TEST BANK for Operations Management 14th Edition By William Stevenson. ISBN13: 9781264151592 by digitaldownload87

Ch. 1 Introduction to Operations Management TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. ⊚ ⊚

true false

2) Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. ⊚ ⊚

true false

3) Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. ⊚ ⊚

true false

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

true false

5) The greater the degree of customer involvement, the more challenging the design and management of operations. ⊚ ⊚

true false

Goods-producing organizations are not involved in service activities. ⊚ ⊚

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true false 1

7) Service operations require additional inventory because of the unpredictability of consumer demand. ⊚ ⊚

true false

8) In for-profit organizations, the value of outputs is measured by the prices customers are willing to pay for goods or services. ⊚ ⊚

true false

The use of models will guarantee the best possible decisions. ⊚ ⊚

true false

10) People who work in the field of operations should have skills that include both knowledge and people skills. ⊚ ⊚

true false

11) Assembly lines improved productivity by using interchangeable parts and craft production. ⊚ ⊚

true false

12) The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. ⊚ ⊚

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true false

13)

The word "technology" is used only to refer to "information technology." ⊚ ⊚

14)

"Value added" by definition is always a positive number since "added" implies increases. ⊚ ⊚

15)

true false

Service often requires relatively greater labor content when compared to manufacturing. ⊚ ⊚

true false

16) Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. ⊚ ⊚

true false

17) Specialized machinery or equipment is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. ⊚ ⊚

18)

Most people encounter operations only in profit-making organizations. ⊚ ⊚

19)

true false

Service typically involves a much higher degree of customer contact than manufacturing.

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⊚ ⊚

true false

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

true false

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

true false

22) Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision making. ⊚ ⊚

true false

23) The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. ⊚ ⊚

true false

24) Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. ⊚ ⊚

25)

true false

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

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⊚ ⊚

true false

26) A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency. ⊚ ⊚

true false

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

true false

28) Elton Mayo's Hawthorne experiments were significant contributions to the human relations movement, which emphasized the importance of the human element in job design. ⊚ ⊚

true false

29) Among Ford's many contributions was the introduction of mass production, using the concepts of interchangeable parts and division of labor. ⊚ ⊚

true false

30) Operations and sales are the two functional areas that exist to support activities in other functions such as accounting, finance, IT, and human resources. ⊚ ⊚

true false

31) Lean production systems incorporate the advantages of both mass production and craft production.

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⊚ ⊚

32)

As an abstraction of reality, a model is a simplified version of a real phenomenon. ⊚ ⊚

33)

true false

Services can be stored and are not provided “on demand.” ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 34) In addition to operations, which of the following is considered a "line" function?

A) accounting B) finance C) IT D) procurement E) sales

35) Marketing personnel and product designers must work closely with operations to successfully develop and produce new products because operations personnel can best judge how new product designs will be.

A) marketable B) segmentable C) manufacturable D) profitable E) nameable

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36) Managing the supply chain has become more important as a result of firms increasing their levels of

A) overtime. B) outsourcing. C) marketing. D) promotions. E) shipping.

37) Which of the following would tend to increase the importance of supply chain management?

A) increased supply chain stability B) lower levels of outsourcing C) reduced competitive pressures D) increased globalization E) greater emphasis on local markets

38) In their chief role of , operations managers exert considerable influence over the degree to which the goals and objectives of the organization are realized.

A) promoter/salesman B) designer/builder C) planner/decision maker D) recruiter/trainer E) troubleshooter/problem-solver

39)

A "product package" consists of

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A) the exterior wrapping. B) the shipping container. C) a combination of goods and services. D) goods if a manufacturing organization. E) customer relations if a service organization.

40)

Business organizations consist of three major functional areas which, ideally

A) support one another. B) are mutually exclusive. C) exist independently of each other. D) function independently of each other. E) do not interface with each other.

41) Which of the following is a type of transformation process used by operations to convert inputs into outputs?

A) cutting B) storing C) transporting D) analyzing E) all of these choices are transformation processes

42)

Technology choices can have a major impact on

A) costs. B) productivity. C) customer satisfaction. D) quality. E) all of these choices are correct.

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

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

44) Budgeting, analysis of investment proposals, and provision of funds are activities associated with the function.

A) operation B) marketing C) purchasing D) finance E) internal audit

45) Which of the following would not generally be classified under the heading of transformation?

A) assembling B) teaching C) staffing D) farming E) consulting

46)

Buying goods or services instead of producing or providing them in-house is called

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A) downsizing. B) outsourcing. C) internationalization. D) vertical integration. E) entrepreneurship.

47)

Product design and process selection are examples of

decisions.

A) financial B) tactical C) system design D) system operation E) forecasting

48)

The responsibilities of the operations manager include

A) allocating financial resources throughout the organization. B) the creation of goods or provision of services. C) promoting the organization’s goods or services. D) assessing consumer wants and needs. E) analyzing investment proposals.

49)

Knowledge skills usually don't include

A) process knowledge. B) accounting skills. C) communication skills. D) global knowledge. E) financial skills.

50)

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

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A) B) C) D) improved. E)

A systems viewpoint is almost always beneficial in decision making. A systems approach emphasizes interrelationships among subsystems. A systems approach concentrates on efficiency within subsystems. A systems approach is essential whenever something is being redesigned or All of the choices are true.

51) Which of the following is a system in which low-skilled workers use specialized equipment to produce high volumes of standardized goods?

A) supply chain B) the Internet C) craft production D) mass production E) lean systems

52)

Production systems with customized outputs typically have relatively

A) high volumes of output. B) low unit costs. C) high amounts of specialized equipment. D) fast work movement. E) skilled workers.

53) Which is not an area of significant difference between manufacturing and service operations?

A) forecasting demand B) uniformity of input C) labor content of jobs D) customer contact E) measurement of productivity

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54)

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

A) intangible output B) high customer contact C) high labor content D) easy measurement of productivity E) low uniformity of input

55) Which of the following most involves coordinating the activities among all the elements of the business including its suppliers and distributors?

A) pollution control B) quality management C) supply chain management D) competition from foreign manufacturers E) technological change

56)

Farming is an example of

A) an obsolete activity. B) a virtual organization. C) nonmanufactured goods production. D) a growth industry. E) customized manufacturing.

57) 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) recognition of priorities. D) analysis of variance. E) decision table analysis.

58) The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the

A) Irwin phenomenon. B) Pareto phenomenon. C) Stevenson phenomenon. D) Tellier phenomenon. E) Adam Smith phenomenon.

59) The process of comparing outputs to previously established standards to determine if corrective action is needed is called

A) planning. B) directing. C) controlling. D) budgeting. E) disciplining.

60)

Which of the following does not relate to system design?

A) altering the system capacity B) location of facilities C) inventory management D) selection and acquisition of equipment E) physical arrangement of departments

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61) Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision makers to consider in response to the .

A) flexibility; pressure to be more efficient B) offshoring; need to promote domestic production C) sustainability; threat of global warming D) technology; impact of random variation E) forecasting; stabilization of demand

62) Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of

A) illegal price discrimination. B) collusion. C) volume analysis. D) revenue management. E) outsourcing.

63)

Which of the following is not an ongoing trend in manufacturing?

A) globalization B) quality improvement C) flexibility and agility D) mass production for greater economies of scale E) technological advances

64)

Which of the following is not a benefit of using models in decision making?

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A) They provide a standardized format for analyzing a problem. B) They serve as a consistent tool for evaluation. C) They are easy to use and less expensive than dealing with the actual situation. D) They force the decision maker to take into account qualitative issues such as personalities and emotions. E) They offer insights into fundamental issues at play in a decision-making setting.

65) Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of is leading to increased emphasis on management.

A) outsourcing; supply chain B) offshoring; lean C) downsizing; total quality D) optimizing; inventory E) internationalization; intercultural

66)

Operations and sales are the two

functions in businesses.

A) strategic B) tactical C) support D) value-adding E) line

67)

Marketing depends on operations for information regarding

A) productivity. B) lead time. C) cash flow. D) budgeting. E) corporate intelligence.

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68)

Two widely used metrics of variation are the

and the

A) mean; standard deviation B) productivity ratio; correlation C) standardized mean; assignable deviation D) randomized mean; standardized deviation E) normal distribution; random variation

69)

Which of the following statements about variation is false?

A) Variation prevents a production process from being as efficient as it can be. B) Some variation can be prevented. C) Variation can either be assignable or random. D) Any variation makes a production process less productive E) Random variation generally cannot be influenced by managers.

70) Which of the following is essential to consider with respect to managing a process to meet demand?

A) advertising B) trends in fashion C) global economic trends D) financial reporting standards E) capacity

71) Which of the following refers to service and production processes that use resources in ways that do not harm ecological systems?

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A) sustainability B) supportability C) marketability D) perishability E) transportability

72) Which of the following principles emphasizes that actions should make the community as a whole better off?

A) The Rights Principle B) The Fairness Principle C) The Virtue Principle D) The Common Good Principle E) The Utilitarian Principle

73) If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher

A) sustainability. B) efficiency. C) productivity. D) agility. E) marketability.

74) Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's

A) division of labor. B) market development. C) outsourcing. D) external process orientation. E) internal supply chain.

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75)

The essence of the operations function is to

during the transformation process.

A) measure feedback B) produce goods C) add labor D) add value E) gather information

76)

Which of the following is not an element of supply chain management?

A) logistics B) operations C) customers D) location E) processing

77)

is considered to be more challenging for

due to the higher variation in input.

A) Labor content of jobs; operations B) Uniformity of input; inventory management C) Measurement of productivity; managers D) Wages; manufacturing E) Quality assurance; services

78) Which of the following is a common complaint that employers have when hiring recent college graduates?

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A) lack of general knowledge of how businesses operate B) not understanding the functions of accounting, finance, and marketing C) lack of knowledge about global dependencies of companies D) not understanding the importance of customer service E) lack of knowledge of economic analysis and forecasting

79)

Which of the following is an example of a supporting process?

A) marketing B) purchasing C) strategy D) sales E) information technology

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Answer Key Test name: Chap 01_14e 1) FALSE 2) TRUE 3) FALSE 4) FALSE 5) TRUE 6) FALSE 7) FALSE 8) TRUE 9) FALSE 10) TRUE 11) FALSE 12) FALSE 13) FALSE 14) FALSE 15) TRUE 16) FALSE 17) FALSE 18) FALSE 19) TRUE 20) TRUE 21) TRUE 22) FALSE 23) TRUE 24) FALSE 25) TRUE 26) FALSE Version 1

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

57) C 58) B 59) C 60) C 61) C 62) D 63) D 64) D 65) A 66) E 67) B 68) A 69) D 70) E 71) A 72) D 73) D 74) E 75) D 76) B 77) E 78) A 79) E

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Ch. 2 Competitiveness, Strategy, and Productivity TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) An example of a strategic operations management decision is the choice of where to locate. ⊚ ⊚

true false

2) An example of an operational operations management decision is inventory level management. ⊚ ⊚

true false

3) Government statistics are a good source of data about productivity trends in the service sector. ⊚ ⊚

true false

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

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

true false

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

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true false

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

true false

If people would only work harder, productivity would increase. ⊚ ⊚

true false

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

10)

Productivity is directly related to the ability of an organization to compete. ⊚ ⊚

11)

true false

Outsourcing tends to improve quality but at the cost of lowered productivity. ⊚ ⊚

13)

true false

A characteristic that was once an order winner may become an order qualifier. ⊚ ⊚

12)

true false

Productivity tends to be only a very minor factor in an organization's ability to compete. ⊚ ⊚

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true false 2

14)

An organization that is twice as productive as its competitor will be twice as profitable. ⊚ ⊚

true false

15) National productivity is determined by averaging the productivity measures of various companies or industries. ⊚ ⊚

true false

16) Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary pressures on a nation's economy. ⊚ ⊚

17)

true false

Global competition really only applies to multinational organizations. ⊚ ⊚

true false

18) A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly. ⊚ ⊚

19)

true false

Services often don't fit simple yield measurements. ⊚ ⊚

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true false

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

true false

21) The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisions. ⊚ ⊚

22)

true false

Strategy includes both organizational and functional strategies. ⊚ ⊚

true false

23) Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy. ⊚ ⊚

true false

24) Mission statements should be as specific as possible regarding exactly how they will be accomplished. ⊚ ⊚

25)

Improving efficiency will guarantee a similar improvement in productivity. ⊚ ⊚

26)

true false

As long as we match a competitor on quality and price we will gain market share.

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⊚ ⊚

true false

27) Environmental scanning is a search for events or trends that present either threats or opportunities to the organization. ⊚ ⊚

28)

true false

Standardization has the advantage of reducing variability. ⊚ ⊚

true false

29) Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation. ⊚ ⊚

30)

true false

Tactics support established functional strategies. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 31) Which of the following is least likely to affect the cost an organization incurs in producing its products or services?

A) price B) productivity C) location D) quality E) inventory management

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32)

Where a firm locates would typically not affect that firm's

A) costs. B) convenience for customers. C) delivery times. D) strategy. E) transportation costs.

33)

Which of the following is not among the chief reasons organizations fail?

A) overemphasis on short-term financial performance B) emphasizing labor productivity in labor-intensive environments C) poor internal communications D) not investing in capital and human resources E) overemphasis on product (or service) design

34)

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

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

35)

An organization's mission statement serves as the basis for:

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A) environmental scanning. B) core competencies. C) operating procedures. D) distinctiveness. E) organizational goals.

36)

Which of the following would be least important in the pursuit of a time-based strategy?

A) cost minimization B) quick changeover times C) operational agility D) reduced complaint resolution times E) flexible technology

37)

Competitiveness doesn't include:

A) productivity. B) effectiveness. C) profitability. D) operations strategy. E) operations management.

38)

Product design and choice of location are examples of

decisions.

A) strategic B) tactical C) operational D) customer-focused E) design

39)

Scheduling personnel is an example of an operations management:

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A) mission implementation. B) operational decision. C) organizational strategy. D) functional strategy. E) tactical decision.

40)

Productivity is expressed as:

A) output plus input. B) output minus input. C) output times input. D) output divided by input. E) input divided by output.

41)

In the 1970s and early 1980s in the United States, organizations concentrated on:

A) operations strategies. B) improving quality. C) marketing and financial strategies. D) revising mission statements. E) environmental issues.

42)

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

A) computer viruses B) design of the workspace C) use of the Internet D) standardizing processes E) product price

43)

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

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

44)

Which of the following is not a key step toward improving productivity?

A) developing productivity measures for all operations B) improving the bottleneck operations C) establishing reasonable goals for improvement D) considering incentives to reward workers E) converting bond debt to stock ownership

45)

For an organization to grow its market share, it must:

A) advertise using multimedia. B) reduce prices. C) exceed minimum standards of acceptability for its products or services. D) establish an Internet Web site. E) broaden its mission statement.

46)

The ratio of good output to quantity of raw material input is called

A) nondefective productivity. B) process yield. C) worker quality measurement. D) total quality productivity. E) quantity/quality ratio.

47)

The fundamental purpose for the existence of any organization is described by its:

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A) policies. B) procedures. C) corporate charter. D) mission statement. E) bylaws.

48) A productivity increase in one operation that does not improve overall productivity of the business is not

A) worthwhile. B) trivial. C) competence-destroying. D) an order winner. E) an order qualifier.

49)

Productivity growth can be calculated by:

A) outputs minus inputs. B) inputs divided by the outputs. C) outputs divided by the inputs. D) input plus output divided by two. E) ((current productivity − previous productivity) ÷ (previous productivity)) × 100

50)

Which of the following is true?

A) Corporate strategy is shaped by functional strategies. B) Corporate mission is shaped by corporate strategy. C) Functional strategies are shaped by corporate strategy. D) External conditions are shaped by corporate mission. E) Corporate mission is shaped by functional strategies.

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51)

Core competencies in organizations generally do not relate to:

A) cost. B) quality. C) time. D) flexibility. E) sales price.

52)

With regard to operations, organization strategy should, ideally, take into account:

A) operations' strengths and weaknesses. B) inventory levels. C) labor productivity. D) product mix. E) production processes.

53)

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

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

54) Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to:

A) product/service design time. B) processing time. C) delivery time. D) response time for complaints. E) internal audits.

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55)

The external elements of SWOT analysis are:

A) strengths and weaknesses. B) strengths and threats. C) opportunities and threats. D) weaknesses and opportunities. E) strengths and opportunities.

56) In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five-day week. What is the labor 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) 60 chairs/worker/day

57) Which of the following is not a reason for poor performance of our organization in the marketplace?

placing too much emphasis on product/service design and too little on process

design B) failing to take into account customer wants and needs C) putting too much emphasis on short-term financial performance D) taking advantage of strengths/opportunities, and recognizing competitive threats E) failing to monitor the external environment

58) The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size 2

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Yards Installed 716

1298

1017

1002

1278

702

A) 2 B) 3 C) 4

59)

Which of the following is not a key factor of competitiveness?

A) price B) product differentiation C) flexibility D) after-sale service E) size of organization

60) Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by:

A) 50 percent. B) 33 percent. C) 25 percent. D) 67 percent.

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

Output

#Workers

Material (ft)

392

2,720

408

2,790

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A) 1.463 B) 1.457 C) 1.431

62) The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas:

A) Sustainability; Flexibility; Efficiency; Technology B) Customers; Financial; Internal Business Processes; Learning and Growth C) Customization; Standardization; Efficiency; Effectiveness D) The Environment; The Community; Suppliers; Other Stakeholders E) Strategy; Tactics; Productivity; Profitability

63) 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) streamlined flow C) quality D) capacity E) productivity

64)

Unique attributes of firms that give them a competitive edge are called:

A) functional strategies. B) Balanced Scorecards. C) supply chains. D) core competencies. E) sustainable initiatives.

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65) Years ago in the overnight delivery business, providing package tracking capability gave some firms a competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an example of becoming over time.

A) tactical implications; strategic B) strategic implications; tactical C) order winners; order qualifiers D) profitability factors; productivity factors E) order qualifiers; order winners

66) For firms competing in worldwide markets, conducting complex, since what works in one country or region might not work in another.

is more

A) productivity analysis B) environmental analysis C) strategy implementation D) sustainability analysis E) growth forecasting

67) Increasing the service offered to the customer makes it more difficult to compete on the basis of:

A) order qualifiers. B) customization. C) quality. D) price. E) flexibility.

68) cost.

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is generally used to facilitate an organization strategy that emphasizes low

A) Speed to market B) Flexibility C) Customization D) Sustainability E) Standardization

69)

Which of the following factors would tend to reduce productivity?

A) improvements in workplace safety B) reductions in labor turnover C) more inexperienced workers D) reductions in the scrap rate E) less variety in the product mix

70) Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5 percent is to be maintained, this means that this year's productivity will have to be:

A) 88.2. B) 79.8. C) 82.8. D) 78.9. E) 4.2.

71) Suppose a country’s productivity was 77 in one period and 82 in the next period. What would the growth rate be? (rounded to one decimal place.)

A) 6.1. B) 8.7. C) 5.3. D) 6.5. E) 4.2.

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72)

and

customers are factors in quality.

A) Cost; improving B) Attracting; retaining C) Flexibility; attracting D) Capacity; improving E) Efficiency; retaining

73) Careful planning must be used with technology, otherwise there could be a(n) productivity.

A) improvement B) stalemate C) reduction D) virus E) increase

74)

Which mission stragegy has a narrow scope?

A) strategic B) common C) organizational D) operational E) tactical

75) "To inspire and nurture the human spirit—one cup and one neighborhood at a time." This statement from Starbucks is an example of a:

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A) vision B) core competency C) strategy D) goal E) mission statement

76)

What is an important factor that help determines cost?

A) innovation B) advertising C) quality D) location E) productivity

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Answer Key Test name: Chap 02_14e 1) TRUE 2) TRUE 3) FALSE 4) TRUE 5) TRUE 6) FALSE 7) FALSE 8) FALSE 9) TRUE 10) TRUE 11) TRUE 12) FALSE 13) FALSE 14) FALSE 15) FALSE 16) TRUE 17) FALSE 18) TRUE 19) TRUE 20) TRUE 21) TRUE 22) TRUE 23) FALSE 24) FALSE 25) FALSE 26) FALSE Version 1

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

57) D 58) A 59) E 60) A 61) B 62) B 63) A 64) D 65) C 66) B 67) D 68) E 69) C 70) A 71) D 72) B 73) C 74) D 75) A 76) E

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Ch. 3 Forecasting TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Forecasting techniques generally assume an existing causal system that will continue to exist in the future. ⊚ ⊚

true false

2) For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques. ⊚ ⊚

true false

3) Once accepted by managers, forecasts should be held firm regardless of new input since many plans have been made using the original forecast. ⊚ ⊚

true false

4) Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors. ⊚ ⊚

true false

5) Forecasts help managers both to plan the system itself and to provide valuable information for using the system. ⊚ ⊚

true false

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

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⊚ ⊚

true false

7) When new products or services are introduced, focus forecasting models are an attractive option. ⊚ ⊚

true false

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

true false

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

true false

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

true false

11) A consumer survey is an easy and sure way to obtain accurate input from future customers since most people enjoy participating in surveys. ⊚ ⊚

true false

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

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⊚ ⊚

true false

13) Exponential smoothing adds a percentage (called alpha) of the last period's forecast to estimate the next period's demand. ⊚ ⊚

true false

14) The shorter the forecast period, the more accurately the forecasts tend to track what actually happens. ⊚ ⊚

true false

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

true false

16) Trend-adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's actual demand. ⊚ ⊚

17)

Forecasts based on an average tend to exhibit less variability than the original data. ⊚ ⊚

18)

true false

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

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true false

19)

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

true false

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

true false

21) 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

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

23)

true false

Forecasts of future demand are used by operations people to plan capacity. ⊚ ⊚

true false

24) An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago. ⊚ ⊚

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true false

25)

Exponential smoothing is a form of weighted averaging. ⊚ ⊚

true false

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

true false

27) The T in the model TAF = S + T represents the time dimension (which is usually expressed in weeks or months). ⊚ ⊚

28)

true false

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

true false

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

30)

true false

A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend. ⊚ ⊚

true false

31) In order to compute seasonal relatives, the trend of past data must be computed or known, which means that for brand-new products this approach cannot be used.

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⊚ ⊚

true false

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

true false

33) If a pattern appears when a dependent variable is plotted against time, one should use time series analysis instead of simple linear regression. ⊚ ⊚

true false

34) Nonlinear and multiple regression procedures permit us to extend associative models to relationships that are nonlinear or involve more than one predictor variable. ⊚ ⊚

35)

The sample standard deviation of forecast error is estimated by the square root of MSE. ⊚ ⊚

36)

true false

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

true false

37) MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD. ⊚ ⊚

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true false

38) In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naive forecast would yield. ⊚ ⊚

true false

39) A forecast method is generally deemed to perform adequately when the errors exhibit an identifiable pattern. ⊚ ⊚

40)

true false

A control chart involves setting action limits for cumulative forecast error. ⊚ ⊚

true false

41) A tracking signal focuses on the ratio of cumulative forecast error to the corresponding value of MAD. ⊚ ⊚

true false

42) The use of a control chart assumes that random errors are normally distributed about a mean of zero. ⊚ ⊚

43)

true false

Bias exists when forecasts tend to be greater or less than the actual values of time series. ⊚ ⊚

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true false

44) Bias is measured by the ratio of the cumulative sum of forecast errors to the mean absolute deviation (MAD). ⊚ ⊚

true false

45) Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast. ⊚ ⊚

46)

true false

The best forecast is not necessarily the most accurate. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 47) Which of the following is a potential shortcoming of using sales force opinions in demand forecasting?

A) Members of the sales force often have substantial histories of working with and understanding their customers. B) Members of the sales force often are well aware of customers' future plans. C) Members of the sales force have direct contact with consumers. D) Members of the sales force can have difficulty distinguishing between what customers would like to do and what they actually will do. E) Customers often are quite open with members of the sales force with regard to future plans.

48) Suppose a four-period weighted average is being used to forecast demand. Weights for the periods are as follows: w t-4 = 0.1, w t-3 = 0.2, w t-2 = 0.3 and w t-1 = 0.4. Demand observed in the previous four periods was as follows: A t-4 = 380, A t-3 = 410, A t-2 = 390, and A t-1 = 400. What will be the demand forecast for period t?

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A) 402 B) 397 C) 399 D) 393 E) 403

49) Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: w t-3 = 0.2, w t-2 = 0.3 and w t-1 = 0.5. Demand observed in the previous three periods was as follows: A t-3 = 2,200, A t-2 = 1,950, and A t-1 = 2,050. What will be the demand forecast for period t?

A) 2,000 B) 2,095 C) 1,980 D) 2,050 E) 1,875

50) When choosing a forecasting technique, a critical trade-off that must be considered is that between:

A) time series and associative. B) seasonality and cyclicality. C) length and duration. D) simplicity and complexity. E) cost and accuracy.

51)

The more novel a new product or service design is, the more forecasters have to rely on

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A) subjective estimates. B) seasonality. C) cyclicality. D) historical data. E) smoothed variation.

52)

Forecasts based on judgment and opinion do not include:

A) executive opinion. B) salesperson opinion. C) second opinions. D) customer surveys. E) Delphi methods.

53) Which of the following is/are a primary input into capacity, sales, and production planning?

A) product design B) market share C) ethics D) globalization E) demand forecasts

54) Which of the following features would not generally be considered common to all forecasts?

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

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Accuracy decreases as the time horizon increases.

55)

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

A) Determine the purpose and level of detail required. B) Eliminate all assumptions. C) Establish a time horizon. D) Select a forecasting model. E) Monitor the forecast.

56)

Minimizing the sum of the squared deviations around the line is called:

A) mean squared error technique. B) mean absolute deviation. C) double smoothing. D) least squares estimation. E) predictor regression.

57)

The two general approaches to forecasting are:

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

58)

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

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

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59)

Accuracy in forecasting can be measured by:

A) MSE. B) MRP. C) MPS. D) MTM. E) MTE.

60) Which of the following would be an advantage of using a sales force composite 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.

61)

Which phrase most closely describes the Delphi technique?

A) associative forecast B) consumer survey C) series of questionnaires D) developed in India E) historical data

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

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

63)

One reason for using the Delphi method in forecasting is to:

A) reduce the risk that one individual’s opinion will prevail. B) achieve a high degree of accuracy. C) maintain accountability and responsibility. D) be able to replicate results. E) prevent hurt feelings.

64)

Detecting nonrandomness in errors can be done using:

A) MSEs. B) MAPs. C) control charts. D) correlation coefficients. E) strategies.

65)

Gradual, long-term movement in time series data is called:

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

66)

The primary difference between seasonality and cycles is:

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A) the duration of the repeating patterns. B) the magnitude of the variation. C) the ability to attribute the pattern to a cause. D) the direction of the movement. E) there are only four seasons but 30 cycles.

67)

Averaging techniques are useful for:

A) distinguishing between random and nonrandom variations. B) smoothing out fluctuations in time series. C) eliminating historical data. D) providing accuracy in forecasts. E) average people.

68)

Putting forecast errors into perspective is best done using

A) exponential smoothing. B) MAPE. C) linear decision rules. D) MAD. E) hindsight.

69)

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 regression analysis.

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70)

For the data given below, what would the naive forecast be for period 5?

Period

Value

A) 58 B) 62 C) 59.5 D) 61 E) cannot tell from the data given

71)

Moving average forecasting techniques do the following:

A) Immediately reflect changing patterns in the data. B) Lead changes in the data. C) Smooth variations in the data. D) Operate independently of recent data. E) Assist when organizations are relocating.

72)

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

A) smoothes random variations in the data B) weights each historical value equally C) lags changes in the data D) requires only last period's forecast and actual data E) smoothes real variations in the data

73) 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) eliminated if the MAD is greater than the MSE.

74)

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 centered moving average forecast. D) an exponentially smoothed forecast. E) an associative forecast.

75)

Which is not a characteristic of exponential smoothing?

A) smoothes random variations in the data B) weights each historical value equally C) has an easily altered weighting scheme D) has minimal data storage requirements E) smoothes real variations in the data

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

A) 0 B) 0.01 C) 0.1 D) 0.5 E) 1.0

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77) Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four 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.

78) Given an actual demand of 59, a previous forecast of 64, and an alpha of 0.3, 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

79) Given an actual demand of 105, a forecasted value of 97, and an alpha of 0.4, 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.

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

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A) 0 B) 0.01 C) 0.05 D) 0.10 E) 0.15

A manager uses the following equation to predict monthly receipts: Y t = 40,000 + 150t. 81) What is the forecast for July if t = 0 in April of this year?

A) 40,450 B) 40,600 C) 42,100 D) 42,250 E) 42,400

82)

In trend-adjusted exponential smoothing, the trend-adjusted forecast consists of

A) an exponentially smoothed forecast and a smoothed trend factor. B) the most recent actual value 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.

83) 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; percentage B) percentage; quantity C) quantity; quantity D) percentage; percentage E) qualitative; quantitative

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84)

Which technique is used in computing seasonal relatives?

A) double smoothing B) Delphi C) mean squared error D) centered moving average E) exponential smoothing

85) A persistent tendency for forecasts to be greater than or less than the actual values is called:

A) bias. B) tracking. C) control charting. D) positive correlation. E) linear regression.

86) Which of the following might be used to develop an estimate of the cyclical component of a forecast?

A) leading variable B) mean squared error C) Delphi technique D) exponential smoothing E) mean absolute deviation

87)

The primary method for associative forecasting is:

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A) sensitivity analysis. B) regression analysis. C) simple moving averages. D) centered moving averages. E) exponential smoothing.

88)

Which term most closely relates to associative forecasting techniques?

A) time series data B) expert opinions C) Delphi technique D) consumer survey E) predictor variables

89)

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 coefficient

90)

The mean absolute deviation is used to:

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

91)

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

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

92)

Given forecast errors of 5, 0,−4, and 3, what is the mean absolute deviation?

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

93)

Given forecast errors of 5, 0,−4, and 3, what is the tracking signal?

A) 3 B) 1.33 C) 4 D) 12 E) 0.75

94)

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

A) mean absolute deviation B) mean squared error C) tracking signal D) bias E) MAPE

95)

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

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A) cost and time horizon. B) accuracy and time horizon. C) cost and accuracy. D) quantity and quality. E) objective and subjective components.

96)

The degree of management involvement in short-range forecasts is:

A) none. B) low. C) moderate. D) high. E) total.

97)

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

A) estimate of accuracy B) timeliness C) meaningful units D) low cost E) written

98)

Forecasting techniques generally assume:

A) the absence of randomness. B) continuity of some underlying causal system. C) a linear relationship between time and demand. D) accuracy that increases the farther out in time the forecast projects. E) accuracy that is better when individual items, rather than groups of items, are being considered.

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99)

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

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

100)

Customer service levels can be improved by better:

A) mission statements. B) control charting. C) short-term forecast accuracy. D) exponential smoothing. E) customer selection.

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

Value

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

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102) Given the following historical data and weights of 0.5, 0.3, and 0.2, what is the threeperiod moving average forecast for period 5? Period

Value

Period

Value

138

148

142

144

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

103)

Use of simple linear regression analysis assumes that:

A) variations around the line are nonrandom. B) deviations around the line are normally distributed. C) predictions can easily be made beyond the range of observed values of the predictor variable. D) all possible predictor variables are included in the model. E) the variance of error terms (deviations) varies directly with the predictor variable.

104)

Given forecast errors of −5, −10, and +15, the MAD is:

A) 0. B) 10. C) 30. D) 175. E) 225.

105) The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year

Version 1

Enrollments

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?

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

106) The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year

Enrollments

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

107) The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year

Version 1

Enrollments

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

108) The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year

Enrollments

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

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109) The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year

Enrollments

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 = 0.05 and beta = 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?

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

110) The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year

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) 100 B) 200 C) 300 D) 500 E) 600

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111) The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year

Enrollments

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 0.5, 0.3, and 0.2?

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

112) The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year

Enrollments

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 = 0.4, if the forecast for two years ago was 750?

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

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113) The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year

Enrollments

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

114) The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year

Enrollments

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 = 0.3 and beta = 0.2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for last year's forecast was −150?

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A) 162.4 B) 180.3 C) 301.4 D) 403.2 E) 510.0

115) Professor Very Busy needs to allocate time next week to include time for office hours. 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 Year

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

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

116) Professor Very Busy needs to allocate time next week to include time for office hours. 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

Version 1

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

117) Professor Very Busy needs to allocate time next week to include time for office hours. 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 exponential smoothing with alpha = 0.2, if the forecast for two weeks ago was 90?

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

118) Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data:

Version 1

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

119) Professor Very Busy needs to allocate time next week to include time for office hours. 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 = 0.5 and beta = 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?

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A) 49.3 B) 50.6 C) 52.0 D) 65.4 E) 78.7

120) A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year

Attendance

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?

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

121) A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year

Attendance

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 0.7 and 0.3?

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

122) A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year

Attendance

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 = 0.2, if last year's smoothed forecast was 15,000?

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

123) A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year

Attendance

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?

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

124) A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year

Attendance

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 for these forecasts?

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

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

Enrollment

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?

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

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

Enrollment

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

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

Enrollment

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 = 0.4, if last year's smoothed forecast was 2,600?

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

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

Enrollment

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

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

Enrollment

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?

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

130) The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: Month

Number of Visits

April

100

May

140

June

110

July

150

August

120

September

160

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

A) 100 B) 160 C) 130 D) 140 E) 120

131) The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: Month

Number of Visits

April

100

May

140

June

110

July

150

August

120

September

160

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What is this month's forecast using a four-month weighted moving average with weights of 0.4, 0.3, 0.2, and 0.1?

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

132) The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: Month

Number of Visits

April

100

May

140

June

110

July

150

August

120

September

160

What is this month's forecast using exponential smoothing with alpha = 0.2, if August's forecast was 145?

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

133) The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: Month

Number of Visits

April

100

May

140

June

110

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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

134) The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: Month

Number of Visits

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

135) Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance?

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A) increased inventory B) reduced flexibility C) higher-quality products D) greater customer satisfaction E) greater seasonality

136) Which of the following changes would tend to shorten the time frame for short-term forecasting?

A) bringing greater variety into the product mix B) increasing the flexibility of the production system C) ordering fewer weather-sensitive items D) adding more special-purpose equipment E) investing in the production system to make it more task-specific

137)

Which of the following helps improve supply chain forecasting performance?

A) contracts that require supply chain members to formulate long-term forecasts B) penalties for supply chain members that adjust forecasts C) sharing forecasts or demand data across the supply chain D) increasing lead times for critical supply chain members E) increasing the number of suppliers at critical junctures in the supply chain

138)

Which of the following would tend to decrease forecast accuracy?

A) a reduction in demand variability B) a shortening of the forecast time horizon C) an attempt to forecast demand for a group of similar items rather than an individual item D) a change in the underlying causal system E) an increase in the flexibility of the production system

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139) Which of the following is the most valuable piece of information the sales force can bring into forecasting situations?

A) what customers are most likely to do in the future B) what customers most want to do in the future C) what plans customers are considering for the future D) whether customers are satisfied or dissatisfied with their performance in the past E) what the salesperson's appropriate sales quota should be

140) Which of the following is not an example of forecasts being used in a business organization?

A) how the organization should be structured B) equipment replacement needs C) timing and amount of funding needs D) hiring activities E) pricing and promotion

141) Inaccurate supply chain.

can lead to excess and/or shortages throughout the organization and the

A) planning B) forecasts C) ordering D) capacity E) deliveries

142) Which forecast uses opinions gathered from consumer surveys, managers, sales staff, experts, and executives?

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A) associative B) time-series C) judgmental D) capacity E) quantitative

143)

Data in a time-ordered sequence will not be in measurements of?

A) demand B) accidents C) productivity D) months E) consumer price index

144) The owner of Yummy Yummy Catering needs to ensure she has enough employees scheduled for the upcoming week to assist with cooking. She needs to forecast the number of clients that will book her services. She has the following historical data: Week

#Clients

6 Weeks ago

5 Weeks ago

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) 51 B) 29 C) 48 D) 44 E) 37

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145) The owner of Yummy Yummy Catering needs to ensure she has enough employees scheduled for the upcoming week to assist with cooking. She needs to forecast the number of clients that will book her services. She has the following historical data: Week

#Clients

6 Weeks ago

5 Weeks ago

4 Weeks ago

3 Weeks ago

2 Weeks ago

Last Week

What is the forecast for this week using weighted moving average with weights of 0.5, 0.3, and 0.2?

A) 51 B) 29 C) 48 D) 40 E) 37

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Answer Key Test name: Chap 03_14e 1) TRUE 2) FALSE 3) FALSE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) TRUE 15) FALSE 16) FALSE 17) TRUE 18) FALSE 19) FALSE 20) TRUE 21) FALSE 22) TRUE 23) TRUE 24) TRUE 25) TRUE 26) FALSE Version 1

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

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

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

117) E 118) A 119) C 120) A 121) A 122) D 123) E 124) C 125) E 126) A 127) B 128) E 129) C 130) B 131) C 132) A 133) C 134) D 135) D 136) B 137) C 138) D 139) A 140) A 141) B 142) C 143) D 144) D 145) D

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Ch. 4 Product and Service Design TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Reliability is frequently defined as the probability that a product or system will function when activated. ⊚ ⊚

true false

2) If a system depends on two subsystems functioning when activated, the reliability of that system is equal to that of the less reliable subsystem. ⊚ ⊚

true false

3) One way to increase overall reliability of a system is to add parts that increase redundancy in the system. ⊚ ⊚

Availability cannot be increased without improving the time between breakdowns. ⊚ ⊚

true false

Product reliability involves both short-term and long-term perspectives. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 6) A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of 0.99. The other has a reliability of 0.95. What is the overall system reliability?

