart that displays values that are too spread out is displaying what type of pattern?

A) variation B) too much dispersion C) bias D) level shift E) cycles

78) A run chart that displays too many observations on one side of the centre line is displaying what type of pattern?

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A) bias B) off centre C) level shift D) variation E) stable trend

79) If sample data is plotted and a pattern is identified, what can be concluded about the process?

A) The process is exhibiting natural variation. B) Larger sample size is required. C) Output is probably not random. D) Smaller sample size is required. E) The process is fluctuating around the mean.

80)

An observation is found to be below the lower limit of a c-chart. What does this indicate?

A) Unusually poor quality. B) The process is trending. C) The operator needs to take another sample. D) Unusually good quality. E) That there is too much variation in the sample.

81)

What term refers to the ability of a process to meet the design specification?

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A) Cp B) Cpk C) Standard deviation D) Six sigma E) Process capability

82)

This is done to determine if the range of variation is within design specifications.

A) Six sigma B) Capability analysis C) Determining the UCL and LCL D) Run test E) Developing a histogram.

83) A process is centred but the output falls outside of the upper and lower specification. Which of the following is NOT a possible solution?

A) Redesign the process. B) Use an alternative process. C) Run the process until it becomes stable. D) Use 100% inspection. E) Relax the design specification.

84) Studies on a machine that molds plastic water pipe indicate that when it is injecting 25 mm diameter pipe, the process standard deviation is 0.25 mm. The 25 mm pipe has a specification of 25 mm plus or minus 1.0 mm. What is the process capability index ( Cp)?

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A) 0.50 B) 0.67 C) 1.00 D) 1.33 E) 1.50

85) Studies on a machine that molds plastic water pipe indicate that when it is injecting 32 mm diameter pipe, the process standard deviation is 0.50 mm. The 32 mm pipe has a specification of 32 mm plus or minus 1.5 mm. What is the process capability index ( Cp)?

A) 0.50 B) 0.67 C) 1.00 D) 1.33 E) 1.50

86) The specifications for a product are 12 mm ±0.2 mm. The process is known to operate at a mean of 12.05 mm with a standard deviation of 0.03 mm. What is the Cpk for this process?

A) 0.67 B) 1.00 C) 1.33 D) 1.5 E) 1.67

87) The specifications for a product are 18 mm ±0.2 mm. The process is known to operate at a mean of 17.90 mm with a standard deviation of 0.02 mm. What is the Cpk for this process?

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A) .67 B) 1.2 C) 1.5 D) 1.67 E) 2.00

88) This refers to the goal of achieving process variability so small that the half-width of design specification equals six standard deviations of the process.

A) Six-S quality B) Six sigma quality C) Cp-6.0 D) Cpk +/-3.0 E) Six times quality.

89)

What is the process capability ratio in a six sigma quality process?

A) 1.00 B) 1.50 C) 2.00 D) 3.00 E) 6.00

90) Changing the levels of factors that influence output and observing the result is referred to as what?

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A) Design of experiments B) Six sigma quality C) Process experimentation D) Multi-factor analysis E) Factorial design

91)

What is the purpose of undertaking design of experiments?

A) To determine if a process has reached six-sigma capability. B) To determine the effects different production factors have on process output. C) To determine if the level and amount of inspection is adequate. D) To find out if a process is capable of achieving a balance of Cp and Cpk values. E) To determine if a product specification meets the process specification.

92) A process that produces explosion-proof fittings has an output that is normally distributed with a mean of 6 cm. and a standard deviation of .01 cm. A job is to be run that requires 200 fittings. (i) Determine three sigma control limits for an x-bar chart assuming a sample size of 10. (ii) If specifications are 5.98 to 6.02, what run size should be used for this job so that the expected number of good pieces is 200, assuming the process is in control?

93) Four samples of three observations each have been taken, with actual measurements (in centimetres) shown below. Construct three sigma mean and range charts and determine if corrective action is needed. Sample

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12.3

11.9

12.0

12.1 36

12.2

11.8

12.1

12.2

11.8

94) A town's department of public works is concerned about adverse public reaction to a sewer project that is currently in progress. Because of this, the Commissioner of Public Works has authorized a weekly survey to be conducted of town residents. Each week, a sample of 100 residents is questioned on their feelings towards the project. The results to date are shown below. Analyze this data using an appropriate control chart with a 5% risk of Type I error. Is the community sentiment stable? Week Number

Opposed

95) Construct the appropriate control chart for the sample observations listed below and determine if the process is in control using two sigma limits. Observation

No. of defects per unit:

96) Given the following process control data for a normally distributed quality variable (three samples of size four each): Machine

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Measurements

17 37

What is the sample mean for sample #1? #2? #3?

97) Given the following process control data for a normally distributed quality variable (three samples of size four each): Machine

Measurements

If the process is known to have a mean of 15 and a standard deviation of 3, what is the mean of the sampling distribution of sample means for whenever this process is under control? The standard deviation?

98) Given the following process control data for a normally distributed quality variable (three samples of size four each): Machine

Measurements

If the process is known to have a mean of 15 and a standard deviation of 3, what is the alpha risk (probability of Type I error) for upper and lower control limits of 16.5 and 13.5 respectively? 18 and 12? 19.5 and 10.5?

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99) Given the following process control data for a normally distributed quality variable (three samples of size four each): Machine

Measurements

If the process is known to have a mean of 15 and a standard deviation of 3, what are the three sigma upper and lower control limits for an x-bar chart?

100) Given the following process control data for a normally distributed quality variable (three samples of size four each): Machine

Measurements

If the process is known to have a mean of 15 and a standard deviation of 3, using three sigma control limits, do any of the sample means indicate an out-of-control process mean?

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101) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

What is the sample proportion of defectives for sample #1? #2? #3?

102) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process is known to produce 11 percent defectives on average, what is the mean of the sampling distribution of sample proportions for whenever this process is under control? The standard deviation?

103) Given the following process control data for a quality attribute (three samples of size 400 each):

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Sample

Defectives

If the process is known to produce 11 percent defectives on average, what is the alpha risk (probability of Type I error) for upper and lower control limits of .1256 and .0944 respectively? .1412 and .0788? .1568 and .0632?

104) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process is known to produce 11 percent defectives on average, what are the upper and lower control limits for an alpha risk of .10? .05? .01?

105) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process is known to produce 11 percent defectives on average, using three sigma control limits, do any of the sample proportions indicate an out-of-control process proportion of defectives?

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106) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process proportion of defectives is unknown, what is the estimate of it?

107) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process proportion of defectives is unknown, what is the alpha risk (probability of Type I error) for upper and lower control limits of .115 and .085 respectively? .13 and .07? .145 and .055?

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108) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process proportion of defectives is unknown, what are the upper and lower control limits for an alpha risk of .10? .05? .01?

109) Given the following process control data for a quality attribute (three samples of size 400 each): Sample

Defectives

If the process proportion of defectives is unknown, using .10 alpha risk control limits, do any of the sample proportions indicate an out-of-control process proportion of defectives?

110) The part of statistical quality control that occurs during the production process is known as acceptance sampling. ⊚ ⊚

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true false

111) Quality control efforts that occur during production are referred to as statistical process control. ⊚ ⊚

true false

112) Typically the production of high-cost, low-volume items require little quality control inspection. ⊚ ⊚

113)

true false

Low-cost, high-volume items typically require relatively low levels of inspection. ⊚ ⊚

true false

114) The amount of inspection can range from no inspection at all to inspecting each item numerous times. ⊚ ⊚

115)

true false

The optimum level of inspection occurs when the cost of passing defectives is minimized. ⊚ ⊚

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true false

116) The optimum level of inspection minimizes the sum of inspection costs and the cost of passing defectives. ⊚ ⊚

117)

true false

The frequency and quantity of inspection depends primarily on the cost of inspection. ⊚ ⊚

true false

118) The amount of inspection needed is governed by the costs of inspection and the expected costs of passing defective items. ⊚ ⊚

true false

119) The end of a manufacturing process is always the best place for a quality inspection point. ⊚ ⊚

true false

120) The primary purpose of statistical process control is to detect defects in finished products before they are shipped to customers. ⊚ ⊚

true false

121) Statistical process control is based on comparing periodic samples from a process to predetermined limits.

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⊚ ⊚

true false

122) Variation in a sample statistic collected from a process may be either random variation or assignable variation. ⊚ ⊚

123)

true false

The main task in process control is to distinguish assignable from random variation. ⊚ ⊚

true false

124) The variability of a process output is equivalent to the distribution of sample means of that process output for any sample size taken from the process. ⊚ ⊚

true false

125) The sampling distribution of sample means taken from a process has less variability than the distribution of the process. ⊚ ⊚

true false

126) Even when the sample size is fairly small, the sampling distribution can be assumed to be approximately normal even if the underlying process distribution is not normally distributed. ⊚ ⊚

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true false

127) Approximately 99.7% of sample means will fall within ± two standard deviations of the process mean. ⊚ ⊚

128)

Assignable variation is variation due to a specific cause, such as tool wear. ⊚ ⊚

129)

true false

Control limits distinguish between non-random and assignable variability. ⊚ ⊚

130)

true false

Control limits are determined based on design specification limits. ⊚ ⊚

true false

131) A sample statistic that falls outside the control limits suggests that the process mean has changed. ⊚ ⊚

true false

132) A sample statistic that falls inside the control limits suggests there is assignable variation in the process.

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⊚ ⊚

133)

Concluding that a process has not changed when it has is known as a Type I error. ⊚ ⊚

134)

true false

Concluding that a process has changed when it has not is known as a Type II error. ⊚ ⊚

135)

true false

Concluding that a process has changed when it has not is known as a Type I error. ⊚ ⊚

true false

136) The probability of a Type I error is the probability of concluding that assignable variation is present even though only random variation exists. ⊚ ⊚

true false

137) If a point on a control chart falls outside one of the control limits, this suggests that the process output is non-random, assignable variation. ⊚ ⊚

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true false

138) The sample size chosen for control charts depends on the cost of inspection versus the expected cost of Type II error. ⊚ ⊚

139)

Sample range control charts are used to monitor process dispersion. ⊚ ⊚

140)

true false

Attributes are process characteristics that must be measured rather than counted. ⊚ ⊚

true false

141) Control charts based on attribute data are for process characteristics that are counted rather than measured. ⊚ ⊚

142)

Sample range control charts are used to measure shifts in the process mean. ⊚ ⊚

143)

true false

A p-chart is used to measure shifts in process dispersion. ⊚ ⊚

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true false

144) The number of defective parts in a sample is a process characteristic that is counted rather than measured. ⊚ ⊚

145)

A p-chart is used to monitor the fraction of defectives in the output of a process. ⊚ ⊚

146)

true false

A c-chart is used to monitor the number of defects per unit of a process output. ⊚ ⊚

148)

true false

A c-chart is used to monitor the number of defectives in the output of a process. ⊚ ⊚

147)

true false

Design specifications are equivalent to control limits. ⊚ ⊚

true false

149) Control limits are specifications established by engineering design or customer requirements.

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⊚ ⊚

150)

"Process capability" compares "process variability" to the "design specifications". ⊚ ⊚

151)

true false

Control limits and process variability are directly related. ⊚ ⊚

152)

true false

There is no direct link between design specifications and statistical process control limits. ⊚ ⊚

true false

153) The output of a process may not conform to design specifications even though the process may be statistically "in control". ⊚ ⊚

true false

154) Control limits are statistical limits that reflect the extent to which sample statistics such as means and ranges can vary due to random variation alone. ⊚ ⊚

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true false

155)

Process variability is a key factor in process capability. ⊚ ⊚

156)

true false

A process is "capable" if the process output falls within the design specification. ⊚ ⊚

true false

157) The process capability index, indicated by Cp is calculated as the ratio of the design specification width to the process width. ⊚ ⊚

158)

true false

The process capability index, indicated by Cpk is used only when the process is centred. ⊚ ⊚

true false

159) When a process is not centred, its capability should be based on C pk because it considers the upper and lower design specifications separately and not just the overall design specification width. ⊚ ⊚

160)

true false

In order for a process to be capable, it must have a capability ratio of at least 1.00. ⊚ ⊚

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true false

161) A process capability index ( Cp) of 0.70 indicates that a process is capable of producing to design specifications. ⊚ ⊚

true false

162) Six sigma quality refers to achieving process variation so small that the half-width of the design specification equals six times the standard deviation of the process. ⊚ ⊚

163)

true false

Appraisal of a good or service against a standard is called inspection. ⊚ ⊚

true false

164) As a rule of thumb, operations with a high proportion of human involvement necessitate less inspection than mechanical operations, which tend to be less reliable. ⊚ ⊚

true false

165) Design of experiments involves performing experiments to determine the best control limits for a process. ⊚ ⊚

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true false

166) Designing quality into the process will NOT have an impact on the amount of inspection required. ⊚ ⊚

167)

true false

Only those quality characteristics that can be measured are candidates for control. ⊚ ⊚

true false

168) In the service sector, the only quality control points required are where personnel and the customer interact ⊚ ⊚

true false

169) Some situations require on-site inspection while other situations lend themselves to inspection off-site. ⊚ ⊚

true false

170) Control charts for attributes are best suited for manufacturing but do NOT have use in services. ⊚ ⊚

171)

true false

For better process control it is best if only variables OR attribute charts are used.

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⊚ ⊚

172)

A run test checks for patterns in a sequence of observations. ⊚ ⊚

173)

true false

Ideally both control charts and run tests should be used to analyse process output. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 10_7ce 1) C 2) D 3) D 4) C 5) D 6) D 7) A 8) C 9) C 10) B 11) C 12) C 13) D 14) E 15) A 16) C 17) E 18) D 19) C 20) D 21) B 22) B 23) A 24) E 25) D 26) C Version 1

27) D 28) B 29) E 30) D 31) A 32) B 33) D 34) C 35) C 36) B 37) C 38) A 39) B 40) D 41) A 42) E 43) B 44) C 45) B 46) D 47) B 48) E 49) A 50) B 51) D 52) B 53) A 54) D 55) D 56) B Version 1

57) A 58) B 59) C 60) B 61) C 62) D 63) C 64) E 65) D 66) A 67) E 68) C 69) B 70) D 71) B 72) E 73) A 74) C 75) D 76) E 77) B 78) A 79) C 80) D 81) E 82) B 83) C 84) D 85) C 86) E Version 1

87) D 88) B 89) C 90) A 91) B 110) FALSE 111) TRUE 112) FALSE 113) TRUE 114) TRUE 115) FALSE 116) TRUE 117) FALSE 118) TRUE 119) FALSE 120) FALSE 121) TRUE 122) TRUE 123) TRUE 124) FALSE 125) TRUE 126) TRUE 127) FALSE 128) TRUE 129) FALSE 130) FALSE 131) TRUE 132) FALSE 133) FALSE 134) FALSE Version 1

135) TRUE 136) TRUE 137) TRUE 138) TRUE 139) TRUE 140) FALSE 141) TRUE 142) FALSE 143) FALSE 144) TRUE 145) TRUE 146) FALSE 147) TRUE 148) FALSE 149) FALSE 150) TRUE 151) TRUE 152) TRUE 153) TRUE 154) TRUE 155) FALSE 156) TRUE 157) TRUE 158) FALSE 159) TRUE 160) TRUE 161) FALSE 162) TRUE 163) TRUE 164) FALSE Version 1

165) FALSE 166) TRUE 167) TRUE 168) FALSE 169) TRUE 170) FALSE 171) FALSE 172) TRUE 173) TRUE

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Chapter 11: Inventory Management 1)

A fill rate is the percentage of

filled by stock on hand

A) lead time B) safety stock C) inventory D) demand E) shipments

2) Laser scanning of bar codes at retail checkout counters does not provide which of the following advantages?

A) B) C) D)

Increased speed and accuracy at checkout Continuous information on inventories Elimination of periodic counting of inventory Improved levels of customer service

The time interval between placing an order and receiving an order is called:

A) Order delay B) Lead time C) Cycle time D) Order cycle E) Order interval

Which is not considered a holding cost?

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A) Warehousing costs B) Insurance C) Building depreciation D) Opportunity cost of funds E) Preparing purchase orders

Which of the following is not included in ordering cost?

A) Time spent paying invoices B) Moving delivered goods to temporary storage C) Inspecting incoming goods D) Taking an inventory count to determine how much needs to be ordered E) Cost of the items purchased

6) In an A-B-C inventory system, the typical percentage of the number of types of items in inventory that represent the A classification items is about:

A) 15 - 20 percent. B) 20 - 30 percent. C) 40 - 50 percent. D) 70 - 80 percent. E) More than 90 percent.

7) In the A-B-C classification system, items which account for about 5 - 10 percent of the annual dollar value (ADV) but 50 - 60 percent of the SKUs in inventory would be classified as:

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A) A items. B) B items. C) C items. D) either A items or B items. E) either B items or C items.

8) In the A-B-C classification system, items which account for 70 to 80 percent of the annual dollar value (ADV) but relatively few inventory items in terms of the number of SKUs would be classified as:

A) A items. B) B items. C) C items. D) either A items or B items. E) either B items or C items.

9) With an A-B-C system, an item that had a high demand quantity but a low annual dollar volume would probably be classified as:

A) B) C) D)

A B C A or B

10) In the basic EOQ model, a monthly demand of 50 units, an ordering cost of $100, and a holding cost of $3/unit per year will result in an EOQ of:

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A) 58 B) 200 C) 4,000 D) 8,000 E) 40,000

11) In the basic EOQ model, a monthly demand of 50 units, an ordering cost of $100, and a holding cost of $3/unit per year, the total ordering cost will be:

A) $300 B) $600 C) $1034.48 D) $2068.9 E) $4000

12) In the basic EOQ model, a monthly demand of 50 units, an ordering cost of $100, and a holding cost of $3/unit per year. How often will this item be ordered?

A) every month B) every two months C) every three months D) every four months E) every six months

13) In the basic EOQ model, a monthly demand of 50 units, an ordering cost of $100, and a holding cost of $3/unit per year, the maximum inventory ( I max) will be:

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A) 58 B) 116 C) 200 D) 400 E) 600

14) Annual demand for a particular item is 1,200 units per year (360 days per year). It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the EOQ model is chosen in this instance, how often will this item be ordered?

A) Every 10 days. B) Every 20 days. C) Every 30 days. D) Every 60 days. E) Every 90 days.

15) Annual demand for a particular item is 1,200 units per year (360 days per year). It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the EOQ model is chosen in this instance, what is the maximum inventory?

A) 100 B) 300 C) 600 D) 1200 E) 2400

16)

Which of the following is not one of the assumptions of the basic EOQ model?

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A) Annual demand requirements are known. B) Lead time does not vary. C) Each order is received in a single delivery. D) Quantity discounts are available. E) Only one product is involved.

17)

The basic EOQ model is most relevant for which one of the following?

A) Ordering items with dependent demand. B) Determination of safety stock. C) Ordering perishable items. D) Determining fixed interval order quantities. E) Determining fixed order quantities.

18)

The goal of the basic EOQ model is to:

A) Minimize order size. B) Minimize order cost. C) Minimize holding cost. D) Minimize the sum of purchasing and ordering costs. E) Minimize the sum of ordering and holding costs.

19)

Which of the following is not an assumption of the basic EOQ model?

A) Lead time does not vary. B) Only one product is involved. C) Holding costs are independent of price. D) Each order is received in a single delivery. E) There are no quantity discounts.

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20)

In the basic EOQ model, the annual ordering cost is equal to:

A) the EOQ multiplied by ordering cost. B) the EOQ divided by ordering cost. C) ordering cost multiplied by the ratio of annual demand to the EOQ. D) ordering cost multiplied by the ratio of the EOQ to annual demand. E) ordering cost multiplied by annual demand.

21)

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is that:

A) it doubles. B) it is four times its previous amount. C) it is half its previous amount. D) it is about 70 percent of its previous amount. E) it increases by about 40 percent.

22)

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will:

A) double. B) increase, but not double. C) decrease by a factor of two. D) remain the same. E) increase by the same ratio as lead time.

23) In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1/unit per year will result in an EOQ of:

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A) 20 B) square root of 200 C) 200 D) 400 E) 40

24) In the basic EOQ model, if D = 60 per month, S = $12 and H = $10 per unit per month, EOQ is:

A) 10 B) 12 C) 24 D) 72 E) 144

25) In the basic EOQ model, if annual demand is 50, holding cost is $2/unit per year, and ordering cost is $15, the EOQ (rounded to the next whole number) is:

A) 11 B) 20 C) 24 D) 28 E) 375

26) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $20.00 per order, and Stein beer costs $8.00 per sixpack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of a Stein beer case. If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

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A) 0.25 days B) 3 days C) 1 day D) 4 days E) 20 days

27) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $20.00 per order, and Stein beer costs $8.00 per sixpack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of a Stein beer case. If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?

A) 4 cases B) 12 cases C) 8 cases D) 20 cases E) 16 cases

28) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $20.00 per order, and Stein beer costs $8.00 per sixpack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of a Stein beer case. If he were to order 16 cases of Stein beer at a time, what would be the total daily holding costs?

A) $3.20 B) $6.40 C) $9.60 D) $12.80 E) $16.00

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29) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $20.00 per order, and Stein beer costs $8.00 per sixpack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of a Stein beer case. What is the economic order quantity for Stein beer?

A) 4 cases B) 8 cases C) 10 cases D) 20 cases E) 80 cases

30) Ann Chovies, owner of the Perfect Pasta Pizza Parlour, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

A) 0 days B) 0.25 days C) 3 days D) 4 days E) 5 days

31) Ann Chovies, owner of the Perfect Pasta Pizza Parlour, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?

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A) 20 pounds B) 40 pounds C) 60 pounds D) 80 pounds E) 100 pounds

32) Ann Chovies, owner of the Perfect Pasta Pizza Parlour, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the total daily costs, including the cost of the pepperoni?

A) $60.00 B) $63.20 C) $64.00 D) $64.10 E) $65.00

33) Ann Chovies, owner of the Perfect Pasta Pizza Parlour, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. What is the economic order quantity for pepperoni?

A) 20 pounds B) 40 pounds C) 60 pounds D) 80 pounds E) 100 pounds

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34) Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. At what point should she reorder pepperoni?

A) 20 pounds remaining B) 40 pounds remaining C) 60 pounds remaining D) 80 pounds remaining E) 100 pounds remaining

35) The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that holding a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armoured car delivery costs, and that order lead time is six days. Assuming a thirty-day month, and without allowing for safety stock, at what point should bills be reordered?

A) 0 bills remaining B) 417 bills remaining C) 2,500 bills remaining D) 10,000 bills remaining E) 12,500 bills remaining

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36) The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that holding a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armoured car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?

A) $3,000 B) $6,000 C) $12,500 D) $300,000 E) $600,000

37) The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that holding a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armoured car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at a time, what would be the total monthly costs, EXCLUDING the value of the bills?

A) $625 B) $1,250 C) $2,500 D) $3,125 E) $5,000

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38) The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that holding a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armoured car delivery costs, and that order lead time is six days. What is the economic order quantity?

A) 866 bills B) 3,000 bills C) 6,000 bills D) 10,392 bills E) 12,500 bills

39) The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to hold a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four (4) days. Without allowing for safety stock, what reorder point should be used to reorder resin?

A) 0 kilograms remaining B) 50 kilograms remaining C) 200 kilograms remaining D) 400 kilograms remaining E) 500 kilograms remaining

40) The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to hold a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four (4) days. If order size was 1,000 kilograms of resin, what would be the length of an order cycle?

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A) 0.05 days B) 4 days C) 16 days D) 20 days E) 50 days

41) The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to hold a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four (4) days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?

A) 50 kilograms B) 200 kilograms C) 500 kilograms D) 800 kilograms E) 1,000 kilograms

42) The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to hold a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four (4) days. If the order size was 1,000 kilograms of resin, what would be the total daily holding costs?

A) $5 B) $10 C) $20 D) $25 E) $40

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43) The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to hold a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four (4) days. What is the economic order quantity for resin?

A) 50 kilograms B) 100 kilograms C) 250 kilograms D) 500 kilograms E) 1,000 kilograms

44)

Given the following data for a particular inventory item: Demand:

500 units per month

Ordering Cost:

$30 per order

Holding Cost:

$1 per unit per year

Lead Time:

1.5 months

Price:

$7.99 per unit 360 working days in a year

What is the economic order quantity for this item?

A) 100 units B) 174 units C) 500 units D) 600 units E) 800 units

45)

Given the following data for a particular inventory item:

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Demand:

500 units per month

Ordering Cost:

$30 per order

Holding Cost:

$1 per unit per year

Lead Time:

1.5 months

Price:

$7.99 per unit 360 working days in a year

For the economic order quantity, what is the maximum inventory level?

A) 100 units B) 174 units C) 500 units D) 600 units E) 800 units

46)

Given the following data for a particular inventory item: Demand:

500 units per month

Ordering Cost:

$30 per order

Holding Cost:

$1 per unit per year

Lead Time:

1.5 months

Price:

$7.99 per unit 360 working days in a year

What is the reorder point?

A) 100 units B) 174 units C) 500 units D) 600 units E) 750 units

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47)

Given the following data for a particular inventory item: Demand:

500 units per month

Ordering Cost:

$30 per order

Holding Cost:

$1 per unit per year

Lead Time:

1.5 months

Price:

$7.99 per unit 360 working days in a year

For the economic order quantity, what is the total annual holding cost?

A) $50 B) $87 C) $250 D) $280 E) $300

48)

Given the following data for a particular inventory item: Demand:

500 units per month

Ordering Cost:

$30 per order

Holding Cost:

$1 per unit per year

Lead Time:

1.5 months

Price:

$7.99 per unit 360 working days in a year

For the economic order quantity, what is the total annual ordering cost?

A) $150 B) $300 C) $1034.48 D) $2000 E) $2546.8

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49) A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the maximum inventory would be:

A) greater than the EOQ. B) equal to the EOQ. C) smaller than the EOQ. D) greater than or equal to the EOQ. E) smaller than or equal to the EOQ.

50)

Which of the following is not true for the EPQ model?

A) Usage rate is assumed to be constant. B) Production rate exceeds usage rate. C) The maximum inventory occurs just after production ceases. D) There are no ordering or setup costs. E) Average inventory is calculated as one-half maximum inventory.

51)

Given the same demand, setup/ordering costs, and holding costs, the EPQ will be:

A) greater than the EOQ. B) equal to the EOQ. C) smaller than the EOQ. D) greater than or equal to the EOQ. E) smaller than or equal to the EOQ.

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52) A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $90 for a run, and holding cost is $1 per year. What will be the optimal production run quantity (rounded to the next whole number)?

A) 2078 units B) 2940 units C) 4157 units D) 5879 units E) 8990 units

53) A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $90 for a run, and holding cost is $1 per year. What will be the maximum inventory level (rounded to the next whole number)?

A) 1470 units B) 2078 units C) 2550 units D) 2940 units E) 4495 units

54) A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $90 for a run, and holding cost is $1 per year. What will be the cycle length for the optimal production run quantity

A) 3.675 days B) 5.36 days C) 6.47 days D) 7.35 days E) 14.70 days

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55) A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $90 for a run, and holding cost is $1 per year. What will be the production run length for the optimal production run quantity)?

A) 3.675 days B) 5.36 days C) 6.47 days D) 7.35 days E) 11.25 days

56) A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $90 for a run, and holding cost is $1 per year. How many times to order (rounded to the next whole number)?

A) 17 B) 28 C) 33 D) 45 E) 48

57) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is $.18 per locket on an annual basis, what will be the optimal order quantity (EOQ) (rounded to the next whole number)?

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A) 1000 units B) 1100 units C) 1205 units D) 1300 units E) 1400 units

58) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is $.18 per locket on an annual basis, what will be the total annual cost for the optimal order quantity?

A) $198 B) $1324.67 C) $2013.75 D) $2134 E) $2376.12

59) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is $.18 per locket on an annual basis, what order size will minimize total cost?

A) 1000 units B) 1100 units C) 1200 units D) 1205 units E) 1400 units

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60) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is 15 percent of price on an annual basis, what will be the optimal order quantity (EOQ) (rounded to the next whole number)?

A) 1000 units B) 1100 units C) 1205 units D) 1300 units E) 1400 units

61) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is 15 percent of price on an annual basis, what will be the total annual cost for the optimal order quantity?

A) $180.75 B) $1323.14 C) $1995.75 D) $2345.65 E) $2568.90

62) Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year. Manager has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. If holding cost is 15 percent of price on an annual basis, what order size will minimize total cost?

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A) 1100 units B) 1200 units C) 1205 units D) 1300 units E) 1400 units

63)

Which of the following is not an assumption of the EOQ with planned shortages model?

A) B) C) D)

There are no backorders. Demand rate is constant. There are no quantity discounts. Lead time is constant.

64) In the EOQ model with planned shortages, if annual demand is 500, holding cost is $200, ordering cost is $15, and back-order cost is $400, EOQ (rounded to the next whole number) is:

A) 8 B) 9 C) 11 D) 13 E) 113

65) In the EOQ model with planned shortages, if annual demand is 500, holding cost is $200, ordering cost is $15, and back-order cost is $400, the quantity back-ordered per replenishment cycle, rounded to the next whole number, is:

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A) 3 B) 4 C) 5 D) 12 E) 38

66) In the EOQ model with planned shortages, if annual demand is 100, holding cost is $400, ordering cost is $20, and back-order cost is $200, the quantity back-ordered per replenishment cycle, rounded to the next whole number, is:

A) 3 B) 4 C) 5 D) 7 E) 20

67)

In a two-bin inventory system, the amount contained in the second bin is equal to the:

A) reorder point, the amount required until an order arrives. B) EOQ C) amount in the first bin. D) optimum stocking level. E) safety stock.

68)

Which one of the following is not a determinant of the reorder point (ROP)?

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A) Rate of demand B) Length of lead time C) Lead time variability D) Stock-out risk E) Purchase cost

69)

If no variations in demand or lead time exist, the reorder point (ROP) will equal:

A) the EOQ. B) the expected usage during lead time. C) safety stock. D) the service level. E) the EOQ plus safety stock.