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A) 0.99 B) 0.95 C) 0.94 D) 0.90 E) Cannot be determined with this information.

7) A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of 0.99. The other has a reliability of 0.95. The components are independent of one another with respect to reliability. What is the overall system reliability?

A) 0.99 B) 0.95 C) 0.94 D) 0.90 E) Cannot be determined with this information.

8) 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?

A) 0.95 B) 0.9975 C) 0.9025 D) 0.9205 E) 0.9795

9) 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?

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A) not in excess of 0.2 B) in excess of 0.2 but not in excess of 0.3 C) in excess of 0.3 but not in excess of 0.4 D) in excess of 0.4 but not in excess of 0.6 E) in excess of 0.6

10) Waygate's residential 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?

A) not in excess of 0.75 B) in excess of 0.75 but not in excess of 0.8 C) in excess of 0.8 but not in excess of 0.9 D) in excess of 0.9 but not in excess of 0.95 E) in excess of 0.95

11) Suppose a given control unit fails, on average, every 12,000 hours. It takes an average of 900 hours to repair and reboot this unit. The repair/reboot procedures for this unit are being reconfigured. By how much would average repair/reboot time need to be reduced to increase availability by 5 percent (assuming the control unit's average life remains unchanged)?

A) not more than 200 hours B) more than 200 hours but not more than 400 hours C) more than 400 hours but not more than 600 hours D) more than 600 hours but not more than 800 hours E) more than 800 hours

12) If the average amount of time a product goes without failing decreased by some amount, that product's availability could nevertheless be maintained at previous levels by its .

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A) increasing; reliability B) reducing; time required for repair C) reducing; reliability D) reducing; reparability E) increasing; time required for repair

13) A classroom has a presentation system that consists of four components, each of which must activate if the system is to work adequately. The first component has a reliability of 0.97, the second component has a reliability of 0.99, the third component has a reliability of 0.97, and the fourth component has a reliability of 0.93. What is the overall system reliability?

A) 0.87 B) 0.95 C) 0.93 D) 0.97 E) 0.89

14)

As the quantity of components increases in a system, the overall system reliability

A) becomes intermittent B) decreases C) stalls D) increases E) does not change

15)

The probability of a product failing over a period of time is known as what type of curve?

A) bell B) S C) bathtub D) U E) circle

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16) What measures the fraction of time that a piece of equipment will not be down for repairs?

A) operational B) maintenance C) idle D) availability E) waiting

17)

Availability

as the mean time between failure

A) stalls; increases B) decreases; decreases C) increases; decreases D) decreases; increases E) increases; increases

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Answer Key Test name: Chap 04S_14e 1) TRUE 2) FALSE 3) TRUE 4) FALSE 5) TRUE 6) E 7) C 8) B 9) C 10) E 11) D 12) B 13) A 14) B 15) C 16) D 17) E

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SUPPLEMENT TO CHAPTER 4: Reliability TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Global teams provide diversity while eliminating conflicts and miscommunication. ⊚ ⊚

true false

2) A house of quality is achieved when no department in a single location has more than 15 percent rejects. ⊚ ⊚

true false

Concurrent engineering is another term for sequential development. ⊚ ⊚

true false

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

true false

5) A disadvantage of standardization is the possibility of standardizing designs too early, which may make them difficult to modify in the future. ⊚ ⊚

true false

Reducing consumer choices makes service more efficient. ⊚ ⊚

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true false

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

true false

Product failures can be easier to remedy with modular design. ⊚ ⊚

true false

9) One motivation for an organization to redesign its product or service is to avoid the alternative of downsizing the organization. ⊚ ⊚

true false

10) A major benefit of computer-aided design (CAD) is the increased productivity of designers. ⊚ ⊚

true false

11) The main forces that initiate product or service design or redesign are market opportunities or threats. ⊚ ⊚

12)

true false

A service blueprint is quite similar to an architectural drawing. ⊚ ⊚

true false

13) The process of dismantling and inspecting a competitor's product to discover product improvement is called benchmarking.

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⊚ ⊚

true false

14) To save money, it is essential that designers revise the production capabilities to meet the requirements of the new products. ⊚ ⊚

true false

15) Many U.S. manufacturers are now shifting their focus from products to both product and process improvements. ⊚ ⊚

16)

true false

Applied research has the objective of achieving commercial applications for new ideas. ⊚ ⊚

true false

17) Basic research is done with the expectation that discoveries will have near-term commercial application. ⊚ ⊚

true false

18) Design for production takes into account the capabilities of the organization to produce or deliver a given product or service. ⊚ ⊚

true false

19) Companies wanting to do business in the European Union must not sell products that contain recycled materials.

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⊚ ⊚

true false

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

true false

21) Concurrent engineering means that at least two engineers are involved in product design at the same time. ⊚ ⊚

true false

22) One approach to extending a product's life cycle is to promote alternate uses of the product. ⊚ ⊚

true false

23) Quality function deployment is a structured approach that guarantees that the highestquality product or service will be designed. ⊚ ⊚

true false

24) 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

25) The process of dismantling and inspecting a competitor's product to discover improvements is called reverse engineering.

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⊚ ⊚

true false

26) Research and development (R&D) refers to organized efforts that are directed toward increasing scientific knowledge and product (or process) innovation. ⊚ ⊚

true false

27) Standardization refers to the extent to which there is absence of variety in a product, service, or process. ⊚ ⊚

true false

28) Remanufacturing refers to replacing worn-out components of old products to extend the products’ useful life. ⊚ ⊚

true false

29) The demand for a product and the rate of technological change have a significant impact on the length of a given phase of the product life cycle. ⊚ ⊚

true false

30) Robust design describes a product that will perform satisfactorily so long as it is used in a very narrow range of conditions. ⊚ ⊚

true false

31) Taguchi design methods involve identifying the optimal operating or environmental conditions for a given product.

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⊚ ⊚

true false

32) Quality function deployment (QFD) is based on a set of standards which relate customer requirements to company capabilities. ⊚ ⊚

true false

33) The quality function deployment matrices are often referred to as the "house of quality" because, when completed, they "house" all of the customer's quality requirements. ⊚ ⊚

34)

true false

Service design often must take into account the degree of customer contact required. ⊚ ⊚

true false

35) Reliability refers to the ability of a product to perform its intended function under normal conditions. ⊚ ⊚

true false

36) Applied research is the major R&D effort of business organizations because of their desire for commercial applications. ⊚ ⊚

37)

true false

Commonality of components is beneficial for manufacturing but not for services. ⊚ ⊚

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true false

38) Standardization can at times lead to serious difficulties and competitive struggles, particularly when systems are running under different conditions. ⊚ ⊚

39)

true false

The term failure as applied to reliability means that a part or item does not function at all. ⊚ ⊚

true false

40) Reliability of an overall system is a function of the reliability of the individual components of the system. ⊚ ⊚

41)

Reliability can be improved by the use of backup components. ⊚ ⊚

42)

true false

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

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 43) Which of the following is least likely to result in product innovations that have near-term commercial application?

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A) process blueprinting B) development C) applied research D) quality function deployment E) basic research

44)

Which of the following is not one of the 3 Rs?

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

45)

Which of the following is an example of a postponement tactic?

A) mass customization B) standardization C) process mapping D) delayed differentiation E) service blueprinting

46)

Which of the following questions is least appropriate during value analysis?

A) How can we reduce the cost of parts? B) How can we improve the performance of the product? C) How can we incorporate more cultural values in the design of our global system? D) Can we find a way to use less energy in the production of our product? E) Could a given component in our product be simplified or combined with another?

47) Which of these pairs of functions would tend to be affected most dramatically by a product or service redesign?

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A) Operations and Accounting B) Marketing and Operations C) Finance and Human Resources D) Engineering and Accounting E) Finance and Engineering

48)

Incorporating design for disassembly principles in product design helps firms with design issues.

A) legal B) social C) reuse D) reverse engineering E) reengineering

49)

Designing for recycling helps facilitate

A) reduced legal liability. B) compliance with regulatory environments. C) increased product reliability. D) reduced standardization costs. E) better customer service.

50)

One way to increase reliability is to:

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

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51)

One way to increase reliability is to:

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

52)

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

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

53)

A disadvantage of global teams for product design is that:

A) customers may have different needs in different countries. B) the product designed may have increased marketability and utility. C) the diversity of an international team may be a detriment. D) ease of face-to-face meetings is absent since members are located everywhere. E) technology allows constant contact with team members.

54) Mobile phones have evolved from devices intended to place and receive phone calls into handheld multimedia communications devices, but in the eyes of some customers these new features make the phones less desirable. This is an example of:

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A) robust design. B) creeping featurism. C) sustainable design. D) quality function deployment. E) component commonality.

55)

One step that is not part of service blueprinting is:

A) Eliminate boundaries for the service and decide on the level of interaction needed. B) Identify and determine the sequence of customer and service actions and interactions. C) Develop time estimates for each phase of the process. D) Understand the time variability involved. E) Identify potential failure points and develop a plan to minimize them.

56) The research and development activity which starts after positive research results are available and attempts to turn these results into useful commercial applications is:

A) basic research. B) applied research. C) development. D) redesign. E) commercial research.

57)

Which of the following is not an advantage of standardization?

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

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58) Products or services with a high degree of similarity of features and components are called:

A) generic. B) copy-cat. C) rip-offs. D) product families. E) product/service matrix.

59)

Excitement characteristics are categories in the

model.

A) bipolar B) Kano C) Pareto D) quality E) service matrix

60)

One possible disadvantage of modular design is that:

A) replacement and repair are more difficult. B) failure diagnosis is more complex. C) the number of configurations of modules decreases. D) individual parts lose their identities. E) inventory problems arise.

61)

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.

62)

Which of the following statements about CAD is not true?

A) It increases the productivity of designers. B) It uses computer graphics. C) It requires a good database. D) Some systems permit engineering or cost analysis of proposed designs. E) It is used successfully by all manufacturing companies.

63)

Which one of the following is not a factor of successful product and service design?

A) Be aware of what the competitors are doing. B) Be aware of what customers want. C) Know what government regulations are. D) Use computerized design techniques. E) Know what new technologies are available.

64) A software company is weighing whether to release a new version of its software as scheduled. The company can go ahead and release the version as scheduled and correct flaws with subsequent patches or upgrades, or it can wait until the new version is reasonably bug-free. Choosing to delay release until the bugs can be worked out is an example of:

A) life cycle analysis. B) value analysis. C) vaporware. D) concurrent engineering. E) design for production.

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65) The assessment of the environmental impact of a product or service throughout its useful life is called:

A) flow diagramming. B) service blueprinting. C) quality function deployment. D) process mapping. E) life cycle analysis.

66) 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) disassembly.

67)

The term "degrees of newness" is associated with:

A) average age of employees. B) average length of time on the job. C) total years of business experience. D) degree of design change. E) average age of the capital equipment.

68)

The term "standardization" is closely associated with:

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

69)

Service design generally differs from product design in which of the following ways?

A) Service design tends to focus on tangible factors. B) There is less latitude in detecting and correcting errors prior to delivery. C) There is a lesser requirement to be aware of competitors' offerings. D) There is less visibility to customers. E) There is no difference.

70) One structured approach for integrating customer requirements into every aspect of product development is:

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

71) Making plans for how products that have reached the end of their useful lives will be dealt with is the primary subject of:

A) cradle-to-grave assessment. B) end-of-life programs. C) life-cycle analysis. D) three R's programs. E) process mapping.

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72)

One of these is not a characteristic of a well-designed service system:

A) user friendly B) robust C) distributed computer networks D) cost effective E) easy to sustain

73) A formal way to ensure customer requirements are factored into the product and service development process is:

A) consumer surveys. B) quality function deployment. C) focus groups. D) the Delphi technique. E) a sales/marketing matrix.

74)

Which of the following is not true about remanufacturing?

A) Remanufactured products can be sold at lower cost. B) The process requires mostly unskilled and semiskilled workers. C) There is less depletion of natural resources. D) It produces high-quality products easily. E) Remanufacturing is made easier by Design for Disassembly (DFD).

75)

Which of the following is not one of the phases of product design and development?

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A) Specify product specifications. B) Conduct market test. C) Specify process specifications. D) Conduct design review. E) Perform applied research.

76) Elements of the service process in which there is no contact with the customer are referred to as:

A) robust. B) delayed differentiators. C) back-of-the-house. D) user-friendly. E) mission-consistent.

77) Which of the following is a systematic approach to managing the series of changes a product goes through, from its conception, design and development, through production and any redesign, to its end of life?

A) Cradle-to-grave assessment B) Life cycle analysis C) End-of-life programs D) Enterprise resource planning E) Product life cycle management

78)

Product life cycle management (PLM) incorporates all of the following except:

A) applied research. B) product design and development. C) working with suppliers. D) managing warranties. E) strategies for product recycling.

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79)

and

is the essence of business organizations.

A) Products; services B) Operations; supply chain management. C) HR; accounting. D) Services; operations. E) Product design; strategic management.

80) Which of the following are not part of the activities and responsibilities of product and service design?

A) construct and test prototypes B) development organizational strategy C) refine existing products and/or services D) formulate cost targets E) document specifications

81)

A buyer makes most of their purchasing decisions based on what two considerations?

A) quality and location B) warranty and brand C) cost and quality D) brand and advertising E) availability and cost

82) Under the Uniform Commercial Code manufacturers are faced with a(n) their products carry an implication of merchantability and fitness.

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in which

A) ethical law. B) quality factor. C) government restrictions. D) implied warranty. E) commercial mandate

83)

Which ISO standard are the procedures for cradle-to-grave assessment in?

A) ISO 26000 B) ISO 13485 C) ISO 50001 D) ISO 9000 E) ISO 14000

84) The Kano model provides the lesson that design elements that fall into each aspect of quality must first be .

A) determined B) standardized. C) completed. D) efficient. E) reinforced.

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Answer Key Test name: Chap 04_14e 1) FALSE 2) FALSE 3) FALSE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) TRUE 10) TRUE 11) TRUE 12) TRUE 13) FALSE 14) FALSE 15) TRUE 16) TRUE 17) FALSE 18) TRUE 19) FALSE 20) TRUE 21) FALSE 22) TRUE 23) FALSE 24) TRUE 25) TRUE 26) TRUE Version 1

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

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

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Ch. 5 Strategic Capacity Planning for Products and Services TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique. ⊚ ⊚

true false

2) Bounded rationality refers to the limits imposed on decision making because of costs, human abilities, time, technology, and/or availability of information. ⊚ ⊚

true false

In reaching a decision, the alternative with the lowest cost should be ranked number 1. ⊚ ⊚

true false

4) The expected monetary value approach is most appropriate when the decision maker is risk neutral. ⊚ ⊚

true false

The expected value of perfect information is inversely related to losses predicted. ⊚ ⊚

true false

6) Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made. ⊚ ⊚

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true false

7) Among decision environments, risk implies that certain parameters have probabilistic outcomes. ⊚ ⊚

true false

8) Among decision environments, uncertainty implies that states of nature have wideranging probabilities associated with them. ⊚ ⊚

In decision theory, states of nature refer to possible future conditions. ⊚ ⊚

10)

true false

The Laplace criterion treats states of nature as being equally likely. ⊚ ⊚

13)

true false

The maximin approach involves choosing the alternative that has the "best worst" payoff. ⊚ ⊚

12)

true false

The maximin approach involves choosing the alternative with the highest payoff. ⊚ ⊚

11)

true false

The maximax approach is a pessimistic strategy.

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⊚ ⊚

14)

true false

A weakness of the maximin approach is that it loses some information. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 15) In a decision-making setting, if the manager has to contend with limits on the amount of information he or she can consider, this can lead to a poor decision due to .

A) bounded rationality B) suboptimization C) risk aversion D) misspecification E) complexification

16)

Departmentalizing decisions increases the risk of

leading to a poor decision.

A) bounded rationality B) suboptimization C) risk aversion D) misspecification E) complexification

17) Suppose a firm has decided to break its departments down into smaller units. While this likely will help with issues, it raises the possibility that poor decisions will result due to .

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A) risk aversion; suboptimization B) economies of scale; risk aversion C) span of control; suboptimization D) span of control; risk aversion E) economies of scale; limited span of control

18) A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. What is the expected value of perfect information?

A) $5,000 B) $4,000 C) $3,000 D) $2,000 E) $1,000

19) A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. The decision maker has discovered a firm that will, for a fee of $1,000, make her position-risk free. How much better off will her firm be if she takes this firm up on its offer?

A) $5,000 B) $4,000 C) $3,000 D) $2,000 E) $1,000

20) Option A has an expected value of $2,000, a minimum payoff of −$4,000, and a maximum payoff of $18,000. Option B has an expected value of $2,200, a minimum payoff of −$1,000, and a maximum payoff of $6,000. Option C has an expected value of $1,900, a minimum payoff of $100, and a maximum payoff of $2,000. In this situation, a risk-averse decision maker would pay for his risk aversion, and a risk-seeking decision maker would pay for his risk seeking.

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A) $200; $300 B) $1,100; $5,000 C) $300; $200 D) $2,100; $16,000 E) $400; $200

21)

The term "suboptimization" is best described as the:

A) result of individual departments making the best decisions for their own areas but hurting other areas. B) limitations on decision making caused by costs and time. C) result of failure to adhere to the steps in the decision process. D) result of ignoring symptoms of the problem. E) optimization on a micro level that extends to the macro level.

22)

Which phrase best describes the term "bounded rationality"?

A) thinking a problem through clearly before acting B) taking care not to exhaust limited resources C) the result of departmentalized decision making D) limits imposed on decision making by costs, time, and technology E) the use of extremely structured steps in the decision-making process

23) The range of probability for which an alternative has the best expected payoff can be determined by:

A) simulation. B) sensitivity analysis. C) priority recognition. D) analysis of variance. E) decision analysis.

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24)

Sensitivity analysis is useful because:

A) payoffs and probabilities are estimates. B) most decisions will affect employees. C) expected payoffs are sensitive to the time value of money. D) it is the second step in the decision model. E) with the passage of time, small decisions get bigger.

25) 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) feasible region. C) Laplace table. D) decision tree. E) payback period matrix.

26)

Which of the following characterizes decision making under uncertainty?

A) Decision makers must rely on probabilities in assessing outcomes. B) The likelihood of possible future events is unknown. C) Relevant parameters have known values. D) Certain parameters have probabilistic outcomes. E) Lack of knowledge about how risk-averse the decision maker is.

27)

Which of the following is not an approach for decision making under uncertainty?

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A) decision trees B) maximin C) maximax D) minimax regret E) Laplace

28) Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the approach called:

A) minimin. B) maximin. C) maximax. D) minimax regret. E) Laplace.

29) Determining the average payoff for each alternative and choosing the alternative with the highest average is the approach called:

A) minimin. B) maximin. C) maximax. D) minimax regret. E) Laplace.

30)

The maximin approach to decision making refers to:

A) minimizing the maximum return. B) maximizing the minimum return. C) maximizing the minimum expected value. D) choosing the alternative with the highest payoff. E) choosing the alternative with the minimum payoff.

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31)

Which one of these is not used in decision making under risk?

A) EVPI B) EMV C) decision trees D) minimax regret E) All are used for risk situations.

32)

The term "opportunity loss" is most closely associated with:

A) minimax regret. B) maximax. C) maximin. D) expected monetary value. E) Laplace.

33) The expected monetary value (EMV) criterion is the decision-making approach used with the decision environment of:

A) certainty. B) risk. C) uncertainty. D) aversion. E) neutrality.

34)

A decision tree is:

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A) an algebraic representation of alternatives. B) a behavioral representation of alternatives. C) a matrix representation of alternatives. D) a schematic representation of alternatives. E) limited to a maximum of 12 branches.

35) The difference between expected payoff under certainty and expected payoff under risk is the expected:

A) monetary value. B) value of perfect information. C) net present value. D) rate of return. E) profit.

36) If the minimum expected regret is computed, it indicates to a decision maker the expected:

A) value of perfect information. B) payoff under certainty. C) monetary value. D) payoff under risk. E) risk-seeking.

37)

The term "sensitivity analysis" is most closely associated with:

A) maximax. B) maximin. C) decision making under risk. D) minimax regret. E) Laplace criterion.

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38)

Consider the following decision scenario: State of Nature High

Low

Buy Rent

$ 80 * 70

0 30

Lease

*PV for profits ($000) The maximax strategy would be:

A) buy. B) lease. C) rent. D) high. E) low.

39)

Consider the following decision scenario: State of Nature High

Low

Buy Rent

$ 80 * 70

0 30

Lease

*PV for profits ($000) The maximin strategy would be:

Version 1

A) buy. B) lease. C) rent. D) rent or lease. E) buy low.

40)

Consider the following decision scenario: State of Nature High

Low

Buy Rent

$ 80 * 70

0 30

Lease

*PV for profits ($000) The minimax regret strategy would be:

A) buy. B) lease. C) rent. D) high. E) low.

41)

Consider the following decision scenario: State of Nature High

Version 1

Low

Buy Rent

$ 80 * 70

0 30

Lease

*PV for profits ($000) If P(high) is 0.60, the choice for maximum expected value would be:

A) buy. B) lease. C) rent. D) high. E) low.

42)

Consider the following decision scenario: State of Nature Yes

Small Medium

$ 10 * 20

30 40

Med-Large

Large

Ex-Large

*PV for profits ($000) The maximax strategy would be:

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A) small. B) medium. C) med.-large. D) large. E) ex-large.

43)

Consider the following decision scenario: State of Nature Yes

Small Medium

$ 10 * 20

30 40

Med-Large

Large

Ex-Large

*PV for profits ($000) The maximin strategy would be:

A) small. B) medium. C) med.-large. D) large. E) ex-large.

44)

Consider the following decision scenario:

Version 1

State of Nature Yes Small Medium

$ 10 * 20

30 40

Med-Large

Large

Ex-Large

*PV for profits ($000) The maximin strategy would be:

A) small. B) medium. C) med.-large. D) large. E) ex-large.

45)

Consider the following decision scenario: State of Nature Yes

Small Medium

$ 10 * 20

30 40

Med-Large

Large

Ex-Large

Version 1

*PV for profits ($000) If yes and no are equally likely, which alternative has the largest expected monetary value?

A) small. B) medium. C) med.-large. D) large. E) ex-large.

46)

Consider the following decision scenario: State of Nature High

Med.

Low

$ 20 *

(28 )

*PV for profits ($000) The maximax strategy would be:

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A) A. B) B. C) C. D) D. E) E.

47)

Consider the following decision scenario: State of Nature High

Med.

Low

$ 20 *

(28 )

*PV for profits ($000) The maximin strategy would be:

A) A. B) B. C) C. D) D. E) E.

48)

Consider the following decision scenario:

Version 1

State of Nature High

Med.

Low

$ 20 *

(28 )

*PV for profits ($000) The minimax regret strategy would be:

A) A. B) B. C) C. D) D. E) E.

49)

Consider the following decision scenario: State of Nature High

Med.

Low

$ 20 *

Version 1

(28 )

*PV for profits ($000) With equally likely states of nature, the alternative that has the largest expected monetary value is:

A) A. B) B. C) C. D) D. E) E.

50) The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. NUMBER OF BEAUTICIANS

DEMAND MEDIUM 75

HIGH 100

One

LOW 50

Two

100

Three

(100 )

300

If she uses the maximax criterion, how many beauticians will she decide to hire?

A) one B) two C) three D) either one or two E) either two or three

Version 1

51) The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. NUMBER OF BEAUTICIANS

DEMAND MEDIUM 75

HIGH 100

One

LOW 50

Two

100

Three

(100 )

300

If she uses the Laplace criterion, how many beauticians will she decide to hire?

A) one B) two C) three D) either one or two E) either two or three

52) The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. NUMBER OF BEAUTICIANS

DEMAND MEDIUM 75

HIGH 100

One

LOW 50

Two

100

Three

(100 )

300

Version 1

If she uses the minimax regret criterion, how many beauticians will she decide to hire?

A) one B) two C) three D) either one or two E) either two or three

53) The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. NUMBER OF BEAUTICIANS

DEMAND MEDIUM 75

HIGH 100

One

LOW 50

Two

100

Three

(100 )

300

If she feels the chances of low, medium, and high demand are 50 percent, 20 percent, and 30 percent respectively, what are the expected annual profits for the number of beauticians she will decide to hire?

A) $54,000 B) $55,000 C) $70,000 D) $50,000 E) $154,000

Version 1

54) The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. NUMBER OF BEAUTICIANS

DEMAND MEDIUM 75

HIGH 100

One

LOW 50

Two

100

Three

(100 )

300

If she feels the chances of low, medium, and high demand are 50 percent, 20 percent, and 30 percent respectively, what is her expected value of perfect information?

A) $54,000 B) $65,000 C) $70,000 D) $80,000 E) $135,000

55) The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus LOW Small Medium Large

50 40 20

DEMAND MEDIUM

HIGH

60 80 50

70 90 120

If he uses the maximin criterion, which size bus will he decide to purchase?

Version 1

A) small B) medium C) large D) either small or medium E) either medium or large

56) The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus LOW Small Medium Large

50 40 20

DEMAND MEDIUM

HIGH

60 80 50

70 90 120

If he uses the Laplace criterion, which size bus will he decide to purchase?

A) small B) medium C) large D) either small or medium E) either medium or large

57) The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus

Version 1

DEMAND

LOW Small Medium Large

50 40 20

MEDIUM

HIGH

60 80 50

70 90 120

If he uses the minimax regret criterion, which size bus will he decide to purchase?

A) small B) medium C) large D) either small or medium E) either medium or large

58) The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus LOW Small Medium Large

50 40 20

DEMAND MEDIUM

HIGH

60 80 50

70 90 120

If he feels the chances of low, medium, and high demand are 30 percent, 30 percent, and 40 percent respectively, what is the expected annual profit for the bus that he will decide to purchase?

Version 1

A) $15,000 B) $61,000 C) $69,000 D) $72,000 E) $87,000

59) The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus LOW Small Medium Large

50 40 20

DEMAND MEDIUM

HIGH

60 80 50

70 90 120

If he feels the chances of low, medium, and high demand are 30 percent, 30 percent, and 40 percent respectively, what is his expected value of perfect information?

A) $15,000 B) $61,000 C) $69,000 D) $72,000 E) $87,000

60) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE LOW

Version 1

PRECIPITATION NORMAL

HIGH

Do Nothing

(100 )

100

300

Expand

350

500

200

Build New

750

300

If he uses the maximax criterion, which alternative will he decide to select?

A) do nothing B) expand C) build new D) either do nothing or expand E) either expand or build new

61) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE Do Nothing

PRECIPITATION LOW NORMAL (100 ) 100

HIGH 300

Expand

350

500

200

Build New

750

300

If he uses the Laplace criterion, which alternative will he decide to select?

Version 1

A) do nothing B) expand C) build new D) either do nothing or expand E) either expand or build new

62) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE Do Nothing

PRECIPITATION LOW NORMAL (100 ) 100

HIGH 300

Expand

350

500

200

Build New

750

300

If he uses the minimax regret criterion, which alternative will he decide to select?

A) do nothing B) expand C) build new D) either do nothing or expand E) either expand or build new

63) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE LOW

Version 1

PRECIPITATION NORMAL

HIGH

Do Nothing

(100 )

100

300

Expand

350

500

200

Build New

750

300

If he feels the chances of low, normal, and high precipitation are 30 percent, 20 percent, and 50 percent respectively, what are expected long-run profits for the alternative he will select?

A) $140,000 B) $170,000 C) $285,000 D) $305,000 E) $475,000

64) The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: ALTERNATIVE Do Nothing

PRECIPITATION LOW NORMAL (100 ) 100

HIGH 300

Expand

350

500

200

Build New

750

300

If he feels the chances of low, normal, and high precipitation are 30 percent, 20 percent, and 50 percent respectively, what is his expected value of perfect information?

Version 1

A) $140,000 B) $170,000 C) $285,000 D) $305,000 E) $475,000

65) The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: NUMBER OF EXAMINERS One

LOW 50

COMPLIANCE NORMAL 50

HIGH 50

Two

100

Three

150

(10 )

If she uses the maximin criterion, how many new examiners will she decide to hire?

A) one B) two C) three D) either one or two E) either two or three

66) The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: NUMBER OF

Version 1

COMPLIANCE 28

EXAMINERS One

LOW 50

NORMAL 50

HIGH 50

Two

100

Three

150

(10 )

If she uses the Laplace criterion, how many new examiners will she decide to hire?

A) one B) two C) three D) either one or two E) either two or three

67) The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: NUMBER OF EXAMINERS One

LOW 50

COMPLIANCE NORMAL 50

HIGH 50

Two

100

Three

150

(10 )

If she uses the minimax regret criterion, how many new examiners will she decide to hire?

Version 1

A) one B) two C) three D) either one or two E) either two or three

68) The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: NUMBER OF EXAMINERS One

LOW 50

COMPLIANCE NORMAL 50

HIGH 50

Two

100

Three

150

(10 )

If she feels the chances of low, medium, and high compliance are 20 percent, 30 percent, and 50 percent respectively, what are the expected net revenues for the number of assistants she will decide to hire?

A) $26,000 B) $46,000 C) $48,000 D) $50,000 E) $76,000

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69) The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: NUMBER OF EXAMINERS One

LOW 50

COMPLIANCE NORMAL 50

HIGH 50

Two

100

Three

150

(10 )

If she feels the chances of low, medium, and high compliance are 20 percent, 30 percent, and 50 percent respectively, what is her expected value of perfect information?

A) $16,000 B) $26,000 C) $46,000 D) $48,000 E) $50,000

70) The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows: Type Single Family

POPULATION TREND Declining Stable Growing 200 90 70

Apartments

170

Condos

(20 )

100

220

Version 1

If he uses the maximin criterion, which kind of dwellings will he decide to build?

A) single family B) apartments C) condominiums D) either single family or apartments E) either apartments or condos

71) The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows: Type Single Family

POPULATION TREND Declining Stable Growing 200 90 70

Apartments

170

Condos

(20 )

100

220

If he uses the Laplace criterion, which kind of dwellings will he decide to build?

A) single family B) apartments C) condos D) either single family or apartments E) either apartments or condos

72) The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows:

Version 1

Type Single Family

POPULATION TREND Declining Stable Growing 200 90 70

Apartments

170

Condos

(20 )

100

220

If he uses the minimax regret criterion, which kind of dwellings will he decide to build?

A) single family B) apartments C) condos D) either single family or apartments E) either apartments or condos

73) The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows: Type Single Family

POPULATION TREND Declining Stable Growing 200 90 70

Apartments

170

Condos

(20 )

100

220

If he feels the chances of declining, stable, and growing population trends are 40 percent, 50 percent, and 10 percent, respectively, which kind of houses will he decide to build?

Version 1

A) single family B) apartments C) condos D) either single family or apartments E) either apartments or condos

74) The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows: Type

POPULATION TREND Declining Stable Growing 200 90 70

Single Family Apartments

170

Condos

(20 )

100

220

If he feels the chances of declining, stable, and growing population trends are 40 percent, 50 percent, and 10 percent, respectively, what is his expected value of perfect information?

A) $187,000 B) $132,000 C) $122,000 D) $64,000 E) $55,000

75) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

Version 1

DEMAND LOW

HIGH 34

Small

$ 1,000

1,000

Medium

500

2,500

Large

3,000

If she uses the maximax criterion, what size outlet will she decide to lease?

A) small B) medium C) large D) either small or medium E) either medium or large

76) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

If she uses the maximin criterion, what size outlet will she decide to lease?

Version 1

A) small B) medium C) large D) either small or medium E) either medium or large

77) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

If she uses the Laplace criterion, what size outlet will she decide to lease?

A) small B) medium C) large D) either small or medium E) either medium or large

78) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

Version 1

DEMAND LOW

HIGH

Small

$ 1,000

1,000

Medium

500

2,500

Large

3,000

If she uses the minimax regret criterion, what size outlet will she decide to lease?

A) small B) medium C) large D) either small or medium E) either medium or large

79) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

If she feels there is a 30 percent chance that demand will be high, what are the expected monthly profits for the outlet she will decide to lease?

Version 1

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

80) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

If she feels there is a 30 percent chance that demand will be high, what is her expected payoff under certainty?

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

81) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

Version 1

DEMAND LOW

HIGH 38

Small

$ 1,000

1,000

Medium

500

2,500

Large

3,000

If she feels there is a 30 percent chance that demand will be high, what is her expected value of perfect information?

A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500

82) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will she decide to lease the small facility?

Version 1

A) 0-0.25 B) 0-0.33 C) 0.25-0.5 D) 0.33-1 E) 0.5-1

83) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF OUTLET

DEMAND

Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will she decide to lease the medium facility?

A) 0–0.25 B) 0–0.33 C) 0.25–0.5 D) 0.33–1 E) 0.5–1

84) The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: SIZE OF

Version 1

DEMAND

OUTLET Small

LOW $ 1,000

HIGH 1,000

Medium

500

2,500

Large

3,000

For what range of probability that demand will be high, will she decide to lease the large facility?

A) 0-0.25 B) 0-0.33 C) 0.25-0.5 D) 0.33-1 E) 0.5-1

85) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she uses the maximax criterion, which advertising strategy will she use?

Version 1

A) print B) mixed C) television D) either print or mixed E) either mixed or television

86) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she uses the maximin criterion, which advertising strategy will she use?

A) print B) mixed C) television D) either print or mixed E) either mixed or television

87) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy

Version 1

Cable Network 42

Successful $ 10

Failure 10

Mixed

Television

If she uses the Laplace criterion, which advertising strategy will she use?

A) print B) mixed C) television D) either print or mixed E) either mixed or television

88) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she uses the minimax regret criterion, which advertising strategy will she use?

Version 1

A) print B) mixed C) television D) either print or mixed E) either mixed or television

89) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she feels that there is a 60 percent chance that the new cable network will be successful, what is her expected cost (per thousand "hits") for the strategy she will select?

A) $3.40 B) $4.60 C) $8.00 D) $9.00 E) $10.00

90) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows:

Version 1

Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she feels that there is a 60 percent chance that the new cable network will be successful, what is her expected cost (per thousand "hits") under certainty?

A) $3.40 B) $4.60 C) $8.00 D) $9.00 E) $10.00

91) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

If she feels that there is a 60 percent chance that the new cable network will be successful, what is her expected value (per thousand "hits") of perfect information?

Version 1

A) $3.40 B) $4.60 C) $8.00 D) $9.00 E) $10.00

92) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

For what range of probability that the new cable network will be successful will she select the print media strategy?

A) 0–0.4 B) 0–0.55 C) 0.4–0.7 D) 0.55–1 E) 0.7–1

93) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows:

Version 1

Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

For what range of probability that the new cable network will be successful will she select the mixed media strategy?

A) 0-0.4 B) 0-0.55 C) 0.4-0.7 D) 0.55-1 E) 0.7-1

94) 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. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: Strategy Print

Cable Network Successful Failure $ 10 10

Mixed

Television

For what range of probability that the new cable network will be successful will she select the television media strategy?

Version 1

A) 0-0.4 B) 0-0.55 C) 0.4-0.7 D) 0.55-1 E) 0.7-1

95) 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.) She feels that 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, she feels that 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 were a success, but its sequel were 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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96) 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.) She feels that 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, she feels that 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) 0.8 B) 0.7 C) 0.56 D) 0.2 E) 0.14

97) 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.) She feels that 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, she feels that 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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98) 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.) She feels that 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, she feels that 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

99) 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.) She feels that 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, she feels that 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?

Version 1

A) $15,000,000 B) $9,060,000 C) $8,400,000 D) $7,200,000 E) $6,000,000

100) One local hospital has just enough space and funds currently 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 American 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 is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association 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 for 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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101) One local hospital has just enough space and funds currently 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 American 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 is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association 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 for 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) 0.4 B) 0.3 C) 0.2 D) 0.1 E) 0

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102) One local hospital has just enough space and funds currently 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 American 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 is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association 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 for 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?

A) $100,000 B) $60,000 C) $50,000 D) $40,000 E) $20,000

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103) One local hospital has just enough space and funds currently 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 American 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 is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association 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 for 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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104) One local hospital has just enough space and funds currently 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 American 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 is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association 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 for 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

105) Two professors at a nearby university want to coauthor 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 cannot 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 cannot 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?

Version 1

A) 0.8 B) 0.5 C) 0.4 D) 0.2 E) 0.1

106) Two professors at a nearby university want to coauthor 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 cannot 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 cannot 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) 0.6 B) 0.5 C) 0.4 D) 0.3 E) 0

107) Two professors at a nearby university want to coauthor 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 cannot 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 cannot 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? Version 1

A) 50,000 copies B) 40,000 copies C) 32,000 copies D) 30,500 copies E) 10,500 copies

108) Two professors at a nearby university want to coauthor 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 cannot 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 cannot 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

109) Two professors at a nearby university want to coauthor 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 cannot 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 cannot 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

110) When a decision-making scenario involves two or more departments, if the individual departments pursue what is optimal for them, sometimes the overall organization suffers. This is an example of:

A) subminimization. B) suboptimization. C) rational boundaries. D) decision making under risk. E) decision making under uncertainty.

111)

Which of the following is not a stage in the decision-making process?

A) Select the best alternative. B) Develop suitable alternatives. C) Analyze and compare alternatives. D) Monitor the competition. E) Specify objectives.

112) Option A has a payoff of $10,000 in environment 1 and $20,000 in environment 2. Option B has a payoff of $5,000 in environment 1 and $27,500 in environment 2. Once the probability of environment 1 exceeds , option A becomes the better choice.

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A) 0.40 B) 0.45 C) 0.50 D) 0.57 E) 0.60

113) Option A has a payoff of $10,000 in environment 1 and $20,000 in environment 2. Option B has a payoff of $12,500 in environment 1 and $17,500 in environment 2. Once the probability of environment 2 exceeds , option A becomes the better choice.

A) 0.33 B) 0.67 C) 0.45 D) 0.50 E) 0.55

114) Which of the following would make decision trees an especially attractive decisionmaking tool?

A) The need to think through a possible sequence of decisions. B) The need to maximize the expected value of perfect information. C) The need to minimize expected regret. D) The need to avoid suboptimization. E) The need to minimize costs for a single decision

115)

Risk implies that there are certain parameters that have

outcomes.

A) probabilistic B) complex C) unknown D) uncertain E) irrational

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116) A decision making involving certainty about potential future conditions will have a relatively decision.

A) uncertain B) straightforward C) unknown D) probabilistic E) irrational

117) The dean of a college wants to determine which of two new classes to offer for the upcoming semester. Due to facility constraints only one class can be offered at this time. The dean feels that the first class has an 80 percent chance of earning the college about $75,000, but a 20 percent chance of losing $35,000. If the class is successful, then its next level class will be offered, with a 75 percent chance of earning $60,000, but a 20 percent chance of losing $30,000. Weighing the options, the dean feels that the second class has a 60 percent chance of earning $85,000, but a 40 percent chance of losing $40,000. If the second class is successful, then its next level class will be offered with a 50 percent chance of earning $80,000, but a 50 percent chance of losing $45,000. If both classes are not successful, neither of their next level classes will be offered to the students.What is the expected value for selecting the first class?

A) $90,000 B) $83,000 C) $75,500 D) $50,000 E) $45,500

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118) The dean of a college wants to determine which of two new classes to offer for the upcoming semester. Due to facility constraints only one class can be offered at this time. The dean feels that the first class has an 80 percent chance of earning the college about $75,000, but a 20 percent chance of losing $35,000. If the class is successful, then its next level class will be offered, with a 75 percent chance of earning $60,000, but a 25 percent chance of losing $30,000. Weighing the options, the dean feels that the second class has a 60 percent chance of earning $85,000, but a 40 percent chance of losing $40,000. If the second class is successful, then its next level class will be offered with a 50 percent chance of earning $80,000, but a 50 percent chance of losing $45,000. If both classes are not successful, neither of their next level classes will be offered to the students.What is the expected value for selecting the second class?

A) $90,000 B) $83,000 C) $75,500 D) $50,000 E) $45,500

119) The dean of a college wants to determine which of two new classes to offer for the upcoming semester. Due to facility constraints only one class can be offered at this time. The dean feels that the first class has an 80 percent chance of earning the college about $75,000, but a 20 percent chance of losing $35,000. If the class is successful, then its next level class will be offered, with a 75 percent chance of earning $60,000, but a 25 percent chance of losing $30,000. Weighing the options, the dean feels that the second class has a 60 percent chance of earning $85,000, but a 40 percent chance of losing $40,000. If the second class is successful, then its next level class will be offered with a 50 percent chance of earning $80,000, but a 50 percent chance of losing $45,000. If both classes are not successful, neither of their next level classes will be offered to the students.What is the expect value for the optimum decision alternative?

A) $90,000 B) $83,000 C) $75,500 D) $50,000 E) $45,500

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120) A decision maker's worst option has an expected value of $2,550, and the decision maker’s best option has an expected value of $4,750. With perfect information, the expected value would be $6,000. What is the expected value of perfect information?

A) $2,200 B) $4,250 C) $3,450 D) $1,250 E) $650

121) A decision maker's worst option has an expected value of $2,550, and the decision maker’s best option has an expected value of $4,750. With perfect information, the expected value would be $6,000. The decision maker has received an offer from a banking firm that will make their position risk-free for a fee of $600. How much better off will the decision maker be if they take the offer?

A) $2,200 B) $4,250 C) $3,450 D) $1,250 E) $650

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Answer Key Test name: Chap 05S_14e 1) FALSE 2) TRUE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) TRUE 8) FALSE 9) TRUE 10) FALSE 11) TRUE 12) TRUE 13) FALSE 14) TRUE 15) A 16) B 17) C 18) D 19) E 20) C 21) A 22) D 23) B 24) A 25) A 26) B Version 1

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

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

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

117) B 118) E 119) B 120) D 121) E

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SUPPLEMENT TO CHAPTER 5: Decision Theory TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The term capacity refers to the maximum quantity an operating unit can process over a given period of time. ⊚ ⊚

true false

2) Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations. ⊚ ⊚

true false

3) Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure. ⊚ ⊚

true false

4) Design capacity refers to the maximum output rate that can be achieved under ideal conditions. ⊚ ⊚

true false

5) 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. ⊚ ⊚

true false

Increasing productivity and also quality will result in increased effective capacity. ⊚ ⊚

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true false 1

Utilization is defined as the ratio of effective capacity to design capacity. ⊚ ⊚

true false

8) Increasing capacity just before a bottleneck operation will improve the output of the process. ⊚ ⊚

true false

9) An example of an external factor that influences effective capacity is government safety regulations. ⊚ ⊚

10)

true false

Having excess capacity tends to keep operating costs low. ⊚ ⊚

true false

11) Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments. ⊚ ⊚

true false

12) 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. ⊚ ⊚

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true false

13) 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

14) According to the reading on restaurant sourcing practices, only fast-food restaurants are able to bring in outsourced foods. ⊚ ⊚

15)

true false

The more current capacity exceeds desired capacity, the greater the opportunity for profit. ⊚ ⊚

true false

16) The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations. ⊚ ⊚

17)

Capacity planning requires an analysis of needs: what kind, how much, and when. ⊚ ⊚

18)

true false

Waiting line analysis can be useful for capacity design, especially for service systems. ⊚ ⊚

true false

19) Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs.

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⊚ ⊚

20)

true false

Outsourcing some production is a means of supporting a constraint. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 21) Outsourcing some production is a means of a capacity constraint.

A) identifying B) modifying C) supporting D) overcoming E) repeating

22)

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?

23) Allowances for which of these factors would be subtracted from design capacity when calculating effective capacity?

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A) personal time B) equipment maintenance C) scheduling problems D) changing the mix of products E) All of these choices are correct

24)

Which of the following is not a reason why capacity decisions are so important?

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.

25)

Which of the following is the case where capacity is measured in terms of inputs?

A) tons of steel per day that can be produced by a steel mill B) kilowatt hours per day that can be generated by an electrical power plant C) number of meals per day that can be served by a restaurant D) gallons of gasoline that can be produced per day by a petroleum refinery E) number of passenger seats that can be filled per day on an airline route

26)

Unbalanced systems are evidenced by:

A) top-heavy operations. B) labor unrest. C) bottleneck operations. D) increasing capacities. E) assembly lines.

27)

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.

28)

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.

29) 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.

30)

Efficiency 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.

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31)

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.

32)

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

33)

The decision to outsource opens the firm up to certain risks, among them .

and

A) lower costs; fewer task-specific investments B) loss of direct control over operations; need to disclose proprietary information C) access to greater expertise; greater demand variability D) greater capacity rigidity; tight knowledge control E) higher marketing costs; small orders

34)

The ratio of actual output to effective capacity is:

A) design capacity. B) effective capacity. C) actual capacity. D) efficiency. E) utilization.

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35)

The ratio of actual output to design capacity is:

A) design capacity. B) effective capacity. C) actual capacity. D) efficiency. E) utilization.

36)

Given the following information, what would efficiency be?

Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48 percent

A) 20 percent B) 35 percent C) 48 percent D) 60 percent E) 80 percent

37)

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

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38)

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

39) 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

40)

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

41) Everything else being equal, a firm considering outsourcing would find all of the following desirable except:

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A) total costs will be lower for outsources goods or services. B) its supplier has more expertise in whatever is being outsourced. C) it can maintain tight control over knowledge. D) proprietary information will be disclosed to the supplier. E) control over operations will be maintained by the firm.

42)

Capacity in excess of expected demand that is intended to offset uncertainty is a:

A) margin protect. B) line balance. C) capacity cushion. D) timing bubble. E) positioning hedge.

43)

Short-term considerations in determining capacity requirements include:

A) demand trend. B) cyclical demand variations. C) seasonal demand variations. D) mission statements. E) new product development plans.

44)

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

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45) Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be:

A) smaller. B) larger. C) predictable. D) controllable. E) less frequent.

46)

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.

47)

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.

48)

When buying component parts, risk does not include:

A) loss of control. B) vendor viability. C) interest rate fluctuations. D) need to disclose proprietary information. E) product liability.

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49)

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.

50)

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

51) An alternative 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:

A) 100. B) 2,000. C) 500. D) 1,000. E) 800.

52) For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

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A) 1,000. B) 1,250. C) 2,250. D) 5,000. E) 3,000.

53)

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

54) If the output rate is increased but the average unit costs also increase, we are experiencing:

A) market share erosion. B) economies of scale. C) diseconomies of scale. D) value-added accounting. E) step-function scaleup.

55) 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.

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56) of:

When determining the timing and degree of capacity change, one can use the approach

A) lead time flexibility strategy. B) expand-early strategy. C) go-with-the-flow strategy. D) backordering. E) delayed differentiation.

57)

The method of financial analysis which results in an equivalent interest rate is:

A) payback. B) net present value. C) internal rate of return. D) queuing. E) cost-volume.

58) The first, and perhaps most important, step in constraint management is to the most pressing constraint.

A) improve B) support C) identify D) elevate E) modify

59)

A market constraint can be overcome by:

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A) lobbying. B) cash flow management. C) outsourcing. D) advertising or price changes. E) supplier development.

60)

Improving cash flow would be a reasonable thing to focus on when trying to overcome a constraint.

A) financial B) market C) demand D) supplier E) material

61) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. What would the potential profit be if he were to split 4,000 cords of wood with this machine?

A) $0 B) $200,000 C) $100,000 D) $75,000 E) $50,000

62) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. How many cords of wood would he have to split with this machine to break even?

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A) 5,000 B) 3,000 C) 2,000 D) 1,000 E) 0

63) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. How many cords of wood would he have to 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

64) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood 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

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65) The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood 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?

A) 100 percent B) 80 percent C) 75 percent D) 70 percent E) 0 percent

66) 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 she could then sell for $6 each. Perunit variable cost would be $3. What would the profit be if she were to produce and sell 5,000 rosebushes?

A) $0 B) $9,000 C) $15,000 D) $10,000 E) $30,000

67) 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 she could then sell for $6 each. Perunit variable cost would be $3. How many rosebushes would she have to produce and sell in order to break even?

A) 1,600 B) 2,400 C) 2,000 D) 1,000 E) 1,500

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68) 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 she could then sell for $6 each. Perunit variable cost would be $3. How many rosebushes would she have to produce and sell in order to make a profit of $6,000?

A) 1,600 B) 2,400 C) 3,000 D) 1,000 E) 4,000

69) 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 she could then sell for $6 each. Perunit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans 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

70) 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 she could then sell for $6 each. Perunit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80 percent efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land?

A) 1,600 B) 2,400 C) 3,000 D) 2,000 E) 1,000

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71) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. 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

72) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. 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

73) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. 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?

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A) 5,000 B) 8,000 C) 2,000 D) 4,000 E) 6,000

74) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. 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

75) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. 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?

A) 5,000 B) 8,000 C) 2,000 D) 4,000 E) 6,000

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76) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $5.00. What would be his profit if he were to perform 5,000 HIV blood analyses?

A) $0 B) $40,000 C) $60,000 D) $25,000 E) $100,000

77) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $5.00. How many HIV blood analyses would he have to perform in order to break even?

A) 12,000 B) 2,400 C) 3,000 D) 1,000 E) 5,000

78) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $5.00. How many HIV blood analyses would he have to perform in order to make a profit of $15,000?

A) 3,000 B) 4,800 C) 5,000 D) 12,000 E) 3,750

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79) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's 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

80) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's 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 his use of this machine, how many HIV blood analyses does he plan to perform each year?

A) 3,200 B) 4,800 C) 4,000 D) 1,000 E) 5,000

81) 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 constraint.

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A) overcoming B) outsourcing C) insourcing D) cushioning E) supporting

82) 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

83) Which of the following makes using present value approaches in capacity decisions difficult?

A) The discount rate must be adjusted to account for inflation. B) Some cash flows are positive and other cash flows are negative. C) The payback period might not be long enough to justify a capacity decision. D) Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy. E) There is a cash outflow at the outset followed by, possibly, net cash inflows.

84) 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?

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A) 80 percent B) 72 percent C) 90 percent D) 70 percent E) 60 percent

85) 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

86) Which of the following is not a factor that influences how frequently or infrequently capacity choices are made?

A) supply chain disruption B) stability of demand C) product design D) technological change E) competitive factors

87) The owner of Sky High Tours is considering purchasing a bus, which sells for $75,000, to expand their tour operations. The owner estimates that it will cost an additional $150 per tour to operate the bus, while the owner can book the bus for tours for $300. If, for this bus, design capacity is 60 passengers per tour, effective capacity is 50 passengers per tour, and actual output is anticipated to be 45 passengers per tour, what would be its utilization?

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A) 100 percent B) 90 percent C) 80 percent D) 75 percent E) 70 percent

88) Which of the following is not a determinant of effective capacity when looking at the facility factor?

A) facility size B) product variety C) distance to market D) energy sources E) transportation costs

89)

Capacity cushion can be determined by:

A) capacity − strategic demand B) capacity − predicted demand C) capacity − expected demand D) capacity − actual demand E) capacity − estimated demand

90) A department within a firm works two 10-hour shifts, 345 days a year. The following are figures for the usage of a machine that is currently being considered. How many machines will the department need to purchase? Product

Annual Demand

1 2 3

300 650 500

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Standard Processing Time per Unit (hr) 8 6 4

Processing Time Needed (hr) 2,500 3,000 1,500

A) 1 B) 3 C) 5 D) 4 E) 2

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Answer Key Test name: Chap 05_14e 1) TRUE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) FALSE 9) TRUE 10) FALSE 11) TRUE 12) FALSE 13) TRUE 14) FALSE 15) FALSE 16) FALSE 17) TRUE 18) TRUE 19) TRUE 20) FALSE 21) D 22) C 23) E 24) E 25) E 26) C Version 1

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

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

87) D 88) B 89) C 90) E

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Ch. 6 Process Selection and Facility Layout TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Continuous processing is the best way to produce customized output. ⊚ ⊚

true false

2) As a general rule, continuous processing systems produce products with very little variety. ⊚ ⊚

true false

3) A job-shop processing system generally requires less-skilled workers than a continuous processing system. ⊚ ⊚

true false

Avoiding bottlenecks is the primary goal of product design. ⊚ ⊚

true false

5) In general, job-shop systems have a lower unit cost than continuous systems do because continuous systems use costly specialized equipment. ⊚ ⊚

true false

Continuous production systems are typically very rigid and costly to change. ⊚ ⊚

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true false

7) Right-sized equipment tends to be larger than equipment used in traditional process layouts. ⊚ ⊚

true false

Intermittent processing can take the form of batch processing or a job shop. ⊚ ⊚

true false

9) The term "computer-aided manufacturing" refers primarily to the use of robotics in process control. ⊚ ⊚

10)

true false

Flexible manufacturing systems bring the benefits of automation to continuous processes. ⊚ ⊚

true false

11) Repetitive processing systems repetitively rotate production through small batches of a variety of products. ⊚ ⊚

12)

Morale problems can be a reason for redesign of a facility layout. ⊚ ⊚

13)

true false

There are three basic process types: input, processing, and output. ⊚ ⊚

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true false 2

14)

A cafeteria line would be an example of a process-focused layout. ⊚ ⊚

15)

A possible disadvantage of a product layout is an inflexible system. ⊚ ⊚

16)

true false

Product layouts typically achieve high utilization of labor and equipment. ⊚ ⊚

17)

true false

A manufacturing cell allows the production of a wide range of very different products. ⊚ ⊚

true false

18) Product layouts can more easily adapt to variations in product requirements than process layouts can. ⊚ ⊚

true false

19) Process layouts feature departments or other functional groupings of personnel or equipment. ⊚ ⊚

20)

true false

Information technology refers to competitive data.

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⊚ ⊚

true false

21) A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout. ⊚ ⊚

22)

Accounting, purchasing, and inventory control are fairly routine with process layouts. ⊚ ⊚

23)

true false

A disadvantage of a product layout can be high in-process inventory costs. ⊚ ⊚

true false

24) In cellular manufacturing, machines and equipment are grouped by type (e.g., all grinders are grouped into a cell). ⊚ ⊚

true false

25) Among the benefits claimed for cellular manufacturing are less material handling and reduced setup time. ⊚ ⊚

26)

true false

Group technology is closely connected to cellular manufacturing. ⊚ ⊚

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true false

27)

The percentage of idle time in an assembly line is called cycle time. ⊚ ⊚

true false

28) Mismatches between operational capabilities and market demand can have a negative impact on an organization. ⊚ ⊚

true false

29) In some service industries, facility layout may influence sales volume and customer attitudes. ⊚ ⊚

30)

"Balance delay" is another name for the percentage of idle time in a product layout. ⊚ ⊚

31)

true false

"Balance delay" is another name for the percentage of idle time in a process layout. ⊚ ⊚

true false

32) For a production line, daily capacity can be determined by dividing the daily operating time by the line's cycle time. ⊚ ⊚

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true false

33) The minimum number of workstations for a production line is determined in part by the desired output rate. ⊚ ⊚

true false

34) The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements. ⊚ ⊚

35)

true false

An idle percentage of zero means a line is perfectly balanced. ⊚ ⊚

true false

36) An optimal set of assignments for a production line cannot be obtained by assigning tasks to workstations in order of either: (1) the most following tasks; or (2) the sum of the task’s time and the times of all following tasks. ⊚ ⊚

37)

true false

Heuristic rules for line balancing will guarantee an optimal solution. ⊚ ⊚

true false

38) The main issue in the design of process layouts concerns the relative positioning of the departments involved. ⊚ ⊚

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true false

39) An advantage of a U-shaped production line is that it facilitates teamwork and flexibility in work assignments. ⊚ ⊚

true false

40) Work design, technological change, and layout are inputs in capacity planning and process selection. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 41) Key aspects of the process selection challenge include and .

A) information technology; marketing strategy B) process flexibility; marketing strategy C) capital intensity; process flexibility D) marketing strategy; operations strategy E) capacity planning; marketing strategy

42) When new products or services are being planned, process selection occurs as a matter of course. Process selection also comes into play as a result of: (I) technological changes. (II) competitive pressures. (III) fundamental changes in demand patterns.

A) I only B) II only C) III only D) I and II but not III E) I, II, and III

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43)

Process choice is

driven.

A) demand B) operations C) marketing D) process E) capacity

44)

The key questions in the process selection task are:

(I) How will the product/service be priced? (II) How much variety will be imposed on the process? (III) What is the target market for the product/service? (IV) At what volume will the process need to operate?

A) I and III B) II and IV C) II and III D) I and IV E) III and IV

45)

Job shops tend to be

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

46) The estimation of costs is generally most difficult when the chosen.

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process has been

A) project B) repetitive C) continuous D) batch E) job shop

47) In an environment in which demand is both substantial and stable, tends to be the best choice.

technology

A) batch production B) fixed automation C) project production D) programmable automation E) flexible automation

48) Computer-integrated manufacturing integrates all of the following except manufacturing.

with

A) consumer satisfaction surveys B) engineering design C) purchasing D) production planning and control E) order processing

49) Which of the following is not a process type commonly considered in making products or delivering services?

A) continuous B) batch C) repetitive D) job shop E) subcontracting

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50)

The type of processing system which is used for highly standardized products is

A) continuous. B) intermittent. C) project. D) batch. E) unit.

51)

Cellular layouts are associated with

A) closeness ratings. B) part families. C) functional (or process) layouts. D) assembly lines. E) job shops.

52) The substitution of machinery that has sensing and control devices for human labor is best described by the term

A) automation. B) feedback control. C) computer-aided manufacturing. D) computer-integrated manufacturing. E) flexible manufacturing system.

53)

Computer-aided manufacturing refers to the use of computers in

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A) product design. B) decision making. C) data analysis. D) quality control. E) process control.

54) A group of machines including supervisory computer control, automatic material handling, and possibly robots is called

A) computer-aided design. B) a manufacturing cell. C) computer-aided manufacturing. D) computer-integrated manufacturing. E) a flexible manufacturing system.

55) In which type of operation are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment?

A) a project B) a job shop C) repetitive production D) batch processing E) intermittent production

56) The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements is called

A) fair employment practices. B) idle time analysis. C) line balancing. D) cycle time optimization. E) capacity cycling.

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57)

An operations strategy for process selection should recognize that

A) process selection seldom requires technical expertise. B) engineering "white elephants" are uncommon. C) there is little need to manage technology. D) flexibility is not always the best choice. E) most technical skills can be contracted out to consultants.

58)

Common reasons for redesign of layouts include:

(I) efficient operations. (II) accidents or safety hazards. (III) new products or services. (IV) morale problems.

A) I and II B) II and IV C) I and III D) II, III, and IV E) I, II, III, and IV

59)

The advantages of automation include:

(I) reduced output variability. (II) reduced variable costs. (III) machines don't strike or file grievances. (IV) machines are always less expensive than human labor.

A) I and IV B) II and III C) I, II, and III D) I and III E) II and IV

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60)

As compared to rigid automation, the benefits of flexible manufacturing systems include

A) reduced labor requirements. B) higher efficiency. C) larger batch sizes. D) significantly lower fixed costs. E) significantly lower variable costs.

61)

Which type of processing system tends to produce the most product variety?

A) assembly B) job shop C) batch D) continuous E) mass customization

62)

In which type of processing system would gasoline be produced from crude oil?

A) job shop B) batch C) assembly D) continuous E) project

63)

Which of the following is not a characteristic of layout decisions in system design?

A) substantial investment of both money and effort B) long-term commitment C) significant impact on short-term efficiency D) usually well received by operative personnel E) can affect supplier or customer processes

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64)

An example of automated services is

A) online banking. B) build your own pizza. C) haircuts. D) massage parlors. E) financial advising.

65)

Which one of the following is not common to product layouts?

A) a high rate of output B) specialization of labor C) low unit costs D) ability to adjust to changes in demand E) special-purpose technology

66)

Which one of the following is not considered an important factor in retail layout design?

A) cost minimization B) traffic patterns and traffic flow C) opportunity to influence customer attitudes D) degree of contact with the customer E) degree of customization

67) The type of layout which features departments or other functional groupings in which similar activities are performed is

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A) process. B) product. C) fixed-position. D) mass. E) unit.

68) Which of the following is not true about process layouts when they are compared to product layouts?

A) higher in-process inventories B) lower span of supervision C) lower rates of output D) more involved cost accounting E) lower unit costs

69) The type of layout in which workers, materials, and equipment are moved to the product as needed is

A) process. B) product. C) fixed-position. D) batch. E) mass.

70) The grouping of equipment by the operations needed to perform similar work for part families is

A) product layout. B) cellular manufacturing layout. C) functional layout. D) fixed-position layout. E) process layout.

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71)

Which term is most closely associated with cellular manufacturing?

A) part families B) assembly line C) robotics D) CAD E) CAM

72)

Laser technology used in surgical procedures is an example of technological advances in

A) product. B) facility layout. C) process. D) information. E) reverse engineering.

73)

Product profiling links key product or service requirements to

A) market conditions. B) order sizes. C) pricing strategies. D) schedule changes. E) process capabilities.

74)

Layout design has many objectives, one of which is

A) reduce bottlenecks. B) move materials and workers simultaneously. C) use workers and space efficiently. D) hold material handling costs to 27 percent or less. E) install computer terminals every 500 feet.

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75)

Which phrase most closely describes flexible manufacturing systems?

A) a variation of CAD B) a more fully automated version of cellular manufacturing C) manufacturing resource planning D) a process layout with a manufacturing overlay E) an approach that allows workers to begin work at a time of their choosing

76) A service organization such as a hospital is likely to use a(n) variability in customer processing requirements.

layout because of

A) project B) process C) flow D) assembly E) nonrepetitive

77) In a product layout, the task of deciding how to assign work to specific stations is referred to as

A) process balancing. B) task allocation. C) line balancing. D) work allocation. E) station balancing.

78) The minimum possible cycle time in a typical product layout with no parallel activities is determined by the

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A) longest task time. B) shortest task time. C) average task time. D) total task time. E) per-unit setup time.

79) A production line is to be designed for a job with three tasks. The task times are 0.4 minutes, 1.2 minutes, and 0.5 minutes. The maximum cycle time in minutes is

A) 0.4. B) 0.5. C) 1.2. D) 2.1. E) 0.7.

80) A production line is to be designed for a job with three tasks. The task times are 0.3 minutes, 1.4 minutes, and 0.7 minutes. For a single production line with no parallel activities, the minimum cycle time in minutes is

A) 0.3. B) 0.7. C) 1.4. D) 2.4. E) 0.8.

81)

Daily capacity of a product layout is determined by

A) cycle time divided by operating time. B) operating time divided by cycle time. C) operating time divided by total task time. D) total task time divided by cycle time. E) cycle time divided by total task time.

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82)

The maximum allowable cycle time is computed as

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

1.00 minus station time.

time.

83)

If a line is balanced with 80 percent efficiency, the "balance delay" will be

A) 20 percent. B) 80 percent. C) 100 percent. D) unknown, since balance delay is not related to efficiency. E) depends on the next operation.

84) The main issue in the design of process layouts for service operations concerns the relative positioning of

A) workstations. B) processing components. C) departments. D) entrances, loading docks, etc. E) manufacturing cells.

85) Which of the following is not an information requirement for the design of a process layout?

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A) a list of departments or work centers B) a projection of work flows between the work centers C) the distance between locations D) the cost per unit of distance to move loads E) a list of product cycle times for every product manufactured

86) Which of the following is not an approach that companies use to achieve a smooth flow of production?

A) line balancing heuristics B) parallel workstations C) dynamic line balancing (cross-training workers) D) mixed model line E) Companies use all of these.

87)

A common goal in designing process layouts is

A) minimizing the number of workers. B) minimizing idle time. C) minimizing transportation costs. D) maximizing workstation productive time. E) maximizing transportation distances.

88) In the use of closeness ratings for process layouts, the code U means the closeness between two departments is

A) (U)nknown. B) (U)nusually important. C) of (U)sual importance. D) (U)nimportant. E) (U)ndesirable.

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89) Which closeness rating reflects the undesirability of having two departments located near each other?

A) A B) E C) I D) U E) X

90) 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

91) Which closeness rating reflects indifference on the nearness or lack of nearness of two departments?

A) A B) E C) I D) U E) X

92)

Heuristic rules are used primarily in which of these types of layouts?

(I) Product (II) Process (III) Fixed-position

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A) I B) II C) I and III D) I and II E) II and III

93)

Heuristic rules are usually applied when

A) an optimum is necessary. B) a computer program is unavailable. C) a problem has a small number of alternatives. D) a problem has a large number of alternatives. E) other approaches have failed.

94)

An advantage of a U-shaped production line is that

A) it is less compact. B) communication is reduced among employees. C) workers are specialists. D) work assignments are more rigid. E) it is more efficient than a traditional product layout.

95)

Which of these items would be most likely to be made with a fixed-position layout?

A) a large, ocean-going cruise ship B) applesauce C) a computer chip D) toothpaste E) all of these

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96) A layout in which workstations are grouped based on the operations needed to perform work on a set of similar items, or part families, is a

A) cellular layout. B) job shop. C) assembly line. D) nonrepetitive process. E) continuous flow.

97) Which one of these drive a machine tool by communicating the details of the operations to be performed?

A) CNC B) CIM C) CAD D) CAM E) automation

98)

Which of the following is not a significant concern for process selection?

A) variety in products/services B) flexibility of equipment C) volume of output D) pricing strategy E) flexibility of personnel

99) A company is designing a product layout for a new product. It plans to use this production line 8 hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task u v

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Time (secs) 30 30

Immediate Predecessor none u

w x y z

6 12 54 30

u w x 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) 30 E) 6

100) A company is designing a product layout for a new product. It plans to use this production line 8 hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task u v w x y z

Time (secs) 30 30 6 12 54 30

Immediate Predecessor none u u w x v,y

If the company wants the output rate to be equal to demand, what is the desired cycle time (in seconds)?

A) 162 B) 72 C) 54 D) 12 E) 60

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101) A company is designing a product layout for a new product. It plans to use this production line 8 hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task u v w x y z

Time (secs) 30 30 6 12 54 30

Immediate Predecessor none u u w x v,y

If the company wants the output rate to be equal to demand, what is the theoretical minimum number of workstations needed?

A) 3 B) 4 C) 5 D) 6 E) 7

102) A company is designing a product layout for a new product. It plans to use this production line 8 hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task u v w x y z

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Time (secs) 30 30 6 12 54 30

Immediate Predecessor none u u w x v,y

If the company wants the output rate to be equal to demand, what would be the efficiency of this line with the theoretical minimum number of workstations?

A) 100 percent B) 92.5 percent C) 75 percent D) 87.5 percent E) 90 percent

103) A company is designing a product layout for a new product. It plans to use this production line 8 hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task u v w x y z

Time (secs) 30 30 6 12 54 30

Immediate Predecessor none u u w x v,y

If the company wants the output rate to be equal to demand, what is the last task performed at the second workstation if tasks are assigned in order of the most following tasks?

A) u B) v C) w D) x E) y

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104) QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 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

Time (secs)

a b c d e f g

34 20 10 16 10 24 38

Immediate Predecessor none a b b c d,e f

Without considering forecasted demand, what is the minimum possible cycle time for this production line?

A) 10 seconds B) 20 seconds C) 34 seconds D) 38 seconds E) 152 seconds

105) QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 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 a b c d e f g

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Time (secs) 34 20 10 16 10 24 38

Immediate Predecessor none a b b c d,e f

For output to equal forecasted demand, what should be the actual cycle time for this production?

A) 32 seconds B) 38 seconds C) 40 seconds D) 76 seconds E) 152 seconds

106) QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 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 a b c d e f g

Time (secs) 34 20 10 16 10 24 38

Immediate Predecessor none a b b c d,e f

For output to equal forecasted demand, what is the theoretical minimum number of workstations needed?

A) 1 B) 3 C) 3.75 D) 4 E) 5

107) QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 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:

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Task

Time (secs)

a b c d e f g

34 20 10 16 10 24 38

Immediate Predecessor none a b b c d,e f

For output to equal forecasted demand, what will be the efficiency of the production line that uses the least number of workstations?

A) 81 percent B) 90 percent C) 95 percent D) 85 percent E) 100 percent

108) QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 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 a b c d e f g

Time (secs) 34 20 10 16 10 24 38

Immediate Predecessor none a b b c d,e f

For output to equal forecasted demand, what will be the second task performed at the second workstation of the production line that uses the fewest number of stations?

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A) a B) b C) c D) d E) e

109) The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line 8 hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies. Task

Time (secs)

u v w x y z

4 14 12 12 6 8

Immediate Predecessor none u v v w x,y

Without considering projected demands, what is the minimum possible cycle time for this production line?

A) B) C) D) E) F) G)

10 seconds 56 seconds 4 seconds 14 seconds 12 seconds 10 seconds 4 seconds

110) The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line 8 hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies.

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Task

Time (secs)

u v w x y z

4 14 12 12 6 8

Immediate Predecessor none u v v w x,y

For output to equal projected demand, what should be the actual cycle time for this production line?

A) 56 seconds B) 27 seconds C) 20 seconds D) 18 seconds E) 14 seconds

111) The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line 8 hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies. Task u v w x y z

Time (secs) 4 14 12 12 6 8

Immediate Predecessor none u v v w x,y

For output to equal projected demand, what is the theoretical minimum number of workstations needed?

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A) 6 B) 4.5 C) 3 D) 2.7 E) 2

112) The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line 8 hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies. Task

Time (secs)

u v w x y z

4 14 12 12 6 8

Immediate Predecessor none u v v w x,y

For output to equal projected demand, what will be the efficiency of the production line that uses the theoretical minimum number of workstations?

A) 93.33 percent B) 95 percent C) 97 percent D) 99 percent E) 100 percent

113) The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line 8 hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies. Task

Version 1

Time (secs)

Immediate Predecessor

u v w x y z

4 14 12 12 6 8

none u v v w x,y

For output to equal projected demand, what will be the first task performed at the third workstation of the production line which uses the minimum number of stations?

A) u B) v C) w D) x E) y

114) A company needs to rebalance a product layout for producing new plastic license plates. 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

Time (secs)

a b c d e

3 4 5 7 9

Immediate Predecessor none none a,b none c,d

Without regard to projected demand, what is the minimum possible cycle time for this assembly line?

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A) 0 seconds B) 3 seconds C) 9 seconds D) 10 seconds E) 28 seconds

115) A company needs to rebalance a product layout for producing new plastic license plates. 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

Time (secs)

a b c d e

3 4 5 7 9

Immediate Predecessor none none a,b none c,d

For output to equal projected demand, what should be the actual cycle time for this assembly line?

A) 0 seconds B) 3 seconds C) 9 seconds D) 10 seconds E) 28 seconds

116) A company needs to rebalance a product layout for producing new plastic license plates. 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

Time (secs)

Version 1

Immediate Predecessor none

b c d e

4 5 7 9

none a,b none c,d

For output to equal projected demand, what is the theoretical minimum number of workstations needed?

A) 2 B) 2.8 C) 3 D) 4 E) 5

117) A company needs to rebalance a product layout for producing new plastic license plates. 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

Time (secs)

a b c d e

3 4 5 7 9

Immediate Predecessor none none a,b none c,d

For output to equal projected demand, what will be the efficiency of the assembly line that uses the minimum number of workstations?

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A) 0.0 percent B) 6.7 percent C) 70.0 percent D) 93.3 percent E) 100 percent

118) A company needs to rebalance a product layout for producing new plastic license plates. 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

Time (secs)

a b c d e

3 4 5 7 9

Immediate Predecessor none none a,b none c,d

For output to equal projected demand, what will be the idle time at the second workstation of the assembly line that uses the minimum number of workstations?

A) 0 seconds B) 1 second C) 2 seconds D) 3 seconds E) 5 seconds

119) 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 $0.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: From/To I

Version 1

Distances (meters) I II 10

III 20

III

From/To X Y Z

Flows (loads per week) X Y 60 40 110 140

Z 90 160 -

What is the distance (in meters) from area III to area I in this new facility?

A) 0 B) 10 C) 20 D) 30 E) 40

120) 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 $0.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

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Flows (loads per week) X Y 60 40 110 140

Z 90 160 -

What is the total flow (loads per week) between department Y and department Z?

A) 140 B) 160 C) 200 D) 250 E) 300

121) 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 $0.50 per load per meter moved. An analyst has prepared the following distances and flow matrices:

From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 60 40 110 140

Z 90 160 -

If departments X, Y, and Z were to be located in areas I, II, and III, respectively, what would be the total distance (in meters) loads would be moved each week?

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A) 4,000 B) 4,500 C) 7,000 D) 8,000 E) 9,000

122) 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 $0.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters) I II 10 -

From/To I II

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 60 40 110 140

Z 90 160 -

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

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123) 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 $0.50 per load per meter moved. An analyst has prepared the following distances and flow matrices:

From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 60 40 110 140

Z 90 160 -

How many least costly process layouts are there?

A) 1 B) 2 C) 3 D) 4 E) 5

124) 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 $0.50 per load meter moved. An analyst has prepared the following flow and distance matrices: From/To I II

Version 1

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 0 30 100 130

Z 80 150 -

What is the distance (in meters) from area III to area I of this new facility?

A) 0 B) 10 C) 20 D) 30 E) 40

125) 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 $0.50 per load meter moved. An analyst has prepared the following flow and distance matrices: From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Version 1

Flows (loads per week) X Y 0 30 100 130

Z 80 150 -

What is the total flow (loads per week) between department Y and department Z?

A) 130 B) 150 C) 180 D) 230 E) 280

126) 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 $0.50 per load meter moved. An analyst has prepared the following flow and distance matrices:

From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 0 30 100 130

Z 80 150 -

If the company were to locate departments X, Y, and Z in areas I, II, and III, respectively, what would be the total distance (in meters) loads would be moved each week?

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A) 3,100 B) 3,600 C) 6,200 D) 6,700 E) 8,200

127) 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 $0.50 per load meter moved. An analyst has prepared the following flow and distance matrices: From/To I II

Distances (meters) I II 10 -

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 0 30 100 130

Z 80 150 -

Which layout 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

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128) 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 $0.50 per load meter moved. An analyst has prepared the following flow and distance matrices: Distances (meters) I II 10 -

From/To I II

III 20 10

III

From/To X Y Z

Flows (loads per week) X Y 0 30 100 130

Z 80 150 -

What are total weekly costs for an optimum layout?

A) $2,600 B) $3,600 C) $6,200 D) $7,200 E) $8,200

129) Which of the following process types would be most likely to be used in the introductory phase of a product's life cycle?

A) continuous B) repetitive C) project D) batch E) job shop

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130) Which of the following process types would be most likely to be used in the maturity phase of a product's life cycle?