70) If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock of 100 units is included, the reorder point (ROP) is:

A) 100 units B) 200 units C) 300 units D) 600 units E) 700 units

71) If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the reorder point (ROP) will be:

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A) 50 B) 70 C) 130 D) 170 E) 220

72) Which one of these would not be a factor in determining the level of the reorder point that includes safety stock?

A) B) C) D)

The order quantity. The lead time. The variability of demand. The demand or usage rate.

73) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $20.00 per order, and Stein beer costs $8.00 per sixpack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of a Stein beer case. Without allowing for safety stock, what reorder point should be used to reorder Stein beer?

A) 0 cases remaining B) 4 cases remaining C) 12 cases remaining D) 16 cases remaining E) 20 cases remaining

74)

Which one of the following is not generally a determinant of the reorder point?

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A) rate of demand B) length of lead time C) safety stock D) lead time variability E) purchase cost

75) Ann Chovies, owner of the Perfect Pasta Pizza Parlour, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. Without allowing for safety stock, what reorder point should be used to reorder pepperoni?

A) 20 pounds remaining B) 40 pounds remaining C) 60 pounds remaining D) 80 pounds remaining E) 100 pounds remaining

76)

Which one of the following is implied by a " lead time " service level of 95 percent?

A) Approximately 95 percent of demand during lead time will be satisfied. B) The probability is 95 percent that demand during lead time will not exhaust the inventory. C) The probability is 95 percent that demand during lead time will exactly equal the amount on hand at the beginning of lead time. D) The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.

77)

The need for safety stock can be reduced by an inventory planning strategy which:

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A) increases lead time. B) increases lead time variability. C) increases lot sizes. D) decreases ordering costs. E) decreases lead time variability.

78) Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?

A) 20 × 2 B) 20 × 10 C) 2 times the square root of 20 D) 2 times the square root of 60 times 10 E) 40 days

79) Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a standard deviation of 2 days. What is the standard deviation of demand during lead time?

A) 60 times 2 B) 60 times the square root of 2 C) 60 times the square root of 10 D) 60 times 10 E) 10 times the square root of 2

80)

Which one of the following is implied by an "annual" service level of 95 percent?

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A) Approximately 95 percent of demand between orders will be satisfied. B) The probability is 95 percent that all demand over the year will exceed supply. C) The probability is 95 percent that all demand over the year will equal supply. D) The probability is 95 percent that all demand over the year will not exceed supply. E) Approximately 95 percent of demand between orders will be lost.

81) If there are shipping cost economies that result from bundling orders for different items together, the model becomes a relatively more attractive option.

A) multi-item B) fixed-order-interval C) fixed-order-quantity D) reorder-point E) multi-period

82)

All of the following are possible reasons for using the fixed order interval model except:

A) that supplier policy encourages use. B) that grouping orders of items held in inventory can save in shipping costs. C) that the level of safety stock required is lower than with an EOQ/ROP model. D) that it is suited to periodic checks of inventory levels rather than continuous monitoring. E) that continuous monitoring is not practical.

83)

Which item would be least likely to be ordered under a fixed order interval system?

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A) Textbooks at a college bookstore. B) Parts and components for an assembly plant with high variability in output. C) Cards at a gift shop. D) Canned peas at a supermarket. E) Car batteries at a "big box" retailer.

84)

The fixed-order-interval model would be most likely to be used for this situation:

A) Production is done in batches. B) Demand is highly variable C) Spare parts are ordered when a new machine is purchased. D) Grouping orders can save shipping costs. E) A company has switched from mass production to lean production.

85) Weekly demand for a particular item averages 30 units, with a standard deviation of 4. This item is managed with a fixed-order-interval model. The order interval is three weeks, and this item has a certain lead time of one week. The desired service level is 97.5 percent. Assume that it is now time to place another order, and there are 43 units on hand. How many units should be ordered? (rounded to the next whole number)

A) 46 B) 84 C) 93 D) 120 E) 136

86) In a single-period model, if excess cost is double the shortage cost, the approximate stockout risk, assuming an optimum service level, is percent.

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A) 33 B) 50 C) 67 D) 95 E) 100

87) In a single-period inventory situation, the probabilities that demand will be 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively. If two units are stocked, what is the probability of selling both of them?

A) 0.5 B) 0.6 C) 0.7 D) 0.8 E) 0.9

88) Which of these products would be most likely to involve the use of a single period model for ordering?

A) Gold coins B) Hammers C) Fresh fish D) Calculators E) Frozen corn

89) Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods?

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A) Economic order quantity B) Economic production quantity C) Single period D) Quantity discount E) Reorder point

90) In a single period model, if shortage and excess costs are equal, then the optimum service level is:

A) 0 B) .33 C) .50 D) .67 E) .87

91) In a single period model, if shortage cost is four times excess cost, then the optimum service level is:

A) 100 percent B) 80 percent C) 60 percent D) 40 percent E) 20 percent

92) In the single period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is:

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A) 100 percent B) 67 percent C) 50 percent D) 33 percent E) 5 percent

93) If, in a single period inventory situation, the probabilities of demand being 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively, what is the probability of selling no more than two units?

A) .3 B) .5 C) .6 D) .8 E) .9

94) A car rental agency uses 96 boxes of staples a year. The boxes cost $4 each. It costs $10 to order staples, and holding costs are $0.80 per box on an annual basis. Determine: (i) the order quantity that will minimize the sum of ordering and holding boxes of staples (ii) the annual cost of ordering and carrying the boxes of staples

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95) A service garage uses 120 boxes of cleaning cloths a year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on an annual basis. Determine: (i) The economic order quantity (ii) The total cost of carrying the cloths (excluding purchase price) (iii) The average inventory

96)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

What is the economic order quantity for this item?

97)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what is the length of an order cycle?

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98)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what is the average inventory?

99)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what are total weekly ordering costs?

100)

Given the following data for a particular inventory item: USAGE:

Version 1

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what are total weekly holding costs?

101)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what are total weekly total costs, including the cost of the inventory item?

102)

Given the following data for a particular inventory item: USAGE:

500 units per week

ORDERING COST:

$40 per order

HOLDING COST:

1 cent per unit each week

LEAD TIME:

3 weeks

PRICE:

50 cents per unit

For the economic order quantity, what is the reorder point? Version 1

103) A shop that makes candles offers a scented candle, which has a monthly demand of 360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis. Determine the following: (i) the economic run size (ii) the maximum inventory (iii) the number of days in a run

104) A company can produce a part it uses in an assembly operation at the rate of 50 an hour. The company operates eight hours a day, 300 days a year. Daily usage of the part is 300 parts. The company uses the part every day. The run size is 6,000 parts. The annual holding cost is $2 per unit, and setup cost is $100. (i) How many runs per year will there be? (ii) While production is occurring, how many parts per day are being added to inventory? (iii) Assuming that production begins when there are no parts on hand, what is the maximum number of parts in inventory? (iv) The machine is dedicated to this product. Every so often, preventive maintenance, which requires six working days, must be performed on it. Does this interrupt production cycles, or is there enough time between cycles to perform the maintenance? Explain.

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105) Suppose that you are the manager of a production department that uses 400 boxes of rivets per year. The supplier quotes you a price of $8.50 per box for an order size of 199 boxes or less, a price of $8.00 per box for orders of 200 to 999 boxes, and a price of $7.50 per box for an order of 1,000 or more boxes. You assign a holding cost of 20 percent of the price to this inventory. What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering? Assume ordering cost is $80/order.

106) The operator of a concession at a downtown location estimates that he will sell 400 bags of circus peanuts during a month. Holding costs are 17 percent of unit price and ordering cost is $22. The price schedule for bags of peanuts is: 1 to 199, $1.00 each; 200 to 499, $.94 each; and 500 or more $.87 each. What order size would be most economical?

107) A manager has just received a revised price schedule from a vendor. What order quantity should the manager use in order to minimize total costs? Annual Demand is 120 units, ordering cost is $8, and holding cost is 8% of price.

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Quantity

Unit price

1 - 39

$14

1.12

40 - 59

1.04

60 - 89

.96

90+

.88

108) HoldM4U Company distributes a specialized air purifier. They are considering allowing backorders, with an estimated cost of $200 per unit per year. The annual demand is 81,000 units, the annual holding cost is 10% of the item cost and the unit cost of this item is $1,000. The ordering cost is $500 per order. a. Determine the optimal order quantity and total annual inventory cost using the basic EOQ model with no backorders. b. Determine the optimal order quantity and backorder quantity and total annual inventory cost using the EOQ with planned shortages model. c. Should the company allow backorders?

109) Demand for a product with a unit ordering cost of $150 is 800 units per year, holding cost per unit per year is $10, and backorder cost is estimated to be $20 per unit per year. What amount of savings, if any, would there be in total annual inventory cost by using planned shortages instead of a basic economic order quantity?

110) The injection molding department of a company uses 40 kilograms of a powder a day. Inventory is reordered when the amount on hand is 240 kilograms. Lead time averages five days. It is normally distributed and has a standard deviation of two days. What is the probability of a stock out during lead time?

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111) A shop owner uses a reorder point approach to restocking a certain raw material. Lead time is six days. Usage of the material during lead time is normally distributed with a mean of 42 kilograms and a standard deviation of 4 kilograms. When should the raw material be reordered if the acceptable risk of a stock-out is 3%?

112) Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with an average of 15 gallons/day and a standard deviation of two gallons/day. Harry has just fired the manager and taken over operating the restaurant himself. Harry has asked you to help him decide how to reorder cooking oil in order to achieve a service level which is seven times the risk of stock out (7/8). Lead time is eight days. (i) If cooking oil can be ordered as needed, what reorder point should be used? (ii) If a fixed interval of 30 days is specified, how much safety stock should Harry hold?

113) A bakery's use of corn sweetener is normally distributed with a mean of 80 gallons per day and a standard deviation of four gallons per day. Lead time for delivery of the corn sweetener is normal with a mean of six days and a standard deviation of two days. If the manager wants a service level of 99 percent, what reorder point should be used?

114) A manager is reordering lubricant when the amount on-hand reaches 422 pounds. Average daily usage is 45 pounds, which is normally distributed and has standard deviation of three pounds per day. Lead time is nine days. What is the risk of a stock-out?

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115)

Given the following information:

Order quantity = 40 Expected demand during lead time = 20 units σd LT = 10 desired annual service level = .99 Find: (i) the expected number of units short per cycle (ii) the required ROP

116) The manager of a bakery orders three 'cake-to-go' wedding cakes every Saturday to accommodate last minute purchases. Demand for the cakes can be described by a Poisson distribution that has a mean of 2. The cakes cost $10 each to prepare, and they sell for $26 each. Any cakes that haven't been sold by the end of the day are sold for half price the next day. Usually, half of those are sold and the rest are tossed. What stocking level would be appropriate?

117) Joe's Coffee Shoppe has fresh doughnuts delivered each morning. Daily demand for plain doughnuts is approximately normal with a mean of 200 and a standard deviation of 15. Joe pays $1.20 per dozen and has a standing order for 16 dozen. Joe and the staff eat any leftovers. What is the implied shortage cost?

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118) A firm stocks a seasonal item that it buys for $22/unit and sells for $29 unit. During the season, daily demand can be described using a Poisson distribution with a mean of 2.4. Because of the nature of the item, units remaining at the close of business each day must be removed at a cost of $2 each. What is the optimum stocking level, and what is the effective service level?

119) A restaurant prepares Peking Duck daily at a cost of $18 per duck. Each duck generates revenue of $47 if sold. Demand for Peking Duck can be described by a Poisson distribution with a mean of 4.2 ducks per day. Unsold ducks at the end of each day are converted to duck soup at an additional cost of $5 over and above the resulting value as soup. How many ducks should be prepared each day? What will be the effective service level?

120) A machine is expected to use approximately three spare parts during its useful life. The spares cost $200 each and have no salvage value or other use. The manager has ordered five spares. Assuming a Poisson usage rate, what range of shortage cost is implied?

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121) A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $400 each and have no salvage value. The manager has compiled a frequency distribution for the probable usage of spare parts, as shown. For what range of shortage costs would stocking one spare part constitute an optimal decision? No. of Spares

Frequency

.08

.30

.24

.20

.18

122) The Corner Newsstand has demand for a certain weekly magazine that can be approximated by a Poisson distribution with a mean of 9.0. Magazines are purchased for $1.50. If unsold copies can be returned for half credit and the owner stocks ten copies, what is the implied range of shortage cost?

123) The Corner Newsstand has demand for a certain weekly magazine that can be approximated by a Poisson distribution with a mean of 9.0. Magazines are purchased for $1.50. If unsold copies must be destroyed and copies sell for $4.00 each, what is the optimum stocking level and its effective service level?

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124) The Corner Newsstand has demand for a certain weekly magazine that can be approximated by a Poisson distribution with a mean of 9.0. Magazines are purchased for $1.50. If unsold copies can be returned for half credit and copies sell for $4.25 each, what is the optimal stocking level and its effective service level?

125) A dry cleaning firm uses an average of 20 gallons of cleaning fluid a day. Usage tends to be normally distributed with a standard deviation of two gallons per day. Lead time is four days, and the desired service level is 92 percent. What amount of safety stock is appropriate under each of these conditions: (i) Cleaning fluid is reordered every 45 days. (ii) A fixed order size of 600 gallons is used.

126) The overall objective of inventory management is to achieve satisfactory levels of customer service by having sufficient quantities while keeping inventory costs reasonable. ⊚ ⊚

true false

127) Two fundamental decisions that buyers or inventory analysts must make about each item held in the inventory are the timing and size of orders. ⊚ ⊚

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true false

128) The ratio of annual cost of goods sold to average inventory investment is called annual service level. ⊚ ⊚

129)

true false

A lower inventory turnover ratio indicates more efficient use of inventories. ⊚ ⊚

true false

130) The inventory turnover ratio indicates how many times a year the inventory is sold or used. ⊚ ⊚

true false

131) A product that takes a short time to manufacture, or a short time to sell, will have a low turnover rate. ⊚ ⊚

true false

132) A perpetual inventory system keeps track of removals from and additions to inventory of each item on a continuous basis, so the system can provide information on the current inventory position for each item at any time. ⊚ ⊚

true false

133) A two-bin system for inventory control eliminates the need for perpetual inventory tracking.

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⊚ ⊚

true false

134) A fixed order quantity/reorder point model for inventory control is usually used with perpetual tracking. ⊚ ⊚

true false

135) In the Periodic Review Model inventory position is reviewed periodically, for example every three days. ⊚ ⊚

true false

136) Quick Response (QR) Codes, Code 39, Code 128, and Data Matrix are examples of different types of RFID. ⊚ ⊚

true false

137) Two-dimensional bar codes provide more precise information than RFID tags and enable businesses to identify, track, monitor, or locate practically any object in the supply chain that is within range of a tag reader. ⊚ ⊚

true false

138) There are two different types of radio frequency identification (RFID); linear and twodimensional.

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⊚ ⊚

true false

139) A point-of-sale (POS) system records actual sales of products at the time and the location of sale. ⊚ ⊚

true false

140) The time it will take for a batch of a part/product to be manufactured is called manufacturing lead time. ⊚ ⊚

true false

141) Ordering costs are usually expressed as a variable cost equal to a percentage of the total purchase cost of an order. ⊚ ⊚

142)

true false

Inspection of goods for quality and quantity upon arrival is part of ordering cost. ⊚ ⊚

true false

143) Warehousing costs, insurance costs, and spoilage costs are all associated with holding costs. ⊚ ⊚

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true false

144) An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier. ⊚ ⊚

true false

145) Shortage cost can include the opportunity cost of not making a sale, loss of customer goodwill, late charges, and expediting costs ⊚ ⊚

146)

true false

The A-B-C approach involves classifying inventory items based on their unit cost. ⊚ ⊚

true false

147) In the A-B-C classification of inventory, items classified under the "A" category typically have high unit costs, but low levels for annual dollar value (ADV). ⊚ ⊚

true false

148) In the A-B-C classification of inventory, C items typically range from 50 to 60 percent of the number of items, but only 5 to 10 percent of the annual dollar value (ADV). ⊚ ⊚

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true false

149) In the A-B-C approach to classify inventory, items that have high unit costs are always classified as "A" category items. ⊚ ⊚

true false

150) In an A-B-C system, the C items should receive close attention through frequent reviews of amounts on hand and control over withdrawals. ⊚ ⊚

true false

151) The inventory position for each item is the quantity on hand plus the quantity on order minus the quantity backordered. ⊚ ⊚

152)

true false

The basic EOQ model assumes that the demand varies widely throughout the year. ⊚ ⊚

true false

153) The average inventory level and the number of orders per year are inversely related; as one increases, the other decreases. ⊚ ⊚

true false

154) Holding or carrying cost is directly proportional to order size, as order size increases, so does the holding cost.

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⊚ ⊚

true false

155) Using the EOQ model, the higher an item's holding costs, the more frequently it will be ordered. ⊚ ⊚

true false

156) In the basic EOQ model, at the optimal order quantity annual holding cost is equal to the annual ordering cost. ⊚ ⊚

true false

157) Annual ordering cost is inversely related to order size, as the size of orders decreases the annual cost of ordering increases. ⊚ ⊚

true false

158) Using the EOQ model, the maximum inventory level is equal to Q or economic order quantity. ⊚ ⊚

159)

true false

Using the EOQ model, the lower ordering costs, the less frequently will be ordered. ⊚ ⊚

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true false

160) The economic order quantity occurs when the annual carrying cost is equal to the annual ordering cost. ⊚ ⊚

161)

true false

As ordering costs increase, the optimal order quantity (EOQ) increases. ⊚ ⊚

true false

162) The total annual inventory cost is at minimum amount when the total ordering cost and the total holding cost intersect each other. ⊚ ⊚

163)

true false

The maximum inventory level under an EPQ is smaller than an EOQ ⊚ ⊚

true false

164) Total annual purchasing cost is included in total cost in the EOQ with quantity discount model. ⊚ ⊚

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true false

165) Using the EPQ model, the maximum inventory level is equal to Q or production run quantity. ⊚ ⊚

true false

166) In the EOQ with planned shortages, it is assumed there is no cost is associated with backorders. ⊚ ⊚

167)

true false

Reorder point models are primarily used for dependent-demand items. ⊚ ⊚

true false

168) The reorder point (ROP) models for inventory management are used to calculate the time between orders. ⊚ ⊚

true false

169) The reorder point (ROP) models determine the point at which the inventory, in terms of quantity must be reordered. ⊚ ⊚

170)

true false

The demand rate is not used in determining the reorder point ROP.

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⊚ ⊚

true false

171) In fixed order-quantity inventory planning, the reorder point (ROP) can include safety stock held to account for demand variability. ⊚ ⊚

172)

true false

Variability in demand and/or lead time can be compensated for by safety stock. ⊚ ⊚

true false

173) The reorder point (ROP) must be recomputed before each order (i.e., once every order cycle). ⊚ ⊚

174)

true false

Purchase cost is not generally a determinant of the reorder point. ⊚ ⊚

true false

175) The reorder point (ROP) is inversely related to safety stock, as the size of safety stock decreases the reorder point (ROP) increases. ⊚ ⊚

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true false

176) Service level can be stated in terms of the lead time for an order cycle or as an annual amount. ⊚ ⊚

177)

true false

The service level for inventory planning is associated with the risk of a stock-out. ⊚ ⊚

true false

178) The fixed order interval model requires a larger amount of safety stock than the reorder point (ROP) model for the same risk of a stock-out. ⊚ ⊚

179)

true false

Fixed-interval systems are widely used by retail businesses. ⊚ ⊚

true false

180) In the fixed order interval model, also known as the order up to level model, the order size is the same for each cycle. ⊚ ⊚

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true false

181) When the item is offered for resale, shortage costs in the single period model can include a charge for loss of customer goodwill. ⊚ ⊚

182)

true false

The single period model can be very helpful in determining how much to order. ⊚ ⊚

true false

183) The single-period model for inventory management is well suited for planning orders for perishables. ⊚ ⊚

true false

184) In the single period model, when the inventory item is a spare part for a production line, shortage cost is determined by the cost of lost production. ⊚ ⊚

true false

185) In the single period model, the service level is the probability that demand will not be more than the stocking level in any period. ⊚ ⊚

true false

186) In the single period model, when excess cost is equal to shortage cost, the optimum stocking level falls in the center of the demand distribution for the item.

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⊚ ⊚

true false

187) In the single-period model, with discrete stocking levels, the service level must equal or exceed, the ratio C s/(C s + C e). ⊚ ⊚

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true false

Answer Key Test name: Chap 11_7ce 1) D 2) C 3) B 4) E 5) E 6) A 7) C 8) A 9) C 10) B 11) A 12) D 13) C 14) C 15) A 16) D 17) E 18) E 19) C 20) C 21) E 22) D 23) A 24) B 25) D 26) D Version 1

27) C 28) D 29) C 30) D 31) B 32) D 33) E 34) C 35) C 36) D 37) D 38) A 39) C 40) D 41) C 42) C 43) D 44) D 45) D 46) E 47) E 48) B 49) C 50) D 51) A 52) D 53) D 54) E 55) D 56) A Version 1

57) B 58) D 59) C 60) C 61) C 62) C 63) A 64) C 65) B 66) B 67) A 68) E 69) B 70) E 71) C 72) A 73) C 74) E 75) C 76) D 77) E 78) C 79) A 80) D 81) B 82) C 83) B 84) D 85) C 86) C Version 1

87) C 88) C 89) C 90) C 91) B 92) B 93) C 126) TRUE 127) TRUE 128) FALSE 129) FALSE 130) TRUE 131) FALSE 132) TRUE 133) TRUE 134) TRUE 135) TRUE 136) FALSE 137) FALSE 138) FALSE 139) TRUE 140) TRUE 141) FALSE 142) TRUE 143) TRUE 144) FALSE 145) TRUE 146) FALSE 147) FALSE 148) TRUE Version 1

149) FALSE 150) FALSE 151) TRUE 152) FALSE 153) TRUE 154) TRUE 155) TRUE 156) TRUE 157) TRUE 158) TRUE 159) FALSE 160) FALSE 161) TRUE 162) TRUE 163) TRUE 164) TRUE 165) FALSE 166) FALSE 167) FALSE 168) FALSE 169) TRUE 170) FALSE 171) TRUE 172) TRUE 173) FALSE 174) TRUE 175) FALSE 176) TRUE 177) TRUE 178) TRUE Version 1

179) TRUE 180) FALSE 181) TRUE 182) TRUE 183) TRUE 184) TRUE 185) TRUE 186) TRUE 187) TRUE

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Chapter 12: Aggregate Operations Planning and Master Scheduling 1)

Aggregate operations planning is capacity planning for:

A) a long-term horizon of several years. B) an intermediate-term horizon, typically 12 months. C) a short-term horizon of four to six weeks. D) day-to-day production for one or two weeks. E) machine loading in a plant on hour-by-hour basis.

Essentially, the output of aggregate operations planning is:

A) the marketing plan. B) the production plan. C) the rough-cut capacity plan. D) the master schedule. E) the material requirements plan.

Which of the following best describes aggregate operations planning?

A) Linking long term capacity decisions with intermediate term production B) Integrating several planning techniques to develop an MPS C) An operations plan to support sales forecasting D) Using predicted demand to plan the general levels of employment, output, and inventories required E) An employee scheduling technique

Which of the following are examples of intermediate operations planning decisions?

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A) Deciding on the amount of inventory to hold B) Deciding on which production equipment to purchase C) Deciding on the location of a production facility D) Deciding on what products/services to offer E) Job sequencing

One area that aggregate operations planning decisions relate to is:

A) job sequencing. B) order quantities. C) inventory levels. D) location. E) layout.

6) In doing "aggregate operations planning" for a firm producing paint, the aggregate operations planners would most likely base their planning on:

A) gallons of paint as an equivalent unit of production, without concern for the different colours to be produced. B) gallons of paint as an equivalent unit of production but be concerned with the different colours to be produced. C) all the different sizes to be produced such as gallons, quarts, and pints. D) all the different sizes and all the different colours to be produced.

Aggregate operations planners balance actions that influence:

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A) demand and inventories. B) demand and costs. C) capacity and inventories. D) capacity and costs. E) capacity and demand.

Aggregate operations planning does NOT require which of the following information?

A) A forecast of expected demand B) Current levels of inventory C) Policies regarding employment D) Production rates E) Maintenance schedules

Which of the following is NOT an input to the aggregate operations planning process?

A) Production rates (capacities) B) Demand forecasts C) Initial inventory levels D) Master production schedules E) Limits on the use of overtime

10) Which one of the following would NOT be considered a decision option for the purpose of aggregate operations planning?

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A) Inventory levels B) Manpower levels C) Pricing D) Production costs E) Promotion

11)

Which one of the following is NOT a basic option for altering demand?

A) Promotion B) Backordering C) Pricing D) Subcontracting E) Exporting

12) One option in aggregate planning that shifts the pattern of demand from one period to another is:

A) backorders. B) overtime. C) part-time workers. D) inventories. E) subcontracting.

13) Which of the following would NOT be a strategy associated with adjusting aggregate capacity to meet expected demand?

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A) Hiring part time workers B) Vary the size of the workforce C) Use overtime to increase workforce utilization D) Allow inventory levels to vary E) Use backorders

14)

One option for altering the period when manufacturing capacity is available is:

A) pricing. B) promotion. C) use of slack time for training. D) stockpiling inventories. E) early orders

15)

One option for altering the capacity available in aggregate planning is:

A) use of overtime or slack time. B) pricing. C) promotion. D) backorders. E) early orders

16) Which of the following is NOT a consideration in the decision to use hiring and laying off permanent full-time workers as a capacity option?

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A) Union contract restrictions B) Nature of the operation regarding accommodating changes in staffing levels C) Available supply of workers D) Skill level of workers E) Finished goods inventory that is stockpiled

17) Which of the following is NOT a basic option for altering the availability of capacity in service?

A) Overtime B) Hiring/layoff C) Part time D) Inventory E) Idle time

18)

Which of the following is NOT true about using overtime for changing capacity?

A) It can be implemented quickly. B) It avoids the challenges of hiring more workers. C) It typically results in higher productivity. D) It typically increases payroll costs. E) It can be implemented easily.

19)

In order to use the "level output/workforce strategy", variations in demand are met by:

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A) varying output during regular time without changing employment levels. B) keeping output level by changing workforce levels. C) relying on overtime to adjust capacity. D) using some combination of inventories, subcontracting and back orders. E) Subcontracting

20) In using the "chase demand strategy" variations in demand can be met with any of the following except:

A) B) C) D)

21)

hiring part time workers. subcontracting. the use of overtime. varying inventory levels.

The two primary factors in choosing an aggregate operations planning strategy are:

A) company policy and the master schedule. B) overall costs and the master schedule. C) company policy and overall costs. D) company policy and the demand forecast. E) overall costs and the demand forecast.

22) and:

Aggregate operations planners seek to match supply and demand at minimum overall cost

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A) keeping inventories at a minimum. B) hiring when necessary. C) keeping inventories at a maximum. D) by staying within company policy. E) using only part time workers.

23)

In practice, the more commonly used techniques for aggregate operations planning are:

A) optimization techniques. B) trial-and-error techniques. C) marketing campaigns to influence demand. D) simulation models. E) some other technique not listed.

24) The main disadvantage(s) of trial-and-error techniques used for aggregate operations planning is (are):

A) B) C) D)

25)

that they are expensive to do. that they may not result in the best plan. that they take a long time to do. that they require the use of a computer.

Inventory information for firm ABC: Inventory at the end of March, 2020

200 units

Forecast Demand during April, 2020

50 units

Production planned during April, 2020

100 units

What is the expected inventory at the end of April, 2020?

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A) 350 B) 250 C) 150 D) 50 E) 100

26)

Inventory information for firm ABC: Forecast Demand during April, 2020

50 units

Production planned during April, 2020

100 units

Expected inventory at the end of April, 2020

200 units

What was the inventory at the end of March, 2020?

A) 350 B) 250 C) 150 D) 50 E) 100

27) Linear programming models used to produce an aggregate operations plan are based on a total cost formula as a linear objective function and:

A) is the most widely used technique for aggregate operations planning. B) is primarily used to address capacity options. C) is primarily used to address demand options. D) establishes an optimal (least cost) solution (if it exists). E) will balance both demand and capacity.

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28) Which of the following is NOT true about the transportation model as an approach to aggregate operations planning?

A) It can only be used when there is no hiring or laying off. B) It is more complex to solve than a linear programming model. C) It requires capacity information. D) It assumes linear terms and relationships among variables. E) It requires cost information

29)

Which term is most closely associated with the term disaggregation?

A) Subcontracting B) Master schedule C) Backordering D) Varying inventory levels E) Firing and laying off

30)

The result of disaggregating the aggregate operations plan is the:

A) marketing plan. B) production plan. C) rough-cut capacity plan. D) master production schedule. E) material requirements plan.

31)

Which of the following is NOT an input of the master production schedule?

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A) B) C) D)

Beginning inventory Demand forecasts for each period of the schedule Orders already committed to customers Hiring policies

32) For each product in the schedule, which of the following are outputs from the master production schedule?

A) Beginning inventory levels B) Demand forecasts C) Subcontracting costs D) Number of employees to hire E) Planned production

33) That portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders is:

A) beginning inventory. B) safety stock inventory. C) available-to-promise inventory. D) marketable inventory. E) banked inventory.

34)

Which of the following is NOT a master production scheduling zone?

A) B) C) D)

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Emergency Production Trading Planning

35) Which planning process converts the MPS into requirements for key resources in order to test the feasibility of a proposed MPS?

A) Master production scheduling B) Aggregate planning C) Trial-and-error D) Rough-cut capacity planning E) Trade-off analysis

36) Master scheduling in process industries is usually performed in two levels: first by family, then by within each family.