A) repetitive B) intermittent C) project D) batch E) job shop

131) What is it about job shops that make them appropriate for products in the introductory phase of their life cycle?

A) efficiency B) technology C) flexibility D) high volume capacity E) rigidity

132) What is it about repetitive processes that make them appropriate for products in the maturity phase of their life cycle?

A) efficiency B) general-purpose technology C) possible variety D) low risk E) flexibility

133) Although they do not guarantee optimal solutions, are useful in finding reasonable solutions when the number of possible options is overwhelming.

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A) cellular layouts B) heuristics C) logistics D) CAM E) CAD

134)

The

process type requires

flexibility of equipment.

A) repetitive; slight B) continuous; no C) batch; moderate D) job shop; high E) project; intermittent

135)

Which of the following does not reflect sustainable production?

A) creatively rewarding B) strategic design C) non-polluting D) conservation of energy E) economically efficient

136)

Which of the following does not reflect lean process design general principles?

A) waste reduction B) reduced inventory C) increased floor space D) quicker response times E) increased productivity

137)

3D printing is also known by this name?

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A) computer-integrated manufacturing B) extrusion C) sintering D) additive manufacturing E) subtractive manufacturing

138) A company has an assembly line with 34 tasks. The longest task is 4.7 minutes and the total time for all tasks is 92 minutes. The line will operate for 615 minutes per day.What is the minimum cycle time?

A) 34 minutes B) 4.7 minutes C) 92 minutes D) 130 minutes E) 615 minutes

139) A company has an assembly line with 34 tasks. The longest task is 4.7 minutes and the total time for all tasks is 92 minutes. The line will operate for 615 minutes per day.What is the maximum cycle time?

A) 34 minutes B) 4.7 minutes C) 92 minutes D) 130 minutes E) 615 minutes

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Answer Key Test name: Chap 06_14e 1) FALSE 2) TRUE 3) FALSE 4) FALSE 5) FALSE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) FALSE 15) TRUE 16) TRUE 17) FALSE 18) FALSE 19) TRUE 20) FALSE 21) FALSE 22) FALSE 23) FALSE 24) FALSE 25) TRUE 26) TRUE Version 1

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

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

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

117) D 118) B 119) C 120) E 121) D 122) C 123) B 124) C 125) E 126) D 127) B 128) A 129) E 130) A 131) C 132) A 133) B 134) A 135) D 136) C 137) D 138) B 139) C

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Ch. 7 Work Design and Measurement TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) If the elapsed time for the task is short and the activity is somewhat routine, a modest amount of improvement occurs during the first few repetitions. ⊚ ⊚

true false

2) When the task is fairly complex and has a longer duration, it will take a larger number of repetitions before improvement is observed. ⊚ ⊚

true false

Negotiated purchasing results in lower unit costs for smaller quantities. ⊚ ⊚

true false

4) Learning curves generally apply to situations in which there is a high degree of human involvement and tasks are fairly repetitive. ⊚ ⊚

true false

5) Learning curves are mostly relevant for complex, new activities that have not been done often. ⊚ ⊚

true false

6) According to learning curve theory, every doubling of total output will produce a constant percentage decrease in time per unit . ⊚ ⊚ Version 1

true false 1

7) 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

8) According to learning curve theory, for certain kinds of tasks the cost per unit decreases as the number of repetitions increases. ⊚ ⊚

true false

9) According to learning curve theory, the time reduction per unit decreases (improves) as the number of units increases. ⊚ ⊚

true false

10) A learning percentage of 95 percent indicates greater learning than a percentage of 90 percent. ⊚ ⊚

11)

true false

A learning curve for an overqualified worker is higher than that for an average worker. ⊚ ⊚

true false

12) An 80 percent learning curve means that with each doubling of repetitions there will be a 20 percent decrease in time per unit. ⊚ ⊚

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true false

13) For an 80 percent learning curve, if the first unit requires 10 hours, the second unit will require 8 hours and the third 6.4 hours. ⊚ ⊚

true false

14) If an 80 percent curve is appropriate for a task and the first unit takes 10 hours, the average time for the first 2 units would be 8 hours. ⊚ ⊚

true false

15) If we have never made the first unit but only think we know how much the labor time will be, we cannot draw a learning curve. ⊚ ⊚

true false

16) The learning curve principle would apply to the number of students in a class: a class twice as large will learn 80 percent faster. ⊚ ⊚

true false

17) The learning curve principle would apply to a baseball pitcher learning to throw a curveball. ⊚ ⊚

true false

18) The learning curve is a basic tool for mass production-type activities because it can deal with large volumes of output. ⊚ ⊚

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true false

19)

Learning curves are used primarily for mass production applications. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 20) Suppose the first unit of output required 800 labor hours, and the second required only 640. How many hours will be reduced from the second unit to the fourth?

A) 128 B) 256 C) 512 D) 486 E) 322

21) Suppose the first unit of output required 900 labor hours, and the second unit required only 810. At this rate, how many more units must be produced before labor requirements are less than 700 hours?

A) 2 B) 4 C) 6 D) 8 E) 10

22) The more effect.

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a task, the less likely it is that a substantial learning curve will be in

A) strategic B) capital intensive C) routine D) tactical E) unusual

23)

Sometimes improvements in labor requirements are more apparent than real because of:

A) fixed costs increasing. B) automation. C) mass production. D) increases in indirect labor. E) greater precision in estimating the learning rate.

24) The fact that human activities typically improve when they are done on a repetitive basis is described by a(n):

A) normal distribution curve. B) learning curve. C) binomial distribution curve. D) exponential curve. E) fatigue factor allowance.

25)

To which worker would learning curves be most applicable?

A) bus driver B) printing press operator C) assembly-line worker D) auto service mechanic E) baker or cook

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26) 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.

27)

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.

28)

Increasing volumes result in

the learning curve.

A) moving up B) moving down C) moving off D) moving away from E) stabilization of

29) It took exactly 10 hours to perform the first kidney transplant on a 100 percent learning curve. The second kidney transplant will take how many hours to perform?

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A) 8 hours B) 10 hours C) 12 hours D) A 100 percent learning curve cannot exist. E) 5 hours

30) 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

31) A job with a 70 percent learning curve required 20 hours for the initial unit. The fourth unit should require approximately how many hours?

A) 6 B) 9.8 C) 14 D) 20 E) 34

32) 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?

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A) 14.1 B) 11.4 C) 10.0 D) 7.8 E) 4.3

33) A job is expected to have a learning curve of 90 percent. The third unit required 16 hours. The twelth unit should take approximately how many hours?

A) 2.67 B) 4.83 C) 7.94 D) 10.31 E) 12.95

34) 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)?

A) 26 B) 36 C) 46 D) 56 E) 66

35) 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?

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A) 0.70 B) 0.75 C) 0.80 D) 0.85 E) 0.90

36) 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

37)

Which of the following is not a major caution or criticism of learning curves?

A) Learning rates may differ between organizations. B) Projections should be regarded as approximations. C) The base time must be carefully determined. D) The curve may eventually tip upwards. E) Carryover effects may alter the learning rate.

38) A job has a 70 percent 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

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39) A job has an 80 percent learning curve. If the first unit took 40 hours to complete, the fourth unit should take roughly how many hours?

A) 20 B) 25 C) 31 D) 35 E) 40

40)

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) capacity planning

41) A job has an 80 percent 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

42) Unit times for a job exhibit a learning effect. If the second unit took 30 hours, and the fourth unit took 21 hours, roughly how many hours would you estimate the third unit took?

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A) 29 B) 27 C) 25 D) 24 E) 21

43) 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:

A) 70 percent. B) 75 percent. C) 80 percent. D) 85 percent. E) 90 percent.

44) A job will have a learning rate of 75 percent. If the third unit requires 10 hours, the twelth unit should require about this many hours:

A) 5.6. B) 6.5. C) 7.4. D) 8.3. E) 9.2.

45) 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?

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A) 70 percent B) 75 percent C) 80 percent D) 85 percent E) 90 percent

46) 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.What is the expected time required to produce the fortieth unit?

A) 3.2 hours B) 4.4 hours C) 5.9 hours D) 3.7 hours E) 2.2 hours

47) 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.What is the average time per unit for the first 30 units?

A) 4.7 hours B) 5.9 hours C) 5.6 hours D) 4.5 hours E) 3.6 hours

48) 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.If a contract for 30 units is canceled after the first 20 units, approximately how much of the expected total direct labor will have been expended to that point?

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A) 73 percent B) 55 percent C) 61 percent D) 50 percent E) It is impossible to say without additional information.

49) 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.Approximately how long will it take to produce the fifteenth unit?

A) 4.3 hours B) 5.5 hours C) 4.7 hours D) 6.9 hours E) 3.4 hours

50) 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.Which unit, if any, will require approximately one-half the time of the first unit?

A) 18th unit B) 19th unit C) 20th unit D) 21st unit E) 22nd unit

51) 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.Approximately how long will it take to produce the 25th through thirtieth units?

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A) 23 hours B) 49 hours C) 29 hours D) 38 hours E) It is impossible to say without additional information.

52) 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 Second Fourth

TIME REQUIRED 5 hours 4 hours

What is the learning curve percentage?

A) 40 percent B) 50 percent C) 75 percent D) 80 percent E) 90 percent

53) 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 Second Fourth

TIME REQUIRED 5 hours 4 hours

How long did it take to produce the first unit?

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A) 5 hours B) 6 hours C) 6.25 hours D) 6.33 hours E) 6.5 hours

54) 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 Second Fourth

TIME REQUIRED 5 hours 4 hours

Approximately how long did it take to produce the first four units?

A) 15 hours B) 16 hours C) 18 hours D) 20 hours E) 21 hours

55) 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 Second Fourth

TIME REQUIRED 5 hours 4 hours

Approximately how long will it take to produce the 10th unit?

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A) 1 hour B) 2 hours C) 3 hours D) 4 hours E) 5 hours

56) 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 Second Fourth

TIME REQUIRED 5 hours 4 hours

Approximately how long will it take to produce the fifth through tenth units?

A) 15 hours B) 16 hours C) 18 hours D) 20 hours E) 21 hours

57) In which of the following scenarios would an 80 percent learning curve be especially relevant?

A) the pursuit of an innovation strategy to stay ahead of competitors B) the pursuit of a flexibility-based strategy to increase customer satisfaction C) the pursuit of a customization-based strategy to command premium prices D) the pursuit of a time-based strategy to gain market share E) the pursuit of a quality-based strategy to gain customer loyalty

58)

To which of the following challenges are learning curves important considerations?

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A) capacity planning B) product designs C) process layouts D) output-based compensation E) demand forecasting

59)

Which of the following is an example of a carryover effect?

A) capacity that was used on older products but that can be used on new products B) previous experience that is relevant to the current scenario C) existing products that are still in the maturity phase of their life cycle D) forecasting errors from previous product lines E) old supplier contracts that must still be honored

60) When are learning curves most relevant to managerial decision making in mass production settings?

A) late in product life cycles B) in the maturity phase C) in the decline phase D) before processes are stabilized E) never

61) Suppose the first unit required 800 hours and the second unit required only 680. Which of the following times for the fourth unit would be consistent with a true learning curve scenario?

A) 492 B) 587 C) 578 D) 603 E) 583

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62) Which of the following is not an improvement that can be traced to preproduction factors?

A) product design B) strategy planning C) methods analysis D) effort expended E) selection of tools

63)

Which of the following is the formula for computing learning curves times? A) T n = T 1 × n b × nc B) T x = T1 C) T b = T 2 × n n D) N t = T1 × Tb E) N t = N1 × nb

64)

The learning curve theory is useful in all of the areas except for which of the following?

A) negotiated purchasing B) pricing new products C) operations management D) capacity planning E) budgeting

65)

Which of the following can affect the ways in which learning curves may be applied?

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A) negotiated purchasing B) pricing new products C) operations management D) flexible manufacturing E) budgeting

66) A firm is preparing a bid on a city service contract for 80 shifts of a cleaning service. The operations manager estimates the time required for the first two shifts to be 17.8 hours and 15.1 hours respectively. What is the appropriate learning curve?

A) 75 percent B) 80 percent C) 85 percent D) 90 percent E) 95 percent

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Answer Key Test name: Chap 07S_14e 1) TRUE 2) TRUE 3) FALSE 4) TRUE 5) TRUE 6) TRUE 7) FALSE 8) FALSE 9) TRUE 10) FALSE 11) TRUE 12) TRUE 13) FALSE 14) FALSE 15) FALSE 16) FALSE 17) TRUE 18) FALSE 19) FALSE 20) A 21) B 22) C 23) D 24) B 25) D 26) B Version 1

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

57) D 58) A 59) B 60) D 61) C 62) B 63) A 64) C 65) D 66) C

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SUPPLEMENT TO CHAPTER 7: Learning Curves TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Ergonomics is the use of computers and robots in the workplace. ⊚ ⊚

true false

2) Specialization is one of the sources of disagreement between the efficiency and behavioral approaches to job design. ⊚ ⊚

true false

One disadvantage of specialization is worker dissatisfaction. ⊚ ⊚

true false

4) The quickest, most effective way to improve an employee's job satisfaction is to increase his or her compensation. ⊚ ⊚

true false

5) Job enrichment involves giving workers a greater share of the total task, which is why they feel enriched. ⊚ ⊚

true false

Trust is a factor influencing productivity. ⊚ ⊚

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true false

Many lower-level jobs are monotonous and boring. ⊚ ⊚

true false

8) Job enrichment involves an increase in the level of responsibility for planning and coordinating tasks. ⊚ ⊚

true false

9) Self-directed teams are allowed to make changes in the work processes under their control. ⊚ ⊚

10)

Self-directed teams help other work groups make changes to their processes. ⊚ ⊚

11)

true false

Motivation influences quality and productivity, but not the work environment. ⊚ ⊚

12)

true false

One important factor that influences productivity is trust between workers and managers. ⊚ ⊚

true false

13) Ergonomics is an important part of job design to consider for factory work but not for office work. ⊚ ⊚ Version 1

true false 2

14) Potential benefits of self-directed teams include higher productivity and greater worker satisfaction. ⊚ ⊚

15)

One of the potential benefits of self-directed teams is higher quality. ⊚ ⊚

16)

true false

One potential disadvantage of self-directed teams is higher turnover and absenteeism. ⊚ ⊚

17)

true false

Job design relates to people, therefore technology has little impact. ⊚ ⊚

true false

18) Methods analysis cannot be done for new jobs (ones that do not yet exist) since it requires observation of the process. ⊚ ⊚

19)

true false

One therblig is the equivalent of 1 hour of sustained work by one average person. ⊚ ⊚

true false

20) A flow process chart is helpful for visualizing the portions of a work cycle during which the equipment is busy or idle.

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⊚ ⊚

true false

21) Predetermined time standards are usually based on observing one very efficient worker performing the task. ⊚ ⊚

22)

true false

Therbligs are basic elemental motions. ⊚ ⊚

true false

23) The two basic causes of accidents are worker carelessness and management demands for increased productivity. ⊚ ⊚

24)

true false

Work measurement concentrates on how long the tasks take to accomplish. ⊚ ⊚

true false

25) Ergonomics is important for preventing common workplace injuries such as back injuries and repetitive-motion injuries. ⊚ ⊚

26)

true false

Work sampling is most frequently used to set time standards. ⊚ ⊚

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true false

27) For purposes of obtaining good time standards using a stopwatch time study, the analyst should try to avoid having the worker discover he or she is being observed. ⊚ ⊚

true false

28) One factor in determining how many cycles to time in a time study is the degree of variation that is present in the observed times. ⊚ ⊚

true false

29) The normal time in time study is obtained by multiplying the observed time by the performance rating. ⊚ ⊚

true false

30) A standard time is the amount of time it should take a fully trained and qualified worker to complete a specific task, working at an efficient, yet sustainable pace, using their choice of methods, tools, equipment, and workplace arrangement. ⊚ ⊚

true false

31) The normal time for a job is multiplied by the performance rating to obtain the standard time for the job. ⊚ ⊚

true false

32) The design of work systems is based on objective standards and thereby avoids most ethical issues.

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⊚ ⊚

true false

33) The standard time for a job can be obtained by multiplying the normal time by an appropriate allowance factor. ⊚ ⊚

34)

true false

Predetermined time standards use historical data from a company's own files. ⊚ ⊚

true false

35) A performance rating of less than 1.0 means that the observed worker was judged to be working at a faster than normal rate—doing the job more quickly than normal. ⊚ ⊚

true false

36) Predetermined time standards involve the use of published data regarding how long various activities are expected to take. ⊚ ⊚

37)

Work sampling can be used to estimate the proportion of time a machine is idle. ⊚ ⊚

38)

true false

Work sampling involves the use of some method of randomizing the observations. ⊚ ⊚

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true false

39) An advantage of work sampling, compared to a stopwatch time study, is that observations are spread out over a period of time in work sampling. ⊚ ⊚

40)

true false

No stopwatch is required in a work sampling study. ⊚ ⊚

true false

41) Work sampling provides a detailed elemental breakdown of a task for purposes of establishing reliable time standards. ⊚ ⊚

42)

Measured daywork systems are output-based compensation systems. ⊚ ⊚

43)

true false

It would be acceptable to use a group incentive plan for an assembly line operation. ⊚ ⊚

44)

true false

Work sampling provides both quick and accurate estimates of activity times. ⊚ ⊚

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true false

45) Methods analysis is more likely to lead to a relatively easy and successful implementation of an improved method if workers have been consulted throughout the process than if the analyst assumed sole responsibility for the development of the improved method. ⊚ ⊚

true false

46) Time-based systems compensate employees according to the time they have worked and the amount of output they produce. ⊚ ⊚

true false

47) Output-based systems compensate employees according to the amount of output they produce, thereby tying pay directly to performance. ⊚ ⊚

48)

Increasing compensation is always the best way to improve worker satisfaction. ⊚ ⊚

49)

true false

A worker-machine chart can help identify nonproductive parts of a process. ⊚ ⊚

true false

50) A worker-machine chart can be used to determine how many machines an operator can manage. ⊚ ⊚

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true false

51) The importance of work design is often underscored by the organization’s dependence on technology. ⊚ ⊚

52)

true false

Specialization is a term that describes job that have a very wide scope. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 53) Giving a worker a larger portion of the total task is known as job:

A) expansion. B) enrichment. C) enlargement. D) rotation. E) elimination.

54) job

If there is a good chance that one or a few employees could wind up in monotonous jobs, can be a good idea.

A) alteration B) expansion C) enrichment D) enlargement E) rotation

55) of

Asking a group of employees at a particular level to take on more responsibility is a form loading, also known as job .

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A) horizontal; enlargement B) horizontal; rotation C) vertical; rotation D) vertical; enrichment E) horizontal; enrichment

56)

Which of the following is not an advantage of time-based pay systems?

A) labor cost stability B) incentives to increase output C) ease of administration D) stability of output E) ease of pay computations

57)

From the worker's perspective, an output-based pay system has the advantage of:

A) linking pay more directly to effort. B) keeping earnings stable. C) keeping pay totally in the worker's control. D) minimizing the temptation to work harder for more money. E) keeping effort from influencing pay.

58) Methods analysis is particularly valuable when it is used on jobs that: (I) are high in labor content.(II) are done frequently.(III) involve a high degree of automation and mechanization.(IV) are unsafe, tiring, unpleasant, and/or noisy.

A) I, II, III, and IV B) I, II, and IV only C) II and III only D) II and IV only E) I and III only

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59) A behavioral approach to job design in which workers periodically exchange jobs is known as:

A) specialization. B) ergonomics. C) job rotation. D) job enlargement. E) job enrichment.

60)

A major advantage of job specialization in business is increased:

A) motivation. B) opportunity for advancement. C) opportunity for self-fulfillment. D) productivity. E) job enrichment.

61)

Which of the following is not generally considered an advantage of specialization?

A) high productivity B) low wage costs C) ease of training employees D) monotonous work E) All are advantages

62)

Process chart symbols do not include:

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A) delay. B) inspection. C) operation. D) rejection. E) storage.

63)

Which of the following most closely describes job enlargement?

A) horizontal loading B) increasing the level of responsibility associated with a job C) transferring 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 jobs to the same worker

64) A behavioral approach to job design that increases responsibility for planning and coordinating tasks is job:

A) enlargement. B) rotation. C) enrichment. D) involvement. E) enhancement.

65)

Which of the following concerns is not one that job designers focus on?

A) what will be done in a job B) who will do the job C) how the job will be done D) when should the job be completed E) where the job will be done

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66)

Which of the following is not a potential benefit of the use of self-directed teams?

A) higher quality B) higher productivity C) greater worker satisfaction D) greater satisfaction for middle managers E) lower turnover

67)

A simo chart includes:

A) delay. B) storage. C) transportation. D) left/right hand movements. E) inspection.

68)

Determining the number of cycles to observe is an element of:

A) stopwatch time study. B) standard elemental times. C) predetermined time standards. D) work sampling. E) MTM tables.

69) The chart used to review the overall sequence of an operation by focusing on the movements of either the operator or materials is called a:

A) simo chart. B) Gantt chart. C) worker-materials chart. D) flow process chart. E) multi-activity chart.

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70) The methods analysis chart that describes the overall sequence of operations, transportation, storage, delays, and inspection is a:

A) flow process chart. B) worker-machine chart. C) gang process chart. D) simultaneous-motion chart. E) time/efficiency chart.

71) The symbols for operation, storage, transportation, inspection, and delay would usually be found on which type of chart?

A) flow process B) Gantt C) simultaneous motion D) worker-machine E) delay analysis

72)

The chart used to focus on busy and idle portions of a work cycle is a:

A) worker-machine chart. B) Gantt chart. C) simo chart. D) idle chart. E) flow process chart.

73) The methods analysis chart that describes the portions of a work cycle during which an operator and equipment are busy or idle is a:

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A) flow process chart. B) worker-machine chart. C) gang process chart. D) simultaneous-motion chart. E) time/efficiency chart.

74)

In motion studies, a therblig is a:

A) charting method of analysis. B) job enrichment technique. C) dummy task. D) basic elemental motion. E) fraction (0.0006) of a minute.

75)

The motion study chart that describes the movements of both hands at the same time is a:

A) flow process chart. B) worker-machine chart. C) gang process chart. D) simo chart. E) time/efficiency chart.

76) One form of long-term team that is increasingly being used, especially in lean production settings, is:

A) quality circle. B) product design. C) self-directed. D) self-improvement. E) mandatory.

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77) In a stopwatch time study, the number of cycles that must be timed is a function of: (I) the variability of observed times.(II) the desired accuracy for the estimated job time.(III) the desired level of confidence for the estimated job time.

A) I only B) I and II only C) II and III only D) I, II, and III E) I and III only

78) What is the effect of an increase in the desired confidence level 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

79) In a stopwatch time study, the average of the times recorded for a given worker to perform a given task is the:

A) observed time. B) normal time. C) standard time. D) allowance time. E) performance rating time.

80)

Which is not a requirement for an effective self-directed team?

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A) talent and skills to meet goals B) one or more members representing supervision C) a system of reinforcement and celebration D) clearly stated and commonly held vision and goals E) effective and skilled interpersonal relations

81) A job has an observed cycle time of 4 minutes, a performance rating of 80 percent, and an allowance that is 20 percent of job time. Normal time for the job in minutes is:

A) 3.20. B) 3.84. C) 4.00. D) 4.80. E) 5.00.

82) When performing a time study, the analyst converts the observed time into the time a worker would require working at an acceptable “average” pace by using which of the following?

A) allowance factors B) MTM C) methods analysis D) performance rating E) analysis of therbligs

83) In a stopwatch time study, adjusting the normal time by an allowance factor for normal delays and interruptions results in the:

A) observed time. B) normal time. C) standard time. D) allowance time. E) performance rating time.

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84) A job had an observed time of 10 minutes and a performance rating of 0.90based on 25 cycles that were timed. The allowance is 20 percent of job time. Standard time for the job in minutes is:

A) 10.0. B) 10.8. C) 12.5. D) 15.0. E) depends on the number of cycles observed.

85) A job has a normal time of 12 minutes, a performance rating of 0.80, and an allowance of 20 percent of job time. The standard time for this job in minutes is:

A) 11.52. B) 12. C) 14.4. D) 15. E) depends on the number of cycles observed.

86)

Time standards derived from a firm's historical time study data are known as:

A) predetermined times. B) MTM. C) work sampling times. D) judgmental times. E) standard elemental times.

87) In calculating standard times, allowance percentages normally would consider all of the following except:

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A) noise levels. B) monotony. C) personal phone calls. D) weight lifted. E) restroom allowances.

88)

A technique for estimating the proportion of time a worker spends on various activities is:

A) stopwatch time study. B) standard elemental (historical) times. C) simultaneous motion study. D) predetermined (published) time standards. E) work sampling.

89) The technique which can be used to estimate the percentage of time a worker or piece of equipment is idle is known as:

A) MTM. B) work sampling. C) methods analysis. D) micro motion study. E) none of these.

90) Which sample proportion will require the largest number of work sampling observations for a given confidence level and allowable error?

A) 0.05 B) 0.25 C) 0.50 D) 0.75 E) 0.95

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91) size?

In work sampling, how will increasing the permissible maximum error affect sample

A) It will increase the number of observations needed. B) It will decrease the number of observations needed. C) It will have no effect on sample size. D) It will sometimes increase and sometimes decrease the sample size, depending on the analyst. E) It is impossible to say without additional information.

92)

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.

93) 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.

94)

Which of the following is not characteristic of time-based compensation plans?

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A) stable labor costs B) easier to administer than output-based plans C) stable pay for workers D) simpler wage computations than output-based plans E) lower cost per unit than output-based plans

95) Which of the following statements should not characterize an operations strategy toward the design of work systems?

A) Manufacturing technology is the heart of a business. B) Workers can make or break a business. C) Workers can be a valuable source of insights. D) A spirit of cooperation can contribute to success. E) Workers can be proud and respected.

96) The design of work systems typically involves: (I) work measurement.(II) job design.(III) compensation.(IV) the use of outside consultants.

A) II and III only B) I and III only C) II, III, and IV only D) I, II, and III only E) I, II, III, and IV

97)

Methods analysis and motion study techniques develop primarily which aspects of jobs?

A) behavioral aspects B) efficiency aspects C) pay levels D) quality levels E) teamwork aspects

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98)

A disadvantage of teams is:

A) higher quality. B) higher productivity. C) greater worker satisfaction. D) team member conflict. E) lower turnover.

99) A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 84

2 76

3 80

4 84

5 76

What is the observed time for this task?

A) 80 seconds B) 84 seconds C) 160 seconds D) 240 seconds E) 400 seconds

100) A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

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1 84

2 76

3 80

4 84

5 76 22

What is the normal time for this task if the employee worked at a 25 percent faster pace than average?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

101) A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 84

2 76

3 80

4 84

5 76

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of the workday is used?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

102) A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

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Observation Time (secs)

1 84

2 76

3 80

4 84

5 76

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

A) 80 seconds B) 96 seconds C) 100 seconds D) 120 seconds E) 125 seconds

103) A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 84

2 76

3 80

4 84

5 76

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 2 seconds? Assume that the standard deviation of the task time is 4 seconds.

A) 5 B) 6 C) 25 D) 36 E) 49

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104) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

Observation Time (secs)

1 99

2 87

3 90

4 81

5 93

6 90

What is the observed time for this task?

A) 81 seconds B) 90 seconds C) 99 seconds D) 108 seconds E) 540 seconds

105) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

Observation Time (secs)

1 99

2 87

3 90

4 81

5 93

6 90

What is the normal time for this task if the employee worked at a 50 percent faster pace than average?

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A) 45 seconds B) 60 seconds C) 90 seconds D) 135 seconds E) 180 seconds

106) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

Observation Time (secs)

1 99

2 87

3 90

4 81

5 93

6 90

What is the standard time for this task if the employee worked at a 50 percent faster pace than average, and an allowance of 20 percent of job time is used?

A) 90 seconds B) 99 seconds C) 100 seconds D) 162 seconds E) 150 seconds

107) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

Observation Time (secs)

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1 99

2 87

3 90

4 81

5 93

6 90

What is the standard time for this task if the employee worked at a 50 percent faster pace than average, and an allowance of 10 percent of the workday is used?

A) 90 seconds B) 99 seconds C) 100 seconds D) 168.8 seconds E) 150 seconds

108) The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

Observation Time (secs)

1 99

2 87

3 90

4 81

5 93

6 90

How many observations should be made if she wants to be 95.44 percent confident that the maximum error in the observed time is 2 seconds? Assume that the standard deviation of the task time is 6 seconds.

A) 5 B) 6 C) 30 D) 36 E) 49

109) 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, he observed one of his workers perform this task five times, with the following results:

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Observation Time (secs)

1 27

2 19

3 20

4 21

5 13

What is the observed time for this task?

A) 20 seconds B) 27 seconds C) 46 seconds D) 66 seconds E) 100 seconds

110) 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, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 27

2 19

3 20

4 21

5 13

What is the normal time for this task if the employee worked at a 20 percent faster pace than average?

A) 16.7 seconds B) 20 seconds C) 24 seconds D) 25 seconds E) 100 seconds

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111) 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, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 27

2 19

3 20

4 21

5 13

What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 20 percent of the workday is used?

A) 20 seconds B) 24 seconds C) 25 seconds D) 28.8 seconds E) 30 seconds

112) 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, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 27

2 19

3 20

4 21

5 13

What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 20 percent of job time is used?

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A) 4.5 seconds B) 5 seconds C) 20 seconds D) 28.8 seconds E) 100 seconds

113) 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, he observed one of his workers perform this task five times, with the following results:

Observation Time (secs)

1 27

2 19

3 20

4 21

5 13

How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is 1 second? Assume that the standard deviation of the task time is 5 seconds.

A) 5 B) 10 C) 25 D) 100 E) 121

114) A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of 2 seconds. What is the normal time for this task if the employee worked at a 20 percent faster pace than average?

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A) 4 seconds B) 16.7 seconds C) 20 seconds D) 24 seconds E) 100 seconds

115) A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of 2 seconds. What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 25 percent of the workday is used?

A) 20 seconds B) 25 seconds C) 26.7 seconds D) 30 seconds E) 32 seconds

116) A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of 2 seconds. What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 25 percent of job time is used?

A) 20 seconds B) 25 seconds C) 26.7 seconds D) 30 seconds E) 32 seconds

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117) A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of 2 seconds. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is 1 second?

A) 3 B) 4 C) 13.3 D) 16 E) 25

118) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the normal time for this task if the bartender worked at a 20 percent faster pace than is average?

A) 75 seconds B) 90 seconds C) 108 seconds D) 110 seconds E) 112.5 seconds

119) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the standard time for this task if the bartender worked at a 20 percent faster pace than is average, and an allowance of 20 percent of the workday is used?

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A) 112.5 seconds B) 120 seconds C) 135 seconds D) 144 seconds E) 150 seconds

120) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds. What is the standard time for this task if the bartender worked at a 20 percent faster pace than is average, and an allowance of 10 percent of job time is used?

A) 135 seconds B) 123.8 seconds C) 118.8 seconds D) 120 seconds E) 112.5 seconds

121) The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders 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 he wants to be 95.44 percent confident that the maximum error in the observed time is 1 second?

A) 64 B) 86 C) 100 D) 144 E) 169

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122) 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, she observed one of her workers perform this task six times with the following results:

Observation Time (secs)

1 46

2 38

3 40

4 34

5 42

6 40

What is the observed time for this task?

A) 34 seconds B) 40 seconds C) 46 seconds D) 48 seconds E) 240 seconds

123) 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, she observed one of her workers perform this task six times with the following results:

Observation Time (secs)

1 46

2 38

3 40

4 34

5 42

6 40

What is the normal time for this task if the employee worked at a 20 percent faster pace than average?

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A) 8 seconds B) 32 seconds C) 40 seconds D) 48 seconds E) 200 seconds

124) 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, she observed one of her workers perform this task six times with the following results:

Observation Time (secs)

1 46

2 38

3 40

4 34

5 42

6 40

What is the standard time for this task if the employee worked at a 20 percent faster pace than average and an allowance of 25 percent of the workday is used?

A) 40 seconds B) 50 seconds C) 53.3 seconds D) 60 seconds E) 64 seconds

125) 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, she observed one of her workers perform this task six times with the following results:

Observation Time (secs)

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1 46

2 38

3 40

4 34

5 42

6 40

What is the standard time for this task if the employee worked at a 20 percent faster pace than average and an allowance of 25 percent of job time is used?

A) 40 seconds B) 50 seconds C) 53.3 seconds D) 60 seconds E) 64 seconds

126) 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, she observed one of her workers perform this task six times with the following results:

Observation Time (secs)

1 46

2 38

3 40

4 34

5 42

6 40

How many observations should be made if she wants to be 86.64 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) 10 B) 12 C) 120 D) 144 E) 169

127) The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results:

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Activity Mowing

Time Observed 200

Trimming

Raking

Miscellaneous

What is the most likely true proportion of time spent mowing?

A) 0 B) 0.1 C) 0.2 D) 0.5 E) 1

128) The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results: Activity Mowing

Time Observed 200

Trimming

Raking

Miscellaneous

What is the probability that the true proportion of time spent mowing is exactly equal to the sample proportion?

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A) 0 B) 0.1 C) 0.2 D) 0.5 E) 1

129) The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results: Activity Mowing

Time Observed 200

Trimming

Raking

Miscellaneous

How confident can the manager be that the true proportion of time spent mowing is between 0.45 and 0.55?

A) 90 percent B) 95 percent C) 95.5 percent D) 99 percent E) 99.7 percent

130) The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results: Activity

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Time Observed

Mowing

200

Trimming

Raking

Miscellaneous

Between what limits can the manager be 68.26 percent confident about the true proportion of time spent mowing?

A) 0 and 0.683 B) 0.475 and 0.525 C) 0.45 and 0.55 D) 0.425 and 0.575 E) 0.4 and 0.6

131) The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results: Activity Mowing

Time Observed 200

Trimming

Raking

Miscellaneous

If the manager wants to be 95.44 percent confident that the true proportion of time spent mowing is within 0.02 (plus or minus) of the sample proportion, what should be her sample size?

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A) 400 B) 1,000 C) 1,600 D) 2,000 E) 2,500

132)

The efficiency approach is a refinement of this person’s scientific management concepts?

A) Frederick Winslow Taylor B) Frank Gilbreth C) Lillian Gilbreth D) Fred E. Bridger E) Edward Deming

133)

Job enrichment and job enlargement are often utilized in these types of operations?

A) strategic operations B) lean operations C) operations management D) manufacturing operations E) operations strategy

134)

Which of the following is not considered a factor in working conditions?

A) temperature B) quality C) humidity D) illumination E) vibrations

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135) Which of the following is not a factor that previously had direct impact on the work environment prior to lean operations being implemented?

A) more managers B) workers skilled in performing one task C) increased emphasis on quality D) less emphasis on flexibility E) no flexibility

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Answer Key Test name: Chap 07_14e 1) FALSE 2) TRUE 3) TRUE 4) FALSE 5) FALSE 6) TRUE 7) TRUE 8) TRUE 9) TRUE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) TRUE 15) TRUE 16) FALSE 17) FALSE 18) FALSE 19) FALSE 20) FALSE 21) FALSE 22) TRUE 23) FALSE 24) TRUE 25) TRUE 26) FALSE Version 1

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

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

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

117) D 118) C 119) C 120) C 121) C 122) B 123) D 124) E 125) D 126) D 127) D 128) A 129) C 130) B 131) E 132) A 133) B 134) B 135) C

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Ch. 8 Location Planning and Analysis TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Location decisions are basically one-time decisions usually made by new organizations. ⊚ ⊚

true false

2) 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; one location typically is as good as another. ⊚ ⊚

You cannot make a mistake by locating where labor costs are low. ⊚ ⊚

true false

Advanced communications has aided globalization. ⊚ ⊚

true false

The first step in developing location alternatives is identifying important factors. ⊚ ⊚

true false

6) An example of a regional factor in location planning is the location of our markets (either existing or potential). ⊚ ⊚

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true false

7) A strategy that emphasizes convenience for the customers would probably select a single very large facility. ⊚ ⊚

true false

8) For service organizations, the dominant factors in location analysis usually are marketrelated. ⊚ ⊚

true false

9) The center of gravity method uses the earth’s center to establish starting grid coordinates (i.e., the 0,0,0 point) in three dimensions (x, y, and z). ⊚ ⊚

10)

true false

Labor laws are an important site-related factor. ⊚ ⊚

true false

11) Web-based, retail businesses should be located near the customer to reduce their long distance phone charges. ⊚ ⊚

12)

true false

For service and retail stores, a prime factor in location analysis is customer access. ⊚ ⊚

true false

13) Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

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⊚ ⊚

true false

14) Technology has made communication with global operations as easy as local communication. ⊚ ⊚

15)

true false

Factor rating is limited to quantitative information concerning location decisions. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 16) For service firms such as banks and supermarkets, location decisions are critical elements of strategy.

A) marketing B) pricing C) promotional D) efficiency E) effectiveness

17) When service firms such as retailers or banks make growth-spurred location decisions, typically these involve

A) finding new sources of resources to replace exhausted ones. B) adding new locations rather than expanding existing ones. C) closing down existing locations and opening new ones elsewhere. D) expanding existing locations rather than adding new ones. E) downsizing existing locations and opening new ones elsewhere.

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18) When making location decisions, nonprofit organizations differ from for-profit ones in seeking a balance between

A) profits and opportunities. B) costs and revenues. C) costs and customer service. D) growth and stability. E) stability and opportunity.

19) In regard to supply chain management and the location decision, a primary challenge is to address distribution.

A) insourced vs. outsourced B) strategic vs. tactical C) local vs. global D) centralized vs. decentralized E) anticipatory vs. reactive

20)

In general, managing global operations is made easier by

and

A) political uncertainty; currency devaluation B) differentiation strategies; diversified markets C) low interest rates; price-sensitive customers D) cost-leadership strategies; labor productivity E) freer trade; technology

21)

Among the potential disadvantages of having global operations is/are

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A) low labor productivity. B) less restrictive environmental regulation. C) lower wage costs. D) proximity to global markets. E) favorable liability laws.

22) Locational cost-profit-volume analysis assumes (I) nonlinear variable costs.(II) fixed costs that are constant over the range of possible output.(III) accurate estimates regarding the required level of output.(IV) multiple products.

A) I, III, and IV only B) II and III only C) I, II, and III only D) II, III, and IV only E) I, II, III, and IV

23) Retail businesses often engage in another.

, the tendency to locate in close proximity to one

A) centering B) strategizing C) clustering D) localcasting E) macromarketing

24)

Nearness to raw materials would be most important to a

A) grocery store. B) tax preparation service. C) manufacturing company. D) post office. E) hospital.

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25) Which statement best characterizes the objective of a typical search for location alternatives?

A) Identify the best location choice. B) Minimize cost consequences. C) Maximize associated profits. D) Locate near markets. E) Identify acceptable locations.

26)

Which of the following is the last step in the procedure for making location decisions?

A) Determine the evaluation criteria. B) Identify important factors. C) Develop location alternatives. D) Evaluate alternatives and make a selection. E) Request input regarding alternatives.

27) When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is

A) linear programming. B) consumer surveys. C) factor rating. D) transportation models. E) center of gravity methods.

28)

The center of gravity method is used to

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travel time or shipping costs.

A) normalize B) eliminate C) average D) minimize E) document

29) In location planning, the location of raw materials, the location of markets, and labor factors are

A) regional factors. B) community factors. C) site-related factors. D) national factors. E) minor considerations.

30)

Software systems known as GIS help in location analysis. The initials GIS stand for

A) Graphic Interface Systems. B) Global Integrated Software. C) Graded Information Systems. D) Geo Intensive Software. E) Geographic Information System.

31)

Some communities offer financial and other incentives to

new businesses.

A) tax B) attract C) marginalize D) incorporate E) zone

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32)

Location options do not usually include

A) expansion. B) a contract. C) adding new facilities. D) moving. E) doing nothing.

33)

Cultural differences, customer preferences, labor, and resources are factors relating to

A) regional choices. B) site selection. C) zoning. D) product design. E) location decisions.

34)

The method for evaluating location alternatives that uses their total-cost lines is

A) locational cost-profit-volume analysis. B) the transportation model. C) factor rating. D) geographic information system (GIS) analysis. E) the center-of-gravity method.

35) The method for evaluating location alternatives that minimizes shipping costs between multiple sending and receiving locations is

A) locational cost-profit-volume analysis. B) the transportation model. C) factor rating. D) geographic information system (GIS) analysis. E) the center-of-gravity method.

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36) The method for evaluating location alternatives that incorporates both qualitative and quantitative inputs to establish a composite score for each alternative is

A) cost-profit-volume analysis. B) the transportation model. C) factor rating. D) geographic information system (GIS) analysis. E) the center-of-gravity method.

37) An approach to location analysis that can include both qualitative and quantitative considerations is

A) locational cost-profit-volume. B) factor rating. C) the transportation model. D) net present value. E) the center-of-gravity method.

38) A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of 0.50, transportation cost, which has a weight of 0.40, and labor cost, which has a weight of 0.10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should

A) be indifferent between these locations. B) choose Akron. C) choose Boston. D) reject both locations. E) build a plant in both cities.

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39) The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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 Location Alpha Ave.

Annual Fixed $ 5,000

Variable $ 200 per person

Beta Blvd.

$ 8,000

$ 150 per person

What would be the total annual costs for the Alpha Ave. location with 20 persons living there?

A) $5,400 B) $4,000 C) $5,000 D) $7,000 E) $9,000

40) The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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 Location Alpha Ave.

Annual Fixed $ 5,000

Variable $ 200 per person

Beta Blvd.

$ 8,000

$ 150 per person

What would be total annual costs for either location at the point of indifference?

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A) $13,000 B) $13,350 C) $9,000 D) $17,000 E) $19,200

41) The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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 Location Alpha Ave.

Annual Fixed $ 5,000

Variable $ 200 per person

Beta Blvd.

$ 8,000

$ 150 per person

If it is estimated that 30 persons will be living in this new chapter house, which location should the Skulls select?

A) Alpha Ave. B) Beta Blvd. C) either Alpha Ave. or Beta Blvd. D) reject both Alpha Ave. and Beta Blvd. E) become a virtual organization.

42) The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' 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 Location Alpha Ave.

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Annual Fixed $ 5,000

Variable $ 200 per person

Beta Blvd.

$ 8,000

$ 150 per person

If it is estimated that 30 persons will be living in this new chapter house, what would be the Skulls' annual cost savings by selecting the less costly location, rather than the more costly?

A) $0 B) $1,500 C) $200 D) $150 E) $350

43) 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 Atlanta

FC (annual) $ 80,000

VC (per unit) $ 20

Phoenix

$ 140,000

$ 16

At what annual output would the company be indifferent between the two locations?

A) 60,000 units B) 15,000 units C) 10,000 units D) 20,000 units E) 4,000 units

44) 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

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FC (annual)

VC (per unit)

Atlanta

80,000

$ 20

Phoenix

$ 140,000

$ 16

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

45) 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 Atlanta

FC (annual) $ 80,000

VC (per unit) $ 20

Phoenix

$ 140,000

$ 16

What would be the total annual costs at the point of indifference?

A) $300,000 B) $240,000 C) $380,000 D) $220,000 E) $760,000

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46) 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 Atlanta

FC (annual) $ 80,000

VC (per unit) $ 20

Phoenix

$ 140,000

$ 16

If annual demand is estimated to be 20,000 units, which location should the company select?

A) Atlanta B) Phoenix C) either Atlanta or Phoenix D) reject both Atlanta and Phoenix E) build at both locations

47) 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 Atlanta

FC (annual) $ 80,000

VC (per unit) $ 20

Phoenix

$ 140,000

$ 16

If the annual demand will be 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

48) 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 Labor Cost Transportation Cost Market Access Raw Materials Cost Utility Cost

Wt. 0.4 0.2 0.2 0.1 0.1

A 70 80 90 50 80

B 80 80 70 70 90

C 90 60 60 90 70

What is the composite score for location A?

A) 76 B) 75 C) 78 D) 74 E) 76.33

49) 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 Labor Cost

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Wt. 0.4

A 70

B 80

C 90

Transportation Cost Market Access Raw Materials Cost Utility Cost

0.2 0.2 0.1 0.1

80 90 50 80

80 70 70 90

60 60 90 70

What is the composite score for location B?

A) 76 B) 75 C) 78 D) 74 E) 76.33

50) 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 Labor Cost Transportation Cost Market Access Raw Materials Cost Utility Cost

Wt. 0.4 0.2 0.2 0.1 0.1

A 70 80 90 50 80

B 80 80 70 70 90

C 90 60 60 90 70

What is the composite score for location C?

A) 76 B) 75 C) 78 D) 74 E) 76.33

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51) 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 Labor Cost Transportation Cost Market Access Raw Materials Cost Utility Cost

Wt. 0.4 0.2 0.2 0.1 0.1

A 70 80 90 50 80

B 80 80 70 70 90

C 90 60 60 90 70

If the selection criterion is to be the greatest composite score, management should choose

A) location A. B) location B. C) location C. D) either location B or location C. E) to reject all locations.

52) 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 Labor Cost Transportation Cost Market Access Raw Materials Cost Utility Cost

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Wt. 0.4 0.2 0.2 0.1 0.1

A 70 80 90 50 80

B 80 80 70 70 90

C 90 60 60 90 70

If the decision rule is to select the location with the greatest composite score exceeding 80, management should choose

A) location A. B) location B. C) location C. D) either location B or location C. E) to reject all locations.

53) A clothing manufacturer produces clothing in five locations in the United States. In a move to vertical integration, the company is planning a new fabric production plant that will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows Location A B C D E

(x, y) 7, 2 4, 7 5, 5 6, 2 8, 4

If the amount of fabric shipped to each plant is 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

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54) A clothing manufacturer produces clothing in five locations in the United States. In a move to vertical integration, the company is planning a new fabric production plant that will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows Location A B C D E

(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

55) A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution center to serve this warehouse network. Location A B C D E

(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 center?

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A) 5, 5 B) 5, 4 C) 4, 5 D) 5, 6 E) 6, 5

56) A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution center to serve this warehouse network. Location A B C D E

(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 center?

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

57) Which of the following circumstances would be least likely to lead to a need for a new location?

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A) shifting of markets B) depletion of basic inputs C) growth in demand that is leading to greater utilization of existing capacity D) the need to expand into new markets E) the opportunity to take advantage of globalization trends

58) Which of the following is least important as a consideration for a firm at the beginning of a supply chain?

A) access to end consumers B) access to resources C) proximity to customers D) access to transportation infrastructure E) access to productive labor

59) Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 250 units?

A) $105,200 B) $102,500 C) $100,250 D) $100,520 E) $105,500

60) Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 550 units?

A) $105,200 B) $102,500 C) $100,250 D) $100,520 E) $105,500

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61) Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location choice J has monthly fixed costs of $150,000 and per-unit variable costs of $9. At what volume would these locations have equal total costs?

A) 30,000 units B) 25,000 units C) 40,000 units D) 50,000 units E) 60,000 units

62) Which of the following is least likely to experience relocation decisions based upon depletion of basic inputs?

A) petroleum operations B) mining operations C) farming operations D) logging operations E) fishing operations

63)

Which of the following is not an option in location planning?

A) expand globally B) expand an existing facility C) do nothing D) move locations E) add locations

64)

All of the following are benefits of globalizing operations except for?

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A) unskilled labor B) expanding markets C) cost savings D) new ideas E) less restrictive regulations

65) goods.

has/have a major influence on the decision-making process of where to produce

A) Automation B) Technology C) Costs D) Transportation costs E) Skilled labor

66)

The following are all ways businesses use GIS except for?

A) plan routes B) balance supply and demand C) analyze circulation D) determine premiums E) technology innovation

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Answer Key Test name: Chap 08_14e 1) FALSE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) FALSE 15) FALSE 16) A 17) B 18) C 19) D 20) E 21) A 22) B 23) C 24) C 25) E 26) D Version 1

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

57) C 58) A 59) B 60) E 61) D 62) C 63) A 64) A 65) A 66) E

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Ch. 9 Management of Quality TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Broadly defined, quality refers to the ability of a product or service to occasionally meet or exceed customer expectations. ⊚ ⊚

An organization achieves quality by consistently meeting its competitors' standards. ⊚ ⊚

true false

Because courtesy is subjective, it cannot be considered a factor in service quality. ⊚ ⊚

4) are.

true false

ISO 9000 standards stress continual improvement regardless of how good you currently ⊚ ⊚

true false

5) The dimensions of quality are important for products but are not applicable in service organizations. ⊚ ⊚

true false

Regardless of superior quality, consumers will not pay premium prices. ⊚ ⊚

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true false

High performance and low prices are both considered to be dimensions of quality. ⊚ ⊚

true false

The Baldrige Award can only be won by manufacturing organizations. ⊚ ⊚

true false

9) Quality of conformance refers to the degree to which goods and services conform to the intent of the designers as documented in the specifications. ⊚ ⊚

true false

10) Quality of design refers to the intention of the designers to include or exclude certain features in a product or service based on marketing and other information. ⊚ ⊚

true false

11) In market research, a group of consumers organized by marketing to express their opinions about a product or service is called a steering committee. ⊚ ⊚

true false

12) Business organizations that achieve good quality benefit in a variety of ways, including a positive reputation for quality, increased customer loyalty, and lower production costs. ⊚ ⊚

true false

13) User instructions and follow-up services after delivery are important elements of overall product or service quality.

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⊚ ⊚

14)

true false

Reducing the variability in our product or service is an important key to quality. ⊚ ⊚

true false

15) The dimensions of product and service quality are too abstract to be used as parameters for product or service design. ⊚ ⊚

true false

16) The degree to which a product or service satisfies its intended purpose is determined by design, conformance to design, cost, and reputation of the producer. ⊚ ⊚

true false

17) The degree to which a product or service satisfies its intended purpose is determined by service after delivery, ease of use, design, and conformance to design. ⊚ ⊚

true false

18) Medical malpractice claims are an example of how poor quality can affect an organization through liability. ⊚ ⊚

19)

true false

Convenience, reliability, and assurance are dimensions of service quality. ⊚ ⊚

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true false

20) Poor quality has a positive effect on productivity because it usually takes longer to produce a good part. ⊚ ⊚

true false

21) If the majority of service customers are satisfied, it is likely that all service customers will be satisfied. ⊚ ⊚

true false

22) The primary difference between internal failures and external failures is time and place of discovery of the failure. ⊚ ⊚

true false

23) Customer expectations tend to change over time, affecting their perception of service quality. ⊚ ⊚

24)

Cost of inspectors, testing, test equipment, and labs are examples of prevention costs. ⊚ ⊚

25)

true false

Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs. ⊚ ⊚

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true false

26) Modern quality management emphasizes finding and correcting mistakes before they reach the customer—catching the errors before they are shipped. ⊚ ⊚

true false

27) Deming stresses that workers are primarily responsible for poor quality because very often they fail to follow instructions. ⊚ ⊚

true false

28) According to Deming, it is the systems that management puts into place that are primarily responsible for poor quality, not employees. ⊚ ⊚

true false

29) Juran describes quality management as a trilogy that consists of quality planning, quality control, and quality improvement. ⊚ ⊚

true false

30) Juran describes quality management as a trilogy that consists of quality planning, control of quality costs, and quality improvement. ⊚ ⊚

31)

Quality at the source means returning all defects to the source—our vendors. ⊚ ⊚

32)

true false

Six Sigma programs have both management and technical components.

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⊚ ⊚

true false

33) Crosby's concept of ''quality is free" means that it is less expensive to do it right initially than to do it over. ⊚ ⊚

true false

34) Quality certification refers to a process of 100 percent inspection to catch all defective products before they leave the company; this allows every item to be certified defect free. ⊚ ⊚

true false

35) The customer is the focal point and customer satisfaction is the driving force in quality management. ⊚ ⊚

36)

When considering service quality, convenience often is a major factor. ⊚ ⊚

37)

true false

Serviceability, conformance, and reliability are dimensions of product quality. ⊚ ⊚

true false

38) Firms that wish to do business with the European Community can benefit from having a quality management system that meets ISO 9000 standards. ⊚ ⊚

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true false

39) Continuous improvement focuses on achieving major breakthroughs in product or service quality. ⊚ ⊚

true false

40) So long as quality input resources are used to make a product, we can expect quality output from the process. ⊚ ⊚

true false

41) Three key philosophies in TQM are continuous improvement, involvement of everyone in the organization, and customer satisfaction. ⊚ ⊚

true false

42) Suppliers are not included in quality assurance and quality improvement efforts in TQM; they should worry about their own problems. ⊚ ⊚

true false

43) Companies that strive for zero defects in the products they deliver to their customers must perform 100 percent inspection of the final product. ⊚ ⊚

44)

true false

The PDSA cycle forms the conceptual basis for continuous improvement. ⊚ ⊚

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true false

45)

A control chart is a visual representation of the steps in a process. ⊚ ⊚

true false

46) 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. ⊚ ⊚

true false

47) TQM expands the traditional view of quality beyond looking only at the quality of the final product or service to looking at the quality of every aspect of the process. ⊚ ⊚

true false

48) Your benchmark organization must be chosen from your industry in order for its methods to be applicable to your business. ⊚ ⊚

true false

49) A quality circle is amanagement team focused onimplementing major changes to improve quality. ⊚ ⊚

true false

50) Total quality management attempts to involve everyone in an organization in the effort to achieve quality. ⊚ ⊚

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true false

51)

There is a positive link between quality and productivity. ⊚ ⊚

true false

52) The expression "quality at the source" refers primarily to the practice of requiring each of our vendors to provide quality parts and materials. ⊚ ⊚

53)

true false

ISO standards aid in transferring technology to developing countries. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 54) In addition to correcting substandard work, employees have an ethical obligation to the quality problem as well.

A) prevent B) offset C) report D) standardize E) redesign

55) When an organization comes to the realization that there are quality problems in products that are already in service, ethical approaches include: (I) divulging the information to the public at large.(II) recalling, if possible, affected products.(III) handling complaints on an individual rather than a systemic basis.

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A) I and III B) I and II C) II and III D) I, II, and III E) Neither I, II, nor III

56) The quality certification that deals primarily with conformance to customer requirements is ISO ; ISO is concerned primarily with the organization's effect on the environment.

A) 9000; 14000 B) 24700; 9000 C) 14000; 9000 D) 9000; 24700 E) 14000; 24700

57)

ISO certification is similar to the Baldrige Award in its emphasis on

A) statistical tools. B) self-appraisal. C) teamwork. D) outsourcing. E) services.

58)

ISO certification differs substantially from the Baldrige Award in that it

A) focuses primarily on quality teams. B) emphasizes self-appraisal. C) is an ongoing process. D) is customer-driven. E) is national rather than international.

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59)

Six-sigma programs involve both

and

components.

A) probabilistic; deterministic B) logistical; managerial C) statistical; probabilistic D) managerial; technical E) local; global

60)

The "Control" phase of DMAIC is intended to ensure that

A) the proper subset of process inputs are monitored. B) variability reduction is pursued. C) data analysis is overseen. D) inputs are closely monitored. E) improvements are sustained.

61) Among the guiding principles of six sigma are (I) Reduction of variation is an important goal.(II) Valid measurement is critical.(III) Outputs determine inputs.(IV) We should focus on those critical few influences on our quality.

A) I, II, and IV only B) II and IV only C) I and III only D) I, II, III, and IV E) III only

62)

A tool that is not used for quality management is a

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A) flowchart. B) histogram. C) Pareto analysis. D) redesign. E) check sheet.

63) A tool that uses time-ordered values of a sample statistic to help detect the presence of correctable causes of variation in a process is a(n)

A) affinity diagram. B) checklist. C) control chart. D) flowchart. E) relationship diagram.

64)

Which is not a cost of quality?

A) prevention cost B) external failure costs C) extended service contract costs D) internal failure costs E) appraisal costs

65)

The Deming Prize was established by the

A) American Statistical Association. B) Union of Japanese Scientists. C) North American Free Trade Association. D) American Quality Society. E) World Trade Organization.

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66)

Lost production time, scrap, and rework are examples of

A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

67)

Warranty service, processing of 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.

68)

Costs of inspectors, 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.

69) Loss of business, increased liability, decreased productivity, and higher costs are all likely consequences of

A) labor unions. B) globalization. C) poor quality. D) robotics. E) micro-factories.

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70) Quality planning and administration, quality training, and quality control procedures are examples of

A) internal failure costs. B) external failure costs. C) appraisal costs. D) prevention costs. E) replacement costs.

71) The Baldrige Award aims to (I) publicize successful quality programs.(II) recognize quality achievements of U.S. companies.(III) stimulate efforts to improve quality.(IV) distribute the grant money available for improved quality.

A) I and IV only B) I and II only C) II and III only D) I, II, III, and IV E) I, II, and III only

72) Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem

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.

73)

Deciding how much to invest in the prevention of defects can be analyzed using

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A) EVPI. B) net present value. C) weighted factor analysis. D) return on quality. E) break-even analysis.

74) The Baldrige Award is based on evaluations in seven main areas. Which is not one of those?

A) relative profitability B) strategic planning C) human resource management D) information and analysis E) leadership

75)

A quality circle is

A) responsible for quality. B) total quality control. C) an inspection stamp found on meat. D) a group of employees who meet to discuss ways of improving products or processes. E) a team of customers and their contacts within the company who meet to discuss ways of improving products or processes.

76)

ISO 9000 currently stresses

of a certified organization.

A) minimizing harmful environmental effects B) product diversity C) inclusion of reused components in the office equipment D) a minimum of four supervisory levels E) continual improvement

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77) The quality tool which helps focus on the most important problem areas based on the 8020 rule is

A) brainstorming. B) check sheets. C) Pareto analysis. D) cause-and-effect diagrams. E) fail-safe methods.

78)

The quality tool that resembles a "fishbone" is

A) brainstorming. B) check sheets. C) Pareto analysis. D) cause-and-effect diagrams. E) fail-safe methods.

79)

TQM stands for

A) taguchi quality methods. B) tactical quality measurements. C) the quality matrix. D) total quality management. E) total quantity measurement.

80)

Which of the following is not an element of TQM?

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A) continuous improvement B) competitive benchmarking C) employee empowerment D) team approach E) quality management as a specialized function within the firm

81)

The tool that is useful in documenting the current process is a

A) control chart. B) Pareto chart. C) check sheet. D) flowchart. E) cause-and-effect diagram.

82)

The tool that is useful in the collection and organization of data is a

A) control chart. B) Pareto chart. C) check sheet. D) flowchart. E) runs chart.

83) A quality improvement technique that involves the sharing of thoughts and ideas in a way that encourages unrestrained collective thinking is

A) Pareto analysis. B) benchmarking. C) brainstorming. D) a control chart. E) a check sheet.

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84)

In order for TQM to be successful, it is essential that most of the organization be

A) members of quality circles. B) under contract. C) ISO certified. D) trained in error detection techniques. E) in agreement with the philosophy and its goals.

85)

Which of the following raises quality risks?

A) currency fluctuations B) outsourcing to less-developed countries C) empowering employees D) benchmarking E) streamlining the supplier base

86)

A technique for focusing attention on the most important problem areas is

A) quality circles. B) quality assurance. C) brainstorming. D) Pareto analysis. E) cause-and-effect analysis.

87)

A chart showing the number of occurrences by category would be used in

A) Pareto analysis. B) interviewing. C) cause-and-effect diagrams. D) benchmarking. E) quality function deployment.

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88)

Cause-and-effect diagrams are sometimes called

A) Pareto diagrams. B) fishbone (Ishikawa) diagrams. C) run charts. D) control charts. E) responsibility charts.

89) The process of identifying other organizations that are best at some facet of your operations, analyzing your performance versus theirs in order to establish a standard against which to judge performance, 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.

90) Giving workers responsibility for quality improvements and authority to make changes is known as

A) continuous improvement. B) passing the buck. C) benchmarking. D) employee empowerment. E) employee involvement.

91)

The typical difference between quality circles and continuous improvement teams is

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A) quality circles work on product design only. B) continuous improvement teams work on product and process design. C) continuous improvement teams use only engineers, while quality circles use just the workers doing the work. D) the amount of employee empowerment. E) There is no difference—they are the same.

92)

Which of the following is not a typical goal of process improvement?

A) increasing customer satisfaction B) reducing waste C) achieving higher quality D) increasing market share E) All are the goals

93) Managers have obligations to a wide variety of stakeholders such as shareholders, employees, and customers. When considering outsourcing production to offshore suppliers, managers have to weigh (I) cost benefits that might make shareholders wealthier.(II) quality issues that might make firms less productive and/or products riskier.(III) the investments already tied up in relationships with existing suppliers.

A) I B) II C) III D) I and II only E) I, II, and III

94) Focusing a supply chain on is a modern way of ensuring high-quality inputs and extending an organization’s continuous improvement efforts.

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A) lowest cost per unit sourced B) close, collaborative ties with suppliers C) suppliers that emphasize continuous-flow production D) ISO 14000 customers E) partners pursuing similar strategies

95) To minimize quality risks, which of the following would be least likely to be outsourced to less-developed countries?

A) rubber processing B) repetitive assembly C) packaging D) pharmaceuticals E) steel manufacturing

96) If customer satisfaction does not always lead to customer loyalty, firms may need to focus additional effort on strategies.

A) remediation B) retention C) rework D) repatriation E) reprocessing

97) Before a dimension of quality can be made operationally useful, it must be restated in some form.

A) qualitative B) manipulative C) certifiable D) measurable E) marketable

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98)

All of the following were key contributors to quality management except?

A) Taguchi B) Kawzuki C) Ishikawa D) Juran E) Shewhart

99)

Which of the following is a tool that is widely used for assessing service quality?

A) SERVQUAL B) SQL C) S&TI D) SARDOT E) SIPRNET

100)

This is the degree to which goods and services conform to the intent of the designers.

A) quality of performance B) quality of design C) quality of conformance D) quality of production E) quality of operations

101) It is estimated that the cost to fix a problem at the customer end is fix the problem earlier in the production or design phase.

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times the cost to

A) 3 B) 4. C) 5 D) 6 E) 7.

102)

There are

basic steps in problem solving.

A) 5 B) 6 C) 7 D) 8 E) 9

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Answer Key Test name: Chap 09_14e 1) FALSE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) FALSE 7) FALSE 8) FALSE 9) TRUE 10) TRUE 11) FALSE 12) TRUE 13) TRUE 14) TRUE 15) TRUE 16) FALSE 17) TRUE 18) TRUE 19) TRUE 20) FALSE 21) FALSE 22) TRUE 23) TRUE 24) FALSE 25) TRUE 26) FALSE Version 1

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

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

87) A 88) B 89) C 90) D 91) D 92) D 93) E 94) B 95) D 96) B 97) D 98) B 99) A 100) C 101) C 102) C

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Ch. 10 Quality Control TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Approving the effort that occurs during the production process is known as acceptance sampling. ⊚ ⊚

true false

Statistical process control is the measurement of rejects in the final product. ⊚ ⊚

true false

3) The traditional view is that the optimum level of inspection occurs when we catch at least 98.6 percent of the defects. ⊚ ⊚

true false

4) The traditional view is that the optimum level of inspection minimizes the sum of inspection costs and the cost of passing defectives. ⊚ ⊚

true false

Processes that are in control eliminate variations. ⊚ ⊚

true false

6) High-cost, low-volume items often require careful inspection since we may have large costs associated with passing defectives. ⊚ ⊚

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true false

7) Low-cost, high-volume items often require more intensive inspection than other types of items. ⊚ ⊚

A lower control limit must by definition be a value less than an upper control limit. ⊚ ⊚

true false

Attributes need to be measured, whereas variable data can be counted. ⊚ ⊚

true false

10) The amount of inspection we choose can range from no inspection at all to inspecting each item numerous times. ⊚ ⊚

true false

11) The amount of inspection needed is governed by the costs of inspection and the expected costs of passing defective items. ⊚ ⊚

12)

The purpose of statistical process control is to ensure that historical output is random. ⊚ ⊚

13)

true false

A process that exhibits random variability would be judged to be out of control.

Version 1

⊚ ⊚

true false

14) If a point on a control chart falls outside one of the control limits, this suggests that the process output is nonrandom and should be investigated. ⊚ ⊚

true false

15) An x-bar control chart can only be valid if the underlying population it measures is a normal distribution. ⊚ ⊚

16)

true false

Concluding that a process is out of control when it is not is known as a Type I error. ⊚ ⊚

true false

17) An R value of zero (on a range chart) means that the process must be in control since all sample values are equal. ⊚ ⊚

18)

Range charts are used mainly with attribute data. ⊚ ⊚

19)

true false

Range charts and p-charts are both used for variable data. ⊚ ⊚

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true false

20)

A p-chart is used to monitor the fraction of defectives in the output of a process. ⊚ ⊚

21)

A c-chart is used to monitor the total number of defectives in the output of a process. ⊚ ⊚

22)

true false

Tolerances represent the control limits we use on the charts. ⊚ ⊚

24)

true false

A c-chart is used to monitor the number of defects per unit for process output. ⊚ ⊚

23)

true false

Process capability compares process variability to the tolerances. ⊚ ⊚

true false

25) Control limits used on process control charts are specifications established by design or customers. ⊚ ⊚

26)

true false

Control limits tend to be wider for more variable processes. ⊚ ⊚

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true false 4

27) Patterns of data on a control chart suggest that the process may have nonrandom variation. ⊚ ⊚

true false

28) The output of a process may not conform to specifications even though the process may be statistically "in control." ⊚ ⊚

29)

Run tests are useful in helping to identify nonrandom variations in a process. ⊚ ⊚

30)

true false

A run test checks a sequence of observations for randomness. ⊚ ⊚

33)

true false

Statistical process control focuses on the acceptability of process output. ⊚ ⊚

32)

true false

Run tests give managers an alternative to control charts; they are quicker and cost less. ⊚ ⊚

31)

true false

Cpk is useful even when the process is not centered.

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⊚ ⊚

34)

true false

Cpk can be used only when the process is centered. ⊚ ⊚

true false

35) The purpose of quality control is making sure that processes are performing in an acceptable manner. ⊚ ⊚

true false

36) The primary purpose of statistical process control is to detect a defective product before it is shipped to a customer. ⊚ ⊚

true false

37) The Taguchi loss function suggests that the capability ratio can be improved by extending the spread between LCL and UCL. ⊚ ⊚

true false

38) The variation of a sampling distribution isless than the variation of the underlying process distribution. ⊚ ⊚

true false

39) The sampling distribution can be assumed to be approximately normal even when the underlying process distribution is not normally distributed.

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⊚ ⊚

true false

40) Approximately 99.7 percent of sample means will fall within plus or minus two standard deviations of the process mean if the process is under control. ⊚ ⊚

41)

The best way to assure quality is to use extensive inspection and control charts. ⊚ ⊚

42)

true false

Control limits are based on multiples of the process standard deviation. ⊚ ⊚

43)

true false

Attribute data are counted, variable data are measured. ⊚ ⊚

true false

44) The number of defective parts in a sample is an example of variable data because it will "vary" from one sample to another. ⊚ ⊚

45)

true false

Larger samples will require wider x-bar control limits because there is more data. ⊚ ⊚

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true false

46) When a process is not centered, its capability is measured in a slightly different way. The symbol for this case is Cpk. ⊚ ⊚

47)

true false

Range control charts are used to monitor process central tendency. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 48) The more progressive a firm's approach to quality assurance, the less that company will need to rely on

A) insourcing. B) inspection. C) outsourcing. D) continuous improvement. E) capability assessment.

49) Statistical process control charts are not really used to fix quality so much as they are used to

A) highlight when processes are not capable. B) point out when random variation is present. C) alert when corrective action is needed. D) monitor the quality of incoming shipments or outgoing finished goods. E) initiate team-building exercises.

50)

The assurance that processes are performing in an acceptable manner is the focus of

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A) variability analysis. B) inspection. C) capability assessment. D) quality control. E) acceptance sampling.

51)

Inspection is a(n)

activity.

A) prevention. B) capability analysis. C) flawless D) corrective. E) appraisal.

52) Acceptance sampling, when it is used, is used (I) before production.(II) during production.(III) after production.

A) I only B) I and III only C) I and II only D) II and III only E) I, II, and III

53)

The amount of inspection needed depends on

and

A) the amount of automation; the reliability of inspectors B) the quality of the supplier; the target market of the process C) the costs of inspection; the costs of passing on defective items D) where in the process the inspection occurs; the volume of the process E) the cost of the item being inspected; the use of the item being inspected

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54)

The greater the volume of the process being targeted for inspection, the more attractive inspection is.

A) monitored B) controlled C) periodic D) variable E) automated

55) Which of the following quality control sample statistics indicates a quality characteristic that is an attribute?

A) mean B) variance C) standard deviation D) range E) proportion

56)

A time-ordered plot of representative sample statistics is called a(n)

A) Gantt chart. B) simo chart. C) control chart. D) up-down matrix. E) standard deviation table.

57)

A control chart used to monitor the process mean is the

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A) p-chart. B) R-chart. C) x-bar chart. D) c-chart. E) Gantt chart.

58)

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.

59)

A p-chart would be used to monitor

A) average shrinkage. B) dispersion in sample data. C) the fraction defective. D) the number of defects per unit. E) the range of values.

60)

A c-chart is used for

A) means. B) ranges. C) percent defective. D) fraction defective per unit. E) number of defects per unit.

61)

A control chart used to monitor the number of defects per unit is the

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A) p-chart. B) R-chart. C) x-bar chart. D) c-chart. E) Gantt chart.

62)

A point which is outside of the lower control limit on an R-chart

A) is an indication that no cause of variation is present. B) should be ignored because it signifies better-than-average quality. C) should be investigated because an assignable cause of variation might be present. D) should be ignored unless another point is outside that limit. E) is impossible since the lower limit is always zero.

63) If a process is performing as it should, it is still possible to obtain observations which are outside of which limits? (I) tolerances(II) control limits(III) process variability

A) I B) II C) I and II D) II and III E) I, II, and III

64)

Which of the following relationships must always be incorrect?

A) Tolerances > process variability > control limits B) Process variability > tolerances > control limits C) Tolerances > control limits > process variability D) Process variability > control limits > tolerances E) Process variability < tolerances < control limits

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65)

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

A) Define what is to be controlled. B) Compare measurements to a standard. C) 100 percent inspection. D) Take corrective action if necessary. E) Evaluate corrective action.

66) The probability of concluding that assignable variation exists when only random variation is present is (I) the probability of a Type I error.(II) known as the alpha risk.(III) highly unlikely.(IV) the sum of probabilities in the two tails of the normal distribution.

A) I and II B) I and IV C) II and III D) I, II, and IV E) I, III, and IV

67)

variation is a variation whose cause can be identified.

A) Assignable B) Controllable C) Random D) Statistical E) Theoretical

68) A plot below the lower control limit on the range chart (I) should be ignored since lower variation is desirable.(II) may be an indication that process variation has decreased.(III) should be investigated for assignable cause.

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A) I and II B) I and III C) II and III D) II only E) I, II, and III

69) by a

A shift in the process mean for a measured characteristic would most likely be detected

A) p-chart. B) x-bar chart. C) c-chart. D) R-chart. E) s-chart.

70)

The range chart ( R-chart) is most likely to detect a change in

A) proportion. B) mean. C) number defective. D) variability. E) sample size.

71)

The traditional view is that the optimum level of inspection is where the

A) cost of inspection is minimum. B) cost of passing defectives is minimum. C) total cost of inspection and defectives is maximum. D) total cost of inspection and defectives is minimum. E) difference between inspection and defectives costs is minimum.

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72)

The purpose of control charts is to

A) estimate the proportion of output that is acceptable. B) weed out defective items. C) determine if the output is within tolerances/specifications. D) distinguish between random variation and assignable variation in the process. E) provide meaningful work for quality inspectors.

73) The process capability index (Cpk) may mislead if (I) the process is not stable.(II) the process output is not normally distributed.(III) the process is not centered.

A) I and II B) I and III C) II and III D) II only E) I, II, and III

74)

A time-ordered plot of sample statistics is called a(n)

chart.

A) statistical B) inspection C) control D) simo E) limit

75)

Consider the following information

Observations Num. of defects

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1 10

2 18

3 13

4 15

5 9

6 12

The number of runs up and down for the preceding data is

A) 3. B) 4. C) 5. D) 6. E) none of these.

76)

Consider the following information

Observations Num. of defects

1 10

2 18

3 13

4 15

5 9

6 12

The number of runs above and below the sample median is:

A) 3. B) 4. C) 5. D) 6. E) none of these.

77)

The following data occurs chronologically from left to right

15.2

19.7

16.0

11.1

14.8

14.5

The number of runs above and below the sample median is:

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A) B) C) D) E) F) G)

78)

5. none of these. 2. 3. 4. 5. none of these.

The following data occurs chronologically from left to right 15.2

19.7

16.0

11.1

14.8

14.5

The number of runs up and down is:

A) 2. B) 3. C) 4. D) 5. E) none of these.

79) A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He 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, he tested service life on random samples of four headlamps, with these results Sample 1 2 3

495 525 470

Service Life (hours) 500 505 515 505 480 460

500 515 470

What is the sample mean service life for sample 2?

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A) 460 hours B) 495 hours C) 500 hours D) 515 hours E) 525 hours

80) A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that when this service life is in control it is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results Sample 1 2 3

495 525 470

Service Life (hours) 500 505 515 505 480 460

500 515 470

What is the mean of the sampling distribution of sample means when the service life is in control?

A) 250 hours B) 470 hours C) 495 hours D) 500 hours E) 515 hours

81) A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He 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, he tested service life on random samples of four headlamps, with these results Sample 1 2 3

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495 525 470

Service Life (hours) 500 505 515 505 480 460

500 515 470

What is the standard deviation of the sampling distribution of sample means for whenever service life is in control?

A) 5 hours B) 6.67 hours C) 10 hours D) 11.55 hours E) 20 hours

82) A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He 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, he tested service life on random samples of four headlamps, with these results Sample 1 2 3

495 525 470

Service Life (hours) 500 505 515 505 480 460

500 515 470

If he uses upper and lower control limits of 520 and 480 hours, what is his risk (alpha) of concluding that service life is out of control when it is actually under control (Type I error)?

A) 0.0026 B) 0.0456 C) 0.3174 D) 0.6826 E) 0.9544

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83) A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He 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, he tested service life on random samples of four headlamps, with these results Sample 1 2 3

495 525 470

Service Life (hours) 500 505 515 505 480 460

500 515 470

If he uses upper and lower control limits of 520 and 480 hours, on what sample(s) (if any) does service life appear to be out of control?

A) sample 1 B) sample 2 C) sample 3 D) both samples 2 and 3 E) all samples are in control

84) A quality analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is in control, package weight is normally distributed with a mean of 20 ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each Day Monday Tuesday Wednesday Thursday Friday

23 23 20 18 18

Weight (ounces) 22 23 21 19 19 20 19 20 20 22

24 21 21 19 20

What is the sample mean package weight for Thursday?