A) items B) aggregate demand C) SKUs within each family D) MPS E) aggregate family

37) A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2. What is the projected on hand inventory at the end of period 2?

A) 21 B) 1 C) 12 D) 20 E) 4

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38) A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2. What quantity is available for commitment to new customers prior to the receipt of the production quantity in week 3?

A) 21 B) 1 C) 20 D) 4 E) 12

39) A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. A production quantity of 100 units is planned for period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3. What is the projected on hand inventory at the end of period 2?

A) 14 B) 32 C) 12 D) 20 E) 22

40) A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. A production quantity of 100 units is planned for period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3. What quantity is available for commitment to new customers prior to the receipt of the production quantity in week 3?

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A) 14 B) 32 C) 12 D) 20 E) 22

41)

Uncommitted inventory is called:

A) available-to-promise inventory. B) free inventory. C) safety stock. D) lead time inventory. E) obsolete inventory.

42)

Linear programming to produce an aggregate plan:

A) will produce the best plan if accurate inputs are used. B) is the most widely used technique. C) is easy to implement. D) will produce a plan that may not be the best plan. E) requires an Excel spreadsheet.

43) Aggregate planning for services is more difficult than aggregate planning for manufacturing because and are more difficult to predict.

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A) capacity availability; customer tastes B) holding costs; overtime costs C) demand; capacity availability D) capacity change costs; holding costs E) hiring costs; holding costs

44) One thing that makes aggregate planning in services easier than aggregate planning in manufacturing is:

A) inventory is cheaper to hold. B) labour availability is more predictable. C) inventory is less perishable. D) labour is more flexible. E) demand is less variable.

45) Aggregate planning in the case of a high-volume product output business such as a restaurant is directed toward:

A) smoothing the service rate. B) reducing the size of the workforce. C) making the kitchen and waitstaff more flexible. D) coming up with a fixed staffing level. E) making weekly work schedules more stable.

46) A company's disaggregation plan calls for the aggregate production to be broken down into 40 percent Product A, 40 percent Product B, and 20 percent Product C. The aggregate plan calls for total production that averages 1,100 units per quarter. Quarter 1 production will be 800 units, quarter 2 production will be 1,400 units, and quarter 3 production will be 1,200 units. How many units of Product A will be produced in quarter 4?

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A) 320 units B) 400 units C) 440 units D) 480 units E) 560 units

47) In a service setting, the aggregate plan results in a time-phased projection of requirements.

A) customer B) staff C) inventory D) subcontracting E) outsourcing

48) Which of the following differs between aggregate planning in services and aggregate planning in manufacturing?

A) uncertainty in demand B) costs of storing inventory C) the perishability of capacity D) cost of overtime E) cost of hiring

49) At XYZ Corp., the master schedule reflects the fact that 50 percent of its output is product version A, 30 percent is version B, and 20 percent is version C. Suppose that over the coming year planned aggregate production is for 10,400 units. Once the production plan is disaggregated evenly throughout the year, what will the weekly production for version A be (assume 52 weeks per year)?

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A) 1,000 B) 200 C) 400 D) 100 E) 50

50) A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3, and 4. What is available to promise for week 6?

A) 50 B) 6 C) 300 D) 100 E) 250

51) These decisions essentially define the capacity constraints within which intermediate planning must function.

A) Short-term B) Long-term C) Forecasting D) S&OP E) Detailed planning and execution

52) Short-term capacity and production planning must operate based on the boundaries established by what?

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A) Unions B) Long-term plans C) Manpower levels D) Intermediate plans E) Sales and marketing plans

53)

What order does the hierarchy of production planning follow?

A) Strategic planning, sales and operations planning, master scheduling, material requirements planning B) Strategic planning, master scheduling, sales and operations planning, material requirements planning C) Sales and operations planning, rough-cut planning, master scheduling, material requirements planning D) Forecasting demand, capacity planning, rough-cut planning, master production schedule E) Forecasting demand, sales and operations planning, rough-cut planning, material requirements planning

54)

What three things are needed when updating the monthly sales and operations plan?

A) Previous months forecasts, production levels, inventory levels B) Previous months sales records, available-to-promise, backorder levels C) Previous months capacity plan, production levels, inventory levels D) Previous months backlog, production levels, capacity plan E) Previous months sales records, production levels, inventory levels

55) In manufacturing, aggregate planning capacity is often stated in period.

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per

A) part time hours, full time hours B) inventory levels, backlog levels C) labour hours, machine hours D) units to hire, units to layoff E) regular time units, overtime units

56) When exploring aggregate planning strategies, management often considers the use of both "pure" and what other type of strategy.

A) demand B) capacity C) strategic D) mixed E) alternate

57) Airlines that offer cheaper air fares during off-peak periods are utilizing what demandinfluencing option?

A) demand shifting B) back orders C) pricing D) promotion E) early orders

58) A bus company that offers their services for school trips and clubs during off-peak periods are utilizing what demand-influencing option?

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A) promotion B) back orders C) pricing D) optimization E) new demand

59) When using graphs to develop aggregate plans the slope of the graphed line represents what?

A) Capacity rate B) Sales forecast C) Inventory level D) Production rate E) Demand rate

60)

What cannot take place when using the transportation model in aggregate planning?

A) Overtime B) Hiring's or layoffs C) Part time D) Holding costs E) Back orders

61)

Changes in this MPS zone can be made by the master scheduler.

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A) emergency B) fluid C) trading D) planning E) Zone 2

62)

Changes in this MPS zone require middle management approval.

A) short term B) emergency C) trading D) Zone 1 E) long term

63) A coffee shop operates 7 days per week and needs to determine how many workers (fulltime equivalent, FTE) employees to staff. Employees work 12 hour shifts. A FTE is defined as an employee that works 8 hours per shift, 5 days a week. Nine employees are needed between 7:00 a.m. and 7:00 p.m., and six employees are needed from 7:00 p.m. until 7:00 a.m. How many FTE are needed?

A) 9.25 B) 15.75 C) 22.50 D) 31.50 E) 33.5

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64) An emergency hot line operates 7 days per week and needs to determine how many workers (full-time equivalent, FTE) employees to staff. Employees work 12 hour shifts. A FTE is defined as an employee that works 8 hours per shift, 5 days a week. Eight employees are needed between 7:00 a.m. and 7:00 p.m., and twelve employees are needed from 7:00 p.m. until 7:00 a.m. How many FTE are needed?

A) 12 B) 24 C) 30 D) 37 E) 42

65) An emergency hot line operates 7 days per week and needs to determine how many workers (full-time equivalent, FTE) employees to staff. Employees work 12 hour shifts. A FTE is defined as an employee that works 7.5 hours per shift, 5 days a week. Ten employees are needed between 7:00 a.m. and 7:00 p.m., and ten employees are needed from 7:00 p.m. until 7:00 a.m. How many FTE are needed?

A) 12.8 B) 24.6 C) 33.2 D) 44.8 E) 46.5

66) A manager has prepared a forecast of expected aggregate demand for the next six months. Develop an aggregate production plan to meet this demand given this additional information: A level production rate of 100 units per month will be used. Backorders are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month. Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero.

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Month

Forecast

100

120 22

110

100

67) Given the projected demands for the next six months, prepare an aggregate production plan that uses inventory, regular time and overtime, and backorders. Regular time is 150 units per month. Overtime is a maximum of 20 units per month. Overtime cost is $30 per unit, backorder cost is $20 per unit, inventory holding cost is $5 per unit, regular time cost of $20 per unit, and beginning inventory is zero. Month

Forecast

180

170

140

150

130

150

68) Use the transportation method to develop an optimum aggregate production plan, given the following data: PERIOD DEMAND

130

160

140

Regular

100

Overtime

Subcontracting

CAPACITY

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COSTS

69)

Regular time:

$10

Overtime:

Subcontracting:

Carrying:

Backorder:

Prepare a master production schedule based on the following information: Week:

Forecast

100

120

150

180

Orders

106

Beginning inventory: 145 Schedule production whenever projected-on-hand drops below 20. Production lot size is 250 units.

70)

Using the given information, determine the following.

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Period

Forecast

200

300

400

500

200

Regular time:

$20 per unit (280 units per period maximum)

Overtime:

$30 per unit (40 units per period maximum)

Subcontracting:

None available

Beginning Inv:

None

Holding cost:

$1 per unit per period

Backorder cost:

$5 Per unit per period

a. What is total forecasted demand? b. What is total regular time capacity? c. How should overtime capacity be utilized? d. What are total regular time costs? e. What are total overtime costs? f. What are total carrying costs? g. What are total backorder costs? h. What are total costs for each period? i. What are total costs for the six periods? j. If hiring cost is $500 and firing cost if $400, would it be more economical on a per unit basis to use overtime or to hire and fire a temporary person (who can produce a maximum of 40 units per period)? What would be the difference in total costs for the six periods?

71) Master production scheduling (MPS) involves long term capacity planning that typically covers a time horizon of one to three years. ⊚ ⊚

72)

true false

Sales and operations planning is typically performed once a year with monthly updates.

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⊚ ⊚

true false

73) The goal of aggregate operations planning is to achieve a production plan that will satisfy total forecast demand at minimum cost. ⊚ ⊚

true false

74) Aggregate operations planning is used to establish general levels of employment, production levels and changes in inventory levels over an intermediate range of time. ⊚ ⊚

true false

75) For aggregate planning, groups of similar products are lumped together and treated as equivalent products for planning purposes. ⊚ ⊚

true false

76) Aggregate operations planning is NOT an effective technique for organizations that experience seasonal fluctuations in demand. ⊚ ⊚

true false

77) Among the basic demand options in aggregate operations planning are promotion and the use of overtime. ⊚ ⊚

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true false

78) Among the basic capacity options in aggregate operations planning are hiring workers and the use of overtime. ⊚ ⊚

true false

79) An example of a demand option in aggregate operations planning is the use of backorders. ⊚ ⊚

true false

80) An example of a capacity option in aggregate operations planning is stockpiling inventories. ⊚ ⊚

81)

true false

Backorders can be thought of as negative inventory. ⊚ ⊚

true false

82) Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand. ⊚ ⊚

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true false

83) In aggregate operations planning, both pricing and promotion are options to shift demand to align more closely with capacity. ⊚ ⊚

true false

84) A "chase" demand strategy in aggregate operations planning would be attempting to match capacity and demand, period by period. ⊚ ⊚

true false

85) An advantage of a "chase" strategy in aggregate operations planning is that inventories can be kept relatively low. ⊚ ⊚

true false

86) An advantage of a "chase" strategy in aggregate operations planning is that it provides greater stability in operations based on a steady rate of output. ⊚ ⊚

87)

true false

A major factor in choosing a strategy in aggregate operations planning is overall cost. ⊚ ⊚

true false

88) Trial and error methods are commonly used by aggregate operations planners in developing aggregate operations plans.

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⊚ ⊚

true false

89) The use of tables and charts in aggregate operations planning enables planners to develop and compare alternative production plans. ⊚ ⊚

true false

90) Aggregate operations planners sometimes use optimization techniques such as linear programming for planning. ⊚ ⊚

true false

91) An example of a capacity option in aggregate operations planning for services is inventory. ⊚ ⊚

92)

true false

Disaggregating an aggregate production plan leads to a master production schedule. ⊚ ⊚

true false

93) The master production schedule indicates the quantity and timing for planned production of an item. ⊚ ⊚

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true false

94) After the first period of the planning horizon, available-to-promise (ATP) inventory is computed only for those periods in which there is a planned production quantity. ⊚ ⊚

true false

95) Master production scheduling has three inputs for each product: the beginning inventory, quantities already committed to customers, and back orders. ⊚ ⊚

true false

96) Available-to-promise (ATP) inventory for the first week is equal to the beginning inventory plus planned production quantity, if any, less the committed customer orders before the next planned production quantity. ⊚ ⊚

true false

97) Master production schedules are often divided into three zones: the emergency, trading, and planning zones. ⊚ ⊚

true false

98) Rough-cut capacity planning converts the MPS into requirements for key resources in order to test the feasibility of a proposed MPS. ⊚ ⊚

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true false

99)

Seasonal variations in demand impact aggregate operations planning. ⊚ ⊚

true false

100) For labour-intensive services a common aggregate planning measure would be machine hours. ⊚ ⊚

true false

101) When considering demand and capacity options organizations will usually adhere to one proven strategy. ⊚ ⊚

true false

102) One advantage to using graphs in the development of aggregate plans is the ability to visualize a production plan. ⊚ ⊚

true false

103) The dividing lines between zones in the schedule horizon are referred to as planning horizons. ⊚ ⊚

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true false

Answer Key Test name: Chap 12_7ce 1) B 2) B 3) D 4) A 5) C 6) A 7) E 8) E 9) D 10) D 11) D 12) A 13) E 14) D 15) A 16) E 17) D 18) C 19) D 20) D 21) C 22) D 23) B 24) B 25) B 26) C Version 1

27) D 28) B 29) B 30) D 31) D 32) E 33) C 34) B 35) D 36) C 37) B 38) D 39) C 40) A 41) A 42) A 43) C 44) D 45) A 46) B 47) B 48) C 49) D 50) C 51) B 52) D 53) A 54) E 55) C 56) D Version 1

57) C 58) E 59) D 60) B 61) D 62) C 63) D 64) E 65) D 71) FALSE 72) TRUE 73) TRUE 74) TRUE 75) TRUE 76) FALSE 77) FALSE 78) TRUE 79) TRUE 80) TRUE 81) TRUE 82) FALSE 83) TRUE 84) TRUE 85) TRUE 86) FALSE 87) TRUE 88) TRUE 89) TRUE 90) TRUE 91) FALSE Version 1

92) TRUE 93) TRUE 94) TRUE 95) FALSE 96) TRUE 97) TRUE 98) TRUE 99) TRUE 100) FALSE 101) FALSE 102) TRUE 103) FALSE

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Chapter 13: Material Requirements Planning and Enterprise Resource Planning 1)

Which of the following most closely describes dependent demand?

A) Demand generated by suppliers. B) Sales forecasts. C) Derived demand. D) Demands placed on suppliers by their customers. E) Net material requirements.

Which of these products and services would be most likely to have dependent demand?

A) Automobiles B) Vegetables C) Flowers D) Fruits E) Gasoline

Which one of the following is not an input in an MRP system?

A) B) C) D)

Planned-order releases Bill of materials Master production schedules Inventory on-hand, open orders and lead times

4) The input used in MRP that lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the:

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A) master production schedule. B) bill of material. C) inventory-records. D) assembly-time chart. E) net-requirements chart.

5) The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the:

A) master production schedule. B) bill-of-materials. C) inventory-records. D) assembly-time chart. E) net-requirements chart.

6) The hierarchical diagram that depicts the subassemblies and components that are needed to produce and/or assemble a product is called a(n):

A) assembly time chart. B) product structure tree. C) MRP II. D) pegging. E) assembly diagram

In MRP, "scheduled receipts" are:

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A) identical to "planned-order receipts." B) identical to "planned-order releases." C) open orders already scheduled to be delivered. D) "net requirements" in a time period. E) the same as gross requirements

8) The following is a list of components required to produce one unit of end item E. If 170 E's are needed, and there are currently no E's on hand, how many F's will be needed?

A) 160 B) 344 C) 408 D) 680 E) 700

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9) The following is a list of components required to produce one unit of end item E. If 200 E's are needed, and no on-hand inventory exists, how many J's will be needed?

A) 1600 B) 2200 C) 3000 D) 4080 E) 3440

10) The following is a list of components required to produce one unit of end item E. If 400 E's are needed, and there are 400 J's in inventory, how many J's will be needed?

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A) 2800 B) 4000 C) 4400 D) 4766 E) 5166

11) The following is a list of components required to produce one unit of end item E. If 1000 E's are needed, and there is inventory on-hand of 400 J's, 100 B's, and 200 E's, how many J's will be needed?

A) 2760 B) 3160 C) 7200 D) 8000 E) 10200

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12)

Refer to this product tree:

If 100 Ps are needed, and no on-hand inventory exists for any items, how many Cs will be needed?

A) 700 B) 800 C) 1000 D) 1200 E) 1600

13)

Refer to this product tree:

If 200 Ps are needed, and on-hand inventory consists of 110 As, 200 Bs, 300 Cs, 120 Ms, and 50 Ns, how many Cs are needed?

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A) 500 B) 1300 C) 2100 D) 2400 E) 3200

14)

Refer to this product tree:

If 600 Ps are needed, and on-hand inventory consists of 150 Ps and 100 each of all other components and subassemblies, how many Cs are needed?

A) 4900 B) 5000 C) 6700 D) 6800 E) 7900

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15)

Refer to this product tree:

If 1000 Ps are needed, and on-hand inventory consists of 200 Ps and 100 each of all other components and subassemblies, how many Cs are needed?

A) 3100 B) 3200 C) 9200 D) 12200 E) 12300

16) Given the following information and MRP table for part D; The planned order release in week 3 will be: 1- Currently, there are 240 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 600 units of part D at the beginning

of week 6. 3- Lot-for-lot ordering is used. 4- Lead time is one week. Part/ Weeks

Part: D Lt=1 week Gross Requirements Lot size: L4L Scheduled receipts Projected on hand= 240 Open order in Projected on-hand week 6= 600 Net requirements

120

180

300

360

560

240

600 240

Planned-order

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receipts Planned-order releases

A) 120 B) 180 C) 300 D) 360 E) 560

17) Given the following information and MRP table for part D; The planned order receipt in week 7 will be: 1- Currently, there are 240 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 600 units of part D at the beginning

of week 6. 3- Lot-for-lot ordering is used. 4- Lead time is one week. Part/ Week

Part: D Lt=1 week Gross Requirements Lot size: L4L Scheduled receipts Projected on hand= 240 Open order in Projected on-hand week 6= 600 Net requirements

120

180

300

360

560

240

600 240

Planned-order receipts Planned-order releases

A) 0 B) 100 C) 140 D) 200 E) 240

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18) Given the following information and MRP table for part D; The net requirement in week 6 will be: 1- Currently, there are 240 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 600 units of part at the beginning of

week 6. 3- Lot-for-lot ordering is used. 4- Lead time is one week. Part/ Week

Part: D Lt=1 week Gross Requirements Lot size: L4L Scheduled receipts Projected on hand= 240 Open order in Projected on-hand week 6= 600 Net requirements

120

180

300

360

560

240

600 240

Planned-order receipts Planned-order releases

A) 0 B) 100 C) 200 D) 240 E) 560

19) Given the following information and MRP table for part E; The net requirement in week 3 will be: 1- Currently, there are 120 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 300 units of part E at the beginning

of week 3. 3- This part must be ordered in multiples of 100 units. 4- Lead time is one week. Part/ Week

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Part: E Lt=1 week Gross Requirements Lot size: Q=100 Scheduled receipts Projected on hand= 120 Open order in Projected on-hand week 3= 300 Net requirements

100

280

340

500

380

720

200

300 120

Planned-order receipts Planned-order releases

A) 0 B) 120 C) 260 D) 280 E) 340

20) Given the following information and MRP table for part E; The planned-order release in week 6 will be: 1- Currently, there are 120 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 300 units of part E at the beginning

of week 3. 3- This part must be ordered in multiples of 100 units. 4- Lead time is one week. Part/ Week

Part: E Lt=1 week Gross Requirements Lot size: Q=100 Scheduled receipts Projected on hand= 120 Open order in Projected on-hand week 3= 300 Net requirements

100

280

340

500

380

720

200

300 120

Planned-order receipts Planned-order releases

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A) 0 B) 250 C) 300 D) 400 E) 500

21) Given the following information and MRP table for part E; The net requirement in week 7 will be: 1- Currently, there are 120 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 300 units of part E at the beginning

of week 3. 3- This part must be ordered in multiples of 100 units. 4- Lead time is one week. Part/ Week

Part: E Lt=1 week Gross Requirements Lot size: Q=100 Scheduled receipts Projected on hand= 120 Open order in Projected on-hand week 3= 300 Net requirements

100

280

340

500

380

720

200

300 120

Planned-order receipts Planned-order releases

A) 0 B) 120 C) 250 D) 300 E) 340

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22) Given the following information and MRP table for product E; The planned-order receipt in week 5 will be: 1- Currently, there are 120 on-hand inventory. 2- There will be a previously arranged scheduled receipt of 300 units of part E at the beginning

of week 3. 3- This part must be ordered in multiples of 100 units. 4- Lead time is one week. Part/ Week

Gross Requirements product: E Lt=1 week Lot size: Scheduled receipts Q=100 Projected on hand= 120 Open Projected on-hand order in week 3= Net requirements 300

100

280

340

500

380

720

200

300 120

Planned-order receipts Planned-order releases

A) 0 B) 100 C) 300 D) 380 E) 400

23) Given the following information and MRP table for part T; The planned-order receipt in week 2 will be: 1- There will be a previously arranged scheduled receipt of 200 units of part T at the beginning

of week 2. 2- Manufacturing lead time is two weeks. 3- Lot-for-lot ordering is used. 4- Currently, there are 600 on-hand inventory. Part/ Week Part: T Lt=2 week

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Gross Requirements

400

320

640

510

300

420

Lot size: L4L Projected on hand= 600 Open order in week 2= 200

Scheduled receipts Projected on-hand

200 600

Net requirements Planned-order receipts Planned-order releases

A) 0 B) 200 C) 320 D) 400 E) 720

24) Given the following information and MRP table for part T; The net requirement in week 3 will be: 1- There will be a previously arranged scheduled receipt of 200 units of part at the beginning of

week 2. 2- Manufacturing lead time is two weeks. 3- Lot-for-lot ordering is used. 4- Currently, there are 600 on-hand inventory. Part/ Week Part: T Lt=2 week Lot size: L4L Projected on hand= 600 Open order in week 2= 200

Gross Requirements

400

320

640

510

300

420

Scheduled receipts Projected on-hand

200 600

Net requirements Planned-order receipts Planned-order releases

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A) 0 B) 320 C) 560 D) 640 E) 720

25) Given the following information and MRP table for part A; The net requirement in week 2 will be: 1- There will be a previously arranged scheduled receipt of 400 units of part A at the beginning

of week 2. 2- Manufacturing lead time is two weeks. 3- This part must be ordered in multiples of 100 units. 4-Currently, there are 700 on-hand inventory. Part/ Week Part: A Lt=2 week Lot size: Q=100 Projected on hand= 700 Open order in week 2= 400

Gross Requirements

500

320

540

610

800

920

Scheduled receipts Projected on-hand

400 700

Net requirements Planned-order receipts Planned-order releases

A) 0 B) 320 C) 400 D) 500 E) 700

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26) Given the following information and MRP table for part A; The planned-order release in week 4 will be: 1- There will be a previously arranged scheduled receipt of 400 units of part A at the beginning

of week 2. 2- Manufacturing lead time is two weeks. 3- This part must be ordered in multiples of 100 units. 4-Currently, there are 700 on-hand inventory. Parts/ Week Part: A Lt=2 week Lot size: Q=100 Projected on hand= 700 Open order in week 2= 400

Gross Requirements

500

320

540

610

800

920

Scheduled receipts Projected on-hand

400 700

Net requirements Planned-order receipts Planned-order releases

A) 300 B) 600 C) 800 D) 890 E) 900

27) Given the following information and MRP table for part A; The net requirement in week 6 will be: 1- There will be a previously arranged scheduled receipt of 400 units of part A at the beginning

of week 2. 2- Manufacturing lead time is two weeks. 3- This part must be ordered in multiples of 100 units. 4-Currently, there are 700 on-hand inventory. Parts/ Week Part: A Lt=2 week Lot size: Q=100

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Gross Requirements Scheduled receipts

500

320

540

610

800

920

400

Projected on hand= 700 Open order in week 2= 400

Projected on-hand

700

Net requirements Planned-order receipts Planned-order releases

A) 300 B) 600 C) 800 D) 890 E) 900

28)

In MRP, under lot-for-lot ordering, the size of "planned-order releases" is equal to:

A) "scheduled receipts." B) "net requirements." C) open orders already scheduled to be delivered. D) "gross requirements." E) the EOQ quantity

29)

The gross requirements of a given part or component are determined from:

A) net requirements + amount on-hand. B) gross requirements of the immediate parent(s). C) planned order releases of the end item. D) net requirements of the end item. E) planned order release of the immediate parent(s).

30)

Pegging is used primarily for which one of the following purposes?

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A) Identifying parent items that have generated a certain set of requirements for an item. B) Identifying the supplier of a given component. C) Identifying the supplier of a given component's parent. D) Periodically update material requirements as conditions change. E) Obtaining exception reports due to periodic changes in material requirements.

31) Bunny Helpers, Inc., has just received an order for 100 Deluxe Easter Baskets, which must be ready for delivery at the start of week 6. An MRP planner has prepared the following table showing product structure, lead times (orders are lot-for-lot), and quantities on hand: Deluxe Easter Basket BOM

Lead Time

On-Hand

Deluxe Easter Basket

week

Dark Chocolate Truffles (2 per)

weeks

Carved Chocolate Eggs (4 per)

week

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs. What is the net requirement for dark chocolate truffles to fill this order?

A) 100 B) 140 C) 150 D) 180 E) 200

32) Bunny Helpers, Inc., has just received an order for 100 Deluxe Easter Baskets, which must be ready for delivery at the start of week 6. An MRP planner has prepared the following table showing product structure, lead times (orders are lot-for-lot), and quantities on hand: Deluxe Easter Basket BOM

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Lead Time

On-Hand

Deluxe Easter Basket

week

Dark Chocolate Truffles (2 per)

weeks

Carved Chocolate Eggs (4 per)

week

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs. When should an order for carved chocolate eggs be released?

A) at the start of week 2 B) at the start of week 3 C) at the start of week 4 D) at the start of week 5 E) at the start of week 6

33) Bunny Helpers, Inc., has just received an order for 100 Deluxe Easter Baskets, which must be ready for delivery at the start of week 6. An MRP planner has prepared the following table showing product structure, lead times (orders are lot-for-lot), and quantities on hand: Deluxe Easter Basket BOM

Lead Time

On-Hand

Deluxe Easter Basket

week

Dark Chocolate Truffles (2 per)

weeks

Carved Chocolate Eggs (4 per)

week

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs. How many dark chocolate eggs should be ordered?

A) 310 B) 450 C) 500 D) 550 E) 600

34) Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called:

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A) pegging. B) planned order releases. C) net-change system. D) regenerative system. E) exception report.

35) The MRP updating approach that immediately updates only those records directly affected by a change is referred to as a(n):

A) regenerative system. B) batch-type MRP. C) Plossl-Wright system. D) net-change system. E) gross-change MRP.

36)

Which is true of a net-change system?

A) It is a batch-type system which is updated periodically. B) It generates exception reports. C) The basic production plan is modified to reflect changes as they occur. D) It is used to authorize the execution of planned orders. E) It indicates the amount and timing of future changes.

37)

Which of the following are not primary reports provided by MRP systems?

A) B) C) D)

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Planned order releases Immediate order releases Assignment of jobs to work centres Changes to open orders

38) Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time?

A) Pegging B) Safety stock C) Increased order sizes D) Safety time E) Low-level coding

39) Under fixed-interval lot sizing, order sizes for component parts are determined based on which one of the following?

A) Gross requirements for one period. B) Net requirements for some predetermined number of periods. C) Economic order quantity for one period. D) Gross requirements - net requirements for a predetermined number of periods. E) Net requirements - amount on-hand for a predetermined number of periods.

40) Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, and 60 units in week 5. If a fixed-period, two-period lot-sizing method is used, what will be the quantity of the first planned receipt?

A) 60 units B) 120 units C) 180 units D) cannot be determined E) none of the choices

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41) Given an order cost of $100, a, per period holding cost of $.50, and the following requirements schedule: Pd

Dmd

120

100

What is the economic part-period (EPP) for ordering this item?

A) 2 B) 50 C) 100 D) 150 E) 200

42) Given an order cost of $100, a, per period holding cost of $.50, and the following requirements schedule: Pd

Dmd

120

100

What is the part-period method lot size for the order for the first period?

A) 120 B) 200 C) 280 D) 350 E) 450

43) Given an order cost of $100, a, per period holding cost of $.50, and the following requirements schedule: Pd

Dmd

120

100

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For which period will the second order be submitted using the part period lot sizing method?

A) Period 2 B) Period 3 C) Period 4 D) Period 5 E) Period 6

44) Given an order cost of $100, a, per period holding cost of $.50, and the following requirements schedule: Pd

Dmd

120

100

What is the lot size for the second order using the part-period method?

A) 80 B) 150 C) 170 D) 250 E) 230

45) Given an order cost of $100, a, per period holding cost of $.50, and the following requirements schedule: Pd

Dmd

120

100

If the firm is using lot size for a fixed period of two, what is the order size for the first order?

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A) 120 B) 200 C) 280 D) 160 E) 150

46) Which of the following are accurate statements concerning MPS, MRP and capacity requirements planning (CRP)?

A) B) C) D)

CRP is equivalent to a master production schedule (MPS). CRP is an input to MRP. CRP is needed to determine if an MPS is feasible Planned-order releases from CRP are the inputs for MRP

47) Which action would not be undertaken if capacity requirements planning (CRP) indicate one or more work stations are projected to be under loaded or over loaded?

A) Shifting some orders to adjacent periods. B) Transferring employees from other areas. C) Scheduling overtime. D) Revise the MPS and MRP. E) Re-run the load report using different values.

48) A report that compares known and expected future capacity requirements with projected available capacity is a:

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A) master production schedule. B) bill of material report. C) inventory status report. D) MRP schedule. E) load report.

49)

Budget overruns when implementing ERP systems are typically caused by:

A) high equipment costs. B) high capital interest charges. C) the cost of the ERP software D) high training costs E) the software supports the companies business processes

50)

The following is a list of components required to produce one unit of end item P:

P: 2 A's, 3 B's, 3 C's A: 5 M's, 2 R's B: 1 D, 3 N's. C: 1 T, 4 N's M: 1 N Determine the number of N's that will be needed to make 60 P's in each of these cases: (i) There are currently 10 P's on hand. (ii) On-hand inventory consists of 15 P's, 10A's, 20 B's, 10 C's, 100 N's, 300 T's, and 200 M's.

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51) Given the following information, develop a material requirements plan that will yield 400 units of product P at the start of week 7. Item

Parent

Quantity for 1 of Parent

Currently OnHand

Scheduled Rept (in wk)

Lead Time

Order Quantity

Lot-for-lot

100

Lot-for-lot

450

A, B

1, 1

100 (wk 2)

600

80 (wk 2)

Lot-for-lot

Use the following form: Week 1

Gross requirements Schedule receipts Projected on hand Net requirements Planned order receipt Planned order release

52) Given the following data, construct a material requirements plan which will result in 100 units of Parent #1 (P1) at the beginning of week 6, and 200 units of Parent #2 (P2) at the beginning of week 8: Item

Parent

Quantity

On-Hand

On Order (due)

Lead Time

Order Size

Lot-for-lot

P1, P2

1, 2

500

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P1, P2

2, 1

250

A, B

3, 4

1000

2000 (wk 2)

2000

53)

MRP usually involves inventory items that have independent demand. ⊚ ⊚

54)

true false

Dependent demand is derived demand. ⊚ ⊚

true false

55) The three basic inputs of MRP are: 1) the bill of material; 2) inventory on hand, open orders and lead times; and 3) planned order releases. ⊚ ⊚

true false

56) The master production schedule states which end items are to be produced, in addition to when and how many. ⊚ ⊚

true false

57) A master production schedule (MPS) is the principal output developed from MRP systems.

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⊚ ⊚

58)

true false

The MRP requires a list of the individual parts that will be converted to finished goods. ⊚ ⊚

true false

59) A bill of material contains a listing of all the raw materials, parts, and subassemblies needed to produce one unit of an end item. ⊚ ⊚

60)

true false

The bill of material contains information on lead times. ⊚ ⊚

true false

61) MRP requires information on inventory on hand, open orders and lead times and purchase orders for each item in stock. ⊚ ⊚

true false

62) For a given component in an MRP plan, under lot-for-lot ordering, planned order release sizes are equal to net requirements. ⊚ ⊚

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true false

63) Lot-for-lot ordering in MRP minimizes holding costs for parts that are carried over to other periods. ⊚ ⊚

true false

64) Gross requirements for components are equal to the gross requirements of their immediate parent multiplied by the quantity per parent. ⊚ ⊚

true false

65) The term pegging refers to identifying the parent items that have generated a given set of requirements for a part or subassembly. ⊚ ⊚

true false

66) Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods. ⊚ ⊚

true false

67) For a given component in an MRP plan, under lot-for-lot ordering, planned order receipts are equal to gross requirements. ⊚ ⊚

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true false

68) A regenerative MRP system is one that is updated continuously, every time there is a schedule change. ⊚ ⊚

true false

69) A net-change MRP is one that involves periodically updating all aspects of an MRP system. ⊚ ⊚

true false

70) For relatively stable situations, a net-change MRP is better suited than using regenerative MRP. ⊚ ⊚

71)

A regenerative MRP is one that is updated periodically. ⊚ ⊚

72)

true false

One of the primary reports of MRP concerns are the changes to open orders. ⊚ ⊚

73)

true false

The output of MRP is a schedule of planned orders for all parts and end items.

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⊚ ⊚

true false

74) If there is a quality problem resulting in scrap for a specific item, planned order release amounts for the item must be increased. ⊚ ⊚

true false

75) Fixed-interval ordering in MRP places orders that cover a predetermined number of periods. ⊚ ⊚

true false

76) The part-period method for lot sizing breaks the time periods into smaller units of time to create daily or hourly production schedules. ⊚ ⊚

true false

77) Modular bills are used to reduce the number of BOMs when a product consists of many modules, each with a few options. ⊚ ⊚

true false

78) DRP is a method used for planning orders in a supply chain which makes the delivery of items more efficient by determining which items, in what quantities, and at what location are required to meet the demand.

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⊚ ⊚

true false

79) Load reports compare planned capacity requirements with projected capacity and availability. ⊚ ⊚

true false

80) MRP II is simply an improved version of MRP that processes more quickly and can plan for a larger number of end items. ⊚ ⊚

true false

81) MRP II is a closed-loop MRP, which involves the whole production planning process, starting with sales and operations planning; then MPS, MRP, and CRP; and finally, detailed scheduling. ⊚ ⊚

true false

82) ERP involves software that is used to manage and coordinate all the resources, information, and functions of an organization from a shared database. ⊚ ⊚

true false

83) ERP systems are based on software modules for various functional areas of a business such as purchasing, production planning, and supply chain management.

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⊚ ⊚

true false

84) ERP packages are intended to fit established ways of doing business, but some modifications to business processes or the ERP software are typically required. ⊚ ⊚

true false

85) ERP automates the tasks involved in performing a business process, such as order fulfilment and financial reporting. ⊚ ⊚

true false

86) Configuring the ERP software involves reengineering established business processes to align with the ERP's procedural settings. ⊚ ⊚

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true false

Answer Key Test name: Chap 13_7ce 1) C 2) A 3) A 4) B 5) A 6) B 7) C 8) D 9) B 10) B 11) D 12) E 13) C 14) C 15) E 16) C 17) D 18) A 19) A 20) C 21) C 22) E 23) A 24) C 25) A 26) E Version 1

27) D 28) B 29) E 30) A 31) C 32) C 33) A 34) D 35) D 36) C 37) C 38) D 39) B 40) E 41) E 42) C 43) C 44) C 45) B 46) C 47) E 48) E 49) D 53) FALSE 54) TRUE 55) FALSE 56) TRUE 57) FALSE 58) TRUE 59) TRUE Version 1

60) FALSE 61) TRUE 62) TRUE 63) TRUE 64) FALSE 65) TRUE 66) FALSE 67) FALSE 68) FALSE 69) FALSE 70) TRUE 71) TRUE 72) TRUE 73) TRUE 74) TRUE 75) TRUE 76) FALSE 77) TRUE 78) TRUE 79) TRUE 80) FALSE 81) TRUE 82) TRUE 83) TRUE 84) TRUE 85) TRUE 86) TRUE

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CHAPTER 14S 1)

Maintenance activities are often organized into the two groups:

A) breakdown maintenance and preventive maintenance. B) breakdown maintenance and predictive maintenance. C) preventive maintenance and predictive maintenance. D) equipment maintenance and breakdown maintenance. E) equipment maintenance and buildings maintenance.

2) As a piece of equipment begins to break down more often, the manager is often faced with a trade-off in which are weighed against the .

A) failure rates; maintenance probabilities B) maintenance intervals; maintenance programs C) operating costs; variable costs D) replacement costs; continued maintenance costs E) fixed costs; maintenance costs

Potential costs of equipment breakdown do not include:

A) loss of output. B) cost of idle workers. C) damage to other equipment. D) replacement of worn parts. E) injuries.

4) Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: Number of Breakdowns

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Prob.

0.50

0.25

0.10

0.05

The cost of a breakdown is $2,000, and the cost of a preventive maintenance program is $2,000 per month. If the preventive maintenance program is adopted, the probability of a machine breakdown is negligible. How much better off per month would the firm be if it adopted preventive maintenance?

A) $100 worse off B) $200 worse off C) $100 better off D) $200 better off E) $2,000 better off

5) Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: Number of Breakdowns

Prob.

0.40

0.30

0.15

0.10

0.05

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A) $100 worse off B) $200 worse off C) $100 better off D) $200 better off E) $2,000 better off

Breakdown maintenance is

preventative maintenance is

A) reactive; proactive B) proactive; reactive C) expensive; inexpensive D) inexpensive; expensive E) unexpected; expected

7) The goal of maintenance is to maintain the productive system in good working order while minimizing:

A) total preventive maintenance costs. B) total breakdown maintenance costs. C) total maintenance costs. D) the difference between preventive and breakdown costs. E) the ratio of breakdown to preventive maintenance costs.

8) Factors affecting the decision of how much preventive maintenance is desirable typically include all of the following EXCEPT:

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A) age of equipment. B) type of product. C) degree of technology. D) type of production process. E) condition of facilities and equipment.

The optimum amount of preventive maintenance is where:

A) total breakdown costs are a minimum. B) total preventive maintenance costs are a minimum. C) each maintenance component cost is a minimum. D) total maintenance costs are a maximum. E) total maintenance costs are a minimum.

10)

The type of maintenance which is reactive in nature is:

A) breakdown maintenance. B) predictive maintenance. C) preventive maintenance. D) total productive maintenance. E) reliability-centered maintenance.

11)

Reliability-centered maintenance is an approach based on:

A) dealing with breakdowns after they occur. B) reducing the effect of each major cause of failure. C) increasing frequency of preventive maintenance. D) predictions based on historical data. E) routine planned inspections.

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12)

Preventive maintenance is generally scheduled on the basis of:

A) planned inspections. B) passage of time C) number of operating hours. D) all of the choices. E) none of the choices.

13) Suppose that the average time before breakdown is normally distributed with a mean of 2.5 weeks and a standard deviation of .4 weeks. If breakdowns cost an average of $1,200 and preventive maintenance costs $800, what is the optimal maintenance interval?

A) Every .67 weeks B) Every .33 weeks C) Every 2.67 weeks D) Every 3.25 weeks E) Every 3.12 weeks

14)

Cost of equipment breakdown does not include:

A) loss of output B) cost of idle workers C) damage to other equipment D) injuries to workers E) preventive maintenance cost

15)

Ideally, preventive maintenance will be performed:

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A) after a planned inspection. B) after the passage of a specified period of time. C) after a predetermined number of operating hours. D) just prior to the start of the workday. E) just prior to a breakdown.

16)

"Total productive maintenance" is best described as:

A) avoiding all breakdown maintenance. B) doing a great deal of preventative maintenance to try to avoid breakdown maintenance. C) having workers that operate equipment responsible for performing maintenance. D) extending preventative maintenance back to design. E) simultaneously changing all components that are subject to a breakdown.

17) The major approaches used in plans to deal with breakdowns include all of the following except:

A) standby equipment. B) inventories of spare parts. C) operator repair of minor problems. D) readily available repair personnel. E) type of production process.

18)

Which of the following is most closely associated with breakdown maintenance?

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A) Equipment adjustments B) Equipment cleaning C) Equipment inspection D) Repair of broken parts E) Replacement of worn parts

19) When breakdowns become frequent and/or costly, managers are faced with a trade-off decision between the cost of continued maintenance and the cost of .

A) passage of time B) preventive maintenance C) breakdowns D) replacement E) reliability

20) The average time before breakdown of a machine is normally distributed and has a mean of 7 weeks and a standard deviation of 1.5 weeks. If breakdown cost averages $2,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?

21) The frequency of breakdown of a piece of equipment is 2.55 breakdowns per month. The cost of a breakdown is $1,000 and the cost of preventive maintenance is $2,000 per month. Assume that the equipment breakdown can be avoided if preventive maintenance is performed. Should the manager use preventive maintenance, or would it be better to fix the equipment when it breaks down?

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22) The average time before breakdown of a machine is normally distributed and has a mean of 9 weeks and a standard deviation of 1.5 weeks. If breakdown cost averages $2,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?

23) The frequency of breakdown of a piece of equipment per month is shown in the table. The cost of a breakdown is $1,000 and the cost of preventive maintenance is $2,000 per month. Assume that the equipment breakdown can be avoided if preventive maintenance is performed. Should the manager use preventive maintenance, or would it be better to fix the equipment when it breaks down? Number of breakdowns

Probability

0.10

0.15

0.20

0.30

0.15

0.10

24) The frequency of breakdown of a piece of equipment per month is shown in the table. The cost of a breakdown is $500 and the cost of preventive maintenance is $2,000 per month. Assume that the equipment breakdown can be avoided if preventive maintenance is performed. Should the manager use preventive maintenance, or would it be better to fix the equipment when it breaks down?

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Number of breakdowns

Probability

0.10

0.15

0.25

0.15

0.10

25) The average time before breakdown of a machine is normally distributed and has a mean of 11 weeks and a standard deviation of 2.5 weeks. If breakdown cost averages $2,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?

26) Maintenance activities are often organized into the two groups: buildings and grounds, and equipment maintenance. ⊚ ⊚

true false

27) The goal of maintenance is to maintain the productive system in good working order at minimum costs. ⊚ ⊚

28)

Replacement of worn parts is a cost of preventive maintenance. ⊚ ⊚

29)

true false

Breakdown maintenance includes activities such as equipment inspection and adjustment. ⊚ ⊚

true false

30) The degree of technology involved is a factor affecting the decision of how much preventive maintenance is desirable.

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⊚ ⊚

true false

31) In the area of maintenance, there is a trade-off between the cost of preventive maintenance and breakdown (emergency) maintenance. ⊚ ⊚

true false

32) Reliability-centered maintenance is based on historical data and ongoing monitoring of equipment condition. ⊚ ⊚

33)

The type of maintenance which is periodic in nature is breakdown maintenance. ⊚ ⊚

34)

true false

One basis for scheduling preventive maintenance is the passage of time. ⊚ ⊚

35)

true false

Predictive maintenance is a major part of reliability-centered maintenance. ⊚ ⊚

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true false

36) In the broadest sense, preventive maintenance extends back to the installation stage of equipment and facilities. ⊚ ⊚

37)

true false

Ideally, preventive maintenance will be performed just prior to a breakdown or failure. ⊚ ⊚

true false

38) Planned periodic inspections is one method of determining when preventive maintenance activities should be performed. ⊚ ⊚

true false

39) Predictive maintenance is an attempt to determine when to perform preventive maintenance activities. ⊚ ⊚

true false

40) Pareto analysis (using the 80/20 rule) is one method of determining when preventive maintenance activities should be performed. ⊚ ⊚

41)

true false

Pareto analysis is a method for prioritizing breakdown programs.

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⊚ ⊚

true false

42) In the area of maintenance, the Pareto phenomenon is reflected in the fact that, regardless of problem classification, all equipment will justify about the same expense. ⊚ ⊚

true false

43) In the area of maintenance, the Pareto phenomenon is reflected in the fact that a few pieces of equipment will justify considerable expense. ⊚ ⊚

44)

Breakdown maintenance takes the form of scheduled periodic maintenance. ⊚ ⊚

45)

true false

The cost of replacement is not considered as part of maintenance analysis. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 14S_7ce 1) A 2) D 3) D 4) A 5) D 6) A 7) C 8) B 9) E 10) A 11) B 12) D 13) C 14) E 15) E 16) C 17) E 18) D 19) D 26) TRUE 27) TRUE 28) TRUE 29) FALSE 30) TRUE 31) TRUE 32) FALSE Version 1

33) FALSE 34) TRUE 35) TRUE 36) TRUE 37) TRUE 38) TRUE 39) TRUE 40) FALSE 41) TRUE 42) FALSE 43) TRUE 44) FALSE 45) FALSE

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Chapter 14: Just-in-Time and Lean Production 1)

Which of the following is not one of the principles of JIT/lean production?

A) System flexibility B) Elimination of waste C) Continuous improvement D) Preventative maintenance E) Elimination of disruptions

Which of the following is not an element of the building blocks of JIT/lean operations?

A) High levels of quality in products and processes B) Highly specialized, narrowly focused, process design C) A program of continuous improvement D) Level loading production planning E) Close supplier relationships

Which one of the following is not one of the foundational building blocks of JIT?

A) Product design B) Process design C) Personnel/organizational elements D) Planning and controls E) ERP application software

The ultimate goal of lean systems is to have:

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A) minimal in-process inventories. B) empowered cross-trained workers. C) a balanced, rapid flow of materials and products through the system. D) reduced setup times. E) small production lot sizes.

Which of the following is one of the principles of continuous improvement (Kaizen)?

A) Involvement of everyone in the organization. B) Applied throughout the organization. C) Learning by doing. D) Direct observation and data collection. E) Rapid, major breakthroughs in improvement.

Which of the following is not considered a type of waste in JIT philosophy?

A) Excess inventory B) Small lot sizes C) Underutilization of employee knowledge and skills D) Unnecessary transportation/movement of goods E) Scrap and rework

7) Which one of the following is not affiliated with product design to support JIT/lean operations?

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A) Concurrent engineering B) Design for manufacturing and assembly C) Product quality D) Material requirements planning (MRP) E) Quality function deployment (QFD) to capture the "voice" of customers

8) In the Toyota Production System, waste and inefficiency are referred to as and the ongoing effort to reduce this is referred to as .

A) jidoka; heijunka B) muda; kanban C) kaizen; heijunka D) muda; kaizen E) muda; jidoka

9) Process design can increase production flexibility in a variety of ways. Which of the following is not a technique used for this purpose?

A) Reduce setup time B) Cross train workers C) Use a few large machines D) Use safety stocks E) Keep some idle capacity

10)

Which of the following is not related to JIT/Lean system?

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A) Insisting vendors provide high-quality materials B) Long production runs C) Workers are involved in continuous improvement D) Less Inspection and rework costs E) Workers are trained to do more than a single job

11)

Which of the following is not a benefit of small lot sizes in JIT systems?

A) In-process inventory is lowered B) Fewer production runs are required for each product C) Holding costs are reduced D) Less space is required for storage E) Increased visibility of problems

12) The method intended to increase functional communications, and to speed up the design product or process in which the different phases run simultaneously is called:

A) design for manufacturing and assembly (DFM and DFA). B) quality function deployment (QFD). C) concurrent engineering. D) group technology. E) takt time reduction.

13)

Which of the following is a characteristic of the JIT philosophy?

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A) Inventories become a valued asset. B) Few, large deliveries of orders from suppliers. C) Suppliers become partners. D) Queues of WIP inventory are a necessary investment. E) Large lot sizes to maximize efficiencies.

14)

Which of the following is a benefit of small lot sizes in JIT systems?

A) Quicker response to changing customer demands. B) No safety stock is required. C) Work-in-process inventory is eliminated. D) Inventory planning models are not required. E) Long production runs increase efficiency

15)

In JIT philosophy, the ideal lot size is:

A) the economic order quantity. B) the economic run size. C) one unit. D) the capacity of the standard container. E) N = (DT(1 + X))/C.

16)

Which of the followings does not contribute to reduce setup time and cost?

A) Convert external setup activities to internal setup activities as possible B) Train operators and standardize the setup procedure C) Simplify setup procedures for products D) Use of multipurpose equipment or attachments E) Use of group technology

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17)

A set of tools and methods for reducing setup time developed by Shigeo Shingo is called:

A) enterprise resource planning (ERP). B) design for manufacturability (DFM). C) single-minute exchange of die (SMED). D) group technology. E) One-at-a-Time

18)

Which of the following is not associated with converting to cellular layouts?

A) Determining a family of products to group together B) Designing the process for the product family C) Balancing the cell D) Reducing the variety of end products E) Determining the capacity of the cell

19) The term used in Japan that refers to quality at the source, meaning stopping to fix problems to avoid passing defective products on to the next workstation is:

A) poka-yoke. B) autonomation. C) jidoka. D) andon. E) kanban.

20)

A term that refers to the automatic detection of defects is:

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A) poka-yoke. B) autonomation. C) jidoka. D) andon. E) kanban.

21)

A system of lights used at each workstation to signal problems or slowdowns is a(n):

A) jidoka. B) automation. C) andon. D) pull system. E) kanban.

22)

The basic objective for operating with low inventories in JIT systems is:

A) to uncover recurring problems in production processes. B) inventory investment must be saved. C) major problems must be uncovered. D) major problems must have been solved. E) inventories must be reduced rapidly.

23) The maximum time allowed at each workstation to complete its set of tasks on a unit is called:

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A) unit time B) takt time C) flow time D) JIT time E) Andon time

24) Demand for a product is 105 units per shift. Total time per shift is 480 minutes, and there are two shifts per day. In addition, there are two 15-minute rest breaks and a 30-minute lunch break per shift. What is the takt time?

A) 3 minutes B) 4 minutes C) 10 minutes D) 12 minutes E) 15 minutes

25) JIT?

Which of the following is not an important element of personnel and organization for

A) Cross-trained workers B) Authoritative command and control style leadership C) Support from non-manufacturing personnel such as marketing and finance D) Participation in kaizen (continuous improvement) E) Workers as assets

26)

Which of the following is not true about worker/management roles and relations for JIT?

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A) Stress on workers is reduced by requiring less of them. B) Workers are considered a key asset of a JIT system. C) Two-way communication between workers and management is encouraged. D) Employees are empowered in selecting and using methods. E) Workers receive non-manufacturing support

27) Which of the following is potentially negative aspect of cross-functionally trained workers?

A) B) C) D)

28)

Which of the following are benefits of level capacity loading?

A) B) C) D)

29)

Less motivated workforce based on reduced decision-making authority Less flexibility because workers are less able to assist one another Higher stress levels from added more responsibilities. Less flexible system of operation.

Maximizes work-in-process inventory Minimizes time to setup for different products Limits the flexibility to meet customer demand Minimizes work-in-process inventory

A production kanban card is used to signal that:

A) there is a need to produce parts at the work centre. B) parts are ready to be moved to the next station. C) there is a need to deliver parts to the next work centre. D) a machine has broken down and needs immediate attention. E) a machine is ready for preventive maintenance

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30) A work centre uses an average of 800 pieces of a part per eight hours of production. Each container holds 70 pieces and the average lead time for replenishment of one container is 120 minutes. The manager has assigned a safety factor of 0.40. How many kanbans are needed?

A) 2 B) 4 C) 32 D) 64 E) 96

31) A work centre uses an average of 800 pieces of a part per eight hours of production. Each container holds 70 pieces and the average lead time for replenishment of one container is 120 minutes. The manager has assigned a safety factor of 0.40. What is the maximum authorized inventory?

A) 100 pieces B) 200 pieces C) 280 pieces D) 400 pieces E) 800 pieces

32) An electronic company operates 9 hours per day and the average demand for a printed circuit board is 3600 units per day. The manager has assigned a safety factor of 0.20. Each container holds exactly 60 units and the cycle time for a Kanban (wait, setup, fill, return) is 60 minutes. How many kanbans are needed?

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A) 2 B) 8 C) 18 D) 72 E) 96

33) An electronic company operates 9 hours per day and the average demand for a printed circuit board is 3600 units per day. The manager has assigned a safety factor of 0.20. Each container holds exactly 60 units and the cycle time for a Kanban (wait, setup, fill, return) is 60 minutes. What is the maximum authorized inventory?

A) 100 pieces B) 200 pieces C) 480 pieces D) 3600 pieces E) 4320 pieces

34) A work centre uses 900 kg of a certain material each day. The material is transported in a container that hold 27 kg each. A kanban will take an average of 0.5 day to complete a cycle. The manager has assigned a safety factor of 0.20. The plant operates on an eight-hour day. How many kanbans are needed?

A) 2 B) 3 C) 8 D) 10 E) 20

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35) A work centre uses 900 kg of a certain material each day. The material is transported in a container that hold 27 kg each. A kanban will take an average of 0.5 day to complete a cycle. The manager has assigned a safety factor of 0.20. The plant operates on an eight-hour day. What is the maximum authorized inventory?

A) 540 kg B) 585 kg C) 880 kg D) 900 kg E) 1270 kg

36) It is determined that four kanbans are needed in a workstation. The workstation uses 200 units of part per hour and a kanban will take an average of 60 minutes to complete a cycle. Assume each standard container holds 60 units, what safety factor is considered?

A) 0.1 B) 0.15 C) 0.2 D) 0.25 E) 0.3

37)

Material requirements planning (MRP) is considered a(n):

A) push production system. B) pull production system. C) backward communications approach. D) inventory accumulation approach. E) visual approach

38)

The control of the flow of work in JIT systems is best characterized as a:

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A) push system. B) pull system. C) backward communications approach D) inventory accumulation approach E) neutral system

39)

With regard to suppliers, JIT systems typically require:

A) delivery of large lots at regular intervals. B) buyer inspection of goods and materials. C) multiple sources from which to purchase. D) long-term relationships and commitments. E) focusing on the lowest price possible.

40)

With regard to suppliers, JIT systems typically involve:

A) delivery of large lots on short notice. B) the highest quality at the lowest price. C) collaborating to ensure on-time delivery. D) multiple suppliers to purchase from. E) negotiating the lowest price.

41) Having a vendor be responsible for managing the restocking of inventory is what is meant by the term:

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A) MRP II. B) JIT II. C) VSM II. D) ERP II. E) DRP II.

42)

Which of the following is not a characteristic of preventive maintenance in JIT systems?

A) Maintaining equipment in good operating condition B) Replacing parts before rather than after they fail C) Training workers to do certain repairs themselves D) Eliminating supplies of spare parts E) Quickly returning equipment to working order after an break down

43) A visual tool consisting of process flow diagrams that includes information flows and the activity times refers to:

A) value stream mapping. B) kanban control. C) the 5S principles. D) push analysis. E) pull analysis.

44)

The Five S's do not include:

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A) Straighten. B) Solve. C) Shine. D) Standardize. E) Sort.

45)

Which of the following is not affiliated with the implementation of JIT/lean systems?

A) Inventories are reduced B) Space requirements are reduced C) Quality is increased D) Fewer deliveries from suppliers need to be processed E) Closer relationships with suppliers

46) Which of the following contributes to the competitive advantage enjoyed by firms using JIT/lean production?

A) Fewer employees B) Higher processing cost C) More work-in-process with longer production runs D) Lower processing costs E) Specialization in employee skills lead to higher productivity

47)

Which of the following is not included in world class manufacturing?

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A) just-in-time manufacturing B) total quality management(TQM) C) total management control (TMC) D) total productive maintenance (TPM) E) total industrial engineering (TIE)

48) The All Seasonings Company uses 3,200 glass jars at one of its jar-filling workstations each eight hours of production. The waiting time for a standard container, which holds 90 jars, averages 45 minutes. If management uses a safety factor of twenty percent, how many containers should be used?

49) The Four Star Publishing Company uses 60 reams of paper each hour at one of its high speed printing stations. The waiting time for a standard container, which holds 15 reams of paper, averages 40 minutes. If management has decided to use three containers, what safety factor was applied?

50) A production system uses kanban cards to control production and movement of parts. One work centre uses an average of 40 pieces per hour of a certain part. Standard containers hold 10 parts. The waiting time for parts containers is about 36 minutes. Management has assigned a safety factor of .20 to this work centre. How many containers should be used to support this operation?

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51) A production cell uses 240 pounds of plastic resin each 8-hour day. Resin is transported in drums that hold 100 pounds each. The material is obtained from a nearby supplier, and has a 12-hour waiting time. A safety factor of .15 has been assigned to this cell. What is the optimum number of containers to support this operation?

52)

In a broad sense, JIT is identical to lean production. ⊚ ⊚

53)

true false

JIT was developed at the Ford Motor Company by Henry Ford. ⊚ ⊚

true false

54) The four building blocks of JIT are: product design, process design, personnel/organizational elements, and planning and control. ⊚ ⊚

true false

55) The ultimate goal of a lean system is to achieve a balanced, rapid flow of materials through the system. ⊚ ⊚

Version 1

true false

56) Continuous improvement and flexible systems are requirements for successful JIT and lean systems. ⊚ ⊚

57)

In a JIT environment, anything superfluous is viewed as waste. ⊚ ⊚

58)

true false

Waiting time is not considered a waste in the JIT philosophy. ⊚ ⊚

true false

59) Underutilization of employee knowledge/skill is considered waste in a lean production system. ⊚ ⊚

60)

In JIT/Lean systems, standardized parts are often used in modular designs. ⊚ ⊚

61)

true false

In the lean philosophy, producing large lot sizes reduces waste.

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⊚ ⊚

true false

62) A benefit of small lot sizes in JIT systems is that each product is produced less frequently. ⊚ ⊚

63)

In the JIT philosophy, the smaller the lot size, the better. ⊚ ⊚

64)

true false

A JIT system uses long production runs as this reduces the setup time required. ⊚ ⊚

67)

true false

The small lot-sizing policy works well in a situation where setup costs are high. ⊚ ⊚

66)

true false

A benefit of JIT is the flexibility to handle a mix of products within a short time frame. ⊚ ⊚

65)

true false

Increased setup times generally require increased work-in-process inventories.

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⊚ ⊚

68)

true false

Reductions in setup time are necessary to make a JIT system feasible. ⊚ ⊚

true false

69) A benefit of the lean philosophy is the flexibility to respond quickly to changing customer product preferences. ⊚ ⊚

true false

70) According to Single-minute exchange of die (SMED) concept, internal setup activities are those that do not involve stopping the machine. They can be done before or after the changeover. ⊚ ⊚

71)

Manufacturing cells are commonly used in JIT systems ⊚ ⊚

72)

true false

"Group technology" can be used to reduce setup cost and time in a JIT conversion. ⊚ ⊚

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true false

73) The purpose of an andon is to provide an immediate visual signal indicating when and where problems are occurring in a process. ⊚ ⊚

74)

Long production runs and make to stock would typically be found in lean systems. ⊚ ⊚

75)

true false

In the lean philosophy, Inventories are an asset. ⊚ ⊚

true false

76) JIT/lean systems minimize finished product inventory but have a greater reliance on work-in-process inventory. ⊚ ⊚

true false

77) In the lean philosophy, 100 percent inspection of raw materials, work-in-process, and finished goods would be a waste. ⊚ ⊚

78)

true false

Workers are responsible to check the quality of their work in lean/just in time system

Version 1

⊚ ⊚

true false

79) A fundamental principle of the JIT philosophy is that workers are assets, not a cost element. ⊚ ⊚

true false

80) An advantage of JIT cross-trained workers is that they can help other workers when bottlenecks occurs. ⊚ ⊚

true false

81) JIT/lean production systems need to be directed by strong leadership roles based on topdown communication to ensure production schedules are implemented accurately. ⊚ ⊚

true false

82) Heijunka also known as level-loading refers to the balanced output rates of production within a process by leveling the type and quantity of production output over a period of time. ⊚ ⊚

83)

true false

Kanban is the Japanese term for continuous improvement. ⊚ ⊚

Version 1

true false

84) In JIT/Lean system, a kanban card is used when a worker needs a batch of an item from the preceding work centre, which is also authorized the preceding work centre to replenish the batch. ⊚ ⊚

85)

true false

The ideal scheduling for JIT/lean operations follows a push system of planning. ⊚ ⊚

true false

86) In a "pull system," a pile of inventory in front of a workstation indicates problems at that workstation. ⊚ ⊚

87)

true false

In JIT/Lean system, each kanban card is affixed to each product. ⊚ ⊚

true false

88) Kanban is a system of lights used to signal problems or slowdowns in a production process. ⊚ ⊚

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true false

89) The main function of a conveyance or withdrawal kanban is to pass the authorization for the movement of parts from one work area to another. ⊚ ⊚

true false

90) Kanban is essentially a two-bin system of inventory: supplies are replenished, when the balance of inventory reaches to a predetermined level. ⊚ ⊚

true false

91) JIT purchasing requires frequent bidding for contracts by multiple sources to ensure the buyer of competitive prices. ⊚ ⊚

92)

true false

In a JIT system, long-term relationships with suppliers are unusual. ⊚ ⊚

true false

93) In JIT/lean systems "preventive maintenance" is designed to provide a rapid response after a breakdown has occurred to get the equipment back on line as fast as possible. ⊚ ⊚

true false

94) Value-stream mapping is a process-focused tool to systematically examine the flow of materials and information involved in bringing a product or service to a consumer.