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A) 19 ounces B) 20 ounces C) 20.6 ounces D) 21 ounces E) 23 ounces

85) A quality analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is in control, package weight is normally distributed with a mean of 20 ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each Day Monday Tuesday Wednesday Thursday Friday

23 23 20 18 18

Weight (ounces) 22 23 21 19 19 20 19 20 20 22

24 21 21 19 20

What is the mean of the sampling distribution of sample means when this process is in control?

A) 18 ounces B) 19 ounces C) 20 ounces D) 21 ounces E) 22 ounces

86) A quality analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is in control, package weight is normally distributed with a mean of 20 ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each Day Monday Tuesday Wednesday Thursday

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23 23 20 18

Weight (ounces) 22 23 21 19 19 20 19 20

24 21 21 19

Friday

What is the standard deviation of the sampling distribution of sample means for whenever this process is in control?

A) 0.1 ounces B) 0.4 ounces C) 0.5 ounces D) 1 ounce E) 2 ounces

87) A quality analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is in control, package weight is normally distributed with a mean of 20 ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each Day Monday Tuesday Wednesday Thursday Friday

23 23 20 18 18

Weight (ounces) 22 23 21 19 19 20 19 20 20 22

24 21 21 19 20

If he uses upper and lower control limits of 22 and 18 ounces, what is his risk (alpha) of concluding this process is out of control when it is actually in control (Type I error)?

A) 0.0026 B) 0.0456 C) 0.3174 D) 0.6826 E) 0.9544

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88) A quality analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is in control, package weight is normally distributed with a mean of 20 ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each Day Monday Tuesday Wednesday Thursday Friday

23 23 20 18 18

Weight (ounces) 22 23 21 19 19 20 19 20 20 22

24 21 21 19 20

If he uses upper and lower control limits of 22 and 18 ounces, 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) None

89) A quality analyst wants to construct a control chart for determining whether three machines, all producing the same product, are in control with regard to a particular quality variable. Accordingly, he sampled four units of output from each machine, with the following results Machine #1 #2 #3

17 16 23

Measurements 15 15 25 18 24 23

17 25 22

What is the sample mean for machine #1?

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A) 15 B) 16 C) 17 D) 21 E) 23

90) A quality analyst wants to construct a control chart for determining whether three machines, all producing the same product, are in control with regard to a particular quality variable. Accordingly, he sampled four units of output from each machine, with the following results Machine #1 #2 #3

17 16 23

Measurements 15 15 25 18 24 23

17 25 22

What is the estimate of the mean of the sampling distribution for the sample mean?

A) 16 B) 19 C) 20 D) 21 E) 23

91) A quality analyst wants to construct a control chart for determining whether three machines, all producing the same product, are in control with regard to a particular quality variable. Accordingly, he sampled four units of output from each machine, with the following results Machine #1 #2 #3

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17 16 23

Measurements 15 15 25 18 24 23

17 25 22

What is the estimate of the sample average range based upon this limited sample?

A) 13.0 B) 4.33 C) 5.4 D) 4.2 E) 2.0

92) A quality analyst wants to construct a control chart for determining whether three machines, all producing the same product, are in control with regard to a particular quality variable. Accordingly, he sampled four units of output from each machine, with the following results Machine #1 #2 #3

17 16 23

Measurements 15 15 25 18 24 23

17 25 22

What are the x-bar chart three-sigma upper and lower control limits?

A) 22 and 18 B) 23.29 and 16.71 C) 23.5 and 16.5 D) 23.16 and 16.84 E) 24 and 16

93) A quality analyst wants to construct a control chart for determining whether three machines, all producing the same product, are in control with regard to a particular quality variable. Accordingly, he sampled four units of output from each machine, with the following results Machine #1 #2 #3

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17 16 23

Measurements 15 15 25 18 24 23

17 25 22

For upper and lower control limits of 23.29 and 16.71, which machine(s), if any, appear(s) to have an out-of-control process mean?

A) machine #1 B) machine #2 C) machine #3 D) all of the machines E) none of the machines

94) The chair of the operations management department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are in control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results Instructor Prof. A Prof. B Prof. C Prof. D

Number of Failures 13 0 11 16

What is the sample proportion of failures ( p) for Prof. D?

A)0 B) .04 C) .11 D) .13 E) .16

95) The chair of the operations management department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are in control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results

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Instructor Prof. A Prof. B Prof. C Prof. D

Number of Failures 13 0 11 16

What is the estimate of the mean proportion of failures for these instructors?

A) .10 B) .11 C) .13 D) .16 E) .40

96) The chair of the operations management department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are in control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results Instructor Prof. A Prof. B Prof. C Prof. D

Number of Failures 13 0 11 16

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

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97) The chair of the operations management department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are in control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results Instructor Prof. A Prof. B Prof. C Prof. D

Number of Failures 13 0 11 16

What are the .95 (5 percent risk of Type I error) upper and lower control limits for the p-chart?

A) .95 and .05 B) .13 and .07 C) .1588 and .0412 D) .16 and .04 E) .1774 and .0226

98) The chair of the operations management department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are in control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results Instructor Prof. A Prof. B Prof. C Prof. D

Number of Failures 13 0 11 16

Using .95 control limits (5 percent risk of Type I error), which instructor(s), if any, should he conclude is (are) out of control?

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A) none B) Prof. B C) Prof. D D) both Prof. B and Prof. D E) all

99) A quality analyst wants to construct a control chart for determining whether four machines, all producing the same product, are in control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results Machine #1 #2 #3 #4

Total Defectives 23 15 29 13

What is the sample proportion of defectives for machine #1?

A) .023 B) .02 C) .0115 D) .0058 E) .005

100) A quality analyst wants to construct a control chart for determining whether four machines, all producing the same product, are in control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results Machine #1 #2 #3 #4

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Total Defectives 23 15 29 13

What is the estimate of the process proportion of defectives?

A) .08 B) .06 C) .04 D) .02 E) .01

101) A quality analyst wants to construct a control chart for determining whether four machines, all producing the same product, are in control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results Machine #1 #2 #3 #4

Total Defectives 23 15 29 13

What is the estimate of the standard deviation of the sampling distribution of sample proportions for this process?

A) .016 B) .00016 C) .04 D) .0044 E) .00002

102) A quality analyst wants to construct a control chart for determining whether four machines, all producing the same product, are in control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results Machine

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Total Defectives

#1 #2 #3 #4

23 15 29 13

What are the control chart upper and lower control limits for an alpha risk of .05?

A) .0272 and .0128 B) .0287 and .0113 C) .029 and .013 D) .0303 and .0097 E) .0332 and .0068

103) A quality analyst wants to construct a control chart for determining whether four machines, all producing the same product, are in control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results Machine #1 #2 #3 #4

Total Defectives 23 15 29 13

For upper and lower control limits of .026 and .014, which machine(s), if any, appear(s) to be out-of-control for process proportion of defectives?

A) machine #3 B) machine #4 C) machines #3 and #4 D) machines #2 and #3 E) none of the machines

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104) Studies on a bottle-filling machine indicate that it fills bottles to a mean of 16 ounces with a standard deviation of 0.10 ounces. What is the process specification, assuming the Cpk index of 1?

A) lower spec = 0.1 ounces and upper spec = 1 ounce B) lower spec = 14.3 ounces and upper spec = 17.7 ounces C) lower spec = 12.0 ounces and upper spec = 21.4 ounces D) lower spec = 15.7 ounces and upper spec = 16.3 ounces E) There is insufficient information to determine the process specification.

105) Studies on a machine that molds plastic water pipe indicate that when it is injecting 1inch-diameter pipe, the process standard deviation is 0.05 inches. The 1-inch pipe has a specification of 1 inch plus or minus 0.10 inch. What is the process capability index ( Cpk) if the long-run process mean is 1 inch?

A) 0.50 B) 0.67 C) 1.00 D) 2.00 E) 2.20

106) 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 E) 1.33

107) The specifications for a product are 6 mm ± 0.1 mm. The process is known to operate at a mean of 6.05 with a standard deviation of 0.01 mm. What is the Cpk for this process?

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A) 3.33 B) 1.67 C) 5.00 D) 2.50 E) 1.33

108) Organizations should work to improve process capability so thatinspection efforts can become more

A) effective. B) efficient. C) necessary. D) unnecessary. E) widespread.

109) A process results in a few defects occurring in each unit of output. Long-run, these defects should be monitored with

A) p-charts. B) c-charts. C) x-bar charts. D) R-charts. E) o-charts.

110) When a process is in control, it results in there being, on average, 16 defects per unit of output. c-chart limits of 8 and 24 would lead to a percent chance of a Type I error.

A) 68.26 B) 95.44 C) 31.74 D) 0.26 E) 4.56

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111) When a process is in control, it results in there being, on average, 16 defects per unit of output. chart limits of 4 and 28 would lead to a percent chance of a Type I error.

A) 68.26 B) 95.44 C) 31.74 D) 0.26 E) 4.56

112)

The basis for a statistical process control chart is a(the)

A) process capability. B) sampling distribution. C) control limit. D) sample range. E) sample mean.

113)

The approaches to quality assurance are

A) process inspection, control analysis, and continuous improvement. B) identification, analysis, and quality assurance C) analysis, quality assurance, and modifications. D) inspection alone, process control, and continuous improvement. E) quality identification, process correction, and improvement inspection

114)

The basic issues of inspection include all of the following except

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A) how much to inspect and how often B) whether to inspect in a centralized or on-site location C) at what points in the process inspection should occur D) whether to inspect attributes or variables E) what will be the total cost involved

115)

This step in the control process includes characteristics that can be counted.

A) define B) compare C) measure D) evaluate E) correct

116)

This step in the control process includes sufficient detail about what is to be controlled.

A) define B) compare C) measure D) evaluate E) correct

117) This step in the control process includes a standard that can be used to evaluate the measurements.

A) define B) compare C) measure D) evaluate E) correct

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118)

This step in the control process includes a definition of out of control.

A) define B) compare C) measure D) evaluate E) correct

119) This step in the control process includes adjustments when a process is found to be out of control.

A) define B) compare C) measure D) evaluate E) correct

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Answer Key Test name: Chap 10_14e 1) FALSE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) TRUE 11) TRUE 12) FALSE 13) FALSE 14) TRUE 15) FALSE 16) TRUE 17) FALSE 18) FALSE 19) FALSE 20) TRUE 21) FALSE 22) TRUE 23) FALSE 24) TRUE 25) FALSE 26) TRUE Version 1

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

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

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

117) B 118) D 119) E

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Ch. 11 Aggregate Planning and Master Scheduling TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Aggregate planning is capacity planning that typically covers a time horizon of one to three months. ⊚ ⊚

true false

2) The goal of aggregate planning is to achieve a production plan thateffectively utilizes the organization's resources to meet expected demand. ⊚ ⊚

true false

Aggregate planners are concerned with the quality and quantity of expected demand. ⊚ ⊚

true false

4) Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate range of time. ⊚ ⊚

true false

5) The assignment of work to specific machines and people are examples of aggregate planning. ⊚ ⊚

true false

6) The output from aggregate planning is a detailed business plan covering the next 2 to 12 months. ⊚ ⊚ Version 1

true false 1

7) Demand can be altered in aggregate planning by promotion and producing additional product using overtime. ⊚ ⊚

true false

8) Capacity can be modified in aggregate planning by promotion and producing additional product using overtime. ⊚ ⊚

true false

9) Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques. ⊚ ⊚

true false

10) Seasonality in demand has the advantage of leveling out requirements for our product or service. ⊚ ⊚

11)

true false

A level capacity strategy is also known as a chase demand strategy. ⊚ ⊚

true false

12) An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low. ⊚ ⊚

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true false

13)

Linear programming models yield the optimal solution. ⊚ ⊚

14) cost.

Ultimately the overriding factor in choosing a strategy in aggregate planning is overall

⊚ ⊚

15)

true false

Aggregate planners commonly use trial-and-error methods in developing aggregate plans. ⊚ ⊚

true false

16) The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan. ⊚ ⊚

true false

17) Aggregate planners typically use mathematical techniques such as linear programming for planning. ⊚ ⊚

18)

true false

Disaggregating an aggregate plan leads to a master schedule. ⊚ ⊚

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true false

19) The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start. ⊚ ⊚

20)

Departmental budgeting is an example of aggregate planning. ⊚ ⊚

21)

true false

Master schedulers are employed primarily by service organizations. ⊚ ⊚

true false

22) Subcontracting "in" would apply to periods in which our organization has excess capacity. ⊚ ⊚

true false

23) Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity. ⊚ ⊚

true false

24) A time fence in the master schedule is used to prevent changes to the schedule within the frozen section. ⊚ ⊚

true false

25) After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity.

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⊚ ⊚

true false

26) In the master production schedule, production is planned for the next period whenever the available-to-promise quantity becomes negative. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 27) Which of the following best describes aggregate planning?

A) the link between intermediate-term planning and short-term operating decisions B) a collection of objective planning tools C) make-or-buy decisions D) an attempt to respond to predicted demand within the constraints set by product, process, and location decisions E) manpower planning

28) Accommodating peak demand and effectively using labor resources during periods of low demand would be the main goals of aggregate planners in

A) manufacturing. B) military. C) archaeology. D) libraries. E) financial services.

29)

Aggregate planning is capacity planning for

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A) the long range. B) the intermediate range. C) the short range. D) typically one to three months. E) typically one or more years.

30)

One area in which aggregate planning decisions are made is

A) job sequencing B) customer order quantities C) inventory levels D) location E) layout

31)

Which of the following is an input to aggregate planning?

A) ending inventory B) demand forecasts for each period C) customer levels D) setup costs E) quantity discounts

32)

Essentially, the output of aggregate planning is the

A) marketing plan. B) production plan. C) rough-cut capacity plan. D) assignment plan. E) material requirements plan.

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33) In doing aggregate planning for a firm producing paint, the aggregate planners would most likely deal with

A) just gallons of paint, without concern for the different colors and sizes. B) gallons of paint, but be concerned with the different colors to be produced. C) gallons, quarts, pints, and all the different sizes to be produced. D) all the different sizes and all the different colors by size. E) all of the different colors targeted for different markets.

34)

Aggregate planning requires which of the following information?

(I) a forecast of expected demand(II) current levels of inventory(III) policies regarding employment levels

A) II only B) I and II only C) I and III only D) I, II, and III E) II and III only

35)

Aggregate planners attempt to balance

A) demand and inventories. B) demand and costs. C) capacity and inventories. D) capacity and costs. E) capacity and demand.

36)

Which of the following is not an input to the aggregate planning process?

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A) resources available B) demand forecast C) policies on workforce changes D) master production schedules E) cost information

37) Which one of the following would not be considered a decision option for purposes of aggregate planning?

A) inventory levels B) manpower levels C) pricing D) production costs E) promotion

38) Which of the following is not a basic option for altering the availability of capacity in a service environment?

A) overtime B) hiring/layoff C) part time D) inventory E) All of the choices are options.

39)

Which one of the following is not a basic option for altering demand?

A) promotion B) backordering C) pricing D) subcontracting E) All of these are demand options.

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40)

One option for altering the pattern of demand is

A) pricing differentials B) overtime. C) part-time workers. D) inventories. E) subcontracting.

41) Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand?

A) Subcontract. B) Vary the size of the workforce. C) Schedule overtime. D) Allow inventory levels to vary. E) Use back orders.

42)

One option for altering the availability of manufacturing capacity is

A) pricing. B) promotion. C) back orders. D) inventories. E) yield management.

43)

One option for altering the availability of capacity is

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A) use of overtime or slack time. B) pricing. C) promotion. D) back orders. E) rigidly fixing work schedules.

44)

In order to use the level capacity strategy, variations in demand are met by

A) varying output during regular time without changing employment levels. B) varying output during regular time by changing employment levels. C) varying output by changing overtime levels. D) using some combination of inventories, overtime, part-time, subcontracting, and back orders. E) price adjustments.

45)

In using the chase strategy, variations in demand could be met by

A) promotions. B) varying output during regular time by changing employment levels. C) varying inventory levels. D) using some combination of inventories, overtime, part-time, subcontracting, and back orders. E) price adjustments.

46)

Uncommitted inventory is called

A) available-to-promise inventory. B) free inventory. C) safety stock. D) lead time inventory. E) obsolete inventory.

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47)

Aggregate planners seek to match supply and demand

A) at minimum overall cost. B) by changing company policy. C) by minimizing layoffs. D) keeping inventories at a minimum. E) by minimizing hires.

48)

In practice, the more commonly used techniques for aggregate planning are

A) mathematical techniques. B) informal trial-and-error techniques. C) transportation models. D) simulation models. E) linear programming optimization.

49)

The main disadvantage(s) of informal techniques used for aggregate planning is(are)

A) they are expensive to do. B) they may not result in the best plan. C) they take a long time to do. D) they require the use of a computer. E) the lack of formal education of the planners.

50)

Information for firm ABC

Inventory at the end of April 2008: Expected demand during April 2008: Production expected during April 2008:

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200 units 50 units 100 units

What is the expected inventory at the end of April 2008?

A) 350 B) 250 C) 150 D) 50 E) 80

51)

Information for firm ABC

Inventory at the end of April 2008: Expected demand during April 2008: Production expected during April 2008:

200 units 50 units 100 units

What was the inventory at the end of March 2008?

A) 350 B) 250 C) 150 D) 50 E) 400

52)

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.

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53)

Simulation to produce an aggregate plan

A) will produce the best plan. 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 a minimum of four iterations to be accurate.

54)

Which of the following is most closely associated with disaggregation?

A) subcontracting B) master schedule C) diversity D) varying inventory levels E) firing and laying off

55)

The direct result of disaggregating the aggregate plan is the

A) marketing plan. B) production plan. C) rough-cut capacity plan. D) master schedule. E) material requirements plan.

56)

Moving from the aggregate plan to a master production schedule requires

A) rough-cut capacity planning. B) disaggregation. C) suboptimization. D) strategy formulation. E) chase strategies.

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57) 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) high-margin inventory. E) master production schedule arrivals.

58)

Proactive and reactive aggregate planning strategies are best associated with

A) input and output. B) make and buy. C) quantitative and qualitative. D) exact and approximate. E) demand and capacity options.

59) Using variable pricing in response to demand variability tomaximize revenue using perishablecapacity is known as

A) yield management. B) profit minimization. C) capacity loading. D) demand optimization. E) perishability avoidance.

60) Which of the following are typically in play in a circumstance in which yield management is worthwhile? (I) Perishable capacity(II) Ample finished goods storage(III) Demand variability(IV) Low holding costs

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A) I, II, and IV only B) I and III only C) III only D) II and III only E) II, III, and IV only

61) Aggregate planning for services is more difficult than aggregate planning for manufacturing because and are more difficult to predict.

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

62) One thing that makes aggregate planning in services easier than aggregate planning in manufacturing is

A) inventory is cheaper to hold. B) labor availability is more predictable. C) inventory is less perishable. D) labor is more flexible. E) demand is less variable.

63) 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.

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64) A company'sdisaggregation 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?

A) 320 units B) 400 units C) 440 units D) 480 units E) 560 units

65) 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) impossible to say without more information

66) 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 in either of the first two periods?

A) 21 B) 1 C) 20 D) 4 E) impossible to say without more information

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67) A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in 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) impossible to say without more information

68) A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in 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 MPS quantity in week 3?

A) 14 B) 32 C) 12 D) 20 E) impossible to say without more information

69) When the opportunity cost of lost revenue is relatively high, more attractive.

become(s) relatively

A) layoffs B) back orders C) excess capacity D) disaggregation E) minimal inventory

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70) 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

71) 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

72) At XYZ Corp., themaster 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 yearplanned 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)?

A) 1,000 B) 200 C) 400 D) 100 E) 50

73) 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? Version 1

A) 50 B) 6 C) 300 D) 100 E) cannot be determined without projected on-hand information

74)

Which of the following steps is necessary to ensure that a master schedule is valid?

A) worker scheduling B) order promising C) inventory counting D) order booking E) rough-cut capacity planning

75)

Which of the following is not an output to the aggregate planning process?

A) inventory levels B) employees required C) backorder projections D) demand forecast E) subcontracting needed

76)

Contract workers are also known by this name

A) independent contractors, or "gig workers" B) dependent contractors, or "DWC" C) union workers, or "ACLU" D) temporary workers, or "temps" E) subcontractors, or "subs"

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77) The following are important considerations when developing a strategy to meet uneven demand

A) operations, capacity, and cost B) flexibility, costs, and company policy C) forecasts, policy, and capacity D) suppliers, distributors, and operations E) capacity, forecasts, costs

78)

Many organizations choose to accomplish aggregate planning on the basis of methods.

and

A) linear programming; trial-and-error. B) experience; trial-and-error. C) simulation; experience. D) spreadsheet; experience. E) heuristic; computerized.

79)

This aggregate planning technique is known for being intuitively appealing.

A) linear programming B) spreadsheet C) simulation D) heuristic E) trial and error

80) This aggregate planning technique is known for being computerized, although some assumptions may not be valid.

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A) linear programming B) spreadsheet C) simulation D) heuristic E) trial and error

81) This aggregate planning technique is known for being examined under a variety of conditions.

A) linear programming B) spreadsheet C) simulation D) heuristic E) trial and error

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Answer Key Test name: Chap 11_14e 1) FALSE 2) TRUE 3) FALSE 4) TRUE 5) FALSE 6) FALSE 7) FALSE 8) FALSE 9) FALSE 10) FALSE 11) FALSE 12) TRUE 13) TRUE 14) TRUE 15) TRUE 16) FALSE 17) FALSE 18) TRUE 19) TRUE 20) FALSE 21) FALSE 22) TRUE 23) TRUE 24) FALSE 25) TRUE 26) FALSE Version 1

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

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

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Ch. 12 Inventory Management TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) One important use of inventories in manufacturing is to decouple operations through the use of work-in-process inventories. ⊚ ⊚

true false

The objective of inventory management is to minimize the cost of holding inventory. ⊚ ⊚

true false

3) A retail store that carries twice as much inventory as its competitor will provide twice the customer service level. ⊚ ⊚

true false

4) The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable. ⊚ ⊚

true false

5) To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: when to order and how much to order. ⊚ ⊚

true false

6) In the EOQ formula, holding costs under 10 percent are expressed as percentages, above 10 percent are expressed as annual unit costs.

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⊚ ⊚

DVD recorders would be an example of independent-demand items. ⊚ ⊚

true false

Reorder point models are primarily used for dependent-demand items. ⊚ ⊚

true false

9) An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier. ⊚ ⊚

10)

Decoupling operations means to break the linkage between two sequential operations. ⊚ ⊚

11)

true false

The A-B-C approach involves classifying inventory items based on their name. ⊚ ⊚

13)

true false

Interest, insurance, and opportunity costs are all associated with holding costs. ⊚ ⊚

12)

true false

An inventory buffer adds value and lowers cost in all supply chains.

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⊚ ⊚

true false

14) In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage. ⊚ ⊚

15)

EOQ inventory models are basically concerned with the timing of orders. ⊚ ⊚

16)

true false

The average inventory level is inversely related to order size. ⊚ ⊚

true false

17) The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases. ⊚ ⊚

true false

18) The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable. ⊚ ⊚

true false

19) Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost. ⊚ ⊚

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true false

20)

Understocking an inventory item is a sure sign of inadequate inventory control. ⊚ ⊚

21)

Annual ordering cost is inversely related to order size. ⊚ ⊚

22)

true false

The total cost curve is relatively flat near the EOQ. ⊚ ⊚

true false

23) Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations. ⊚ ⊚

true false

24) In the quantity discount model, if holding costs are given as a percentage of unit price, a graph of the total cost curves will have the same EOQ for each curve. ⊚ ⊚

true false

25) In the quantity discount model, the optimum quantity will always be found on the lowest total cost curve. ⊚ ⊚

26)

true false

ROP models indicate to managers the time between orders.

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⊚ ⊚

27)

When to order can be calculated by the ROP and expressed as a quantity. ⊚ ⊚

28)

true false

The rate of demand is an important factor in determining the ROP. ⊚ ⊚

true false

29) The inventory value of the supply chain exceeds the inventory value of the organization's work-in-process inventory. ⊚ ⊚

30)

Safety stock is held because we anticipate future demand. ⊚ ⊚

31)

true false

Variability in demand and/or lead time can be compensated for by safety stock. ⊚ ⊚

32)

true false

Solving quality problems can lead to lower inventory levels. ⊚ ⊚

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true false

33) ROP models assume that demand during lead time is composed of a series of dependent daily demands. ⊚ ⊚

34)

Profit margins tend to be inversely related to inventory turns. ⊚ ⊚

35)

true false

In the fixed-order-interval model, the order size is the same for each order. ⊚ ⊚

36)

true false

The fixed-order-interval model requires a continuous monitoring of inventory levels. ⊚ ⊚

true false

37) Discrete stocking levels are used when an organization does not want visibility of inventory levels. ⊚ ⊚

true false

38) The fixed-order-interval model requires a larger amount of safety stock than the ROP model for the same risk of a stockout. ⊚ ⊚

39)

true false

The single-period model can be very helpful in determining when to order. ⊚ ⊚

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true false 6

40)

The single-period model can be very helpful in determining how much to order. ⊚ ⊚

41)

Monitoring inventory turns over time can be used as a measure of performance. ⊚ ⊚

42)

true false

A single-period model would be used mainly by organizations going out of business. ⊚ ⊚

43)

true false

The basic EOQ model ignores the purchasing cost. ⊚ ⊚

true false

44) When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill. ⊚ ⊚

true false

45) In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period. ⊚ ⊚

46)

true false

A quantity discount will lower the reorder point.

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⊚ ⊚

47)

It is critical that the exact quantity calculated in the EOQ model be ordered. ⊚ ⊚

48)

true false

The two basic issues in inventory are how much to order and when to order. ⊚ ⊚

51)

true false

The calculation of safety stock requires knowledge of demand and lead time variability. ⊚ ⊚

50)

true false

Safety stock eliminates all stockouts. ⊚ ⊚

49)

true false

Cycle counting can be used in motorcycle inventory control. ⊚ ⊚

true false

52) Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered. ⊚ ⊚

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true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 53) A stock or store of goods is called a(n)

A) bundler. B) servicer. C) retailer. D) supply chain. E) inventory.

54)

Which of the following is typically the largest of all inventory costs?

A) shortage cost B) purchase cost C) holding cost D) ordering cost E) pipeline cost

55) Even though it is often the case that no cash outflows result when demand exceeds capacity, can nevertheless be experienced in those circumstances.

A) foreorder costs B) service costs C) shortage costs D) holding costs E) setup costs

56) If there are shipping cost economies that result from bundling orders for different items together, the model becomes a relatively more attractive option.

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A) multi-period B) reorder-point C) fixed-order-quantity D) fixed-order-interval E) multi-item

57) Average demand for a particular item is 1,200 units 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 fixed-order-interval model is chosen in this instance, how often (on average) will this item be ordered?

A) once a month B) once every other month C) twice a month D) twice every three months E) three times every two months

58) 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?

A) 120 B) 93 C) 136 D) 46 E) 84

59)

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 and constant. B) Lead time does not vary. C) Each order is received in a single delivery. D) Quantity discounts are available. E) Ordering and holding costs have been estimated reasonably accurately.

60) Which of the following interactions with vendors would potentially lead to inventory reductions?

A) reduced lead times B) increased safety stock C) less frequent purchases D) larger batch quantities E) longer order intervals

61)

A nonlinear cost related to order size is the cost of

A) interest. B) insurance. C) taxes. D) ordering. E) space.

62)

In a two-bin inventory system, the amount contained in the second bin is equal to the

A) ROP. B) EOQ. C) amount in the first bin. D) optimum stocking level. E) safety stock.

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63) When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves

A) line up. B) equal zero. C) do not line up. D) cannot be calculated. E) depend on the percentage assigned.

64)

Dairy items, fresh fruit, and newspapers are items that

A) do not require safety stocks. B) cannot be ordered in large quantities. C) are subject to deterioration and spoilage. D) require that prices be lowered every two days. E) have minimal holding costs.

65)

Which of the following is least likely to be included in order costs?

A) processing vendor invoices for payment B) processing purchase orders C) inspecting incoming goods for quantity D) taking an inventory to determine how much is needed E) temporary storage of delivered goods

66) In an A-B-C system, the typical percentage of the number of items in inventory that is classified as A items is about

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A) 10. B) 30. C) 50. D) 70. E) 90.

67) In the A-B-C classification system, items which account for about 15 percent of the annual dollar value, but which account for a majority of the inventory items, would be classified as

A) A items. B) B items. C) C items. D) A items plus B items. E) B items plus C items.

68) In the A-B-C classification system, items which account for about 60 percent of the annual dollar value, but only about 10 to 15 percent of the items in inventory, would be classified as

A) A items. B) B items. C) C items. D) A items plus B items. E) B items plus C items.

69)

The purpose of cycle counting is to

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A) count all the items in inventory. B) count bicycles and motorcycles in inventory. C) reduce discrepancies between inventory records and actual quantities. D) reduce theft. E) count 10 percent of the items each month.

70)

The 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

71)

Which is not a true assumption in the basic EOQ model?

A) Each order is received in a single delivery. B) Lead time does not vary. C) No more than three items are involved. D) Usage rate is constant. E) No quantity discounts.

72) of

In a supermarket, a vendor's restocking the shelves every Monday morning is an example

A) safety stock replenishment. B) economic order quantities. C) reorder points. D) fixed order intervals. E) blanket ordering.

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73)

A cycle count program will usually require that Class A items be counted

A) daily. B) once a week. C) monthly. D) quarterly. E) more often than annually.

74)

A risk avoider would want

safety stock.

A) less B) more C) the same D) zero E) 50 percent

75)

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is

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.

76)

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 2. D) remain the same. E) increase, but more information is needed to calculate exactly how much.

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77) In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of

A) 20. B) square root of 200. C) 200. D) 400. E) 600.

78) 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.

79) In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately

A) 11. B) 20. C) 24. D) 28. E) 375.

80)

Which of the following is not true for the economic production quantity model?

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A) Usage rate is constant. B) Production rate exceeds usage rate. C) Run size exceeds maximum inventory. D) There are no ordering or setup costs. E) Average inventory is one-half maximum inventory.

81) Given the same demand, setup/ordering costs, and carrying costs, the EPQ calculated using incremental replenishment will be if instantaneous replenishment was assumed.

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

82)

The introduction of quantity discounts will cause the optimum order quantity to be

A) smaller. B) unchanged. C) greater. D) smaller or unchanged. E) unchanged or greater.

83)

A fill rate is the percentage of

filled by stock on hand.

A) shipments B) demand C) inventory D) safety stock E) lead time

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84) In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must

A) have the lowest total cost. B) be in a feasible range. C) be to the left of the price break quantity for that price. D) have the largest quantity compared to other EOQs. E) have smaller ordering costs than the others.

85)

Which one of the following is not generally a determinant of the reorder point?

A) rate of demand B) length of lead time C) lead time variability D) stockout risk E) purchase cost

86)

If no variations in demand or lead time exist, the ROP will equal

A) the EOQ. B) expected usage during lead time. C) safety stock. D) the service level. E) the EOQ plus safety stock.

87) If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is

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A) 100 units. B) 200 units. C) 300 units. D) 600 units. E) 700 units.

88)

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) Approximately 95 percent of inventory will be used during lead time. C) The probability is 0.95 that demand during lead time will exactly equal the amount on hand at the beginning of lead time. D) The probability is 0.95 that demand during lead time will not exceed the amount on hand at the beginning of lead time. E) The probability is 0.95 that the order will arrive after the on-hand inventory is exhausted.

89)

Which one of the following is implied by an annual service level of 95 percent?

A) Approximately 95 percent of demand during lead time will be satisfied. B) The probability is 0.95 that demand will exceed supply during lead time. C) The probability is 0.95 that demand will equal supply during lead time. D) The probability is 0.95 that demand will not exceed supply during lead time. E) Approximately 95 percent of all demand will actually be satisfied directly from onhand inventory.

90) 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?

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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

91) 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 times 2 B) 20 times 10 C) 2 times the square root of 20 D) 2 times the square root of 10 E) 400 times the square root of 10

92)

All of the following are possible reasons for using the fixed-order-interval model except

A) supplier policy encourages use. B) grouping orders can save in shipping costs. C) the required safety stock is lower than with an EOQ/ROP model. D) it is suited to periodic checks of inventory levels rather than continuous monitoring. E) continuous monitoring is not practical.

93)

Which of these products would be most apt to involve the use of a single-period model?

A) gold coins B) hammers C) fresh fish D) calculators E) frozen corn

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94) In a single-period model, if shortage and excess costs are equal, then the optimum service level is

A) 0. B) 0.33. C) 0.50. D) 0.67. E) 0.75.

95) In a single-period model, if shortage cost is four times excess cost, then the optimum service level is percent.

A) 100 B) 80 C) 60 D) 40 E) 20

96) In the single-period model, if excess cost is double the shortage cost, the approximate stockout risk, assuming an optimum service level, is percent.

A) 100 B) 67 C) 50 D) 33 E) 5

97) In a single-period inventory situation, the probabilities that demand will be 1, 2, 3, or 4 units are 0.3, 0.3, 0.2, and 0.2, respectively. If two units are stocked, what is the probability of selling both of them?

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A) 0.5 B) 0.6 C) 0.7 D) 0.8 E) 0.9

98)

An operations strategy for inventory management should work toward

A) increasing lot sizes. B) decreasing lot sizes. C) increasing safety stocks. D) decreasing service levels. E) increasing order quantities.

99)

Cycle stock inventory is intended to deal with

A) excess costs. B) shortage costs. C) stockouts. D) expected demand. E) quantity discounts.

100) An operations strategy which recognizes high carrying costs and reduces ordering costs will result in

A) unchanged order quantities. B) slightly decreased order quantities. C) greatly decreased order quantities. D) slightly increased order quantities. E) greatly increased order quantities.

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101)

The need for safety stocks can be reduced by an operations strategy which

A) increases lead time. B) increases lead time variability. C) increases lot sizes. D) decreases ordering costs. E) decreases lead time variability.

102) If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the ROP will be

A) 20. B) 50. C) 70. D) 80. E) 130.

103) With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as

A) A. B) B. C) C.

104)

The fixed-order-interval model would be most likely to be used for this situation

A) A company has switched from mass production to lean production. B) Production is done in batches. C) Spare parts are ordered when a new machine is purchased. D) Grouping orders can save shipping costs. E) Demand is highly variable

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105)

Which item would be least likely to be ordered under a fixed-order-interval system?

A) textbooks at a college bookstore B) auto parts at an assembly plant C) cards at a gift shop D) canned peas at a supermarket E) magazines at a news stand

106)

Which one of these would not be a factor in determining the reorder point?

A) the EOQ B) the lead time C) the variability of demand D) the demand or usage rate E) all are factors

107) 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 economic production quantity would be approximately

A) the same. B) 20 percent larger. C) 40 percent larger. D) 20 percent smaller. E) 40 percent smaller.

108) 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 approximately

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A) 70 percent higher. B) 30 percent higher. C) the same. D) 30 percent lower. E) 70 percent lower.

109) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $0.80 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 5 percent of the cost of the beer. At what point should he reorder Stein beer?

A) 0 cases remaining B) 4 cases remaining C) 12 cases remaining D) 16 cases remaining E) 20 cases remaining

110) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 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 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

A) 0.25 days B) 3 days C) 1 day D) 4 days E) 20 days

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111) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 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 5 percent of the cost of the beer. 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

112) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 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 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be theaverage daily total inventory costs, EXCLUDING the cost of the beer?

A) $2.00 B) $4.00 C) $1.28 D) $3.28 E) $2.56

113) The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 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 5 percent of the cost of the beer. What is the economic order quantity for Stein beer?

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A) 8 cases B) 11 cases C) 14 cases D) 20 cases E) 32 cases

114) 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

115) 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. 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

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116) 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. If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?

A) 20 pounds B) 40 pounds C) 60 pounds D) 80 pounds E) 100 pounds

117) 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. If she were to order 80 pounds of pepperoni at a time, what would be theaverage total daily costs, including the cost of the pepperoni?

A) $60.00 B) $63.20 C) $64.00 D) $64.10 E) $65.00

118) 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. 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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119) 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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, 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

120) 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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the length of an order cycle?

A) 0.48 days B) 2.08 days C) 6 days D) 8.4 days E) 14.4 days

121) 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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?

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A) $3,000 B) $6,000 C) $12,500 D) $300,000 E) $600,000

122) 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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the average monthly total costs, EXCLUDING the value of the bills?

A) $625 B) $1,250 C) $2,500 D) $3,125 E) $37,500

123) 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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, what is the economic order quantity?

A) 600 bills B) 3,000 bills C) 949 bills D) 6,215 bills E) 12,500 bills

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124) 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 $0.04 per day to carry 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 days. At what point should resin be reordered?

A) 0 kilograms remaining B) 50 kilograms remaining C) 200 kilograms remaining D) 400 kilograms remaining E) 500 kilograms remaining

125) 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 carry 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 days. If order size was 1,000 kilograms of resin, what would be the length of an order cycle?

A) 0.05 days B) 4 days C) 16 days D) 20 days E) 50 days

126) 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 carry 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 days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?

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A) 50 kilograms B) 200 kilograms C) 500 kilograms D) 800 kilograms E) 1,000 kilograms

127) 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 carry 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 days. If the order size was 1,000 kilograms of resin, what would be theaverage daily total inventory costs, EXCLUDING the cost of the resin?