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⊚ ⊚

true false

95) In relation to lean, it can be difficult for an organization to change its culture within a short time. ⊚ ⊚

96)

true false

Inventory reduction is another aspect of lean that can apply to services. ⊚ ⊚

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true false

Answer Key Test name: Chap 14_7ce 1) D 2) B 3) E 4) C 5) E 6) B 7) D 8) D 9) C 10) B 11) B 12) C 13) C 14) A 15) C 16) A 17) C 18) D 19) C 20) B 21) C 22) A 23) B 24) B 25) B 26) A Version 1

27) C 28) D 29) A 30) B 31) C 32) B 33) C 34) E 35) A 36) C 37) A 38) B 39) D 40) C 41) B 42) D 43) A 44) B 45) D 46) D 47) C 52) TRUE 53) FALSE 54) TRUE 55) TRUE 56) TRUE 57) TRUE 58) FALSE 59) TRUE 60) TRUE Version 1

61) FALSE 62) FALSE 63) TRUE 64) TRUE 65) FALSE 66) FALSE 67) TRUE 68) TRUE 69) TRUE 70) FALSE 71) TRUE 72) TRUE 73) TRUE 74) FALSE 75) FALSE 76) FALSE 77) TRUE 78) TRUE 79) TRUE 80) TRUE 81) FALSE 82) TRUE 83) FALSE 84) TRUE 85) FALSE 86) TRUE 87) FALSE 88) FALSE 89) TRUE 90) TRUE Version 1

91) FALSE 92) FALSE 93) FALSE 94) TRUE 95) TRUE 96) TRUE

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Chapter 15: Supply Chain Management 1) The ability for members to connect in real time to any part of the supply chain to access data such as forecasts, shipments, inventory levels, and shortages that could impact the timely flow of products is called:

A) electronic data interchange (EDI). B) e-commerce. C) quick response (QR). D) supply chain visibility. E) event management.

2) What is the term used to identify the ability of an organization to detect and respond to unplanned events such as delayed shipment or a warehouse running low on a certain item?

A) risk management B) event management C) risk pooling D) resiliency E) strategic inventory management

3) What is the term used to identify the ability of a business to recover from an event that negatively impacts the supply chain?

A) event management B) risk recovery C) supply chain visibility D) resiliency E) risk pooling

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4) Which of the following is not a benefit of managing the supply chains in small businesses?

A) increased efficiencies B) reduced costs C) reduced risks D) increased profits E) increased risks

Which of the following is not a challenge companies face in global supply chains?

A) language B) culture C) currencies D) untapped markets E) Additional modes of transportation

Logistics includes all of these except:

A) the movement of materials within a production facility B) incoming shipments of goods or materials. C) outgoing shipments of goods or materials. D) customer selection. E) returned goods processing.

Which of the following is not a component of logistics?

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A) the movement of materials within a production facility. B) incoming deliveries. C) the use of information to control the movement of goods. D) outgoing deliveries E) product design

is the least costly mode of transportation for moving product.

A) B) C) D)

Waterway Railroad Trucking Air freight

The most flexible mode of transportation is:

A) water B) rail C) truck D) air E) pipeline

10)

Using a combination of airplanes and trucks for parcel delivery is an example of

A) reverse logistics. B) intermodal transportation. C) LTL freight shipping. D) TL freight shipping. E) Backhauling.

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11) is a unique mode of transportation having the highest fixed cost and lowest variable operating cost.

A) Railroad B) Waterway C) Pipeline D) Air freight E) Trucking

12) A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be more expensive overall than using the faster method.

A) $1.08 B) $1.16 C) $2.37 D) $2.73 E) $1.61

13) An item with a holding cost of $500 per year can be shipped by air in 1 day, costing $100, or by ground in 4 days, costing $25. Assuming the holding costs of $500 per year are based on an operational year of 365 days, which is cheaper and by how much?

A) Ground is cheaper by $75.00 B) Ground is cheaper by $70.89 C) Ground is cheaper by $72.26 D) Ground and air have the same total cost E) Air is cheaper by $25.

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14) An item with a holding cost of $400 per year can be shipped by air in 1 day, costing $250, or by ground in 5 days, costing $150. Assuming the holding costs of $400 per year are based on an operational year of 365 days, which is cheaper and by how much?

A) Ground is cheaper by $60.00 B) Ground is cheaper by $70.89 C) Ground is cheaper by $95.62 D) Ground and air have the same total cost E) Air is cheaper by $100.

15)

Which of the following is not a decision involved in transport planning?

A) Selecting a mode of transportation B) Negotiating a transport rate C) Selecting a carrier D) Choosing a supplier for the item to be purchased E) Deciding whether or not to outsource transportation

16) Which of the following is not a LTL characteristics of the product in determining the shipping rate?

A) density B) stowability C) difficulty of handling D) liability E) unit cost

17)

Placing inventory in a local warehouse in anticipation of future need is called:

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A) stocking B) consolidation C) breaking bulk D) cross-docking E) value-added services

18) Which of the following is the term used to describe the backward flow of goods returned by consumers or retailers?

A) Gate keeping B) Bullwhip effect C) Reverse logistics D) Cross docking E) Delayed differentiation

19)

Which of the following is not a suggestion for an inventory storage system?

A) Store heavy or fast-moving items on the floor. B) Store obsolete items in the highest locations. C) Have the right level of automation. D) Have controlled access to the building. E) Make sure the storeroom is not cluttered.

20) The process of organizing, grouping, and locating products within the warehouse storage is called:

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A) consolidating. B) slotting. C) breaking bulk. D) cross-docking. E) deconsolidating.

21) The process of taking goods from the warehouse storage to fulfill customer orders is called:

A) slotting B) order picking C) breaking bulk D) consolidating E) deconsolidating

22)

Overseeing the shipment of incoming and outgoing goods is the function of:

A) traffic management. B) distribution management. C) production management. D) inventory management. E) purchasing.

23)

Which of the following is not a duty of purchasing?

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A) Set quality standards for purchased products B) Maintaining databases of suppliers C) Identify sources of supply D) Establish partnerships with suppliers E) Negotiating supply contracts

24)

Which one of the following is the interface between the firm and the suppliers?

A) Purchasing B) Production C) Distribution D) Logistics E) Distribution planning

25)

The purchasing cycle begins with:

A) selecting a supplier. B) placing an order. C) evaluating potential vendors. D) conducting a value analysis. E) receiving a requisition.

26)

The purchasing cycle ends when the purchasing department is notified that:

A) an order has been placed. B) potential suppliers have been identified. C) the supplier has been paid. D) the supplier has been selected. E) the order has been received.

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27)

Which of the following is not one of the steps in the purchasing cycle?

A) Receive a requisition B) Execute a spend analysis C) Select a supplier D) Monitor orders E) Payment to supplier

28) Examination of the function of purchased parts or materials in an effort to reduce costs and/or improve performance is called:

A) vendor analysis. B) value analysis. C) negotiated purchasing. D) vendor relations. E) vendor assessment.

29)

Value analysis has the greatest potential for savings for items which have:

A) low cost per unit. B) low annual cost-volume. C) high cost per unit. D) high annual usage. E) high annual dollar-volume.

30)

Which of the following is not true about value analysis?

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A) It involves an examination of the function of purchased parts or products. B) Its purpose is to reduce costs and/or improve performance of purchased goods or services. C) It is usually performed only periodically. D) Representatives from design and operations may work with purchasing. E) If improvements are identified, purchasing usually has the authority to implement them.

31)

Which of the following is not a benefit of centralized purchasing?

A) Potential for quantity discounts B) Better service from suppliers C) Quick response to local needs D) Potential for use of purchasing specialists E) All are potential benefits of centralized purchasing

32) This involves collecting, cleansing, and analyzing data regarding expenditures with the purpose of reducing costs, improving efficiency, and monitoring compliance with purchasing policies.

A) Value analysis B) Risk analysis C) Order fill rate analysis D) Spend analysis E) Purchasing analysis

33) Which of the following is a principle required for ethical behaviour in purchasing? (I) loyalty to employer (II) justice to those you deal with (III) faith in your profession

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A) I only B) II only C) III only D) II and III only E) I, II, and III

34)

Which of the following is not a benefit of "quick response" for retailers?

A) Reduced dependency on forecasts B) Reduced transportation costs C) Reduced inventory holding costs D) Better match between supply and demand E) Reduced shortage costs

35)

Which of the following is an advantage of e-commerce?

A) Increased transaction costs B) Greater customer loyalty C) Shortened supply chain response times D) Access to services are limited by time E) The inability to gather information of customer preferences

36) Which of the following is not considered an advantage of e-commerce for supply chain management?

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A) Substantial reduction of transaction costs B) Data concerning customers' choices can be collected and analyzed more readily C) Supply chain response time is reduced D) Opportunities to reach customers more directly based on disintermediation E) Transaction costs tend to be higher

37)

Which of the following would not usually be a main factor in selecting a vendor?

A) Location B) Price C) Quality D) inventory turnover E) vendor services

38) Given the following table and using the factor-weighting technique, supplier …… is selected. Factor

Price

On-Time Delivery

Quality

Flexibility

Weight

Supplier A

Supplier B

Supplier C

Supplier D

Supplier E

A) A B) B C) C D) D E) E

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39) Given the following table and using the factor-weighting technique, the total score for supplier C will be: Factor

Price

On-Time Delivery

Quality

Flexibility

Weight

Supplier A

Supplier B

Supplier C

Supplier D

Supplier E

A) 40 B) 51 C) 54 D) 57 E) 62

40)

Which of the following is not a key consideration when a company chooses a supplier?

A) Lead time and on-time delivery B) Reputation and financial stability C) Flexibility in handling changes D) Quality control procedures of suppliers E) Size of the supplier's warehouses

41) The perspective of business organizations in viewing suppliers as partners is characterized by:

A) price based competitive bidding. B) reliance on more suppliers C) long-term contracts D) adversarial relationship E) unwillingness to share information

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42)

Of the following, which is not a benefit of establishing partnerships with suppliers?

A) higher quality. B) increased delivery speed C) lower inventories D) flexibility in quantities required E) less flexibility in delivery schedules

43) supply chains.

is the latest effort to increase the effectiveness and efficiency of

A) Collaborative planning, forecasting, and replenishment (CPFR) B) Strategic supplier/customer partnership C) Supply chain visibility D) Supplier analysis E) Distribution requirements planning

44) Holding safety stock inventory in one central location rather than in multiple locations is called:

A) postponement. B) outsourcing. C) risk pooling. D) cross-docking. E) vendor-managed inventory.

45) Small changes in consumer demand can result in large variations in orders placed because of the:

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A) supply chain. B) safety stock requirement. C) lead time effect. D) bullwhip effect. E) FCFS scheduling.

46) is a method of replenishing inventory in which companies reduce their overhead costs by shifting responsibility for owning, managing, and replenishing inventory to vendors.

A) B) C) D)

47)

Efficient consumer response (ECR) Vendor-managed inventory (VMI) Quick response (QR) Delayed differentiation/postponement

Which of the following is not true about JIT deliveries?

A) Also referred to as "quick response" (QR) in wholesale sectors B) Small lot sizes C) Frequent deliveries D) Decreased transportation cost per unit E) Began in the auto industry

48) Which of the following is not associated with quick response (QR) replenishment methods?

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A) Sales information made available to vendors B) Regular, periodic orders by retailers C) Frequent small-lot shipments D) Reduced dependence on forecasts E) Closer match between supply and demand

49) The situation when inventories are held at more than one location in a company's outbound distribution supply chain is referred to as:

A) A-B-C classification for inventory management. B) order up to level inventory management. C) economic production quantity inventory planning. D) multi-echelon inventory management. E) basic economic order quantity inventory model.

50)

Which of the following is not the input for distribution requirements planning (DRP)?

A) Demand forecasts at each retailer B) Current inventory on hand C) Lead times D) Holding costs at the distribution centre E) Order quantities

51) Distribution requirements planning (DRP) is a (QR) is a system.

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system, whereas quick response

A) B) C) D)

pull; push push; pull lean; push pull; lean

52) Inventory is a method that determines the location and optimal level of inven-tory in the supply chain.

A) optimization B) planning C) positioning D) distribution E) management

53) Which technology allows companies to automatically identify, track, monitor, or locate objects within the supply chain?

A) Hand-held barcode readers B) Radio frequency identification (RFID) tags C) Electronic data interchange (EDI) systems D) E-commerce websites E) The internet

54) Last quarter, a retailer sold 8,000 T-shirts, 7,000 of which were sold directly from onhand inventory. This retailer's was 88 percent.

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A) fill rate B) inventory yield C) profit margin D) inventory turnover E) working yield

55) Which of the following is not typically used as a performance attribute/metric commonly used to measure supply chain performance?

A) Inventory turnover B) Cost C) Variety/flexibility (e.g. speed of product changes) D) Item fill rate E) Product quality

56)

The item fill rate is categorized as which type of supply chain performance metric?

A) Flexibility B) Cost C) Variety D) Delivery E) Customer service

57) A company's supply chain involves the flow of materials and information from suppliers, through production, to the final customer. ⊚ ⊚

Version 1

true false

58) Supply chain management is collaboration among, and coordination of all the facilities and activities of companies so that market demand is met as effectively as possible. ⊚ ⊚

true false

59) The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain ⊚ ⊚

60)

true false

Supply chains are sometimes called value chains. ⊚ ⊚

true false

61) A company's supply chain comprises the internal flow of materials and information from the point of receiving inputs from suppliers, through production, to the point of shipping to final customers. ⊚ ⊚

62)

true false

Every business organization is part of at least one supply chain ⊚ ⊚

true false

63) Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.

Version 1

⊚ ⊚

true false

64) Supply chain visibility refers to the physical flow of material in supply chain management including the design of warehouses to make it easier to locate products. ⊚ ⊚

true false

65) Event management involves identifying risks, assessing their likelihood of occurring and their potential impact, and then developing strategies for addressing those risks. ⊚ ⊚

true false

66) Determining the number, location, and capacity of facilities would be considered one of the tactical/operational activities of supply chain management. ⊚ ⊚

67)

Small businesses pay as much attention to their supply chains as large businesses. ⊚ ⊚

68)

true false

The need for risk management increases as globalization of supply chains increases. ⊚ ⊚

Version 1

true false

69) The more global a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically. ⊚ ⊚

70)

As international trade barriers fall, less companies are expanding their global operations. ⊚ ⊚

71)

true false

Information technology is a key to integrating operations across global supply chains. ⊚ ⊚

true false

72) Event management is the ability to detect and respond to unplanned events such as delayed shipment or a warehouse running low on a certain item. ⊚ ⊚

true false

73) One of the major reasons for a company to adopt third party logistics (3PL) is to concentrate on one's core business. ⊚ ⊚

Version 1

true false

74) Third-party logistics service providers (3PLs) are carriers that always own their transport equipment (trucks, planes, ships). ⊚ ⊚

true false

75) Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit. ⊚ ⊚

true false

76) The faster the material passes through the supply chain, the higher the inventory costs will be, and the faster the products and services will be delivered to the customer. ⊚ ⊚

true false

77) Traffic management involves the equipment used for delivery, including pipelines, ships, trains, trucks, and airplanes. ⊚ ⊚

true false

78) The oldest mode of transportation waterways is best suited for hauling large tonnage over long distances. ⊚ ⊚

79) rate.

true false

In LTL freight shipping, the higher the stowability results in the lower class and freight

Version 1

⊚ ⊚

80)

true false

Trucking can be used for door-to-door deliveries ⊚ ⊚

true false

81) Intermodal transportation refers to using a combination of two or more transportation modes to transport products. ⊚ ⊚

82)

true false

Transportation cost increases as product density decreases. ⊚ ⊚

true false

83) A bill of lading (BOL) is the transport contract. It provides all the information the carrier needs. ⊚ ⊚

84)

true false

For a TL carrier, freight rates are specified in dollars per mile, for a given truck capacity. ⊚ ⊚

Version 1

true false

85) In LTL freight shipping, the higher density products are typically assessed the lower freight rate. ⊚ ⊚

true false

86) The rate of an LTL common carrier for a given origin-destination pair is usually in dollars per hundredweight which is abbreviated as "cwt". ⊚ ⊚

87)

true false

Cross-docking is one of the benefits of warehousing to reduce supply chain lead times. ⊚ ⊚

true false

88) Cross-docking minimizes handling and warehousing of products in the supply chain by shipping directly from manufacturers to retailers. ⊚ ⊚

true false

89) Cross docking is a technique to reduce the need to store inventory at warehouses and distribution centres. ⊚ ⊚

90)

true false

The two key elements of reverse logistics are gate keeping and avoidance.

Version 1

⊚ ⊚

true false

91) Value-added services provide product customization by delaying the labelling, packaging, kitting, and final assembly of products in a warehouse until customer orders are received. ⊚ ⊚

true false

92) Grouping small inbound shipments into one large outbound shipment is called deconsolidation. ⊚ ⊚

93)

true false

In cross-docking, inbound goods are moved directly onto outbound trucks. ⊚ ⊚

true false

94) In a closed-loop supply chain, a manufacturer controls both the forward and reverse logistics. ⊚ ⊚

true false

95) One of the examples of value-added services is to assemble a specific product in a distribution warehouse to meet customer order. ⊚ ⊚

Version 1

true false

96)

Reverse logistics is the backward flow of goods returned by consumers or retailers. ⊚ ⊚

true false

97) In zone random storage slotting method, a specific zone is established for similar goods, and within the zone, items are placed randomly in different location numbers. ⊚ ⊚

true false

98) In ABC warehouse slotting method, fast moving items must be located in zone C farther away from the receiving and shipping areas. ⊚ ⊚

true false

99) In ABC warehouse slotting method, slow moving must be located in zone A close to the dispatch and shipping areas. ⊚ ⊚

true false

100) In random location slotting method, same items with the same part number may be placed at different locations at different times. ⊚ ⊚

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true false

101) Zone order picking is faster than wave order picking because the orders are fulfilled at the same time. ⊚ ⊚

true false

102) In zone order picking method, all items in a specific order are picked by an assigned worker. ⊚ ⊚

true false

103) In wave order picking, all orders are processed through zones and each worker is responsible for its specific zone to pick all items for each order, one item at a time. ⊚ ⊚

true false

104) The primary factors of importance to purchasing are the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services. ⊚ ⊚

true false

105) The purchasing department interfaces with the accounting, engineering design, and operations functions, along with several other functional areas. ⊚ ⊚

true false

106) The primary goal of purchasing is to negotiate low prices from an organization's suppliers.

Version 1

⊚ ⊚

true false

107) The risks of outsourcing include having less control over supplies and lower expertise internally. ⊚ ⊚

108)

true false

As the level of outsourcing increases, the need for supply chain management decreases. ⊚ ⊚

true false

109) The extent of vertical integration and outsourcing decisions are strategic (design) supply chain management activities. ⊚ ⊚

true false

110) Outsourcing refers to buying goods or services from outside sources instead of making the goods or providing the services in-house. ⊚ ⊚

true false

111) Global purchasing is more complex because of the variety of issues and risks that must be considered. ⊚ ⊚

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true false

112)

Outsourcing has helped firms to concentrate on their core business. ⊚ ⊚

true false

113) The purchasing cycle ends when the receiving staff are notified that the supplier has shipped the items. ⊚ ⊚

true false

114) The purchasing cycle involves collecting, cleansing, and analyzing data regarding expenditures with the purpose of reducing costs, improving efficiency, and monitoring compliance with purchasing policies. ⊚ ⊚

true false

115) Buyers are more likely to require quotes or use competitive bidding when ordering large quantities of standard items. ⊚ ⊚

116)

true false

For small orders of standard products or services, competitive bidding is typically used. ⊚ ⊚

Version 1

true false

117) For large orders of standard products or services, price negotiation is more common than competitive bidding. ⊚ ⊚

true false

118) Value analysis examines the function of purchased parts and materials in an effort to reduce costs. ⊚ ⊚

119)

true false

Decentralized purchasing means buying the same item from multiple suppliers. ⊚ ⊚

true false

120) An important advantage of decentralized purchasing is the opportunity to obtain lower prices than with centralized purchasing. ⊚ ⊚

121)

Decentralized purchasing can usually offer quicker response than centralized purchasing. ⊚ ⊚

122)

true false

Some firms use both centralized and decentralized purchasing. ⊚ ⊚

Version 1

true false

123)

An advantage of decentralized purchasing is the attention given to local needs. ⊚ ⊚

124)

true false

Centralized or decentralized purchasing is directly related to the size of an organization. ⊚ ⊚

true false

125) Spend analysis involves collecting, cleansing, and analyzing data regarding expenditures with the purpose of reducing costs, improving efficiency, and monitoring compliance with purchasing policies. ⊚ ⊚

true false

126) Disintermediation occurs when the traditional retailer or service provider is reduced or eliminated in a supply chain ⊚ ⊚

true false

127) Disintermediation involves terminating the relationship with a supplier as a result of repeated failures to meet performance expectations. ⊚ ⊚

Version 1

true false

128) An advantage of the use of e-commerce for supply chain management is that companies can collect more detailed information about clients' choices. ⊚ ⊚

true false

129) Make-to-order (MTO) approach refers to, producing or manufacturing goods based on demand forecasting, and products are sold to the customer from finished goods stock. ⊚ ⊚

true false

130) Typically, Japanese companies rely on short-term contracts with many suppliers in order to be consistent with the frequent deliveries and large lot sizes of JIT systems. ⊚ ⊚

131)

Japanese firms tend to use fewer vendors than many of their American counterparts. ⊚ ⊚

132)

true false

Price is the primary determining factor in choosing a supplier. ⊚ ⊚

true false

133) Supplier analysis is the process that evaluates the source of supply in terms of price, quality, delivery, and service.

Version 1

⊚ ⊚

134)

true false

Long-term contracts imply stronger relationships with fewer suppliers. ⊚ ⊚

true false

135) The design of the supply chain and establishing partnerships with vendors and distributors are examples of operational issues in a supply chain. ⊚ ⊚

true false

136) Establishing partnerships with suppliers typically leads to depending on more suppliers and shorter term relationships. ⊚ ⊚

true false

137) Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others. ⊚ ⊚

true false

138) Collaborative planning, forecasting, and replenishment (CPFR) is a process for communicating and agreeing on forecasts and orders between the manufacturer and the customer (distributor/retailer). ⊚ ⊚

Version 1

true false

139) Holding safety stock inventory at multiple retail outlets rather than at a centralized distribution centre is an example of risk pooling. ⊚ ⊚

true false

140) Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse. ⊚ ⊚

true false

141) Bullwhip effect refers to a phenomenon in which the demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain. ⊚ ⊚

true false

142) Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease. ⊚ ⊚

true false

143) Delayed differentiation or postponement adds differentiated features to products early in a process to achieve a closer match between supply and demand. ⊚ ⊚

Version 1

true false

144) Delayed differentiation/postponement is a technique to minimize the cost of providing product variety by adding differentiating features late in the supply chain. ⊚ ⊚

true false

145) Delayed differentiation is a mean of increasing product variety without building the customized product from scratch or keeping large inventories of custom products. ⊚ ⊚

true false

146) "Quick response" (QR) involves making sales information available to vendors to allow for JIT replenishment. ⊚ ⊚

true false

147) Quick response (QR) results in frequent small-lot shipments and has the benefit of reduced reliance on forecasts. ⊚ ⊚

true false

148) Efficient consumer response (ECR) is an extension of quick response, initially developed in the retail clothing industry. ⊚ ⊚

Version 1

true false

149) A distribution centre (DC) that supplies inventory to a network of retail outlets is an example of a multi-echelon inventory management system. ⊚ ⊚

150)

true false

The role of ERP systems in supply chain management is limited to inventory planning. ⊚ ⊚

true false

151) EDI is the direct transmission of inter-organizational transactions from computer to computer, including purchase orders, shipping notices, and more. ⊚ ⊚

true false

152) Electronic data interchange (EDI) is rapidly becoming obsolete with increased usage of the internet. ⊚ ⊚

true false

153) The primary use of radio frequency identification (RFID) in supply chain management is to track the location of delivery trucks. ⊚ ⊚

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true false

154) Relative to bar-codes, RFID tags have the advantage of providing more detailed information and being able to be read automatically. ⊚ ⊚

true false

155) Blockchains enable companies to build anti-counterfeit database, track stolen products, or track items with specific qualities, such as luxury products that rely on product authenticity. ⊚ ⊚

true false

156) One application of blockchains is in the food safety industry, where it allows food items to be tracked, and if a producer identifies a problem, the problem can be contained by identifying the source and issuing a recall for only the affected products. ⊚ ⊚

true false

157) Examples of metrics for supply chain performance are logistics costs, percentage of ontime delivery, and item fill rate. ⊚ ⊚

true false

158) Inventory turnover refers to the rate at which inventory (material) goes through the supply chain. ⊚ ⊚

159)

true false

Item fill rate refers to the time it takes to have inventory replenished from a supplier.

Version 1

⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 15_7ce 1) D 2) B 3) D 4) E 5) D 6) D 7) E 8) A 9) C 10) B 11) C 12) E 13) B 14) C 15) D 16) E 17) A 18) C 19) B 20) B 21) B 22) A 23) A 24) A 25) E 26) C Version 1

27) B 28) B 29) E 30) E 31) C 32) D 33) E 34) B 35) C 36) E 37) D 38) B 39) C 40) E 41) C 42) E 43) A 44) C 45) D 46) B 47) D 48) B 49) D 50) D 51) B 52) A 53) B 54) A 55) E 56) E Version 1

57) TRUE 58) TRUE 59) TRUE 60) TRUE 61) FALSE 62) TRUE 63) FALSE 64) FALSE 65) FALSE 66) FALSE 67) FALSE 68) TRUE 69) TRUE 70) FALSE 71) TRUE 72) TRUE 73) TRUE 74) FALSE 75) TRUE 76) FALSE 77) FALSE 78) TRUE 79) TRUE 80) TRUE 81) TRUE 82) TRUE 83) TRUE 84) TRUE 85) TRUE 86) TRUE Version 1

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147) TRUE 148) FALSE 149) TRUE 150) FALSE 151) TRUE 152) FALSE 153) FALSE 154) TRUE 155) TRUE 156) TRUE 157) TRUE 158) TRUE 159) FALSE

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Chapter 16: Job and Staff Scheduling 1)

Which of the following is NOT a common criterion when using the Assignment model?

A) costs B) prioritizing C) profits D) performance E) optimization

When sequencing jobs with sequence-dependent setup times the goal is to:

A) Minimize total setup time B) Maximize total setup time C) Average the setup times D) Minimize flow time E) Maximize utilization

Which of the following is NOT a method to reduce scheduling difficulty?

A) Set realistic due dates B) Adapt the schedule to changing customer requirements C) Focus in bottleneck operations D) Use scheduling software E) Use shop floor control

In airline crew scheduling what is the last thing that is scheduled?

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A) flights B) crews C) planes D) maintenance E) destinations

Job scheduling pertains to:

A) hiring workers. B) capacity planning. C) buying machinery. D) timing the use of work centres. E) inventory allocation.

6) Which of the following is the last step in the production planning hierarchy before actual output is produced?

A) Material requirements planning. B) Enterprise resource planning. C) Capacity planning. D) Aggregate planning. E) Scheduling.

7) An area in a production facility consisting of one or more workers and machines with similar capabilities that can be considered one unit for the purpose of scheduling is a:

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A) job shop. B) bottleneck. C) work team. D) cell layout. E) work centre.

8) Assigning jobs to work centres without regard to the available capacity of the work centres describes:

A) backward loading. B) forward loading. C) finite loading. D) infinite loading. E) capacity loading.

9) Assigning jobs to work centres and to various machines within each work centre describes:

A) loading. B) staff scheduling. C) material requirements planning. D) capacity planning. E) capacity utilization.

10) Monitoring and managing the work flow at each work centre on the shop-floor of a production facility is called:

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A) lot sizing. B) inventory turnover. C) daily dispatch lists. D) Gantt chart. E) Input/output (I/O) control.

11)

Which of the following is NOT a "tool" (technique) for shop-floor control?

A) Anticipated delay report B) Input/output (I/O) control C) Daily dispatch lists D) Product structure tree E) Schedule/control Gantt chart

12) A schedule/control Gantt chart is a visual representation of progress on the shop-floor which shows on a vertical axis, and on the horizontal axis.