A) $5 B) $10 C) $20 D) $25 E) $40

128) 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 carry 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 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

129)

Which of the following can be calculated by dividing profit after taxes by total assets?

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A) return on investment B) return on equity C) return on assets D) return on sales E) return on invested capital

130)

Which of the following are not types of inventory?

A) customer orders B) raw materials C) work-in-progress D) tools E) goods in transit

131) is that the average amount of inventory in a system is equal to the product of the average demand rate and the average time a unit is in the system.

A) Little’s Law B) Little’s Operation C) Little’s Test D) Little’s Stockout E) Little’s Demand

132) What are the two functions that management must be concerned with in regard to inventory?

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A) estimating costs / developing an inventory counting system B) creating accurate forecasts / communicating with the entire supply chain C) tracking inventory / developing an operations strategy D) establishing a classification system / creating a perpetual inventory system E) establishing a system to track items / making decisions about the quantity and when to order

133)

The perpetual inventory system is also known as what type of review system?

A) interval B) periodic C) continuous D) estimated E) scheduled

134) Which system requires a physical count of items that are in inventory made at periodic intervals?

A) interval B) periodic C) continuous D) estimated E) scheduled

135) Which system keeps track of the items removed from inventory in order to provide realtime levels?

A) interval B) periodic C) perpetual D) estimated E) scheduled

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Answer Key Test name: Chap 12_14e 1) TRUE 2) FALSE 3) FALSE 4) TRUE 5) TRUE 6) FALSE 7) TRUE 8) FALSE 9) FALSE 10) FALSE 11) TRUE 12) FALSE 13) FALSE 14) FALSE 15) FALSE 16) FALSE 17) TRUE 18) TRUE 19) TRUE 20) FALSE 21) TRUE 22) TRUE 23) FALSE 24) FALSE 25) FALSE 26) FALSE Version 1

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

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

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

117) D 118) E 119) C 120) E 121) D 122) D 123) B 124) C 125) D 126) C 127) D 128) D 129) A 130) A 131) A 132) E 133) C 134) B 135) C

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Ch. 13 MRP and ERP TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) MRP works best if the inventory items have dependent demand. ⊚ ⊚

true false

Low-level coding represents items less than $18 per unit. ⊚ ⊚

true false

3) Independent demand tends to be more "lumpy" than dependent demand, meaning that we need large quantities followed by periods of no demand. ⊚ ⊚

true false

4) Lumpy demand for components results primarily from the periodic scheduling of batch production. ⊚ ⊚

true false

MRP is used within MRP II systems. ⊚ ⊚

true false

6) The master production schedule states which end items are to be produced, in addition to when and how many. ⊚ ⊚

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true false

Net requirements equal gross requirements minus safety stock. ⊚ ⊚

true false

8) The master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items. ⊚ ⊚

true false

Initially, the output from MRP may not represent a feasible schedule. ⊚ ⊚

true false

10) MRP, considering inventory position, bills of material, open purchase orders, and lead times guarantees a feasible production plan if the inputs to MRP are accurate. ⊚ ⊚

true false

11) The bill of materials indicates how much material will be needed to produce the quantities on a given master production schedule. ⊚ ⊚

true false

12) A bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item. ⊚ ⊚

true false

13) The bill of materials contains information on lead times and current inventory position on every component required to produce the end item.

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⊚ ⊚

14)

true false

The inventory records contain information on the status of each item by time period. ⊚ ⊚

true false

15) An assembly-time chart indicates gross and net requirements taking into account the current available inventory. ⊚ ⊚

16)

true false

MRP II did not replace the basic MRP. ⊚ ⊚

true false

17) The gross requirements at one level of an MRP plan determine the gross requirements at the next lower level continuing on down to the lowest levels shown on the bill of materials. ⊚ ⊚

true false

18) The gross requirements value for any given component is equal to the net requirements of that component's immediate parent multiplied by the quantity per parent. ⊚ ⊚

true false

19) The term pegging refers to identifying the parent items that have generated a given set of material requirements for a part or subassembly. ⊚ ⊚

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true false

20) A net-change MRP system is one that is updated periodically but not less frequently than once a week. ⊚ ⊚

true false

21) One reason that accurate bills of material are important is that errors at one level become magnified at lower levels because of the multiplication process used by MRP. ⊚ ⊚

true false

22) A regenerative MRP system is one that is updated continuously, every time there is a schedule change. ⊚ ⊚

23)

One of the primary output reports of MRP concerns changes to planned orders. ⊚ ⊚

24)

true false

Safety time is sometimes used in MRP rather than safety stock quantities. ⊚ ⊚

true false

25) Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods (such as two or three) that extend beyond the orders already received for those periods. ⊚ ⊚

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true false

26)

MRP output reports are divided into two main groups, daily and weekly. ⊚ ⊚

true false

27) In MRP, EOQ models tend to be less useful for materials at the lowest levels than for upper-level assemblies of the bill of materials since higher-level assemblies have larger dollar investments. ⊚ ⊚

true false

28) Load reports show capacity requirements for departments or work centers which may be more or less than the capacity available in that work center. ⊚ ⊚

29)

true false

ERP began in manufacturing organizations but has spread into service organizations. ⊚ ⊚

true false

30) 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

31) Lot-for-lot ordering in MRP minimizes holding costs for parts that are carried over to other periods. ⊚ ⊚

32)

true false

Capacity requirements planning is an important feature in MRP.

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⊚ ⊚

33)

true false

Project management approaches can help in a conversion to an ERP system. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 34) Which of the following is absolutely necessary for successful implementation and operation of MRP? (I) accurate inventory records (II) master schedules (III) accurate holding and backordering costs (IV) accurate bills of materials

A) I, II, and IV only B) I, III, and IV only C) I, II, and III only D) I and II only E) I, II, III, and IV

35) In many organizations, information flows much more freely within functions than it does across functions. represents an expanded effort to overcome this tendency.

A) MRP B) ERP C) CRP D) MRP II E) DRP

36)

Backflushing takes place

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A) when inventory records need updating. B) after some bills of material have been found to be inaccurate. C) after production has been completed. D) when customer orders are being reconciled. E) when previous periods' planned releases are converted to scheduled receipts.

37)

Scheduled receipts differ from planned receipts in that scheduled receipts

A) have longer lead times. B) involve orders that have not yet been placed. C) have not been pegged with actual customer orders. D) involve orders that have already been placed. E) involve exceptions to order quantity policies.

38)

MRP can apply to services, especially when it is focused on

(I) work-in-process inventory. (II) finished goods inventory. (III) service components. (IV) materials that are part of the service process.

A) II and IV only B) I and III only C) I, II, and IV only D) I, III, and IV only E) III and IV only

39)

Which of the following is a direct input into capacity requirements planning?

(I) the master production schedule (II) routing information (III) current shop loads (IV) planned-order releases

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A) II, III, and IV only B) I, II, and IV only C) I, III, and IV only D) I and II only E) I, II, III, and IV

40)

Capacity requirements planning helps managers reconcile

with

A) what is needed; what has been done B) what is needed; what is possible C) what has been done; who will be doing it D) what needs to be done; where it will be done E) what has been done; how much what needs to be done will cost

41)

Which of the following most closely describes dependent demand?

A) demand generated by suppliers B) estimates of demand using regression analysis of independent variables C) derived demand D) demands placed on suppliers by their customers E) net material requirements

42)

ERP implementation probably will not require

A) cross-functional teams. B) just a few weeks to install. C) intensive training. D) high funding for both initial cost and maintenance. E) upgrades after installation.

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43) A computer-based information system designed to handle ordering and scheduling of dependent-demand items is used for

A) computer-aided manufacturing. B) computer-integrated manufacturing. C) economic order quantity. D) material requirements planning. E) economic run size.

44) Successful implementation of an effective MRP system depends upon: (1) the recognition of the difference between independent and dependent demand, and (2)

A) computers. B) development of the EOQ model. C) inventory control systems. D) blanket purchase orders. E) the Internet.

45)

The output of MRP is

A) gross requirements. B) net requirements. C) a schedule of planned orders for all parts and end items. D) inventory reorder points. E) economic order quantities and reorder points.

46)

Which one of the following is not an input in an MRP system?

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A) planned-order schedules B) bill of materials C) master production schedule D) inventory records E) All are inputs.

47) The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the

A) master schedule. B) bill of materials. C) inventory records. D) assembly time chart. E) net requirements chart.

48) In a master schedule, the planning horizon is often separated into a series of time periods called

A) pegging. B) lead times. C) stacked lead times. D) time buckets. E) firm, fixed, and frozen.

49) The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the

A) master production schedule. B) bill of materials. C) inventory records. D) assembly time chart. E) net requirements chart.

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50) A visual depiction of 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) Gantt chart.

51) The MRP input storing information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size) is the

A) master production schedule. B) bill of materials. C) inventory records. D) assembly time chart. E) net requirements chart.

52) Which one of the following most closely describes net requirements for the current period?

gross requirements for current period− projected on-hand inventory for current

period B) gross requirements for current period − planned receipts for previous period C) gross requirements for current period − planned order releases for previous period + projected on-hand inventory for previous period D) gross requirements for current period − planned order releases for previous period E) gross requirements for current period − projected on-hand inventory for current period + planned order releases for current period

53)

In MRP, scheduled receipts are

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A) identical to planned-order receipts. B) identical to planned-order releases. C) open orders (that is, ordered before the first time bucket, but not delivered yet). D) net requirements. E) available-to-promise inventory.

54)

In MRP, under lot-for-lot ordering, planned-order receipts are

A) identical to scheduled receipts. B) identical to net requirements. C) open orders (that is, ordered before the first time bucket, but not delivered yet). D) gross requirements. E) available-to-promise inventory.

55) Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following?

A) gross requirements B) net requirements C) economic order quantity D) gross requirements minus scheduled receipts E) net requirements minus projected on-hand inventory

56)

In MRP, the gross requirements of a given component part are calculated directly from

A) net requirements + projected on-hand inventory. B) gross requirements of the immediate parent. C) planned order releases of the end item. D) net requirements of the end item. E) planned order releases of the immediate parent.

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57) The identification of parent items that have generated a given set of material requirements for an item is called

A) paternity. B) pegging. C) requirement I.D. D) relationship tracking. E) master scheduling.

58) An MRP system that is updated periodically to account for all changes which have occurred within a given time interval is called a(n) system.

A) pegging B) planned order release C) net-change D) regenerative E) exception report

59)

An MRP system whose records are updated continuously is referred to as a(n)

A) regenerative system. B) batch-type system. C) Plossl-Wright system. D) net-change system. E) gross-change system.

60)

Which is true of a net-change system?

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A) It is a batch-type system which is updated periodically. B) It is usually run at the beginning of each month. C) The 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.

61) 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

62) When MRP II systems include feedback to revise a plan that is not feasible, they are known as

A) MRP III. B) enterprise resource planning. C) circular MRP. D) feasible MRP. E) closed loop MRP.

63)

The multiplication process used by MRP to determine lower-level requirements is called

A) time-phasing. B) pegging. C) netting. D) projecting. E) exploding.

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64)

is choosing how many to order or make each time an order is planned.

A) Quantity determination B) Package sizing C) Lot sizing D) Grouping E) Aggregation

65) Which of the following is not usually necessary in order to have an effective MRP system?

A) a computer and software B) an accurate bill of materials C) lot-for-lot ordering D) an up-to-date master schedule E) integrity of file data

66)

The

of ERP makes it valuable as a strategic planning tool.

A) Internet base B) rapid batch capability C) employee focus D) real-time aspect E) database structure

67) An effort to expand the scope of material planning by involving other functional areas in the planning process has been

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A) material requirements planning. B) capacity requirements planning. C) manufacturing resources planning. D) just-in-time planning. E) multifunctional relationships planning.

68)

Which statement concerning MRP II is false?

A) It has material requirements planning at it heart. B) It can handle complex planning and scheduling quickly. C) It involves other functional areas in the production planning process. D) It involves capacity planning. E) It connects all parts of a firm and key portions of its supply chain to a single database for information sharing.

69)

Which of these items would be most likely to have dependent demand?

A) computer chips B) potato chips C) poker chips D) chocolate chip cookies E) wood chippers

70)

Which of these products would be most likely to have dependent demand?

A) refrigerators B) automobile engines C) televisions D) brownies E) Automobiles

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71)

Refer to this product tree

If 17 Ps are needed, and no on-hand inventory exists for any items, how many Cs will be needed?

A) 8 B) 16 C) 136 D) 204 E) 272

72)

Refer to this product tree

If 17 Ps are needed, and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns, how many Cs are needed?

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A) 48 B) 144 C) 192 D) 212 E) 272

73)

Refer to this product tree

If 40 Ps are needed, and on-hand inventory consists of 15 Ps and 10 each of all other components and subassemblies, how many Cs are needed?

A) 340 B) 350 C) 380 D) 400 E) 590

74) 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

1 week

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Dark Chocolate Truffles (2 per)

2 weeks

Carved Chocolate Eggs (4 per)

1 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

75) 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

1 week

Dark Chocolate Truffles (2 per)

2 weeks

Carved Chocolate Eggs (4 per)

1 week

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs. When should an order for carved chocolate eggs be released?

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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

76) 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

1 week

Dark Chocolate Truffles (2 per)

2 weeks

Carved Chocolate Eggs (4 per)

1 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

77) 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

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Deluxe Easter Basket BOM

Lead Time

On-Hand

Deluxe Easter Basket

1 week

Dark Chocolate Truffles (2 per)

2 weeks

Carved Chocolate Eggs (4 per)

1 week

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs. If the firm is using a fixed-period lot size of two periods, what is the order size for the first order?

A) 120 B) 200 C) 280 D) 160 E) 150

78) Which of the following represents an attempt to balance the benefits of stability in the production plan against the benefits of responding quickly to new orders?

A) safety stock B) safety time C) bills of material D) time fences E) fixed-period lot sizing

79) Comparing known and expected capacity requirements with projected capacity availability is the job of

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A) planned releases. B) load reports. C) lot sizing. D) work loading. E) time fencing.

80)

ERP is now about enterprise applications

A) deployment. B) development. C) interfaces. D) integration. E) networking.

81) 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

82)

MRP is used to answer what three questions?

A) What is needed? / Who is needed? / How much is needed? B) Where it is needed? / When it is needed? / What is needed? C) When is it needed? / How much is needed? / What is needed? D) How much is needed? / Why it is needed? / When it is needed? E) Why it is needed? / What is needed? / Where it is needed?

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83)

is important and absolutely essential for a successful MRP system.

A) Management B) Completeness C) Accuracy D) Integrity E) Forecasting

84)

Which of the following is not a common problem associated with MRP systems?

A) Products produced differently B) Assumption of constant lead times C) Allocation of production time D) Failure to alter bill of materials when customizing a product E) Bill of materials does not match products produced

85)

Refer to this product tree

If 24 Ys are needed, and no on-hand inventory exists for any items, how many Rs will be needed?

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A) 84 B) 154 C) 284 D) 310 E) 384

86)

Refer to this product tree

If 24 Ys are needed, and on-hand inventory consists of 15Xs and 7As, how many Rs will be needed?

A) 84 B) 154 C) 284 D) 310 E) 384

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Answer Key Test name: Chap 13_14e 1) TRUE 2) FALSE 3) FALSE 4) TRUE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) TRUE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) TRUE 15) FALSE 16) TRUE 17) FALSE 18) FALSE 19) TRUE 20) FALSE 21) TRUE 22) FALSE 23) TRUE 24) TRUE 25) FALSE 26) FALSE Version 1

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

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

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Ch. 14 JIT and Lean Operations TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The goal of maintenance is to minimize cost. ⊚ ⊚

true false

2) The goal of maintenance is to maintain the productive system in good working order while minimizing or eliminating the cost of preventive maintenance. ⊚ ⊚

true false

Breakdown maintenance includes activities such as equipment inspection and adjustment. ⊚ ⊚

true false

4) Degree of technology is a factor affecting the decision of how much preventive maintenance is desirable. ⊚ ⊚

Breakdown maintenance is best performed on a regularly scheduled basis. ⊚ ⊚

true false

One basis for scheduling preventive maintenance is passage of time. ⊚ ⊚

true false

Ideally, preventive maintenance will be performed before a breakdown or failure.

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⊚ ⊚

true false

8) In the broadest sense, preventive maintenance extends back to the installation stage of equipment and facilities. ⊚ ⊚

true false

9) Pareto analysis (using the 80/20 rule) is one method of determining when preventive maintenance activities should be performed. ⊚ ⊚

true false

10) 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

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 11) 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

12) Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows:

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Number of Breakdowns 0 1 2 3 4

Prob. .40 .30 .15 .10 .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

13) Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: Number of Breakdowns 0 1 2 3 4

Prob. .50 .25 .10 .10 .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

14) 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

15)

Maintenance activities are often organized into the following 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.

16)

Breakdown maintenance is

; preventive maintenance is

A) reactive; proactive B) proactive; reactive C) expensive; inexpensive D) inexpensive; expensive E) easy; hard

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17) 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.

18)

is most closely associated with breakdown maintenance.

A) Equipment adjustment B) Equipment cleaning C) Equipment inspection D) Repair of broken parts E) Replacement of worn parts

19) Factors affecting the decision of how much preventive maintenance is desirable typically include all of the following except

A) age of equipment. B) type of product. C) degree of technology. D) type of production process. E) condition of equipment.

20)

Potential costs of equipment breakdown do not include

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A) loss of output. B) cost of idle workers. C) damage to other equipment. D) replacement of worn parts. E) injuries.

21) The optimum amount of preventive maintenance occurs when the production system is kept in good working order and

A) total breakdown costs are at a minimum. B) total preventive maintenance costs are at a minimum. C) each maintenance component cost is at a minimum. D) total maintenance costs are at a maximum. E) total maintenance costs are at a minimum.

22)

The type of maintenance which is periodic in nature is

A) breakdown maintenance. B) predictive maintenance. C) preventive maintenance. D) corrective maintenance. E) all of the choices.

23)

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.

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24)

Ideally, preventive maintenance will be performed

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 or failure.

25) Attempting to determine when preventive maintenance activities should be performed is called

A) breakdown maintenance. B) forecastive maintenance. C) preventive maintenance. D) predictive maintenance. E) corrective maintenance.

26)

“Total productive maintenance” is best described as

A) avoiding all breakdown maintenance. B) doing a great deal of preventive maintenance to try to avoid breakdown maintenance. C) a JIT approach in which workers perform preventive maintenance on the machines they operate. D) extending preventive maintenance back to design. E) none of these.

27) the

In the broadest sense, equipment and facilities preventive maintenance extends back to

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A) design and selection stage. B) procurement stage. C) installation stage. D) pilot-testing stage. E) implementation stage.

28) 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) All are major approaches.

29)

In the area of maintenance, the Pareto phenomenon is reflected in the fact that

A) all equipment justifies about the same expense. B) a majority of equipment will justify considerable expense. C) a few pieces of equipment will justify little expense. D) a few pieces of equipment will justify considerable expense. E) no piece of equipment will justify major expense; it's better to replace.

30)

A reactive approach to maintenance is

maintenance.

A) planned B) breakdown C) proactive D) predictive E) preventive

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31) The total maintenance cost curve (preventive maintenance cost plus breakdown and repair cost)

A) slopes up as the number of preventive maintenances increases. B) slopes down as the number of preventive maintenances increases. C) starts low, increases rapidly, and then drops back down as the number of preventive maintenances increases. D) starts high, drops gradually, but then goes back up as the number of preventive maintenances increases. E) remains relatively flat as the number of preventive maintenances increases.

32) The average time before breakdown of a machine is normally distributed and has a mean of nine weeks and a standard deviation of 1.5 weeks. If breakdown cost averages $1,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?

A) 3.8 weeks B) 8.4 weeks C) 9.6 weeks D) 6.9 weeks E) 7.2 weeks

33) The average time before breakdown of a machine is normally distributed and has a mean of 18 weeks and a standard deviation of three weeks. If breakdown cost averages $2,000 and preventive maintenance costs $1,400, what is the optimal preventive maintenance interval?

A) 16.4 weeks B) 14.6 weeks C) 16.9 weeks D) 19.6 weeks E) 21.3 weeks

34) Which of the following is the primary consideration with regard to preventive maintenance?

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A) what technology to use B) how varied the maintenance will be C) how often the maintenance will occur D) which products it will be provided to E) who will do it

35)

Which of the following would not improve the performance of a breakdown program?

A) more trained personnel B) short lead times for replacement parts C) standby equipment D) cross-training repair personnel E) reducing inventories of spare parts

36) Breakdown programs often are prioritized such that some equipment gets a lot of attention and other equipment gets very little. This typically reflects the fact that breakdowns are consistent with

A) Pareto phenomena. B) production interruptions. C) supply disturbances. D) cross-trained workers. E) lean operations.

37) Which of the following is not a reason for having machines and equipment in good operating condition?

A) lower the production processing B) no added service or production costs C) maintain high quality D) avoid missed delivery dates E) avoid production or service disruptions

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38)

is known as being a reactive approach to maintenance.

A) Breakdown maintenance B) Preventative maintenance C) Predictive maintenance D) Corrective maintenance E) Condition-based maintenance

39)

is known as being a proactive approach to maintenance.

A) Breakdown maintenance B) Preventative maintenance C) Predictive maintenance D) Corrective maintenance E) Condition-based maintenance

40) This is considered an important issue when dealing with preventative maintenance. <u></u>

A) repair costs B) frequency C) seasonality D) timing of breakdown E) cost of training

41)

Which of the following is not a major approach used to deal with breakdowns?

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A) backup equipment B) cost of repairs C) spare parts D) operators E) repair technicians

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Answer Key Test name: Chap 14S_14e 1) FALSE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) TRUE 8) FALSE 9) FALSE 10) FALSE 11) D 12) D 13) A 14) C 15) E 16) A 17) C 18) D 19) B 20) D 21) E 22) C 23) D 24) E 25) D 26) C Version 1

27) A 28) E 29) D 30) B 31) D 32) B 33) D 34) C 35) E 36) A 37) A 38) A 39) B 40) B 41) B

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SUPPLEMENT TO CHAPTER 14: Maintenance TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A functioning MRP system is required prior to adopting lean planning and control systems. ⊚ ⊚

true false

2) In a lean environment, anything not essential to the product or process is viewed as waste. ⊚ ⊚

true false

3) The ultimate goal of lean operations is a system characterized by the smooth, rapid flow of materials. ⊚ ⊚

true false

4) Although inventories are maintained, the goal of lean operations is to minimize safety stock. ⊚ ⊚

true false

In the lean philosophy, producinglarge lot sizes reduces waste. ⊚ ⊚

true false

6) The four building blocks of lean operations are: product design, process design, personnel/organizational elements, and manufacturing planning and control. ⊚ ⊚ Version 1

true false 1

7) Fast and simple are two common threads that run through the four building blocks of lean operations. ⊚ ⊚

true false

8) Value stream mapping is a technique focused on finding new ways of adding value for critical stakeholders such as customers. ⊚ ⊚

true false

9) Quality and highly capable production systems are requirements for the successful implementation of lean operations. ⊚ ⊚

true false

10) The small lot-sizing policy works well in a situation where both holding costs and setup costs are high. ⊚ ⊚

true false

11) The use of small lot sizes in lean operations is in conflict with the EOQ approach since setup costs tend to be significantly higher than holding costs. ⊚ ⊚

true false

12) A basic requirement for operating with low inventories in lean systems is that major system problems must already have been solved and new problems will be solved as they appear. ⊚ ⊚

Version 1

true false

13) A benefit of small lot sizes in lean systems is that each product is produced less frequently. ⊚ ⊚

14)

In the lean philosophy, the larger the lot size, the easier it is to schedule. ⊚ ⊚

15)

true false

Setup time and its associated cost can often be reduced by the use of group technology. ⊚ ⊚

16)

true false

Lean systems often use layouts that are based on multiple manufacturing cells. ⊚ ⊚

true false

17) A goal of lean operations is to produce output using fewer resources than traditional planning systems. ⊚ ⊚

true false

18) "Autonomation" indicates that the firm is attempting to reduce its dependence on automated equipment. ⊚ ⊚

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true false

19) Preventive maintenance is additional maintenance done immediately after a breakdown has occurred to help prevent any further breakdowns. ⊚ ⊚

true false

20) In the lean approach, inventories are reduced gradually, instead of eliminating inventories as rapidly as possible. ⊚ ⊚

true false

21) One problem with lean operations is that they can lead to much stress on workers due to their increased responsibility for process and quality improvement. ⊚ true ⊚ false

22) A real advantage of the lean philosophy is the reduction of coordination effort required with supply chain partners. ⊚ true ⊚ false

23) The lean philosophy recognizes that some work-in-process inventories are a necessary investment to allow for smooth work flow. ⊚ ⊚

24)

Preventive maintenance will eliminate the need to carry supplies of spare parts. ⊚ ⊚

25)

true false

A fundamental tenet of the lean philosophy is that workers are paid based on seniority.

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⊚ ⊚

26)

true false

In lean operations, a responsibility of the worker is to check the quality of their work. ⊚ ⊚

true false

27) In lean operations, when work is completed at one work center, it is important to immediately move the completed work to the next work center to minimize idle time. ⊚ ⊚

true false

28) In a pull system, the accumulation of excessive inventory in front of a workstation is avoided even if there are problems such as equipment failure at that workstation which prevent it from completing its work. ⊚ ⊚

29)

true false

Limited WIP lowers inventory carrying costs but reduces flexibility. ⊚ ⊚

true false

30) Engineering changes should not be made in the six-month period following the introduction of a new product. ⊚ ⊚

31)

true false

Kanban is the Japanese term for autonomation. ⊚ ⊚

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true false

32)

Increased setup times generally require increased work-in-process inventories. ⊚ ⊚

33)

true false

Kanban focuses on specific part numbers; CONWIP does not. ⊚ ⊚

true false

34) Lean systems typically require that suppliers be able to provide large lots at periodic intervals. ⊚ ⊚

true false

35) Lean purchasing requires frequent contract bidding by multiple sources to ensure the buyer of competitive prices. ⊚ ⊚

true false

36) Lean operations reduce the number of suppliers the organizationworks with by limiting contacts to two tiers of suppliers. ⊚ ⊚

true false

37) One major difference between the use of kanban and MRP in scheduling theitems to beproduced or ordered is that kanban is primarily a manual system while MRP uses computers. ⊚ ⊚

Version 1

true false

38) A benefit of the lean philosophy is the flexibility to respond quickly to changing customer product preferences. ⊚ ⊚

true false

39) A requirement of lean systems is that lead times are increased, allowing more time for processing. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 40) Which of the following is not something commonly found in lean systems? (I) waste reduction(II) output match to a detailed forecast(III) visual controls(IV) quick changeovers(V) long production runs

A) both I and V B) both II and V C) both II and IV D) both IV and V E) both III and V

41) Which of the following is not a principle regarding the way lean systems function? identifying customer valuesfocusing on processes that create valueelimination of waste to create flowincreasing forecast accuracyproducing only according to customer demandoptimizing on setup costs with long production runsstriving for perfection

A) IV B) both II and IV C) both IV and VI D) both IV and V E) VI

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42) 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

43) Although lean systems tend to produce standardized product lines, to provide production variety without accompanying waste, lean producers often use in .

A) standardized parts; modular designs B) jidoka parts; kaizen designs C) modular parts; flexible designs D) capable parts; automated designs E) heijunka parts; kanban designs

44)

Lean systems often rely on a method of overhead allocation known as

A) direct-labor allocation. B) capital-charge allocation. C) mixed-model accounting. D) activity-based costing. E) indirect-labor allocation.

45)

A lean-systems method of asking questions about a process is the

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approach.

A) jidoka B) 3 kanban C) heijunka D) 2 kaizen E) 5W2H

46) Although transitioning to a lean system can be a powerful means of improving performance, some believe that using along with lean can lead to even better results. A) kaizen B) EOQ C) Six Sigma D) JIT E) Jidoka

47) For a company with a product mix of 40 percent of product A and 30 percent each of products B and C, which of the following mixed-model sequences best reflects the lean philosophy?

A) AABBCCAABC B) ABCABCABCA C) AAAABBBCCC D) BCABCABCAB E) BBBAACCCAA

48)

The lean philosophy suggests that workers are

A) assets. B) liabilities. C) interchangeable. D) replaceable. E) to be phased out.

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49)

The ultimate goal of lean operations is to have

A) no in-process inventories. B) cross-trained workers capable of handling every process. C) a smooth, rapid flow of work through the system. D) no setup times. E) all of the choices.

50) Which one of the following is not one of the building blocks that is the foundation of the lean philosophy?

A) product design B) process design C) personnel/organizational elements D) manufacturing planning and control E) kanban

51)

Which of the following would you not expect to see in a lean environment?

A) a flexible system B) minimum inventory C) little waste D) reduced setup times E) a significant number of daily schedule changes

52) The approaches used in lean systems to deal with quality include(I) designing quality into products and processes(II) insisting vendors provide high-quality materials(III) expecting workers to be involved in continuous improvement(IV) training workers in statistical process control(V) 100 percent inspection of raw materials, work-in-process, and finished goods

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A) only I B) only I and II C) only III and IV D) only I, II, III, and IV E) I, II, III, IV, and V

53)

Which of the following is not a benefit of small lot sizes in lean systems?

A) In-process inventory is considerably less. B) Each product is produced less frequently. C) Carrying costs are reduced. D) There is less clutter in the workplace. E) Inspection and rework costs are less.

54)

In the lean 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.

55)

Which of the following does not contribute to reduced setup time and cost?

A) standardized setup tools B) standardized setup equipment C) custom setup procedures for each product D) use of multipurpose equipment or attachments E) use of group technology

56)

A conveyance

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signals parts movement.

A) andon B) routing C) WIP D) kanban E) kaizen

57)

The term that refers to the automatic detection of defects is

A) kaizen. B) kanban. C) autonomation. D) automation. E) 100 percent inspection.

58)

A basic requirement for operating with the low inventories present in lean systems is

A) Inventory space must be increased. B) Inventory investment must be increased. C) Major problems must be identified. D) Major problems must have been solved. E) Inventories must be reduced rapidly.

59)

Which of the following is not characteristic of preventive maintenance in lean systems?

A) maintaining equipment in good operating condition B) replacing partsthat have a tendency to fail before they fail C) workers maintaining their own equipment D) eliminating supplies of spare parts to reduce capital investment E) perceiving breakdowns as an opportunity for improvement

60)

The Five S's do not include

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A) Sort. B) Straighten. C) Sanitize. D) Sweep. E) Standardize.

61)

The kaizen philosophy applies to

A) employee development. B) safety stock. C) waste. D) supply chain management. E) MRP III.

62)

A production kanban card is used to signal that

A) there is a need to produce parts at the work center. B) parts are ready to be moved to the next station. C) there is a need to deliver parts to the next work center. D) a machine has broken down and needs immediate attention. E) a machine is ready for preventive maintenance.

63)

With regard to suppliers, lean 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) the lowest price possible.

64)

Which of the following is characteristic of the lean philosophy?

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A) Inventories are an asset. B) Lot sizes are optimized by formula. C) Close, long-term relationships with vendors. D) Queues are a necessary investment. E) All of the choices.

65)

Thegoals of both kanban and MRP include

A) smooth rates of output. B) reduction of inventories. C) explosion of materials required. D) determination of capacity required. E) larger lot sizes.

66)

Process design that supports lean does not include

A) production flexibility. B) duplicate facilities. C) setup time reduction. D) minimal inventory storage. E) small lot sizes.

67)

Which of the following questions is not answered by value stream mapping?

A) Where does waste occur? B) Which processes have to deal with the most variability? C) Where are the best opportunities to extract more value from customers? D) Where are process bottlenecks? E) Where do errors occur?

68)

A successful conversion to a lean system requires that the conversion

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A) be done as quickly as possible. B) begin at the start of the process and work forward. C) convert vendors to lean as one of the last steps. D) reduce setup times as one of the last steps. E) all of the choices.

69) A potential obstacle to conversion to a lean system is(I) lack of management commitment(II) lack of worker cooperation(III) supplier resistance(IV) insufficient space to store the increased inventories

A) only I B) only I and II C) only II and III D) only I, II, and III E) only II, III, and IV

70)

A system of lights used at each workstation to signal problems or slowdowns is

A) a command and control center. B) automation. C) andon. D) a pull system. E) kanban.

71) Which of the following contributes to the competitive advantage enjoyed by service firms using lean concepts?

A) backup employees to cover for absenteeism B) one hundred percent inspection to remove defects C) dedicated equipment to reduce unit costs D) safety stocks to prevent stockouts E) greater flexibility to cope with change

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72) Managers considering an operations strategy reflecting the lean philosophy of operations should recognize that lean

A) is most suited for nonrepetitive manufacturing. B) cannot be implemented sequentially. C) requires a wholesale commitment from the outset. D) may leave their company vulnerable to supply chain disruptions. E) All of these choices are correct.

73)

With regard to suppliers, lean systems typically involve

A) delivery of large lots on short notice B) the highest quality at the lowest price C) long-term relationships D) multiple suppliers to assure continuous availability E) dedicated staging areas for material

74)

A common objective of both MRP and the lean philosophy is to

A) smooth the flow of production. B) reduce (and ultimately eliminate) “excess” inventory. C) obtain high quality components. D) reduce overhead. E) eliminate process bottlenecks.

75)

The ultimate goal in a lean system is

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A) low to moderate levels of inventory. B) high quality, zero defects. C) minimal waste (less than 6 percent). D) balanced and rapid flow. E) all of these.

76) When lean is used in the context of services, which of the following is most often the focus?

A) the labor content of the service B) the time needed to perform a service C) the inventory tied up in the service D) the equipment used in the service E) suppliers of inputs to the service

77)

Which of the following would not contribute to making services more lean?

A) Train workers so they can handle variety in the tasks they perform. B) Increase the flexibility of the service system. C) Have service workers handle multiple tasks simultaneously. D) Standardize the work methods for providing the service. E) Simplify the service process.

78) Having a vendor be responsible for managing the restocking of inventory is what is meant by the term

A) JIT II. B) MRP II. C) SCM I. D) EOQ III. E) POQ II.

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79) Previously, management calculated the number of kanban cards allowed by using a value of 1.3 for X. Assuming nothing else (e.g., usage rates, container capacities, etc.), which of the following values for X would indicate management's belief that the system has become more efficient?

A) 2.6 B) 2.3 C) 1.5 D) 1.4 E) 1.2

80) Before lean approaches could be implemented successfully, many North American companies needed to make which changes?

A) strategy modifications B) modify their supply chain C) cultural and organizational changes D) simplifying their workflows E) operations management changes

81) What is a flexible system that uses considerably fewer resources than a traditional system?

A) just-in-time production B) quality management C) lean operation D) Heijunka E) takt time

82) What is a highly coordinated activity that delivers goods and/or services when they are needed?

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A) just-in-time production B) quality management C) lean operation D) Heijunka E) takt time

83)

Which of the following is not commonly found in lean systems?

A) few changeovers B) visual controls C) use of teams D) small lot sizes E) work cells

84)

Which of the following is not a benefit of lean systems?

A) fewer resources B) lower inventories C) increased flexibility D) increased productivity E) reduced waste

85)

Which of the following is not a risk of lean systems?

A) reduced cycle time B) increased stress C) increased responsibilities D) fewer resources E) supply chain disruptions

86)

How many wastes (muda) are there in lean philosophy?

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A) 2 B) 4 C) 6 D) 8 E) 10

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Answer Key Test name: Chap 14_14e 1) FALSE 2) TRUE 3) TRUE 4) FALSE 5) FALSE 6) TRUE 7) TRUE 8) FALSE 9) TRUE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) FALSE 15) TRUE 16) TRUE 17) TRUE 18) FALSE 19) FALSE 20) TRUE 21) TRUE 22) FALSE 23) TRUE 24) FALSE 25) FALSE 26) TRUE Version 1

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

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

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Ch. 15 Supply Chain Management TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users. ⊚ ⊚

In supply chain organizations, functions must operate independently of each other. ⊚ ⊚

true false

In purchasing, one's only ethical obligation is to one's suppliers. ⊚ ⊚

true false

4) Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain. ⊚ ⊚

true false

Every business organization is part of at least one supply chain. ⊚ ⊚

true false

6) Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit. ⊚ ⊚

Version 1

true false

7) The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain. ⊚ ⊚

true false

8) Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs. ⊚ ⊚

true false

9) The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain. ⊚ ⊚

10)

true false

The need for risk management increases as globalization of supply chains increases. ⊚ ⊚

true false

11) The design of the supply chain and establishing partnerships with vendors and distributors are examples of operational issues in a supply chain. ⊚ ⊚

12)

true false

Traffic management refers to truck movement within our parking areas. ⊚ ⊚

true false

13) One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.