A) jobs in progress; time B) jobs in progress; total costs C) hours worked; jobs in progress D) total costs; jobs in progress E) actual output; actual input

13)

The purpose of a Gantt chart is to:

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A) visually express the capacity of resources. B) quantitatively analyze the optimum sequencing of resources. C) visually represent the loading and scheduling of jobs for control purposes. D) quantitatively analyze the capacity of production resources. E) visually express the material allocation at work centres.

14)

Two different approaches to load work centres in job scheduling are:

A) economic order quantity (EOQ) and material requirements planning (MRP). B) Gantt charts and shop-floor control. C) infinite loading and finite loading. D) linear programming and trial-and-error. E) linear programming and Gantt charts.

15)

Finite loading, as compared to infinite loading, assumes that:

A) there are a finite number of jobs to be done. B) work centres can be loaded without regard to their capacity. C) work centres' capacity must be taken into account in assigning jobs. D) work centres' capacity will be increased as needed after assigning jobs. E) only certain jobs will be loaded based on processing time.

16) In the drum-buffer-rope conceptualization used in the theory of constraints, the "drum" that sets the pace for production refers to:

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A) work-in-process inventory before the bottleneck. B) the bottleneck of the process. C) total capacity of the process. D) first stage in the process. E) the master schedule.

17) In the drum-buffer-rope conceptualization used in the theory of constraints, the "buffer" refers to:

A) inventory just before the bottleneck. B) the bottleneck of the process. C) total capacity of the process. D) first stage in the process. E) the master schedule.

18)

Scheduling that starts with the present time and continues into the future is called:

A) detailed scheduling. B) staff scheduling. C) master production scheduling. D) forward scheduling. E) backward scheduling.

19)

Input/Output (I/O) control is used to:

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A) increase work flows and queues at a work centre. B) ensure overloading of a work centre to maximize efficiency. C) minimize WIP at a work centre D) manage work flows and queues at a work centre. E) maximize make-span.

20) The priority rule where jobs are processed according to the smallest ratio of time until due date to processing time is:

A) critical ratio (CR). B) earliest due date (EDD). C) first come, first serve (FCFS). D) minimum slack time (MST). E) shortest processing time (SPT).

21)

As a performance measure in scheduling, job flow time does NOT include:

A) movement time between operations. B) processing time. C) idle time. D) setup time. E) due dates for each job.

22) Which of the following is NOT a measure for judging the effectiveness of a schedule sequence?

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A) Average work-in-process B) Total processing time C) Job flow time D) Job lateness E) average hours or days late

23) The total time needed to complete a group of jobs from the beginning of the first job to the completion of the last job is called the:

A) job flow time. B) make-span. C) earliest due date (EDD). D) delivery time. E) average WIP.

24)

Average job flow time for a schedule sequence at a work station is:

A) total processing time divided by the number of jobs. B) total flow time divided by the number of jobs. C) total flow time divided by total processing time. D) total processing time plus total late time divided by number of jobs. E) total flow time plus total late time divided by number of jobs.

25)

Which sequencing rule is designed specifically to minimize job lateness?

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A) Critical ratio (CR) B) Earliest due date (EDD) C) First come, first serve (FCFS) D) Minimum slack time (MST) E) Shortest processing time (SPT)

26) The scheduling sequencing rule which always results in the lowest average flow (flow) time is the:

A) critical ratio (CR). B) earliest due date (EDD). C) first come, first serve (FCFS). D) minimum slack time (MST). E) shortest processing time (SPT).

27)

A scheduling rule used for sequencing jobs through two work centres is:

A) critical ratio rule. B) Johnson's rule. C) minimum slack time rule. D) shortest processing time rule. E) earliest due date rule.

28) For the jobs listed below, which processing sequence would result using Johnson's Rule? Processing time (hrs.) Job

Centre 1

Centre 2

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A) c-a-d-b B) b-d-a-c C) a-b-c-d D) d-c-b-a E) c-a-b-d

29)

What is the optimum job sequence for the jobs listed below, using Johnson's Rule? Job

Centre 1

Centre 2

A) e-g-f-d B) d-g-f-e C) d-f-g-e D) e-d-f-g E) f-e-d-g

30)

The Theory of Constraints focuses on

A) work-in-process inventory B) total processing time C) bottleneck operations D) job sequencing E) worker assignments

31)

Shift scheduling for services does NOT involve:

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A) forecasting the amount of work to be done per time period. B) assigning shifts to staff based on skill and availability. C) converting work per time period into number of workers required D) covering requirements with a minimum of shifts. E) staffing at a constant minimum level to minimize wage costs.

32) A primary reason why staff scheduling in services can be more challenging than it is for manufacturing is:

A) services have less processing variability. B) services cannot be inventoried. C) people generally are willing to wait longer for manufactured products. D) customers will not wait for services. E) all services use appointments that have to match customers' schedules.

33)

In scheduling staff for services, flexible capacity is achieved by:

A) part time workers and the timing of shifts. B) using Johnson's rule. C) offering incentives for customers to come during non-peak hours. D) maintaining inventory. E) managing waiting lines so customers perceptions of waiting are altered.

34) The table below contains information about five jobs waiting to be processed at work station number three. Job

Processing Time (Hrs.)

Hours Until Due

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The sequence that would result using the SPT rule is:

A) e-b-c-d-a. B) c-a-b-e-d. C) a-d-c-e-b. D) d-e-b-a-c. E) e-d-b-a-c.

35) The table below contains information about five jobs waiting to be processed at work station number three. Job

Processing Time (Hrs.)

Hours Until Due

Using the EDD rule, the sequence of jobs would be:

A) d-e-b-a-c. B) a-d-c-b-e. C) e-d-b-a-c. D) a-d-c-e-d. E) e-b-c-d-a.

36) The table below contains information about five jobs waiting to be processed at work station number three. Job

Processing Time (Hrs.)

Hours Until Due

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Using the CR rule, the sequence of jobs would be:

A) c-a-b-d-e. B) a-b-d-e-c. C) d-e-b-a-c. D) c-a-b-e-d. E) e-d-b-a-c.

37) The table below contains information about five jobs waiting to be processed at work station number three. Job

Processing Time (Hrs.)

Hours Until Due

Using the MST rule, the sequence of jobs would be:

A) c-a-b-d-e. B) a-b-d-e-c. C) d-e-b-a-c. D) c-a-b-e-d. E) e-d-b-a-c.

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38) The owner/operator of the local franchise of Handyfix, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hours)

Due (hours)

If the owner uses the first come, first served (FCFS) priority rule to schedule these jobs, what will be the average flow time?

A) 7.5 hours B) 5 hours C) 3 hours D) 2.5 hours E) 2 hours

39) The owner/operator of the local franchise of Handyfix, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hours)

Due (hours)

If the owner uses the earliest due date first (EDD) priority rule to schedule these jobs, what will be the average job lateness?

A) 0 hours B) 1.5 hours C) 1.75 hours D) 2 hours E) 2.25 hours

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40) The owner/operator of the local franchise of Handyfix, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average flow time?

A) 7.5 hours B) 5 hours C) 3 hours D) 2.5 hours E) 2 hours

41) The owner/operator of the local franchise of Handyfix, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average job lateness?

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A) 0 hours B) 1.5 hours C) 1.75 hours D) 2 hours E) 2.25 hours

42) The owner/operator of the local franchise of Handyfix, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average WIP in the shop today?

A) 0 jobs B) 1 job C) 2 jobs D) 3 jobs E) 4 jobs

43) The owner of an Electronic Repair business currently has five jobs to be scheduled, shown in order in which they arrived: Job

Processing Time (hours)

Due (hours)

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If the owner uses the first come, first served (FCFS) priority rule to schedule these jobs, what will be the average flow time?

A) 3 hours B) 5 hours C) 7 hours D) 7.2 hours E) 8 hours

44) The owner of an Electronic Repair business currently has five jobs to be scheduled, shown in order in which they arrived: Job

Processing Time (hours)

Due (hours)

If the owner uses the earliest due date first (EDD) priority rule to schedule these jobs, what will be the average job lateness?

A) 2 hours B) 2.2 hours C) 2.33 hours D) 2.4 hours E) 3 hours

45) The owner of an Electronic Repair business, currently has five jobs to be scheduled, shown in order in which they arrived: Job

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Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average flow time?

A) 3 hours B) 5 hours C) 7 hours D) 7.2 hours E) 8 hours

46) The owner of an Electronic Repair business currently has five jobs to be scheduled, shown in order in which they arrived: Job

Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average job lateness?

A) 2 hours B) 2.2 hours C) 2.33 hours D) 2.4 hours E) 3 hours

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47) The owner of an Electronic Repair business currently has five jobs to be scheduled, shown in order in which they arrived: Job

Processing Time (hours)

Due (hours)

If the owner uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average WIP in the shop today?

A) 2 jobs B) 2.33 jobs C) 2.4 jobs D) 2.67 jobs E) 3 jobs

48) The operations manager of a body and paint shop has five cars to schedule for repair. The manager would like to minimize the make-span to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the work at each of the two stations are as follows: Car

Body Work (hours)

Paint (hours)

Using Johnson's rule where in the optimum sequence should car E be scheduled?

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A) First B) Second C) Third D) Fourth E) Fifth

49) The operations manager of a body and paint shop has five cars to schedule for repair. The manager would like to minimize the make-span to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the work at each of the two stations are as follows: Car

Body Work (hours)

Paint (hours)

Using Johnson's rule where in the optimum sequence should car A be scheduled?

A) First B) Second C) Third D) Fourth E) Fifth

50) The operations manager of a body and paint shop has five cars to schedule for repair. The manager would like to minimize the make-span to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the work at each of the two stations are as follows: Car

Body Work (hours)

Paint (hours)

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Using Johnson's rule what is the optimum sequence (first car to last)?

A) A; B; C; D; E B) E; D; C; B; A C) E; B; D; C; A D) E; D; B; C; A E) E; B; D; A; C

51) The operations manager of a body and paint shop has five cars to schedule for repair. The manager would like to minimize the make-span to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the work at each of the two stations are as follows: Car

Body Work (hours)

Paint (hours)

What is the make-span for the optimal schedule?

A) 24 hours B) 25 hours C) 26 hours D) 28 hours E) 50 hours

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52) The operations manager of a body and paint shop has five cars to schedule for repair. The manager would like to minimize the make-span to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the work at each of the two stations are as follows: Car

Body Work (hours)

Paint (hours)

What is the idle time at the paint work centre for the optimal schedule?

A) 1 hour B) 2 hours C) 4 hours D) 7 hours E) 10 hours

53) This relates to the execution of the schedule and involves maintaining, communicating and monitoring the status of orders.

A) Input-output control B) Shop-floor control C) MRP D) Priority rules E) Sequencing control

54)

This identifies the needs of MRP and accommodates them to make the MRP feasible.

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A) Load Gantt chart B) Theory of Constraints C) Shop-floor control D) Input-output control E) Capacity requirements planning

55)

Which of the following is NOT a goal of loading?

A) Minimize processing time B) Minimize setup costs C) Maximize idle time D) Minimize job completion time E) Minimize idle time

56)

What are the two types of Gantt charts?

A) schedule, sequence B) trial-and-error, load C) finite, infinite D) load, schedule E) single, multiple

57)

Infinite loading can lead to time periods where capacity is:

A) balanced B) always underutilized C) overloaded or underloaded D) always overloaded E) not matched to MRP

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58) Scheduled based on this may have to be updated often, due to processing delays and the addition of new jobs.

A) Infinite loading B) Input-output control C) Forward scheduling D) Finite loading E) Backward scheduling

59)

With finite loading, what is NOT an option for addressing overloaded work centres?

A) Shifting work to other periods B) Speeding up the process C) Working overtime D) subcontracting E) Part time workers

60)

This is used when specific tasks or jobs need to be matched with specific resources.

A) Finite loading B) Capacity balancing C) FCFS D) Load matching E) Assignment model

61)

This priority rule is based on time until due minus remaining processing time.

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A) MST B) SPT C) CR D) EDD E) FCFS

62)

This priority rule is based on order of arrival.

A) MST B) SPT C) CR D) EDD E) FCFS

63) This measure of performance is determined by the amount of time the completion date exceeds the due date.

A) Job flow time B) Job lateness C) Make-span D) Job negative slack E) Late-span

64) When using SPT, after waiting for a given period of time a job is automatically moved to the head of the line. What is this known as?

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A) Rush SPT B) Critical lateness C) Truncated SPT D) Exception rule E) Emergency SPT

65) When using the Johnson's rule a job has the shortest processing time in the second work centre. Where will this job be placed in the sequence?

A) first B) In the middle C) It depends on the next job to be sequenced D) last E) It depends on the previous job sequenced

66)

When using Moore's rule what initial job sequencing rule is used?

A) FCFS B) CR C) SPT D) MST E) EDD

67)

This is a list of jobs to be run in priority sequence for each work centre or machine.

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A) Johnson's schedule B) Daily dispatch list C) Priority report D) Job schedule E) Work centre report

68) This report identifies late shop and purchase orders, causes of delay, actions taken and new due dates.

A) Work centre report B) Expedite report C) Input/output control report D) Anticipated delay report E) Priority report

69) jobs.

A schedule Gantt chart shows the

and

starting and finishing times of

A) scheduled, re-scheduled B) planned, actual C) duration, scheduled D) forecast, scheduled E) optimistic, pessimistic

70)

In a schedule Gantt chart how is actual progress shown?

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A) With an arrow B) Red square brackets C) A series of squares D) Red horizontal bars E) Blue horizontal bars

71)

What is the ultimate goal of input/output control?

A) To minimize work centre costs B) To ensure that down stream operations have enough work C) A balance between input and output D) To always have excess work ahead of a work centre so there is no idle time E) To maintain the integrity of the schedule5

72) Five sequential operations have the following hourly production rates. A=150, B=175, C=95, D=88, E=120. What is the hourly throughput rate?

A) 150 B) 175 C) 95 D) 88 E) 120

73) Five sequential operations have the following hourly production rates. A=150, B=175, C=95, D=88, E=120. What operation is the bottleneck?

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A) A B) B C) C D) D E) E

74) Five sequential operations have the following hourly production rates. A=150, B=175, C=95, D=88, E=120. If the production rate for D increases to 130 what operation is the bottleneck?

A) A B) B C) C D) D E) E

75) This involves determining the work days and the start and end times of work on each day for each employee.

A) Manpower planning B) Cyclical scheduling C) Shift scheduling D) Staff scheduling E) Manpower scheduling

76)

What is the goal of shift scheduling?

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A) To cover demand with the minimum number of shifts B) To schedule shifts at the level to meet minimum demand. C) To cover demand with the maximum number of shifts D) To schedule shifts at the average level of demand. E) To schedule complete shifts to maximize worker wages.

77)

One reason scheduling job shops is difficult is:

A) Manpower can be difficult to schedule B) It is difficult to balance demand and capacity C) Each job may need a different sequence of operations D) Input/output control is difficult to achieve E) The schedule in a job shop is unstable

78)

Given the information below, determine the following:

(i) Processing sequence using (1) SPT and (2) EDD. (ii) Average flow time and average job lateness using (1) SPT and (2) EDD. Job

Processing Time (hours)

Hour (due)

79) Given the following information concerning jobs awaiting processing at a single work centre, what is the processing sequence using the critical ratio (CR) rule? Job

Proc. Time At This Opn

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Proc. Time Remaining at Other Opns (hrs) Final Due Date (hrs)

(hrs) G

80) Given the following information concerning jobs awaiting processing at a single work station, what is the processing sequence using the critical ratio (CR) rule? Job

Proc. Time At This Opn (hrs)

81)

Proc. Time Remaining at Other Opns (hrs) Final Due Date (hrs)

Using the information below, determine the following:

(i) processing sequence using (1) SPT and (2) EDD and (3) MST rules (ii) average flow time and average job lateness for EDD and MST. Job

Processing Time (days)

Due Date (days)

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82) Determine the processing sequence for the six jobs shown below using Johnson's Rule. Chart make-span. Can total time be reduced by splitting the latest job? If so, by how much? Job

Station 1

Station 2

83) Use Johnson's Rule to determine the optimum processing sequence for the jobs listed below. Chart make-span. Processing Time (minutes) Job

Centre 1

Centre 2

84) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival):

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Job

Processing Time (days)

Due Date (days)

What is the schedule sequence using the first come, first served (FCFS) priority rule?

85) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

What is the average flow time for the first come, first served (FCFS) priority rule schedule? Average job lateness? Average WIP at the centre?

86) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

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What is the schedule sequence using the earliest due date (EDD) priority rule?

87) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

What is the average flow time for the earliest due date (EDD) priority rule schedule? Average job lateness? Average WIP at the centre?

88) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

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What is the schedule sequence using the Minimum Slack Time (MST) priority rule? To break a tie, use the Critical Ratio (CR) rule.

89) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

What is the average flow time for the minimum slack time (MST) priority rule schedule (using the CR rule to break ties)? Average job lateness? Average WIP at the centre? Sequence

Slack Time Critical Ratio Processing Time Completion Time Due Date Days Late

1.2

1.3

1.7

90) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Version 1

Processing Time (days)

Due Date (days)

What is the schedule sequence using the shortest processing time (SPT) priority rule?

91) The following questions refer to the table data for jobs awaiting processing at a single work station (jobs are shown in order of arrival): Job

Processing Time (days)

Due Date (days)

What is the average flow time for the shortest processing time (SPT) priority rule? Average job lateness? Average WIP at the centre?

92) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

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If these jobs were scheduled in the sequence shown, what would be the make-span?

93) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

If these jobs were scheduled in the sequence shown, what would be the idle time at machine B?

94) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

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If these jobs were scheduled in the sequence shown, when would idle time occur at machine B?

95) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

In developing the sequence which will minimize make-span, what is the initial job to be placed in the schedule sequence?

96) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

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In developing the sequence that will minimize make-span, where in the schedule sequence should the job W be placed?

97) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

In developing the sequence which will minimize make-span, what is the second job to be added to the sequence?

98) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

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In developing the sequence which will minimize throughput time, where should the job X be placed?

99) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

What is the sequence which will minimize make-span?

100) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

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What is the make-span for the optimum schedule?

101) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

What is the idle time at machine B for the optimum schedule?

102) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

When does idle time occur at machine B for the optimum schedule? Version 1

103) Determine the minimum number of workers needed, and a schedule for the following staffing requirements, giving workers two consecutive days off per cycle. Day

Mon

Tue

Wed

Thu

Fri

Sat

Sun

Staff needed

104) Determine the minimum number of workers needed, and a schedule for the following staffing requirements, giving workers two consecutive days off per cycle. Day

Mon

Tue

Wed

Thu

Fri

Sat

Sun

Staff needed

105) Given the following data for jobs awaiting processing at a manufacturing cell in which jobs are first processed by machine A, then by Machine B: Time (hours) Job

Centre A

Centre B

Develop the sequence that will minimize make-span. What is the make-span?

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106) Using the Assignment Model determine which workers will be assigned to what jobs. What is the total cost? Costs

Worker A

Worker B

Worker C

Worker D

Job 1

Job 2

Job 3

Job 4

107) Using the Assignment Model determine which workers will be assigned to what jobs. What is the total cost? Costs

Worker A

Worker B

Worker C

Worker D

Job 1

Job 2

Job 3

Job 4

108)

Backward scheduling is based on working back from the due dates for jobs. ⊚ ⊚

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true false

109) In the production planning hierarchy, scheduling is the final step before the actual output is produced. ⊚ ⊚

110)

true false

Forward scheduling is based on completing jobs exactly on their due date. ⊚ ⊚

true false

111) Scheduling work centre loading must be completed before starting materials requirement planning (MRP). ⊚ ⊚

112)

In job scheduling, most loading of work centres is based on infinite loading. ⊚ ⊚

113)

true false

Finite loading does not account for the capacity of work centres. ⊚ ⊚

114)

true false

Loading refers to the assignment of jobs to work centres. ⊚ ⊚

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true false

115) A Gantt chart is a specialized scheduling tool specifically for planning construction projects. ⊚ ⊚

116)

true false

A Gantt chart is a visual aid for loading, scheduling, and control purposes. ⊚ ⊚

true false

117) The term loading, as used in scheduling, refers to choosing the sequence of jobs to process. ⊚ ⊚

118)

true false

A load Gantt chart only designates the total load for work centres not the timing of jobs. ⊚ ⊚

true false

119) Input/output (I/O) control refers to monitoring changes in productivity for various work centres in a process. ⊚ ⊚

120)

true false

A schedule/control Gantt chart can be used to monitor job progress.

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⊚ ⊚

true false

121) Sequencing is concerned with the order in which jobs are processed, while loading is concerned with assigning jobs to work centres or workstations. ⊚ ⊚

true false

122) All priority rules are designed to ensure that the most urgent jobs (earliest due date) are scheduled first. ⊚ ⊚

true false

123) Input/Output (I/O) control is a visual representation of the progress of jobs that indicates if they are ahead or behind schedule. ⊚ ⊚

true false

124) The Theory of Constraints focuses on developing schedules for part-time workers or overtime shifts to address capacity constraints. ⊚ ⊚

true false

125) Priority rules generally assume that a job's setup time is independent of the sequence of processing jobs. ⊚ ⊚

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true false

126)

First come, first served (FCFS) is an example of a priority rule for sequencing. ⊚ ⊚

127)

true false

Make-span is the total time needed to complete a group of jobs. ⊚ ⊚

true false

128) For a one machine/station shop, the shortest (imminent) processing time (SPT) priority rule will always result in the lowest average flow time. ⊚ ⊚

true false

129) All priority or dispatching rules involve complex computations intended to establish an optimal processing sequence for production facilities. ⊚ ⊚

true false

130) The primary limitation of the first come, first served (FCFS) priority rule is that short jobs will tend to delay longer jobs that follow. ⊚ ⊚

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true false

131) For service systems with customers directly involved in the process, FCFS is the dominant priority rule. ⊚ ⊚

132)

The shortest processing time (SPT) rule minimizes downstream idle time. ⊚ ⊚

133)

true false

Johnson's rule is a technique used to sequence jobs through a two-step work sequence. ⊚ ⊚

true false

134) A major reason for scheduling difficulty is variability in setup times, processing times, interruptions, and changes in the set of jobs. ⊚ ⊚

true false

135) A schedule/control Gantt chart depicts jobs or their components versus time to illustrate if they are behind or ahead of schedule. ⊚ ⊚

136)

true false

The output of the system is limited by the output of the bottleneck operation(s). ⊚ ⊚

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true false

137) The elimination of idle time on both bottleneck and non-bottleneck operations is equally important. ⊚ ⊚

true false

138) As long as the bottleneck operations are used effectively, the idle time of non-bottleneck operations will not affect the overall productivity of the system. ⊚ ⊚

true false

139) For the Theory of Constraints, the transfer batch denotes a portion of the production lot that could be moved to the bottleneck operation. ⊚ ⊚

true false

140) Splitting a large lot at one or more operations after a bottleneck operation would reduce the waiting time of the bottleneck operation. ⊚ ⊚

141)

true false

Bottlenecks occur at work centres when the idle time is equal to zero. ⊚ ⊚

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true false

142) A basic difference between staff scheduling in services and manufacturing companies is the demand for end products in manufacturing is more volatile in contrast to relatively uniform, predictable demand in services. ⊚ ⊚

true false

143) The inability to store services makes staff scheduling for services more complex than for manufacturing companies. ⊚ ⊚

true false

144) For services, the process of assigning work shifts to staff begins with forecasting the amount of work to be done during each hour (or shift) during the time period the schedule is being planned. ⊚ ⊚

true false

145) Moore's rule is a technique to minimize the number of late jobs for a group of jobs to be processed on one work centre/machine. ⊚ ⊚

true false

146) Shop-floor control, or production activity control, involves the execution of the job schedule, and taking any necessary actions. ⊚ ⊚

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true false

147)

Schedulers can use load Gantt charts for trial-and-error schedule development. ⊚ ⊚

148)

Finite loading can lead to time period overloads and underloads. ⊚ ⊚

149)

true false

In the Johnson's rule job splitting can be used when determining the job sequence. ⊚ ⊚

true false

150) When significant idle time at the second work centre occurs, job splitting can reduce make-span. ⊚ ⊚

true false

151) When sequencing jobs through three or more work centres the objective is to minimize make-span. ⊚ ⊚

152)

true false

There is no practical method for identifying the optimal schedule. ⊚ ⊚

Version 1

true false

153)

It is acceptable to try various scheduling sequences and then choose the best method. ⊚ ⊚

154)

One technique to reduce scheduling difficulty is to schedule the bottleneck operation last. ⊚ ⊚

155)

true false

In airline crew scheduling flight attendants and pilots are scheduled together as one crew. ⊚ ⊚

157)

true false

One technique to reduce scheduling difficulty is to reschedule frequently. ⊚ ⊚

156)

true false

In airline crew scheduling flight attendants and pilots are scheduled separately. ⊚ ⊚

true false

158) One problem with staff scheduling is that many services operate seven days a week and employees work five consecutive days.

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⊚ ⊚

159)

true false

The use of scheduling software does not reduce scheduling difficulty. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 16_7ce 1) B 2) A 3) B 4) B 5) D 6) E 7) E 8) D 9) A 10) E 11) D 12) A 13) C 14) C 15) C 16) E 17) A 18) D 19) D 20) A 21) E 22) B 23) B 24) B 25) B 26) E Version 1

27) B 28) E 29) C 30) C 31) E 32) B 33) A 34) D 35) B 36) D 37) A 38) A 39) E 40) B 41) D 42) C 43) E 44) B 45) C 46) A 47) B 48) A 49) E 50) B 51) D 52) C 53) B 54) E 55) C 56) D Version 1

57) C 58) D 59) B 60) E 61) A 62) E 63) B 64) C 65) D 66) E 67) B 68) D 69) B 70) E 71) C 72) D 73) D 74) C 75) D 76) A 77) C 108) TRUE 109) TRUE 110) FALSE 111) FALSE 112) FALSE 113) FALSE 114) TRUE 115) FALSE 116) TRUE Version 1

117) FALSE 118) FALSE 119) FALSE 120) TRUE 121) TRUE 122) FALSE 123) FALSE 124) FALSE 125) TRUE 126) TRUE 127) TRUE 128) TRUE 129) FALSE 130) FALSE 131) TRUE 132) TRUE 133) TRUE 134) TRUE 135) TRUE 136) TRUE 137) FALSE 138) TRUE 139) TRUE 140) FALSE 141) TRUE 142) FALSE 143) TRUE 144) TRUE 145) TRUE 146) TRUE Version 1

147) TRUE 148) FALSE 149) FALSE 150) TRUE 151) TRUE 152) TRUE 153) TRUE 154) FALSE 155) TRUE 156) FALSE 157) TRUE 158) TRUE 159) FALSE

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Chapter 17: Project Management 1)

Which of the following is not part of the project management triangle?

A) B) C) D)

risk cost time scope

Which of the following is not an example of a project?

A) Planning and constructing a new city hall B) Developing a marketing campaign for the launch of a new product C) Designing and constructing a subway system D) Scheduling workers and purchasing raw materials for a manufacturing plant E) Producing and staging a music festival

Which of the following is not a common theme regarding people that work on projects?

A) They are often on loan from their regular job. B) They are often work only part time on the project. C) Many are associated with the project for less than the full time required to complete it. D) They are exclusively from inside the organization. E) Some people go from project to project.

4) In phase of project life cycle, details on deliverables, scope of the project, budget, schedule and milestones, performance objectives, resources needed, a quality plan, and a plan for handling risks are prepared.

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A) initiating B) planning C) execution D) monitoring and controlling E) closing

Which of the following is not a phase of the life cycle for a project ?

A) Initiation B) Planning and scheduling C) Growth and maturity D) Closeout E) Execution

Which of the following is the last step in project portfolio selection?

A) Collect project data B) Assess resources C) Prioritize projects within categories D) Provide reasons for selection or non-selection of each project E) Project closeout

Which of the following is not involved in project planning?

A) Risk management planning B) Material requirements planning (MRP) C) Quality planning D) Communication planning E) Purchase planning

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A hierarchical listing of what must be done during the project is called:

A) work breakdown structure (WBS). B) program evaluation and review technique (PERT). C) planning matrix. D) crashing. E) critical path method (CPM).

9) The project management technique that is repeated until activities are decomposed into work packages that can be performed by a designated worker, team or subcontract is called:

A) work breakdown structure (WBS). B) program evaluation and review technique (PERT). C) planning matrix. D) crashing. E) project scheduling

10)

A simple visual tool for planning and scheduling projects is the:

A) crashing. B) planning matrix. C) a Gantt chart. D) critical path method. E) program evaluation and review technique.

11) Which of the following is not an advantage(s) the PERT/CPM technique has over a Gantt chart?

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A) its ability to reveal relationships among activities. B) it illustrates multiple paths as a project network. C) it indicates which activities are critical. D) it indicates the implications of delays in activities. E) it is a more complex scheduling for large-scale projects.

12)

Besides project activities, the primary information that all Gantt charts illustrate is:

A) project budget and when activities occur. B) cost of activities and delays in the schedule. C) planned duration of activities and when they occur in the schedule. D) project budget and staffing levels. E) critical path and project budget.

13) The main determinant of the way PERT/CPM networks are used is whether activity/work package durations are or .

A) statistical, actual B) probabilistic or deterministic. C) normal, variable D) actual, variable E) probabilistic or statistical

14)

Concerning PERT and CPM, which of the following statements is correct?

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A) PERT is used to manage activities that are uncertain in a project; however, CPM is used to manage activities that are certain in a project. B) CPM tends to focus more on the critical path. C) PERT gives a clearer indication of activity slack, while CPM gives a better picture of path slack. D) Because of its recent discovery, much less is known about CPM than PERT. E) Neither provides as much detail as a Gantt chart.

15)

In a precedence network, the critical path is the sequence of activities which has:

A) the most activities. B) the most nodes. C) the most events. D) the longest duration. E) the greatest variance.

16) Given this information about activity H: ES = 27, EF = 34, LS = 42, and LF = 49, we can determine that the amount of slack associated with the activity is:

A) 7 B) 8 C) 12 D) 15 E) 22

17) Given this information about activity H: ES = 27, EF = 34, LS = 42, and LF = 49, we can determine that the duration of activity H is:

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A) 7 B) 8 C) 12 D) 15 E) 22

18) Given this information about activity B: ES = 10, EF = 15, LS = 16 and LF = 21, we can determine that the amount of slack associated with the activity is:

A) 0 B) 1 C) 5 D) 6 E) 11

19)

Given the information provided below, the critical path is:

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A) A-B-D-G B) A-C-F-G C) A-C-D-F-G D) A-C-D-G E) A-B-E-G

20)

Given the information provided below, the latest finish time for activity D is:

A) 12 B) 13 C) 19 D) 22 E) 27

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21)

Given the information provided below, the earliest start time for activity F is:

A) 13 B) 15 C) 20 D) 22 E) 27

22)

Given the information provided below, the latest start time for activity C is:

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A) 4 B) 5 C) 12 D) 13 E) 19

23)

Given the information provided below, the earliest finish time for activity E is:

A) 12 B) 15 C) 19 D) 22 E) 27

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24)

Given the information provided below, the expected duration of the project is:

A) 12 B) 15 C) 19 D) 22 E) 27

25)

Given the information provided below, the amount of slack for activity F is:

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A) 0 B) 1 C) 2 D) 3 E) 7

26)

Given the project network shown below, the critical path(s) is(are):

A) a-c-d-f-g B) a-c-d-e-g C) a-b-d-f-g D) Both A and B E) Both A and C

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27)

Given the project network shown below, the amount of slack for activity b is:

A) 0 B) 1 C) 2 D) 3 E) 4

28)

Given the project network shown below, the expected duration of the project is:

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A) 11 B) 13 C) 16 D) 22 E) 24

29)

Given the project network shown below, the earliest finish time for activity e is:

A) 11 B) 13 C) 16 D) 22 E) 24

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30)

Given the project network shown below, the latest start time for activity f is:

A) 11 B) 13 C) 16 D) 22 E) 24

31) Given the portion of the network shown above, what is the earliest finish time for activity F, if the earliest start time of E is 14, and the earliest start time of D is 16?

A) 14 B) 16 C) 22 D) 25 E) 30

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32) Activity 7 is directly preceded by two activities—activity 5 and activity 6. Activity 5 has an expected duration of five and an ES time of six. Activity 6 has an expected duration of seven and an ES time of seven. Activity 7 has an expected duration of 10. The ES for activity 7 is:

A) 11 B) 14 C) 21 D) 24 E) 25

33) Which of the following is used to compute the earliest finish times once the earliest start times are calculated for an activity on a precedence network?

A) Expected activity duration B) Activity slack time C) Activities that are on the critical path D) Variance in project duration E) Maximum project duration

34) An activity, A, has two succeeding activities, B and C. Given the following information, determine the latest starting time for activity A. EF B = 15, EF C = 17, LF B = 24, LF C = 27; activity times are A = 4, B = 6, C = 8.

A) 14 B) 15 C) 16 D) 17 E) 18

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35) Activity C has an early start time of 8, an early finish time of 12, a latest start time of 13, and a latest finish time of 17. Its slack is:

A) 0 B) 1 C) 4 D) 5 E) 9

36)

In precedence network analysis, knowing the slack time allows managers to:

A) delay critical activities. B) extent the project if necessary. C) increase the critical path. D) pay attention to activities that could delay the project. E) decrease the project duration.

37) In the probabilistic approach to precedence network analysis, the duration estimate annotated " tm" for any activity is the:

A) mean duration. B) median duration. C) most likely duration. D) optimistic duration. E) pessimistic duration.

38) In the probabilistic approach to precedence network analysis, the duration estimate that is given the highest weighting in calculating the expected duration for an activity is:

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A) duration of the immediately prior activity. B) duration of the immediately following activity. C) most likely duration. D) optimistic duration. E) pessimistic duration.

39) When developing probabilistic estimates of project duration, it is necessary to know which of the following?

A) The mean and variance of every activity B) The mean and variance of activities on the critical path C) The standard deviation of activities on the critical path D) Each activity's probability of completion E) The distribution of activity durations

40) A PERT/CPM activity has an optimistic duration estimate of 3 days, a most likely duration estimate of 8 days, and a pessimistic duration estimate of 10 days. The expected duration of this activity te is:

A) 7.0 B) 7.5 C) 8.0 D) 8.5 E) 10.0

41) Activity E in a network diagram has an optimistic duration estimate of 4 days, a most likely duration estimate of 7 days, and a pessimistic duration estimate of 10 days. The expected duration of Activity E is:

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A) 5 B) 6 C) 7 D) 8 E) 9

42) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the estimated expected (mean) time for project completion?

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A) 100 days B) 140 days C) 199 days D) 200 days E) 440 days

43) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the probability that this project will be completed within 205 days?

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A) 0.6826 B) 0.8413 C) 0.9544 D) 0.9772 E) 0.9987

44) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the estimated slack time for activity A?

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A) 0 days B) 20 days C) 40 days D) 60 days E) 100 days

45) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the estimated expected (mean) duration for activity E?

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A) 91 days B) 99 days C) 100 days D) 101 days E) 115 days

46) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the estimated standard deviation of the duration for activity E?

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A) 2 days B) 3 days C) 4 days D) 16 days E) 24 days

47) A project manager has compiled a list of major activities that will be required to install a heating system. The list includes three-point estimates of durations (optimistic, most likely, pessimistic) for activities and the precedence relationships. Time Estimates (days) Activity

Immediate Predecessor(s)

Start

Optimistic

Most Likely

Pessimistic

Start

108

Start

100

115

100

115

End

C, E, F

What is the estimated slack time for the path A-D-F?

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A) 0 days B) 20 days C) 40 days D) 60 days E) 100 days

48) There are four activities on the critical path, and the variances for their durations are 1, 4, 16, and 4 days. The standard deviation of the duration of the critical path is:

A) 3 B) 5 C) 9 D) 16 E) 25

49) There are four activities on the critical path. Coincidentally, the variances for their durations are 16, 16, 16, and 16. The standard deviation of the duration for the critical path is:

A) 2 B) 4 C) 8 D) 16 E) 64

50) The owner of Ace Building Co. is about to begin work on a project comprised of the following activities: Activity Start

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Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

End

C, D

What is the estimated expected (mean) duration for activity D?

A) 32 days B) 41 days C) 44 days D) 42 days E) 40 days

51) The owner of Ace Building Co. is about to begin work on a project comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

End

C, D

What is the estimated standard deviation of the duration for activity D?

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A) 0 days B) 2 days C) 3 days D) 4 days E) 12 days

52) The owner of Ace Building Co. is about to begin work on a project comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

End

C, D

What is the estimated expected (mean) duration for project completion?

A) 41 days B) 70 days C) 100 days D) 120 days E) 221 days

53) The owner of Ace Building Co. is about to begin work on a project comprised of the following activities: Activity

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Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

End

C, D

What is the estimated slack time for the path B-D?

A) 0 days B) 19 days C) 20 days D) 79 days E) 80 days

54) The owner of Ace Building Co. is about to begin work on a project comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

End

C, D

What is the probability that this project will be completed within 130 days?

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A) .8413 B) .90 C) .9544 D) .9772 E) .9987

55) A project manager for Durable Construction Co. is about to build a house involving the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

A, B

E, D

End

What is the estimated expected (mean) duration for activity E?

A) 35 days B) 36 days C) 39 days D) 40 days E) 45 days

56) A project manager for Durable Construction Co. is about to build a house involving the following activities: Activity

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Immediate

Durations (days)

Predecessor(s)

Optimistic

Most likely

Pessimistic

Start

A, B

E, D

End

What is the estimated standard deviation of the duration for activity E?

A) 1 day B) 2 days C) 3 days D) 4 days E) 5 days

57) A project manager for Durable Construction Co. is about to build a house involving the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

A, B

E, D

End

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What is the estimated expected (mean) duration for project completion?

A) 160 days B) 170 days C) 200 days D) 210 days E) 300 days

58) A project manager for Durable Construction Co. is about to build a house involving the following activities: Activity

Immediate Predecessor(s)

Durations (days) Optimistic

Most likely

Pessimistic

Start

A, B

E, D

End

What is the estimated slack time for the path B-D-F?

A) 0 days B) 30 days C) 40 days D) 50 days E) 100 days

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59) A project manager for Durable Construction Co. is about to build a house involving the following activities: Activity

Durations (days)

Immediate Predecessor(s)

Optimistic

Most likely

Pessimistic

Start

A, B

E, D

End

What is the probability that the critical path for this project will be completed within 210 days?

A) 0.5000 B) 0.8413 C) 0.9544 D) 0.9772 E) 0.9987

60) A project superintendent is about to begin work on a freeway resurfacing project, which is comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (weeks) to

Start

End

C, D, E

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What is the estimated expected (mean) duration for Activity E?

A) 31 weeks B) 38 weeks C) 39 weeks D) 40 weeks E) 43 weeks

61) A project superintendent is about to begin work on a freeway resurfacing project, which is comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (weeks) to

Start

End

C, D, E

What is the estimated standard deviation of the duration for activity E?

A) 0 weeks B) 1 week C) 2 weeks D) 3 weeks E) 4 weeks

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62) A project superintendent is about to begin work on a freeway resurfacing project, which is comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (weeks) to

Start

End

C, D, E

What is the estimated expected (mean) duration for project completion?

A) 35 weeks B) 39 weeks C) 50 weeks D) 104 weeks E) 105 weeks

63) A project superintendent is about to begin work on a freeway resurfacing project, which is comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (weeks) to

Start

End

C, D, E

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What is the estimated slack time for Activity E?

A) 0 weeks B) 3 weeks C) 9 weeks D) 11 weeks E) 12 weeks

64) A project superintendent is about to begin work on a freeway resurfacing project, which is comprised of the following activities: Activity

Immediate Predecessor(s)

Durations (weeks) to

Start

End

C, D, E

What is the probability that the critical path for this project will be completed within 52 weeks?

A) 0.1554 B) 0.3108 C) 0.3466 D) 0.6554 E) 0.8277

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65) The manager of a National Forest is about to undertake a reforestation project in a burned out area. The project will involve the following activities: ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATION ESTIMATES (days) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

U, V

Y, W

End

What is the estimated expected (mean) duration for activity Y?

A) 30 days B) 29 days C) 38 days D) 26 days E) 35 days

66) The manager of a National Forest is about to undertake a reforestation project in a burned out area. The project will involve the following activities: ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATION ESTIMATES (days) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

U, V

Y, W

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End

What is the estimated standard deviation of the duration for activity Z?

A) 3 days B) 2 days C) 4 days D) 8 days E) 5 days

67) The manager of a National Forest is about to undertake a reforestation project in a burned out area. The project will involve the following six activities: ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATION ESTIMATES (days) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

U, V

Y, W

End

What is the estimated expected (mean) duration for project completion?

A) 135 days B) 145 days C) 170 days D) 180 days E) 255 days

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68) The manager of a National Forest is about to undertake a reforestation project in a burned out area. The project will involve the following six activities: ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATION ESTIMATES (days) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

U, V

Y, W

End

What is the estimated slack time for the path U-W-Z?

A) 0 days B) 25 days C) 35 days D) 45 days E) 85 days

69) The manager of a National Forest is about to undertake a reforestation project in a burned out area. The project will involve the following six activities: ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATION ESTIMATES (days) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

U, V

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Y, W

End

What is the probability that the critical path for this project will be completed within 200 days?

A) 0.8413 B) 0.9544. C) 0.9772 D) 0.9974 E) 0.9987

70) Suppose a project is subject to the following risk events (each with a given probability of occurring and a cost associated with that occurrence): Event

Probability

Cost($000s)

III

Given these, Event probably get the least.

should probably get the most attention and Event

should

A) II; IV B) III; IV C) I; III D) I; II E) II; III

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71)

Which of the following is not a form of risk reduction in project management?

A) Backup systems B) Outsourcing components of the project C) Frequent monitoring of project activities D) Expand the project scope to reduce external dependencies E) Improving communications

72) The project management strategy of injecting additional resources in order to reduce the length of the project is called:

A) expediting. B) rushing. C) panicking. D) crashing. E) reducing

73)

In "crashing", a project manager will generally focus on activities which:

A) are not on the critical path. B) are the least costly to crash. C) are costly to crash and are on the critical path. D) are on the critical path and are the least costly to crash. E) have the most slack

74)

At which point does crashing of a project cease?

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A) When the project is completed B) When no additional crashing is possible C) When the cost to crash equals or exceeds the benefit of crashing D) When there is zero slack. E) When there are two critical paths.

75)

Uncontrolled changes to a project is called:

A) cost creep B) project randomness C) scope creep D) transferring risk E) avoidance

76) Uncontrolled growth in the number of activities that end up being included as a part of a project is called:

A) the critical path. B) project slack. C) scope creep. D) indirect costs. E) time-cost trade-offs.

77)

Using the information given, do the following:

(i) Identify the critical path. (ii) Determine expected project duration. Activity

Immediate Predecessor(s)

Duration

Start

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Start

d, e

f, h

End

i, g

78) Determine the amount of slack in each of a project's activities (see the list below), and identify those which are on the critical path. Activity

Immediate Predecessor(s)

Duration (wk)

Start

d, f

End

c, g

79) Activity E has an optimistic duration of 9 days, a most likely duration of 12 days, and a pessimistic duration of 15 days. Estimate its expected duration and standard deviation.

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80) Activity D has an optimistic duration of 3 days, a pessimistic duration of 9 days, and a most likely duration of 4 days. Determine its expected duration and variance.

81) A project consists of nine major activities, as shown. There are three separate paths in the network: a-c-f, b-d-g, and e-h-i. (i) What is expected project duration time? (ii) Determine the probability that the project will take more than 35 weeks to complete. (All durations are in weeks.)

82)

Act.

Exp. Duration

Variance

What are the estimated expected (mean) durations (in weeks) for activities A-H?

ACTIVITY

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IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

83)

Start

E, F, G

End

What are the estimated standard deviations (in weeks) of the durations for activities A-H?

ACTIVITY

84)

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

What is the estimated expected (mean) duration (in weeks) for project completion?

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ACTIVITY

85)

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

What are the estimated slack times (in weeks) for activities A and H?

ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

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86)

What is the critical path for this project network?

ACTIVITY

87)

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

What is the estimated standard deviation (in weeks) for the critical path completion time?

ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

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88) What is the probability that the critical path for this project will be completed within 75 weeks? 80 weeks? 85 weeks? 90 weeks? ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

E, F, G

End

89) Within what amount of time (in weeks) is there a 90% probability that the critical path for this project will be completed? 95%? 99%? ACTIVITY

IMMEDIATE PREDECESSOR(S)

DURATIONS (WEEKS) OPTIMISTIC

MOST LIKELY

PESSIMISTIC

Start

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E, F, G

End

90)

What activities make up the critical path?

Activity

Immediate Predecessor(s)

Normal Duration (wk.)

Crashing1st time

Costs ($ 000)2nd time

Start

E, F

End

H, I

91)

In crashing this project, which activity is the first to be reduced

Activity

Immediate Predecessor(s)

Normal Duration (wk.)

Crashing1st time

Costs ($ 000)2nd time

Start

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E, F

End

H, I

92) In crashing this project to 18 weeks, which activities (in order of selection) will be reduced? Activity

Immediate Predecessor(s)

Normal Duration (wk.)

Crashing1st time

Costs ($ 000)2nd time

Start

E, F

End

H, I

93)

What is the total cost of reducing this project by two weeks?

Activity

Immediate Predecessor(s)

Normal Duration (wk.)

Crashing1st time

Costs ($ 000)2nd time

Start

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Start

E, F

End

H, I

94)

What is the total cost of reducing the project to 18 weeks?

Activity

Immediate Predecessor(s)

Normal Duration (wk.)

Crashing1st time

Costs ($ 000)2nd time

Start

E, F

End

H, I

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95) Indirect cost for a project is $2500 per day. Given the following information, determine an optimum crashing plan. What is the total cost for the plan? Activity

Immediate Predecessor(s)

Normal Duration (days)

Crashing potential

Crash Cost per day

1000

2000

1200

B, C

1500

1000

1600

E, F

3000

96)

A program is a set of projects. ⊚ ⊚

true false

97) Unlike ongoing business activities, projects have lifetimes with definite beginning and ending points. ⊚ ⊚

98)

Projects involve routine operations that are performed repeatedly. ⊚ ⊚

99)

true false

In a matrix organization, functional and project managers share workers and facilities.

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⊚ ⊚

100)

true false

Project managers bear the ultimate responsibility for the success or failure of the project. ⊚ ⊚

true false

101) A project champion is a person, usually within the company, who can be instrumental in facilitating the work of the project manager by "talking up" the project to other managers who might be asked to share resources with the project team and employees who might be asked to work on parts of the project. ⊚ ⊚

102)

The task of identifying risks should involve everyone associated with the project. ⊚ ⊚

103)

true false

Purchase planning is typically outside the scope of project planning activities. ⊚ ⊚

104)

true false

A hierarchical listing of what must be done during a project is called a project matrix. ⊚ ⊚

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true false

105)

The decomposition of the work of the project is called project life cycle. ⊚ ⊚

106)

The smallest level of the work breakdown structure (WBS) is a work package. ⊚ ⊚

107)

true false

A Gantt chart provides a visual representation of the sequence of activities in a project. ⊚ ⊚

true false

108) The Gantt chart shows sequential relationships among major activities on a project. Answer: ⊚ ⊚

true false

109) Deterministic networks use three duration estimates for each activity in order to best determine the activity's estimated duration. ⊚ ⊚

true false

110) The precedence network for a project depicts sequential relationships among activities in a project.

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⊚ ⊚

true false

111) In the AON network, the arrows represent activities and they show the sequence in which certain activities must be performed. ⊚ ⊚

true false

112) The path in a PERT/CPM precedence network with the fewest activities and shortest duration is referred to as the critical path. ⊚ ⊚

113)

true false

The path in a precedence network with the longest duration is the critical path. ⊚ ⊚

true false

114) The sum of activity durations of the longest path in a network indicates expected project completion time, and the activities on it are called the critical activities. ⊚ ⊚

true false

115) The earliest finish time for an activity is equal to the latest finish time minus the activity time. ⊚ ⊚

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true false

116) The latest starting time for an activity is equal to the latest finish time minus the activity time. ⊚ ⊚

true false

117) The earliest finish time for an activity is equal to the latest finish time minus the activity slack. ⊚ ⊚

true false

118) If two consecutive activities on the same path each have two days of activity slack, this means that each of them can be delayed by two days without delaying the overall project. ⊚ ⊚

true false

119) For the PERT/CPM technique, completing the backward pass includes making the latest finish (LF) equal to the earliest finish (EF) for the end activity. ⊚ ⊚

120)

true false

The critical path has zero path slack time. ⊚ ⊚

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true false

121)

Activity slack is the difference between the latest finish and earliest finish times. ⊚ ⊚

122)

true false

Activities not on the critical path have a slack time equal to zero. ⊚ ⊚

true false

123) Consecutive activities on the same path have shared slack, which means if activities are delayed, the amount of slack remaining is reduced for all these activities without delaying completion of the project. ⊚ ⊚

true false

124) The allowable slippage for any path is called path slack time, and it reflects the difference between the length of the path and the length of the critical path. ⊚ ⊚

125)

true false

Slack time is equal to LF-ES or LS-EF ⊚ ⊚

true false

126) A normal distribution is usually used to describe probabilistic duration estimates for activities in a project.

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⊚ ⊚

true false

127) A beta distribution can be used to describe the inherent variability of an activity's duration. ⊚ ⊚

true false

128) The standard deviation of a project duration is equal to the sum of the variances of all the activities of the project. ⊚ ⊚

true false

129) The standard deviation of the duration of the critical path is equal to the square root of the sum of the variances of all of the activities on the critical path. ⊚ ⊚

true false

130) The probability that the project will go beyond the desired time is equal to one minus the joint probability that all paths will be completed within the desired time. ⊚ ⊚

131)

true false

Simulation can be used for cases in which network activity durations are dependent. ⊚ ⊚

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true false

132) Risks involved in a project can be transferred by outsourcing a particular component of the project and requiring performance bonds. ⊚ ⊚

true false

133) Project managers are sometimes able to reduce indirect project costs by increasing direct costs. ⊚ ⊚

134)

true false

Only activities on the critical path are initial candidates for crashing. ⊚ ⊚

true false

135) The optimum project length in crashing occurs when the cumulative cost of crashing equals savings in the indirect costs. ⊚ ⊚

true false

136) Earned value analysis is a method of measuring a project's progress at any given point in time, forecasting its completion date and final cost, and analyzing variances in the schedule and budget as the project proceeds. ⊚ ⊚

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true false

137)

Scope creep refers to the tendency for projects to take longer than planned. ⊚ ⊚

true false

138) The cost control technique of earned value analysis measures project progress by the budgeted cost of work scheduled. ⊚ ⊚

true false

139) Project execution involves the actual performance of the activities/work packages that were planned in project planning. ⊚ ⊚

true false

140) Quality tools such as control charts can be used in project management to identify variance. ⊚ ⊚

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true false

Answer Key Test name: Chap 17_7ce 1) A 2) D 3) D 4) B 5) C 6) D 7) B 8) A 9) A 10) C 11) E 12) C 13) B 14) A 15) D 16) D 17) A 18) D 19) D 20) D 21) A 22) A 23) C 24) E 25) E 26) D Version 1

27) C 28) D 29) C 30) B 31) E 32) B 33) A 34) A 35) D 36) D 37) C 38) C 39) A 40) B 41) C 42) D 43) B 44) D 45) D 46) C 47) D 48) B 49) C 50) E 51) B 52) D 53) C 54) D 55) A 56) B Version 1

57) C 58) B 59) D 60) C 61) C 62) C 63) D 64) D 65) A 66) D 67) C 68) B 69) E 70) E 71) D 72) D 73) D 74) C 75) C 76) C 96) TRUE 97) TRUE 98) FALSE 99) TRUE 100) TRUE 101) TRUE 102) TRUE 103) FALSE 104) FALSE 105) FALSE Version 1

106) TRUE 107) TRUE 108) FALSE 109) FALSE 110) TRUE 111) FALSE 112) FALSE 113) TRUE 114) TRUE 115) FALSE 116) TRUE 117) TRUE 118) FALSE 119) TRUE 120) TRUE 121) TRUE 122) FALSE 123) TRUE 124) TRUE 125) FALSE 126) FALSE 127) TRUE 128) FALSE 129) TRUE 130) TRUE 131) TRUE 132) TRUE 133) TRUE 134) TRUE 135) TRUE Version 1

136) TRUE 137) FALSE 138) FALSE 139) TRUE 140) TRUE

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Chapter 18S Simulation 1) What term is used when seeking the best alternative for decision variables based on some measure of performance?

A) maximization B) best-case C) optimization D) goal seek E) testing

Simulation is basically a technique which is used for:

A) optimizing. B) testing decision alternatives. C) cost minimizing. D) using random numbers. E) heuristic problem solving.

Which of the following is not a reason for simulation's popularity?

A) It is simple to use and/or understand. B) Extensive software packages are available. C) Many situations are too complex for mathematical solutions. D) It can be used for a wide range of applications. E) It simplifies the design of operational processes.

The second step in the simulation process is to:

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A) run the simulation. B) develop the simulation experiment(s). C) test the simulation model. D) develop the simulation model. E) identify the problem and set objectives.

Monte Carlo simulation is always associated with:

A) computers. B) multiple-decision criteria. C) gambling. D) chance or random components. E) a town in southern Italy.

Which of the following words does not characterize Monte Carlo?

A) Random B) Chance C) Sampling D) Probabilistic E) Deterministic

What type of simulation is Monte Carlo?

A) gaming B) sequential C) deterministic D) probabilistic E) random

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8) A student wants to simulate rainy and sunny days in a town for a three-week period. What is the minimum number of digits the student must obtain from a random number table for each observation, if it rained on two-fifths of the days over the past several years at this time of the year? Assume that days can be classified historically as either sunny or rainy.

A) 1 B) 2 C) 3 D) 4 E) 5

Which statement does NOT accurately describe simulation?

A) Enables decision makers to conduct experiments B) Involves developing models of processes C) Alternatives are considered based on the what- if approach D) Determines optimal solutions E) Is a descriptive technique that does not produce a solution per se

10) An analyst wants to simulate observations from a Normal distribution that has a mean of 41 and a standard deviation of 3. The analyst draws a random number from a normally distributed table of random numbers. The random number is -2.00. The simulated value is:

A) 31 B) 35 C) 38 D) 41 E) 43

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11) A Normal distribution has a mean of 500 and a standard deviation of 50. A manager wants to simulate two values from this distribution, and has drawn these random numbers: -0.60 and +1.40. Respectively, the two values are:

A) 640 and 440. B) 470 and 570. C) 570 and 470. D) 440 and 640.

12) An analyst wants to simulate observations from a Uniform distribution that has a lower limit of 60 minutes and an upper limit of 80 minutes. The analyst draws the random number 75 from a two-digit random number table. In terms of this uniform distribution, this is equivalent to a simulated value of:

A) 61 B) 65 C) 70 D) 75 E) 80

13) A Uniform distribution has end points of 450 and 500, which represent the time limits for a production operation. A manager wants to simulate two times from this distribution, and has obtained the numbers 44 and 10 from a two-digit random number table. Respectively, the two simulated times are:

A) 460 and 494. B) 472 and 455. C) 455 and 472. D) 494 and 460.

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14) Customers arrive at a retail store at an average rate of five per hour. The time between arrivals can be described by an Exponential distribution. Assuming a customer has just arrived (time = 12:00 pm), find the arrival time for next two customers. Using the following random digits (left to right): 27, 05

A) 12:16 PM. and 12:36 PM B) 12:27 PM and 12:32 PM C) 12:05 PM and 12:27 PM D) 12:32 PM and 12:59 PM

15)

Natural logarithms are used in simulating the:

A) binomial distribution. B) exponential distribution. C) normal distribution. D) Poisson distribution. E) uniform distribution.

16)

The first step in the simulation process is to:

A) Develop the model B) Validate the model C) Run a trial simulation D) Define the process to be modelled E) Develop experiments

17)

This process tests and debugs the simulation so that it works correctly.

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A) verification B) experiments C) behaviour D) validation E) run test

18)

This determines if the model adequately depicts the real process's performance.

A) accuracy B) validation C) experiments D) comparison E) verification

19) Part of the simulation process is to develop conditions under which the models behaviour is examined. This is referred to as :

A) validation B) verification C) experiments D) trials E) investigation

20) On cold mornings, the probability that David's car won't start is .22. When it doesn't start, he takes the bus and is late for work. When it does start, he drives to work on the freeway. Sixtyfive percent of the time the freeway is clear, and he gets to work on time. The rest of the time he is late. Simulate 10 consecutive days' worth of trips to work using the random numbers given. Use the lower numbers in each string to represent "car won't start" and "freeway clear". Random numbers:

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Car:

Traffic:

21)

An item of inventory is checked at the end of each hour. Given the following data:

Hours

Demand

Beginning Inventory

Ending Inventory

Simulate 10 hours of operation for demand, beginning and ending inventories, and order placements and arrivals. Order quantity is 4, order arrival takes two hours. Use the following random digits (left to right): 07

22) The number of machine breakdowns per day in a large factory can be described by a Poisson distribution with a mean of 2.0. Simulate the number of breakdowns over a five-day period, using these random numbers: 728

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202

205

927

589

23) During a cross-country trip, a statistics professor decided that the probability that their car could break down on any day was .15. Assume a maximum of one breakdown per day. Repair time, she decided, was normally distributed with a mean of four hours and a standard deviation of .6 hours. Simulate 10 days using these random numbers: Breakdowns:

Service:

-0.46

-1.05

97 0.15

40 +.71

+.44

-.12

Simulate whether a breakdown would occur and, if so, time of repair.

24) A Uniform distribution has endpoints of 250 and 400. Simulate three values of this distribution using these random numbers: 05

25) A production operation consists of two steps. The time for the first step is uniformly distributed between 10 minutes and 20 minutes. The time for the second operation is uniformly distributed between 15 and 20 minutes. Process one cannot start a new unit until its previous unit has been passed to process two. Process two cannot accept another unit while still processing the previous one. Using these two random number strings (left to right), simulate the total time for three units: Process one:

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Process two:

26) Patients arrive at a hospital emergency room at an average rate of four per hour. The times between arrivals can be described by an Exponential distribution. Assuming a patient has just arrived (time = 0), simulate the arrival times for five patients using the following random digits (left to right): 27

27)

Simulation is used to determine the optimal solution to a problem. ⊚ ⊚

28)

true false

Simulation is basically an optimizing technique. ⊚ ⊚

true false

29) Simulation models are fairly easy to use and understand; therefore they can be used for a wide range of decisions. ⊚ ⊚

30)

true false

Simulation is useful in situations that are too complex to develop mathematical solutions. ⊚ ⊚

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true false

31) Simulation enables a decision maker to experiment with a system and observe its behaviour. ⊚ ⊚

32)

true false

A simulation model is validated if it adequately depicts real system performance. ⊚ ⊚

true false

33) The purpose of running experiments on a simulation model is to answer "what if" questions. ⊚ ⊚

true false

34) In probabilistic simulations, a single simulation run will be needed to obtain confidence in the results. ⊚ ⊚

35)

true false

Monte Carlo simulations are deterministic. ⊚ ⊚

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true false

36) A Monte Carlo simulation implies that randomness has been incorporated in the simulation. ⊚ ⊚

true false

37) In the sets of random numbers, every possible combination of the numbers has the same probability of appearing, and there are no discernible patterns. ⊚ ⊚

true false

38) Monte Carlo simulation is only applicable to situations that have elements that can be described by random variables. ⊚ ⊚

39)

true false

Monte Carlo simulations yield approximate rather than exact answers. ⊚ ⊚

true false

40) Random numbers used in Monte Carlo simulation are generated by computer or from random number tables. ⊚ ⊚

true false

41) When using a random number table, it is important to always start at the same point of the table so that results may be replicated.

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⊚ ⊚

true false

42) A Normal distribution has a mean of 9 and a standard deviation of 2. The random number + 1.00 has been drawn from a table of normally distributed random numbers. The simulated number is 10. ⊚ ⊚

true false

43) A Uniform distribution has end points of 40 and 90. A random number of 20 from a twodigit random number table equates to a simulated value of 50. ⊚ ⊚

true false

44) When simulating numbers for an Exponential distribution, a table of random numbers can be used. ⊚ ⊚

true false

45) In simulating values for an Exponential distribution, the larger the random number, the smaller the simulated value. ⊚ ⊚

46) 999.

true false

A random variate is an integer value chosen from a specific range such as between 00 and

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⊚ ⊚

47)

true false

In a terminating simulation the simulation could theoretically go on indefinitely. ⊚ ⊚

true false

48) Dofasco managers used the Arena simulation model to determine if relatively small expenditures would result in productiv-ity improvements, ⊚ ⊚

true false

49) Simulation is helpful in system reliability but does not have an application in product design. ⊚ ⊚

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true false

Answer Key Test name: Chap 18S_7ce 1) C 2) B 3) E 4) D 5) D 6) E 7) D 8) A 9) D 10) B 11) B 12) D 13) B 14) A 15) B 16) D 17) A 18) B 19) C 27) FALSE 28) FALSE 29) TRUE 30) TRUE 31) TRUE 32) TRUE 33) TRUE Version 1

34) FALSE 35) FALSE 36) TRUE 37) TRUE 38) TRUE 39) TRUE 40) TRUE 41) FALSE 42) FALSE 43) TRUE 44) TRUE 45) TRUE 46) FALSE 47) FALSE 48) TRUE 49) FALSE

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Chapter 18: Waiting-Line Analysis 1)

All of the following are constraint management options, EXCEPT:

A) use temporary workers B) increase waiting space C) shift demand D) standardize the service E) look for a bottleneck

2) In waiting lines, what is the term used when customers become impatient from waiting and leave the line?

A) balking B) premature exit C) failure D) reneging E) service failure

3) In a single server, exponential service durations, and finite number in system model there are 4 customers in the system three in line and one being served. What is the probability no new customer will join the line? The probability of zero customers in the system is .375, arrival rate is 18 per hour and the service rate is 24 per hour.

A) 0.093 B) 0.1187 C) 0.256 D) 0.289 E) 0.311

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4) In a single server, exponential service durations, and finite number in system model there are 4 customers in the system three in line and one being served. What is the probability no new customer will join the line? The probability of zero customers in the system is .40, arrival rate is 16 per hour and the service rate is 18 per hour.

A) 0.1156 B) 0.1987 C) 0.2115 D) 0.2497 E) 0.3655

5) A multiple server queuing system has a Poisson arrival rate of 9 per hour and exponential service time averaging 5 per hour. Server cost is $100 per hour and the cost of waiting is $360 per hour. Based on total cost, how many servers should be staffed?

A) 2 B) 3 C) 4 D) 5 E) 6

6) A multiple server queuing system has a Poisson arrival rate of 16 per hour and exponential service time averaging 8 per hour. Server cost is $25 per hour and the cost of waiting is $40 per hour. Based on total cost, how many servers should be staffed?

A) 1 B) 2 C) 3 D) 4 E) 5

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7) A queuing system has four work stations with three workers to staff each station. To analyze this system, the number of "servers" is:

A) 3 B) 4 C) 7 D) 12 E) 1

8) Why is there waiting in a queue even if the service capacity exceeds the average demand on the system?

A) Poor scheduling B) Slow service C) Low utilization D) Variability in arrival and service rates E) Multiple phase processing

The goal of queuing analysis is to minimize:

A) the sum of customer waiting costs and costs of providing capacity. B) the sum of customer waiting time and service time. C) costs of providing capacity. D) customer waiting time. E) the number of servers, service cost.

10) All of the following are characteristics of the waiting line system that affect the choice of the queuing model EXCEPT:

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A) potential number of customers. B) order of service (queue discipline). C) cost of service. D) arrival and service patterns. E) number of servers.

11)

A basic difference between infinite source and finite source queuing models is:

A) the number of servers. B) the average waiting time. C) the average arrival rate. D) the potential number of customers. E) the processing rate.

12)

A single phase queuing system is one which has a single:

A) type of customer (homogeneous). B) server. C) customer being served. D) operational step. E) time all customers wait.

13) A single server queuing system has an average service time of eight minutes and an average time between arrivals of 10 minutes. The average arrival rate is:

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A) 6 per hour. B) 7.5 per hour. C) 8 per hour. D) 10 per hour. E) 12.5 per hour.

14) Which of the following is NOT a disadvantage of a single line for a multiple server queuing system?

A) It might appear too long for customers. B) It increases average wait time for customers. C) It may take up too much space. D) Customers can't choose their favourite server. E) Servers may not work as fast as if they were responsible for their own line.

15) If a manager increases server utilization (assuming no change in the customer arrival rate) what happens to the customer waiting time?

A) It increases exponentially. B) It increases proportionally. C) It decreases proportionally. D) It decreases exponentially. E) There is no change in the time.

16)

The term "queue discipline" refers to:

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A) the willingness of customers to wait in line for service. B) having multiple waiting lines without customers switching from line to line. C) the order in which customers are served. D) the reason waiting occurs in underutilized systems. E) an overloaded system.

17) Which of the following is NOT generally considered as a measure of system performance in queuing analysis?

A) The average number waiting in line B) The average number in the system C) Server utilization D) The probability that an arriving customer will have to wait for service E) The average service time

18)

As the ratio of arrival rate to service rate is increased, which of the following is likely?

A) Customers move through the system in less time because utilization is increased. B) Customers move through the system more slowly because utilization is increased. C) Utilization is decreased because of the added strain on the system. D) The average number in the system decreases. E) The arrival rate decreases.

19)

Which of these would increase server utilization?

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A) An increase in the average service rate. B) An increase in average arrival rate. C) An increase in the number of servers. D) A decrease in service time. E) An increase in server cost.

20) A single bay car wash with a Poisson arrival rate and an exponential service time has cars arriving an average of 10 minutes apart, and an average service time of four minutes. The server utilization is:

A) 24 B) 40 C) 67 D) 2.50 E) 60

21)

Which one of the following measures of system performance is a key measure?

A) The average number of customers waiting in line. B) The average time customers wait in line. C) The average time customers are in the system. D) The average number of customers in the system. E) The probability that an arrival will have to wait for service.

22) A single server queuing system has an average service time of 16 minutes per customer, which is exponentially distributed. The manager is thinking of converting to a system with a constant service time of 16 minutes. The average arrival rate will remain the same. The effect will be to:

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A) increase utilization. B) decrease utilization. C) increase the average waiting time. D) decrease the average waiting time. E) not have any effect since the service time is unchanged.

23) A multiple server queuing system with a Poisson arrival rate and exponential service time has an average arrival rate of 4 customers per hour and an average service time of 18 minutes per customer. The minimum number of servers required to avoid an overloaded system is:

A) 1 B) 2 C) 3 D) 4 E) 5

24) A multiple server system has customers arriving at an average rate of five per hour and an average service time of forty minutes. The minimum number of servers for this system to be underloaded is:

A) 2 B) 3 C) 4 D) 5 E) 6

25)

When the cost incurred by all customers is not the same, an appropriate queuing model is:

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A) single server, single phase. B) single server, two phases. C) multiple server, single priority. D) multiple server, multiple phase. E) multiple server, with priority.

26)

The basic multiple-server-with-priority queuing model assumes that:

A) arrival rates are exponentially distributed. B) service times are Poisson distributed. C) items are serviced in order of arrival. D) items are serviced in order of priority class. E) service activities are pre-emptive.

27) Which of the following is NOT an assumption of an infinite source, multiple servers with priority queuing model?

A) Poisson arrival rates B) Poisson service rates C) Customers are processed in order of arrival. D) Customers wait in a single line. E) A unit with a low priority could conceivably wait a rather long time for processing.

28) A bank of ten machines requires regular periodic service. Machine running time and service time are both exponential. Machines run for an average of 44 minutes between service requirements, and service time averages 6 minutes per machine. What is the probability that a machine will have to wait for service with two operators?

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A) .654 B) .090 C) .346 D) .910 E) .016

29) A bank of ten machines requires regular periodic service. Machine running time and service time are both exponential. Machines run for an average of 44 minutes between service requirements, and service time averages 6 minutes per machine. What is the average machine downtime with two operators?

A) 1.71 minutes B) 3.46 minutes C) 6.25 minutes D) 7.71 minutes E) 9.46 minutes

30) A bank of ten machines requires regular periodic service. Machine running time and service time are both exponential. Machines run for an average of 44 minutes between service requirements, and service time averages 6 minutes per machine. What is the average number of machines down with one operator?

A) 1.49 B) 3.35 C) 4.40 D) 6.65 E) 8.51

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31) A bank of ten machines requires regular periodic service. Machine running time and service time are both exponential. Machines run for an average of 44 minutes between service requirements, and service time averages 6 minutes per machine. If operators cost $15 per hour in wages and fringe benefits and machine downtime costs $75 per hour in lost production, what is the optimal number of operators for this bank of machines?

A) 1 B) 2 C) 3 D) 4 E) 5

32) A bank is designing a new branch office and needs to determine how much driveway space to allow for cars waiting for drive up teller service. The drive up service will have three tellers and a single waiting line. At another branch of the bank in a similar setting, the average service time for drive up tellers is 4 minutes per customer and average arrival rate is 36 customers per hour. It is expected that the new bank will have similar characteristics. How many spaces should be provided to have a 96% probability of accommodating all of the waiting cars?

A) 10 B) 12 C) 14 D) 16 E) 18

33) A bank is designing a new branch office and needs to determine how much driveway space to allow for cars waiting for drive up teller service. The drive up service will have three tellers and a single waiting line. At another branch of the bank in a similar setting, the average service time for drive up tellers is 4 minutes per customer and average arrival rate is 36 customers per hour. It is expected that the new bank will have similar characteristics. What is the expected average number of cars in the system?

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A) approx. 2.6 B) approx. 5.0 C) approx. 2.3 D) approx. 1.8 E) approx. 4.2

34) A bank is designing a new branch office and needs to determine how much driveway space to allow for cars waiting for drive up teller service. The drive up service will have three tellers and a single waiting line. At another branch of the bank in a similar setting, the average service time for drive up tellers is 4 minutes per customer and average arrival rate is 36 customers per hour. It is expected that the new bank will have similar characteristics. What is the average time that a customer would have to wait in line before being served?

A) 4.3 minutes B) 8.3 minutes C) 2.7 minutes D) 6.7 minutes E) 9.3 minutes

35) A bank is designing a new branch office and needs to determine how much driveway space to allow for cars waiting for drive up teller service. The drive up service will have three tellers and a single waiting line. At another branch of the bank in a similar setting, the average service time for drive up tellers is 4 minutes per customer and average arrival rate is 36 customers per hour. It is expected that the new bank will have similar characteristics. By how much would the average time in the system increase if only two tellers were on duty?

A) approx. 4 minutes B) approx. 10 minutes C) approx. 6 minutes D) The lines would become infinitely long. E) It is impossible to say without more information.

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36) A bank is designing a new branch office and needs to determine how much driveway space to allow for cars waiting for drive up teller service. The drive up service will have three tellers and a single waiting line. At another branch of the bank in a similar setting, the average service time for drive up tellers is 4 minutes per customer and average arrival rate is 36 customers per hour. It is expected that the new bank will have similar characteristics. For how many tellers should the system be designed if the managers want the average time a customer spends in the system to be no more than 5 minutes?

A) at least 3 B) at least 4 C) at least 5 D) at least 6 E) It is impossible to say without more information.

37)

What is the result of having more capacity than is needed to handle demand?

A) Servers are overutilized B) Customer wait time increase C) There is unproductive capacity D) Lines become longer E) The cost of waiting increases

38) From a managerial perspective what is the key when considering system service capacity?

A) To staff at the minimum level to satisfy arrival patterns B) To minimize the cost of waiting C) To staff at a level determined by the customers D) To provide a balance between level of service and cost. E) To always have capacity slightly less than demand.

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39)

This is the mathematical approach to the analysis of waiting lines.

A) Theory of constraints B) Queuing theory C) Erlang analysis D) Cost benefit analysis E) Server cost versus waiting cost

40)

Where are waiting lines commonly found?

A) Whenever customer arrivals are scheduled B) When service rates exceed customer arrival rates C) Whenever customers arrive randomly for a service D) In underloaded systems E) In systems where service capacity far exceeds demand

41) What is the effect on waiting lines in a system where variability is minimal or nonexistent?

A) Waiting lines will be long B) The cost of waiting will be high C) Customers will become impatient due to longer than normal wait times D) Balking and reneging will be significantly higher E) Waiting lines do not ordinarily form

42)

What are the two basic categories of costs in a queuing situation?

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A) Customers waiting for service and capacity B) Queue costs and wait costs C) Server cost and capacity cost D) Waiting and loss of goodwill E) Poor service quality and loss of goodwill

43)

The fuel consumed by an airplane waiting to land is an example of what type of cost?

A) delay B) service C) server/waiting D) customer waiting E) server waiting

44)

These are costs of maintaining the ability to provide service.

A) Wait cost B) Capacity costs C) Lost sales cost D) Utilization cost E) Server/wait costs

45)

The number of bays at a car wash is an example of what type of cost?

A) server B) wait C) capacity D) queue E) utilization

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46)

What is the result of having a service facility idle?

A) Waiting becomes longer B) Perceived time in queue is less C) The resource is inventoried for future use D) Capacity is reduced E) Capacity is lost

47) Informing the customer of the cause of an abnormal wait and allowing customers to serve themselves relate to this aspect of queuing theory?

A) Service recovery B) Psychology of waiting C) Queue discipline D) Queue priority E) Service priority

48)

Using temporary or part time employees to reduce wait times is an example of what?

A) Queue management B) Service capacity C) Server priority D) Constraint management E) Revising priorities

49) Offering lower prices to shift demand from busy times is an example of which constraint management option?

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A) Shift demand B) Demand management C) Arrival management D) Service matching E) Price adjust

50)

This exists when the potential number of customers is limited.

A) Infinite source B) Exponential arrivals C) Finite source D) Constant service times E) Scheduled arrivals

51)

This exists when the potential number of customers is unlimited.

A) Unlimited capacity B) Infinite source C) Scheduled arrivals D) Priority arrivals E) Finite source

52)

What is the difference between a finite and infinite population source?

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A) In an infinite source the population is limited, in an finite source the population is unlimited B) In a finite source the population is constant, in an infinite source the population is random C) In an infinite source the population is random, in an finite source the population is scheduled D) In a finite source the population is limited, in an infinite source the population is unlimited E) In a finite source the population is unknown, in an infinite source the population is known.

53) A technician is responsible for maintaining 10 sorting machines at an Amazon distribution centre. What is the population source?

A) scheduled B) finite C) random D) infinite E) priority

54)

The capacity of a queuing system is a function of the capacity of each server and:

A) the arrival rate B) the service rate C) the number of phases D) utilization E) the number of servers.

55)

This is the proportion of time a server will be busy or the percentage of capacity utilized.

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A) System capacity B) Capacity utilization C) Server utilization D) Available capacity E) Capacity planning

56) If arrival and service rates are not constant operating hours can be divided into these to produce more constant rates.

A) Scheduled arrivals B) Scheduled services C) priority D) sub periods E) averages

57) At an information booth with one server, during peak hours customers arrive according to a Poisson distribution with an average rate of 20 customers per hour. Service time is random with an average of 2.5 minutes and a standard deviation of 1 minute. Determine the average number of customers in line.

A) 1.67 B) 2.25 C) 2.42 D) 2.76 E) 3.14

58) At an information booth with one server, during peak hours customers arrive according to a Poisson distribution with an average rate of 20 customers per hour. Service time is random with an average of 2.5 minutes and a standard deviation of 1 minute. Determine the average time spent in line.

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A) 6.25 minutes B) 7.25 minutes C) 7.75 minutes D) 8.15 minutes E) 8.33 minutes

59) At an information booth with one server, during peak hours customers arrive according to a Poisson distribution with an average rate of 25 customers per hour. Service time is random with an average of 2.0 minutes and a standard deviation of 1 minute. Determine the average number of customers in line.

A) 1.90 B) 2.10 C) 2.40 D) 2.60 E) 3.10

60) At an information booth with one server, during peak hours customers arrive according to a Poisson distribution with an average rate of 25 customers per hour. Service time is random with an average of 2.0 minutes and a standard deviation of 1 minute. Determine the average time spent in line.

A) 4.75 minutes B) 5.60 minutes C) 6.25 minutes D) 6.80 minutes E) 7.20 minutes

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61) A limousine service at a local airport expects to have 5.6 requests per hour for limousine service. The average service time is 45 minutes. How many limousines will be needed if customer wait time is close to but no longer than 10 minutes?

A) 3 B) 4 C) 5 D) 6 E) 7

62) A limousine service at a local airport expects to have 4.4 requests per hour for limousine service. The average service time is 30 minutes. How many limousines will be needed if customer wait time is close to but no longer than 10 minutes?

A) 2 B) 3 C) 4 D) 5 E) 6

63)

Which of the following is NOT associated with the cost of waiting?

A) Waiting space B) Wages and crew costs C) Lost sales D) shoplifting E) congestion

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64) Trucks arrive at a distribution centre at a rate of 25 per hour following a Poisson distribution. On average a work crew can unload 6 trucks per hour. Crew cost is $100 per hour and the cost to have a truck waiting is $150 per hour. How many crews should be staffed to minimize total cost?

A) 3 B) 4 C) 5 D) 6 E) 7

65) Trucks arrive at a distribution centre at a rate of 20 per hour following a Poisson distribution. On average a work crew can unload 4 trucks per hour. Crew cost is $250 per hour and the cost to have a truck waiting is $200 per hour. How many crews should be staffed to minimize total cost?

A) 3 B) 4 C) 5 D) 6 E) 7

66) Trucks arrive at a distribution centre at a rate of 12 per hour following a Poisson distribution. On average a work crew can unload 5 trucks per hour. Crew cost is $300 per hour and the cost to have a truck waiting is $450 per hour. How many crews should be staffed to minimize total cost?

A) 3 B) 4 C) 5 D) 6 E) 7

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67) Trucks arrive at a distribution centre at a rate of 12 per hour following a Poisson distribution. On average a work crew can unload 5 trucks per hour. Crew cost is $300 per hour and the cost to have a truck waiting is $450 per hour. What is the average number of trucks waiting to be unloaded?

A) 1.26 B) 1.10 C) 0.956 D) 0.568 E) 0.431

68) Trucks arrive at a distribution centre at a rate of 18 per hour following a Poisson distribution. On average a work crew can unload 6 trucks per hour. Crew cost is $400 per hour and the cost to have a truck waiting is $450 per hour. What is the average number of trucks waiting to be unloaded?

A) 0.227 B) 0.354 C) 0.468 D) 0.856 E) 1.233

69)

Customers in queue that grow impatient and switch to another line is called?

A) shifting B) balking C) jockeying D) reneging E) repositioning

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70) Customers arrive at a suburban ticket outlet at the rate of 14 per hour on Monday mornings. This can be described by a Poisson distribution. Selling the tickets and providing general information takes an average of 3 minutes per customer, and varies exponentially. There is 1 ticket agent on duty on Mondays. Determine each of the following: (i) server utilization (ii) average number in line (iii) average time in line (iv) average time in the system

71) During the early morning hours, customers arrive at a branch post office at an average rate of 45 per hour (Poisson), while clerks can handle transactions in an average time (exponential) of 4 minutes each. (i) find the average number of customers waiting for service if 6 clerks are used. (ii) find the minimum number of clerks needed to keep the average time in the system to under 5 minutes. (iii) If clerk cost is $30 per hour and customer waiting time represents a "cost" of $20 per hour, how many clerks can be justified on a cost basis?

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72) Customers filter into a record shop at an average of 1 per minute (Poisson) where the service rate is 15 per hour (Poisson). Determine the following: (i) the average number of customers in the system with 8 servers (ii) the minimum number of servers needed to keep the average time in the system to less than 6 minutes

73) A department has 5 semiautomatic pieces of equipment which operate for an average of 79 minutes before they must be reloaded. The reloading operation takes an average of 21 minutes per machine. Assume exponential distributions. (i) What is the minimum number of servers needed to keep the average downtime per cycle to less than 25 minutes? (ii) If 1 server is used, what percentage of time will the machine be down?

74) Two trouble-shooters handle service calls for 10 machines. The average time between service requirements is 18 days, and service time averages 2 days. Assume exponential distributions. While running, each machine can produce 1,500 pieces per day. Determine: (i) the percentage of time trouble-shooters are idle (ii) each machine's net productivity (iii) If trouble-shooters represent a cost of $150 per day, and machine downtime cost is $600 per day, would another trouble-shooter be justified? Explain.

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75) A department has 5 machines that each run for an average of 8.4 hours (exponential) before service is required. Service time average is 1.6 hours (exponential). (i) While running, each machine can produce 120 pieces per hour. With one server, what is the average hourly output actually achieved? (ii) With 2 servers, what is the probability that a machine would be served immediately when it requires service? (iii) If machine downtime cost is $100 per hour per machine, and server time costs $30 per hour, how many servers would be optimal?

76) Customers arrive at a video rental desk at the rate of one per minute (Poisson). Each server can handle .40 customers per minute (Poisson). (i) If there are four servers, determine: 1) The average time it takes to rent a video tape 2) The probability of three or fewer customers in the system (ii) What is the minimum number of servers needed to achieve an average time in the system of less than three minutes?

77) The following questions refer to this data for a multiple server, priority service queuing model:

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PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is the overall average arrival rate?

78) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is server utilization?

79) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is average time in line for a high priority item?

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80) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is average time in line for a low priority item?

81) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is average time in the system for a high priority item?

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82) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is average time in the system for a low priority item?

83) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is the average number of high priority items waiting in line for service?

84) The following questions refer to this data for a multiple server, priority service queuing model:

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PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is the average number of low priority items waiting in line for service?

85) The following questions refer to this data for a multiple server, priority service queuing model: PRIORITY

AVERAGE ARRIVAL RATE

High

3 per hour (Poisson)

Low

5 per hour (Poisson)

NUMBER OF SERVERS:

SERVICE RATE

2 per hour (Poisson)

What is the average number of all items waiting in line for service?

86) A manager assembled the following information about an infinite source waiting line system: 5 servers, an arrival rate of 6 per hour, and a service time of 20 minutes. The manager has determined that the average number of customers waiting for service is .04. Determine each of the following: (i) the server utilization (ii) the average waiting time in line in minutes with 3 servers. (iii) the average time in the system with 3 servers. (iv) the average number in the system with 3 servers.

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87) Tourists stop at an information desk at a rate of one every 2 minutes, and answering their questions takes an average of 5 minutes each. There are three employees on duty. (i) What percentage of time will all three employees be idle at the same time? (ii) If a tourist isn't served immediately, how long on average would the tourist have to wait for service? (iii) What is the probability that there will be at least three tourists "in the system"? (iv) How many employees would be needed to maintain an average waiting time in line of no more than 4 minutes?

88) Waiting lines occur even in underloaded systems because of variability in service rates and/or arrival rates. ⊚ ⊚

true false

89) A system has one service facility that on an average can service 10 customers per hour. The customers arrive at a variable rate, which averages 6 per hour. In this circumstance, no waiting lines will form. ⊚ ⊚

90)

true false

The goal of queuing analysis is to minimize the length of customer waiting lines. ⊚ ⊚

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true false

91) The cost of customers waiting is always greater than the cost of increasing service capacity. ⊚ ⊚

true false

92) The cost of having customers wait has to be balanced with the cost of providing service capacity. ⊚ ⊚

true false

93) Total queuing system costs are always minimized at the point where the costs of customers waiting are equal to the service capacity costs. ⊚ ⊚

94)

The goal of queuing analysis is to minimize the cost of customers having to wait. ⊚ ⊚

95)

true false

A multiple server system assumes that each server will have its own waiting line. ⊚ ⊚

96)

true false

Typically customers will perceive waiting times to be less if the line continues to move.

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⊚ ⊚

true false

97) If customers are homogeneous (similar needs), then separate waiting lines for each server are preferable. ⊚ ⊚

true false

98) Having separate lines for customers that are heterogeneous (different needs) can reduce the variability of service times. ⊚ ⊚

true false

99) The most commonly used queuing models assume a service rate that follows an exponential distribution. ⊚ ⊚

true false

100) The most commonly used queuing models assume an arrival rate that can be described by a Poisson distribution. ⊚ ⊚

true false

101) In waiting-line analysis, queue discipline refers to the willingness of customers to wait in line for service. ⊚ ⊚

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true false

102) For a server that already has a high utilization ratio, decreasing service capacity will only have a negligible effect on customer waiting time. ⊚ ⊚

103)

true false

Average service rate is the reciprocal of the average service time. ⊚ ⊚

true false

104) Queuing models discussed in the text pertain only to stable conditions. Stable conditions exist only when customers arrive at a constant rate; that is, without any variability. ⊚ ⊚

true false

105) In an infinite source model, the average number being served is equal to the ratio of the average arrival rate to the average service rate. ⊚ ⊚

true false

106) In an infinite source model, the server utilization is the ratio of the average arrival rate to the service capacity. ⊚ ⊚

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true false

107) In a single-server system, the utilization is equal to the average arrival rate divided by the average service rate. ⊚ ⊚

108)

true false

The reciprocal of the average rate of arrivals is the average interarrival time. ⊚ ⊚

true false

109) In an infinite source model, the average time in line is equal to the average number of customers in line divided by the average arrival rate. ⊚ ⊚

110)

All infinite source queuing models require the server utilization to be less than 1.0. ⊚ ⊚

111)

true false

Infinite-source queuing models assume average arrival and service rates are stable. ⊚ ⊚

true false

112) Infinite source queuing models basically apply only to underloaded systems in which waiting lines can form. ⊚ ⊚

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true false

113) Compared to a single server system with exponential service time, a single server system with a constant service time causes a reduction of 50 percent in the average number waiting in line. ⊚ ⊚

true false

114) Compared to a single server system with exponential service time, the same system with a constant service time will have an average of one-half the number of customers waiting in the system. ⊚ ⊚

115)

true false

The multiple server queuing table cannot be applied to single server systems. ⊚ ⊚

true false

116) The finite-source queuing model is appropriate when the potential calling population is relatively small. ⊚ ⊚

true false

117) A major difference between the finite and infinite source queuing models is that the customer arrival rate in a finite situation is dependent on the length of the waiting line. ⊚ ⊚

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true false

118) Studies have shown a difference between the actual time customers spend waiting and their perceived time. ⊚ ⊚

true false

119) In waiting lines, reneging occurs when a customer does not join the line because it is too long. ⊚ ⊚

120)

If wait times are too long managers can relegate some customers to lower priority classes. ⊚ ⊚

121)

true false

For businesses the cost of waiting can result in lower productivity. ⊚ ⊚

123)

true false

Waiting lines do not reflect the level of customer service. ⊚ ⊚

122)

true false

For society the cost of waiting can be reduced quality of life.

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⊚ ⊚

true false

124) The cost of customer waiting include the salaries paid to employees while they wait for service. ⊚ ⊚

125)

As service capacity increases its capacity cost decreases. ⊚ ⊚

126)

true false

In some instances it is not feasible to shorten waiting times. ⊚ ⊚

129)

true false

As the service capacity increases, customer waiting cost decreases non-linearly. ⊚ ⊚

128)

true false

As service capacity increases waiting decreases. ⊚ ⊚

127)

true false

Distractions will not have an effect on a customer's perceived wait times.

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⊚ ⊚

130)

The number of steps in a system is referred to as phases. ⊚ ⊚

131)

true false

Arrival rates can be described as either Poisson or Exponential. ⊚ ⊚

132)

true false

Service rates can be described as either Exponential or Poisson. ⊚ ⊚

true false

133) When using FCFS customers are sometimes given priority based on individual waiting costs. ⊚ ⊚

134)

Arrival and service rates do not need to be in the same time units. ⊚ ⊚

135)

true false

It can be difficult to determine the cost of customer waiting.

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⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 18_7ce 1) B 2) D 3) B 4) D 5) C 6) D 7) B 8) D 9) A 10) C 11) D 12) D 13) A 14) B 15) A 16) C 17) E 18) B 19) B 20) B 21) A 22) D 23) B 24) C 25) E 26) D Version 1

27) C 28) C 29) D 30) B 31) C 32) B 33) B 34) A 35) D 36) B 37) C 38) D 39) B 40) C 41) E 42) A 43) D 44) B 45) C 46) E 47) B 48) D 49) A 50) C 51) B 52) D 53) B 54) E 55) C 56) D Version 1

57) C 58) B 59) D 60) C 61) D 62) C 63) B 64) D 65) E 66) B 67) E 68) B 69) C 88) TRUE 89) FALSE 90) FALSE 91) FALSE 92) TRUE 93) FALSE 94) FALSE 95) FALSE 96) TRUE 97) FALSE 98) TRUE 99) TRUE 100) TRUE 101) FALSE 102) FALSE 103) TRUE 104) FALSE Version 1

105) TRUE 106) TRUE 107) TRUE 108) TRUE 109) TRUE 110) TRUE 111) TRUE 112) TRUE 113) TRUE 114) FALSE 115) FALSE 116) TRUE 117) TRUE 118) TRUE 119) FALSE 120) TRUE 121) FALSE 122) TRUE 123) TRUE 124) TRUE 125) FALSE 126) TRUE 127) TRUE 128) TRUE 129) FALSE 130) TRUE 131) FALSE 132) FALSE 133) TRUE 134) FALSE Version 1

135) TRUE

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