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⊚ ⊚

14)

E-commerce refers to the use of electronic technology to facilitate business transactions. ⊚ ⊚

15)

true false

E-commerce involves business-to-business (B2B) interaction only. ⊚ ⊚

true false

16) Disintermediation occurs when the traditional retailer or service provider is reduced or eliminated in a supply chain. ⊚ ⊚

true false

17) Most people working for a business organization are somehow involved with the supply chain of that business. ⊚ ⊚

true false

18) Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others. ⊚ ⊚

true false

19) Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services. ⊚ ⊚

Version 1

true false

20) Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse. ⊚ ⊚

21)

Global supply chains make purchasing easier because there are more options. ⊚ ⊚

22)

true false

Centralized or decentralized purchasing is directly related to the size of an organization. ⊚ ⊚

true false

23) The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain. ⊚ ⊚

24)

true false

Information technology is a key to integrating operations across global supply chains. ⊚ ⊚

true false

25) Bullwhip effect refers to a phenomenon in which demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain. ⊚ ⊚

Version 1

true false

26) 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

27) Scheduling operations and shipping are operational responsibilities in supply chain management. ⊚ ⊚

28)

true false

To avoid temporary storage in a warehouse, cross-docking can be used. ⊚ ⊚

true false

29) Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products. ⊚ ⊚

30)

true false

Returned goods are part of reverse logistics. ⊚ ⊚

true false

31) A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain. ⊚ ⊚

true false

32) The service function of purchasing interfaces with many areas, including legal, accounting, and engineering functions.

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⊚ ⊚

33)

true false

Gatekeeping contracts with 3PLs to minimize the cost of shipping returned goods. ⊚ ⊚

true false

34) Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses. ⊚ ⊚

true false

35) Vendor analysis examines the function of purchased parts and materials with a view toward improvement or cost reduction. ⊚ ⊚

36)

true false

Using third-party fulfillment means losing control of fulfillment. ⊚ ⊚

true false

37) Price is the primary determining factor in choosing a vendor since most products are essentially the same. ⊚ ⊚

true false

38) RFID eliminates the need for manual counting and bar-code scanning of goods at receiving docks. ⊚ ⊚

Version 1

true false

39) The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60 percent or more of the cost of finished goods. ⊚ ⊚

true false

40) Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services. ⊚ ⊚

true false

41) Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service. ⊚ ⊚

true false

42) In e-commerce, the front-end design is significantly more important than the back-end design. ⊚ ⊚

43)

One disadvantage to RFID is that it requires a clear “line of sight” to operate. ⊚ ⊚

44)

true false

Decentralized purchasing can usually offer quicker response than centralized purchasing. ⊚ ⊚

Version 1

true false

45) Some firms have structured their procurement function to include both centralized and decentralized purchasing. ⊚ ⊚

true false

46) Creating an effective supply chain requires linking the marketing, distribution, and supplier channels. ⊚ ⊚

47)

true false

An advantage of decentralized purchasing is the attention given to local needs. ⊚ ⊚

true false

48) Event-response capability is the advanced planning required to respond to planned events such as receiving a scheduled shipment. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 49) Strategies to address supply chain risks include: (I) risk avoidance (II) risk reduction (III) risk projection (IV) risk sharing

Version 1

A) I, II, and IV only B) II and III only C) I and IV only D) II and IV only E) I, II, III, and IV

50) Which of the following, while desirable from some perspectives, might actually increase the risk of supply chain disruptions? (I) fewer supply chain partners (II) a shorter supply chain (III) greater supply chain visibility

A) I and II only B) II and III only C) I and III only D) I only E) I, II, and III

51) One of the biggest ethical risks in supply chain management is that the supply chain member tends to be the one that suffers the blame and/or lost goodwill when something goes wrong.

A) most responsible B) buying C) most visible D) supplying E) most ethical

52) The more a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically.

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A) interconnected B) global C) visible D) shortened E) Competitive

53) It is especially the case for small businesses that closer interactions and increased agility make relatively more attractive.

A) domestic suppliers B) centralized purchasing C) global suppliers D) decentralized purchasing E) risk transfer

54) Which of these aspects of supply chain management are especially concerning to small business? (I) customer reliability (II) inventory management (III) purchasing costs (IV) risk management (V) international trade

A) III, IV, and V only B) I, II, and III only C) I, III, and IV only D) I and II only E) II, IV, and V only

55)

Which of the following is not a goal of supply chain management?

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A) fewer suppliers and long-term relationships B) small lot sizes C) on-time deliveries D) lowest possible transportation costs E) delivery often to the place of use

56)

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.

57) Small changes in consumer demand can result in large variations in orders placed because of the

A) supply chain. B) safety stock requirement. C) lead time effect. D) bullwhip effect. E) FCFS scheduling.

58)

RFID chips:

(I) are used to track goods in distribution. (II) are used to track job progress in production. (III) are used to provide special instructions to operators. (IV) can be used in inventory record keeping.

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A) II and III only B) I and II only C) II, III, and IV D) I, II, and IV E) IV only

59)

Which of the following is not a benefit of RFID?

A) increased productivity B) elimination of paperwork C) frequent deliveries of smaller shipments D) reduction in clerical labor E) increased accuracy

60) A factor that makes it desirable for business organizations to actively manage their supply chains is

A) more potential vendors. B) increasing globalization. C) downsizing. D) the Internet. E) RFIDs.

61)

Which of the following is not a benefit of effective supply chain management?

A) lower inventory costs B) higher productivity C) shorter lead times D) greater customer loyalty E) larger number of suppliers

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62)

Which of the following is not a measure of the reliability of the supply chain?

A) supply chain response time B) on-time delivery C) fill rate D) lead time variability E) improving e-fulfillment statistics

63)

The automatic identification of material is part of/facilitated by

A) holding costs. B) RFID. C) working capital reduction. D) net present value calculations. E) vendor analysis.

64)

Which of the following is not an application of e-business?

A) Internet buying and selling B) e-mail C) order and shipment tracking D) electronic data interchange (EDI) E) universal product codes

65)

Which of the following is an advantage of e-business?

(I) reduction of transaction costs (II) shortened supply chain response time (III) greater customer loyalty

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A) I B) II C) I and II D) II and III E) I, II, and III

66) Which of the following is a barrier to the integration of separate organizations in the supply chain? (I) conflicting objectives of the companies in the chain (II) different capacity levels of the companies in the chain (III) reluctance of the organizations in the chain to allow other organizations access to their data

A) I only B) I and II C) II and III D) I and III E) I, II, and III

67)

has/have helped firms to concentrate on their core business.

A) Supply chains B) Scheduling C) Outsourcing D) ERP E) Lean production

68)

After outsourcing to global suppliers,

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is not simple.

A) integration B) unionization C) back-shoring D) computerization E) just-in-time

69)

The interface between the firm and its suppliers is

A) purchasing. B) production. C) distribution. D) engineering. E) accounting.

70)

One important role of purchasing is to

A) set quality standards for purchased items from suppliers. B) be knowledgeable about new products from suppliers. C) maintain numerous sources of supply. D) obtain the lowest prices on all purchased items. E) determine the processes that should be used by suppliers.

71)

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.

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72) Examination of the sources of supply for purchased parts or materials in order to improve performance is called

A) vendor analysis. B) value analysis. C) negotiated purchasing. D) reverse engineering. E) disintegration.

73)

Vendor 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 cost-volume.

74)

Which of the following is not true of vendor analysis?

A) It involves an examination of the function of purchased parts or raw materials. 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 implements those that purchasing agrees are justified.

75)

Which of the following would not usually be a main factor in selecting a vendor?

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A) location B) price C) quality D) inventory turnover E) vendor services

76)

Which of the following is part of the purchasing cycle?

(I) Purchasing selects a supplier. (II) Orders from vendors are received. (III) Purchasing receives a requisition.

A) II and III B) I, II, and III C) I only D) I and II E) I and III

77) Which of the following is least likely to be a key consideration when a company chooses a supplier?

A) lead time and on-time delivery B) reputation and financial stability C) current inventory D) quality and quality assurance E) flexibility of design change

78)

Which of the following is not a benefit of centralized purchasing?

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A) potential for quantity discounts B) better service from suppliers C) quick response to local needs D) potential for use of purchasing specialists E) supplier research

79)

The purchasing perspective of the supplier as a partner is characterized by

A) an emphasis on low prices. B) one or a few suppliers. C) low flexibility. D) 100 percent inspection for quality. E) low volume.

80)

Vendor analysis is the examination of the

of purchased materials.

A) function B) source C) quality D) cycle E) quantity

81) 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.

A) fill rate B) inventory yield C) profit margin D) inventory turnover E) working yield

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82)

Which of the following is a principle required for ethical behavior in purchasing?

(I) loyalty to employer (II) justice to those you deal with (III) faith in your profession

A) III only B) I only C) II only D) I, II, and III E) II and III only

83)

The activity which begins with a request from within the organization is

A) outsourcing search. B) purchasing cycle. C) supplier selection. D) order receipt. E) supply chain management.

84) Our organization can obtain visibility to potential trading partners on the Internet by using

A) C2C websites. B) B2C enablers. C) B2B exchanges. D) C2B marketplaces. E) 2BC commerce.

85) Real-time information about product movement on store shelves could benefit from the use of

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A) batch processing. B) economic order quantities. C) statistical process control. D) radio frequency identification tags. E) infrared remote scanners.

86)

The website and order fulfillment are essential features of

A) delayed differentiation. B) e-commerce. C) Internet service providers. D) inventory balancing. E) market segmentation.

87) 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

88) This is known as the strategic coordination of the supply chain for the purpose of integrating supply and demand management.

A) supply chain management B) logistics C) ERP D) strategic partnerships E) strategic procurement

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89)

Which of the following is not a key aspect of supply chain management?

A) determining the appropriate level of outsourcing B) managing procurement C) managing suppliers D) implementing lean principles E) managing customer relationships

90)

This enables managers to incorporate economics into outsourcing and other decisions.

A) measuring outsourcing ROI B) measuring distribution ROI C) measuring procurement ROI D) measuring supply chain ROI E) measuring inventory ROI

91)

It is essential to adopt procedures to manage

in the supply chain.

A) procurement B) distribution C) risks D) inventory E) suppliers

92) is the ability of a business to recover from an event that negatively impacts the supply chain.

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A) Risk avoidance B) Risk reduction C) Resiliency D) Risk sharing E) Establishing transparency

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Answer Key Test name: Chap 15_14e 1) TRUE 2) FALSE 3) FALSE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) FALSE 9) TRUE 10) TRUE 11) FALSE 12) FALSE 13) TRUE 14) TRUE 15) FALSE 16) TRUE 17) TRUE 18) TRUE 19) FALSE 20) FALSE 21) FALSE 22) FALSE 23) FALSE 24) TRUE 25) TRUE 26) FALSE Version 1

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

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

87) E 88) A 89) D 90) D 91) C 92) C

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Ch. 16 Scheduling TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Flow-shop scheduling is used in high-volume systems. ⊚ ⊚

true false

2) Line balancing is a major factor in the design and scheduling of low-volume systems because of batch processing. ⊚ ⊚

true false

3) Scheduling in intermediate-volume systems has three basic issues: run size, timing, and sequence. ⊚ ⊚

true false

4) When operations are often bottlenecked, additional planned idle time will improve the throughput in those areas. ⊚ ⊚

true false

5) When orders exceed our capacity, priority rules are used to select which orders will be accepted. ⊚ ⊚

true false

6) The term loading, as used in scheduling, refers to choosing the order in which jobs will be processed in low-volume systems. ⊚ ⊚ Version 1

true false 1

Loading is the determination of which work centers should perform which jobs. ⊚ ⊚

A Gantt chart is a basic scheduling tool that works best for high-volume systems. ⊚ ⊚

true false

A Gantt chart is a basic scheduling tool that is most useful in low-volume systems. ⊚ ⊚

true false

10) A schedule chart depicts the loading and idle times for a group of machines or departments. ⊚ ⊚

11)

true false

The output of the system cannot exceed the output of the bottleneck operation(s). ⊚ ⊚

true false

12) The elimination of idle time on both bottleneck and non-bottleneck operations must be accomplished to optimize output. ⊚ ⊚

true false

13) As long as the bottleneck operations are used effectively, idle time in non-bottleneck operations will not affect the overall productivity of the system.

Version 1

⊚ ⊚

true false

14) The quantity sent to a bottleneck operation could be split into two or more process batches to better utilize a bottleneck resource rather than process the entire batch. ⊚ ⊚

true false

15) Splitting a large lot after one operation beyond a bottleneck operation would reduce the overall waiting time of the bottleneck operation. ⊚ ⊚

true false

16) Input/output (I/O) control refers to monitoring the productivity changes since productivity is determined by the ratio of output to input. ⊚ ⊚

17)

Infinite loading and finite loading are two major approaches used to load work centers. ⊚ ⊚

18)

true false

A schedule chart can be used to monitor job progress. ⊚ ⊚

19)

true false

The assignment model seeks an optimum matching of tasks and resources. ⊚ ⊚

Version 1

true false

20) Sequencing is concerned with the order in which jobs are done, while loading is concerned with assigning jobs to work centers or workstations. ⊚ ⊚

21)

Priority rules are widely used to sequence jobs in high-volume systems. ⊚ ⊚

22)

true false

The Hungarian method is limited to a maximum of two jobs per resource. ⊚ ⊚

true false

23) Priority rules generally assume that job setup cost is independent of the processing sequence of jobs. ⊚ ⊚

true false

24) In a single work center, makespan improvement can be accomplished by selecting the optimal sequencing rule. ⊚ ⊚

25)

Priority rules are used in low-volume systems to identify an optimal processing sequence. ⊚ ⊚

26)

true false

The SPT priority rule always results in the lowest average completion time.

Version 1

⊚ ⊚

true false

27) Bottlenecks in service systems may shift with the passage of time, so that different operations become bottleneck operations at different times. ⊚ ⊚

true false

28) In the decision-making hierarchy, scheduling decisions are the final step in the transformation process before actual output occurs. ⊚ ⊚

29)

Makespan is the total time needed to complete a group of jobs. ⊚ ⊚

30)

true false

The theory of constraints has a goal of maximizing flow through the entire system. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 31) Similar to that in manufacturing, the service scheduling hierarchy begins with and ends with .

A) aggregate planning; detailed daily scheduling B) aggregate planning; master scheduling C) master scheduling; detailed material planning D) aggregate planning; detailed material planning E) quarterly planning; monthly planning

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32) Which of the following is present in the manufacturing scheduling hierarchy but is absent in the service scheduling hierarchy?

A) aggregate planning B) materials planning C) master scheduling D) detailed, short-term scheduling E) detailed, short-term planning

33)

In theory of constraints scheduling, the refers to the schedule and the refers to inventory used to ensure that the bottleneck is never idle.

A) rope; drum B) drum; rope C) drum; buffer D) buffer; drum E) buffer; rope

34) In theory of constraints scheduling, the synchronization of the sequence of operations is referred to as the

A) buffer. B) bottleneck. C) constraint. D) rope. E) drum.

35)

To facilitate utilization of bottleneck operations, in theory of constraints scheduling can be split into to reduce waiting times.

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A) bottleneck lots; non bottleneck lots B) transfer batches; process lots C) sized lots; constrained lots D) process batches; transfer batches E) buffer lots; transfer lots

36) Ensuring that the constraining resource is used to its maximum is an example of constraint

A) elevation. B) subordination. C) identification. D) elimination. E) exploitation.

37)

Scheduling pertains to

A) hiring workers. B) process selection. C) buying machinery. D) timing the use of specific resources. E) determining the lowest cost.

38)

Which of the following is the last step in the capacity/scheduling chain?

A) product planning B) process planning C) capacity planning D) aggregate planning E) scheduling

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39)

Which of the following is not an example of a high-volume system?

A) aircraft manufacturing B) magazine printing C) petroleum refining D) waste treatment E) commercial donut baking

40)

Which of the following is not usually a characteristic of successful high-volume systems?

A) smooth workflow through the system B) customized output C) rapid repair of breakdowns D) minimal quality problems E) reliable supply schedules

41)

Primary considerations in scheduling high-volume systems involve:

(I) coordinating the flow of inputs. (II) overcoming the disruptions to planned outputs. (III) assigning workers to work centers.

A) I and III B) I and II C) II and III D) I, II, and III E) II only

42)

Organizations with fixed, perishable capacity can benefit from

Version 1

A) yield management. B) price increases. C) constraints. D) suboptimization. E) waiting lines.

43)

A work center can be a:

(I) machine. (II) group of machines. (III) department. (IV) a part used to produce a product.

A) I, II, and III only B) II and IV only C) II and III only D) I and III only E) I, II, III, and IV

44)

The EDD priority rule usually does well with regard to

A) cost. B) lateness. C) overtime. D) waste. E) makespan.

45)

Which of the following is not an assumption of priority rules?

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A) The set of jobs is known: no new jobs arrive after processing begins. B) Setup time is independent of processing sequence. C) Finite loading is assumed. D) Processing times are deterministic. E) No machine breakdowns are assumed.

46)

The two different approaches to load work centers in job-shop scheduling are

A) load charts and schedule charts. B) Gantt charts and assignment method. C) infinite loading and finite loading. D) linear programming and makespan. E) infinite charting and finite charting.

47)

The priority rule which will sequence jobs in the order they are received is

A) EDD. B) LIFO. C) SPT. D) CR. E) FCFS.

48)

A scheduling technique used to achieve an optimum matching of tasks and resources is

A) the assignment method. B) Johnson's rule. C) the optimum production technology method. D) the appointment method. E) the reservation method.

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49) In a task assignment situation, in how many different ways can five jobs be assigned to five machines if each job must be assigned to each machine and each machine must be assigned one job?

A) 1 B) 5 C) 25 D) 120 E) 3,125

50) The following matrix shows relative costs for various job-machine combinations. Assume there must be one-to-one matching between jobs and machines. Which set of pairs constitutes the minimum-cost solution using the assignment method? Machine

Job

A) 1-B, 2-C, 3-A B) 1-B, 2-A, 3-C C) 1-A, 2-C, 3-B D) 1-A, 2-B, 3-C E) 1-C, 2-A, 3-B

51) Based on the cost information given in the following table, which set of job-machine pairs reflects the minimum-cost solution using the Assignment method?

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Machine

Job

A) 1-B, 2-A, 3-C B) 1-A, 2-B, 3-C C) 1-C, 2-A, 3-B D) 1-B, 2-C, 3-A E) 1-C, 2-B, 3-A

52)

Effective scheduling cannot

A) yield cost savings and improved productivity. B) reduce the need for expansion of facilities. C) improve customer service. D) eliminate the need to train employees. E) improve patient care in medical settings.

53) The priority rule where jobs are processed according to the smallest ratio of time remaining to due date to processing time is

A) CR. B) EEDD. C) FCFS. D) S/O. E) SPT.

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54)

Scheduled due dates are the result of

A) promises to customers. B) MRP processing. C) managerial decisions. D) all of the choices. E) our competitor's promises.

55) Which of the following is not a measure for judging the effectiveness of a schedule sequence?

A) average number of jobs at the work center B) total number of jobs at the work center C) average completion (flow) time D) average job tardiness E) length of time between start of first job to completion of the last job in the work center

56)

The purpose of cyclical scheduling is to

A) eliminate weekends and holidays. B) establish work assignments that will repeat on a cyclical basis. C) add flexible hours. D) incorporate overtime. E) rotate schedules across a service workforce to ensure everyone gets an equal number of weekends off per year.

57)

Average completion (flow) time for a schedule sequence at a work center is

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A) the sum of processing time divided by the number of jobs. B) the sum of jobs' flow times divided by the number of jobs. C) overall flow time divided by total processing time. D) total processing time plus total late time divided by number of jobs. E) the sum of flow time plus total late time divided by number of jobs.

58) The scheduling sequencing rule which always results in the lowest average completion (flow) time is the

A) first come, first served (FCFS) rule. B) shortest processing time first (SPT) rule. C) earliest due date first (EDD) rule. D) least slack per operation first (S/O) rule. E) run until slack happens (RUSH) rule.

59)

Which sequencing rule is designed specifically to minimize job tardiness?

A) S/O B) EDD C) FCFS D) SPT E) LPT

60) A scheduling rule used for sequencing jobs through two work centers such that makespan is minimized is

A) critical ratio rule. B) Johnson's rule. C) slack per operation rule. D) shortest processing time rule. E) Pareto rule.

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61)

For the jobs listed below, which processing sequence would result using Johnson's rule? Processing time (hrs) Center 1 Center 2

Job a

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

62)

What is the optimum job sequence for the jobs listed below using Johnson's rule?

Job

Processing time (hrs) Center 1 Center 2

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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

63)

A major difference between manufacturing and service systems in terms of scheduling is

A) variability in arrival and service rates. B) processing cost per unit. C) the number of units to be processed. D) length of processing time. E) output rate.

64)

Scheduling in service systems often takes the form of:

(I) appointment systems. (II) reservation systems. (III) makespan systems.

A) I only B) II only C) I and II only D) III only E) I, II, and III

65)

Scheduling in service systems may involve scheduling:

(I) the workforce. (II) the equipment. (III) customers.

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A) II only B) I and II only C) II and III only D) I and III only E) I, II, and III

66)

One disadvantage of appointment systems is

A) Capacity can be adjusted by varying hours. B) The customer's desired time may be already taken. C) People generally accept it as fair. D) It can reduce customer waiting time. E) Appointments do not have to be all the same length.

67)

In an assignment model where there are fewer jobs than resources

A) dummy jobs are needed to solve the problem. B) dummy resources are needed to solve the problem. C) the problem cannot be solved using an assignment model. D) the problem will have multiple optimum solutions. E) the simplex method must be used to solve the problem.

68) The following table contains information about five jobs waiting to be processed at work center 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.

69) The following table contains information about five jobs waiting to be processed at work center number three. Job

Processing Time (hrs)

Hours Until Due

Using the EDD rule, the sequence of jobs would be

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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.

70) There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows: Job (Hours) Resource

After the row reduction, what is the resulting entry in the new table for assigning resource 4 to Job D?

A) 0 hours B) 2 hours C) 3 hours D) 6 hours E) 9 hours

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71) There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows: Job (Hours) Resource

After the row and column reductions, what is the resulting entry in the new table for assigning resource 4 to job D?

A) 0 hours B) 2 hours C) 3 hours D) 6 hours E) 9 hours

72) There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows: Job (Hours) Resource

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After the row and column reductions, what is the minimum number of lines needed to cover all of the zeroes?

A) 0 lines B) 1 line C) 2 lines D) 3 lines E) 4 lines

73) There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows: Job (Hours) Resource

What is the optimal assignment of resources to jobs?

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A) 1 to A; 2 to C; 3 to B; 4 to D B) 1 to B; 2 to D; 3 to C; 4 to A C) 1 to C; 2 to B; 3 to A; 4 to D D) 1 to D; 2 to B; 3 to C; 4 to A E) 1 to A; 2 to C; 3 to D; 4 to B

74) There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows: Job (Hours) Resource

For the optimal schedule, what is the total number of hours required to complete these jobs?

A) 23 hours B) 22 hours C) 21 hours D) 20 hours E) 19 hours

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75) The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: Project (Hours) Consultant

Charlie

Betty

Johnny

Rick

Assume there must be one-to-one matching between consultants and projects. In how many different ways can she assign these consultants to these projects?

A) 4 B) 8 C) 16 D) 24 E) 256

76) The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: Project (Hours) Consultant

Charlie

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Betty

Johnny

Rick

Assume there must be one-to-one matching between consultants and projects. After the row and column reductions, what is the resulting entry in the new table for assigning Rick to project D?

A) 0 hours B) 8 hours C) 10 hours D) 9 hours E) 22 hours

77) The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: Project (Hours) Consultant

Charlie

Betty

Johnny

Rick

Assume there must be one-to-one matching between consultants and projects. What is the optimal assignment of consultants to projects?

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A) Charlie to A; Betty to B; Johnny to C; Rick to D B) Charlie to D; Betty to C; Johnny to B; Rick to A C) Charlie to C; Betty to A; Johnny to D; Rick to B D) Charlie to D; Betty to B; Johnny to C; Rick to A E) Charlie to D; Betty to A; Johnny to C; Rick to B

78) The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: Project (Hours) Consultant

Charlie

Betty

Johnny

Rick

Assume there must be one-to-one matching between consultants and projects. For the optimal schedule, what is the total number of hours it will take these consultants to complete these projects?

A) 53 hours B) 46 hours C) 50 hours D) 61 hours E) 54 hours

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79) The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hrs)

Due (hrs from now) 4

If he uses the first come, first served priority rule to schedule these jobs, what will be the average completion time?

A) 7.5 hours B) 5 hours C) 3 hours D) 2.5 hours E) 2 hours

80) The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hrs)

Due (hrs from now) 4

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If he uses the earliest due date first priority rule to schedule these jobs, what will be the average job tardiness?

A) 0 hours B) 1.5 hours C) 1.75 hours D) 2 hours E) 2.25 hours

81) The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hrs)

Due (hrs from now) 4

If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average completion time?

A) 7.5 hours B) 5 hours C) 3 hours D) 2.5 hours E) 2 hours

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82) The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hrs)

Due (hrs from now) 4

If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average job tardiness?

A) 0 hours B) 1.5 hours C) 1.75 hours D) 2 hours E) 2.25 hours

83) The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: Job

Processing Time (hrs)

Due (hrs from now) 4

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If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average number of jobs in his shop today?

A) 0 B) 1 C) 2 D) 3 E) 4

84) Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: Job

Processing Time (hrs)

Due (hrs from now) 5

If Eva uses the first come, first served priority rule to schedule these jobs, what will be the average completion time?

A) 3 hours B) 5 hours C) 7 hours D) 7.2 hours E) 8 hours

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85) Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: Job

Processing Time (hrs)

Due (hrs from now) 5

If Eva uses the earliest due date first (EDD) priority rule to schedule these jobs, what will be the average job tardiness?

A) 2 hours B) 2.2 hours C) 2.33 hours D) 2.4 hours E) 3 hours

86) Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: Job

Processing Time (hrs)

Due (hrs from now) 5

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If Eva uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average completion time?

A) 3 hours B) 5 hours C) 7 hours D) 7.2 hours E) 8 hours

87) Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: Job

Processing Time (hrs)

Due (hrs from now) 5

If Eva uses the shortest processing time first priority rule to schedule these jobs, what will be the average job tardiness?

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A) 2 hours B) 2.2 hours C) 2.33 hours D) 2.4 hours E) 3 hours

88) Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: Job

Processing Time (hrs)

Due (hrs from now) 5

If Eva uses the shortest processing time first priority rule to schedule these jobs, what will be the average number of jobs in her shop today?

A) 2 jobs B) 2.33 jobs C) 2.4 jobs D) 2.67 jobs E) 3 jobs

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89) The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the makespan to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body and paint work on each are as follows: Car

Body Work (hrs)

Paint (hrs) 2

Where in the optimum sequence should car E be scheduled?

A) first B) second C) third D) fourth E) fifth

90) The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the makespan to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body and paint work on each are as follows: Car

Body Work (hrs)

Paint (hrs) 2

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Where in the optimum sequence should car A be scheduled?

A) first B) second C) third D) fourth E) fifth

91) The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the makespan to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body and paint work on each are as follows: Car

Body Work (hrs)

Paint (hrs) 2

What is the optimum sequence (first car to last)?

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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

92) The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the makespan to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body and paint work on each are as follows: Car

Body Work (hrs)

Paint (hrs) 2

What is the makespan for the optimal schedule?

A) 24 hours B) 25 hours C) 26 hours D) 28 hours E) 50 hours

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93) The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the makespan to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body and paint work on each are as follows: Car

Body Work (hrs)

Paint (hrs) 2

What is the idle time at the paint work center for the optimal schedule?

A) 1 hour B) 2 hours C) 4 hours D) 7 hours E) 10 hours

94) Job X, which has a duration of four days, is due by the close of business on Friday, December 23. Without looking at the work already scheduled on X's required resource, the scheduler schedules X to be begun on the morning of Tuesday, December 20. This is an example of

A) infinite scheduling. B) finite scheduling. C) forward scheduling. D) backward scheduling. E) prioritization.

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95) Job X, which has a duration of four days, is due by the close of business on Friday, December 23. Without looking at the work already at X's required resource, the scheduler schedules X to be begun immediately and assumes that X will be done four days from now. This is an example of

A) infinite scheduling. B) finite scheduling. C) forward scheduling. D) backward scheduling. E) prioritization.

96) Job X arrived at work center Q at noon. At 2 p.m. that same day X was begun. X left work center Q at 3:15 p.m. that same day. X's flow time, in minutes, was

A) 195. B) 120. C) 75. D) 60. E) Cannot be determined.

97)

Which of the following is critical to effective yield management?

A) one-price pricing B) forecasting C) capacity flexibility D) constant demand E) trained service personnel

98) Which of the following is least likely to be a source of disruption that results in less than the desired output in a high-volume system?

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A) equipment failures B) material shortages C) accidents D) worker absences E) demand variability

99) All of the following are examples of decisions that must be made before scheduling decisions, except

A) the capacity of the system, product, or service design. B) equipment selection. C) selection and training of workers. D) developing schedules. E) aggregate planning.

100)

High-volume jobs that often follow the same sequence are known as

A) optimal systems. B) timing systems. C) sequencing systems. D) rapid systems. E) flow systems.

101)

Which costs depend on the order in which the jobs are processed?

A) sequencing B) setup C) finishing D) transportation E) distribution

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102)

charts are often the preferred charts related to loading and scheduling activities.

A) Pareto B) Mekko C) Gantt D) Histogram E) Flow

103) is a technique that managers can utilize in order to minimize the makespan for a group of jobs to be processed on two machines or at two work centers.

A) Smith’s rule B) Hungarian rule C) Johnson’s rule D) Priority rule E) Lane’s rule

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Answer Key Test name: Chap 16_14e 1) TRUE 2) FALSE 3) TRUE 4) FALSE 5) FALSE 6) FALSE 7) TRUE 8) FALSE 9) TRUE 10) FALSE 11) TRUE 12) FALSE 13) TRUE 14) FALSE 15) FALSE 16) FALSE 17) TRUE 18) TRUE 19) TRUE 20) TRUE 21) FALSE 22) FALSE 23) TRUE 24) FALSE 25) FALSE 26) TRUE Version 1

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

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

87) A 88) B 89) A 90) E 91) B 92) D 93) C 94) D 95) C 96) A 97) B 98) E 99) D 100) E 101) B 102) C 103) C

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Ch. 17 Project Management TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Good project management is very important with virtual teams. ⊚ ⊚

true false

2) One way that project management differs from management of more traditional activities is because of the limited time framework of projects. ⊚ ⊚

true false

3) Once a project is approved and underway, project managers are only responsible for effectively managing time and costs which, if done well, will assure project completion on time and on budget. ⊚ ⊚

true false

4) Matrix organizations transfer control of workers to project managers for the duration of the project. ⊚ ⊚

true false

5) Some organizations use a matrix organization to integrate the activities of specialists within a functional framework. ⊚ ⊚

true false

The project computing algorithm requires both a forward and a backward pass. ⊚ ⊚

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true false 1

A hierarchical listing of what must be done during a project is called matrix. ⊚ ⊚

true false

8) An advantage of Gantt charts in project management is that they identify which activities can be delayed without delaying the overall project. ⊚ ⊚

true false

9) A Gantt chart is apopular visual tool for displaying the established precedence relationships. ⊚ ⊚

10)

true false

The higher the node number, the longer the activity will take. ⊚ ⊚

true false

11) The probability of occurrence of risk events is lower near the beginning of a project and higher near the end of the project since very few activities remain. ⊚ ⊚

true false

12) The costs associated with risk events tend to be lower near the beginning of a project and higher near the end of the project. ⊚ ⊚

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true false

13) Although PERT and CPM were originally developed independently, they are now nearly identical in terms of analysis and procedures. ⊚ ⊚

14)

The network diagram shows sequential relationships among major activities on a project. ⊚ ⊚

15) path.

true false

The path in a network with the average length of time to completion is called the critical

⊚ ⊚

true false

16) The sum of times of the longest path in a network indicates expected project duration, and the activities represent the critical activities. ⊚ ⊚

17)

Path probabilities are calculated by dividing path mean by path standard deviations. ⊚ ⊚

18)

true false

The main function of dummy activities is to clarify relationships in network diagrams. ⊚ ⊚

true false

19) The earliest finish time for an activity is equal to the latest finish time minus the activity time.

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⊚ ⊚

true false

20) The latest starting time for an activity is equal to the latest finish time minus the activity time. ⊚ ⊚

true false

21) The earliest finish time for an activity is equal to the latest finish time minus the activity slack. ⊚ ⊚

true false

22) Many activities have slack time; if we add these slack times together, this represents the potential improvement in early completion for the project. ⊚ ⊚

true false

23) 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 project. ⊚ ⊚

24)

The task of identifying risks should involve everyone associated with the project. ⊚ ⊚

25)

true false

Most likely time generally is at least as long as optimistic time. ⊚ ⊚

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true false

26)

Activities not on the critical path have a slack time equal to zero. ⊚ ⊚

true false

27) If two consecutive activities have shared slack, this means that each of them can use only half of the slack without delaying completion of the project. ⊚ ⊚

true false

28) Deterministic networks use three time estimates—shortest, most likely, and longest—for each activity in order to best determine the activity's estimated time. ⊚ ⊚

29)

true false

Slack time is equal to LS-ES or LF-EF. ⊚ ⊚

true false

30) Project management software eliminates constraint violations when there are shared resources. ⊚ ⊚

true false

31) The standard deviation of the critical path is equal to the sum of the standard deviations of all of the activities on the critical path. ⊚ ⊚

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true false

32) The total cost of crashing any one activity should never exceed 20 percent of the total cost of the original project. ⊚ ⊚

true false

33) If the expected length of a path is more than 2.5 standard deviations less than a desired project completion time, the path will not be a factor in assessing the probability of finishing the project on time. ⊚ ⊚

true false

34) In order to determine the probability of timely project completion, it is sometimes necessary to take into account paths other than the critical path. ⊚ ⊚

true false

35) 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. ⊚ ⊚

36)

true false

A disadvantage of activity-on-node diagrams is the occasional need for dummy activities. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 37) Which of the following stages is that one in which the project's expected costs, benefits, and risks are assessed?

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A) executing B) monitoring/controlling C) assessment D) planning E) initiating

38) In the execution phase of a project's life cycle, activities are guided by decisions that were made in the phase.

A) initiating B) planning C) monitoring/controlling D) closing E) assessment

39) Which of the following is not one of the six key decisions in project management? (I) Selecting the project team(II) Deciding on the project manager's title(III) Managing and controlling project resources(IV) Deciding which projects to implement(V) Selecting the project manager

A) I B) II C) III D) IV E) V

40)

One upside to terminating a project that is not going as well as planned is that

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A) elsewhere. B) C) D) E)

poorly performing project team members will be kept from causing trouble no additional costs will be incurred. poor project managers will be weeded out. resources can perhaps be put to better use elsewhere. project completion will be hastened.

41) Project risk events tend to be unlikely tend to be the .

a project, but that's also when they

A) early in; most costly B) late in; least costly C) late in; most costly D) before the beginning of; most complex E) at the conclusion of; least complex

42) 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

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should

A) II; IV B) III; IV C) I; III D) I; II E) II; III

43) Project management differs from management of more traditional activities mainly because of: (I) its limited time frame.(II) its unique, defined set of activities.(III) the requirement for use of the appropriate resources.(IV) the need for planning and execution.

A) I B) II C) I and II D) I and III E) I, II, and IV

44)

Which of the following would probably not involve the use of PERT?

A) planning and constructing a new city hall B) developing an advertising campaign for a new product C) designing and constructing a subway system D) writing a poem E) preparing for the visit of a foreign dignitary

45) Once a project is underway, the project manager usually is not responsible for effectively managing

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A) the people. B) costs. C) resources. D) time. E) project priority.

46)

Which of the following is not a form of risk reduction in project management?

A) backup system B) outsourcing C) risk sharing D) scenario analysis E) frequent monitoring of critical project dimensions in order to catch and eliminate problems early

47)

A sequence of activities that leads from the starting node to the finishing node is called a

A) path. B) sequel. C) trail. D) critical sequence. E) time line.

48)

Which of the following is not typically treated as part of a project life cycle?

A) feasibility assessment B) planning C) maturity D) release resources E) project staffing

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49)

A hierarchical listing of what must be done in a project is called a

A) work breakdown structure (WBS). B) PERT. C) planning matrix. D) crashing plan. E) critical path.

50) A method used for establishing a logical framework for identifying the required activities for the project is called

A) work breakdown structure. B) PERT. C) planning matrix. D) crashing. E) critical path analysis.

51) A popular visual tool for planning and scheduling simple projects, and for monitoring progress, is the

A) activity-on-arrows network. B) activity-on-nodes network. C) Gantt chart. D) critical path method. E) program evaluation and review technique.

52)

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an activity means to shorten the time it will take.

A) smash B) fund C) crash D) aggregate E) matrix

53)

Concerning PERT and CPM

A) These are two different names for essentially the same technique. B) CPM tends to focus more on the critical path; PERT focuses on the parallel paths. 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) CPM is useful for project manager selection; PERT is useful for project team selection.

54)

The advantage a precedence diagram has over a Gantt chart is

A) its ability to reveal relationships among activities. B) its difficulty in depicting networks. C) its complexity. D) its simplicity. E) its lack of riskiness.

55)

In a project network, the critical path is the sequence of activities which has the

A) most activities. B) most nodes. C) most events. D) longest duration. E) greatest variance.

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56) Which of the following is not true about the use of dummy activities in project networking?

A) They preserve the separate identities of activities. B) They clarify precedence relationships among activities. C) They have an activity time equal to zero. D) They have an activity time variance equal to zero. E) They are used in activities-on-nodes (AON) network diagrams.

57)

Shortening activity durations is called

A) expediting. B) crashing. C) vendor management. D) null nodes. E) trade-off analysis.

58)

Consider the portion of a project depicted by this graph:

What is the earliest finish time for activity 10–11 (far right–hand side) if the earliest start time of 8–10 (upper left–hand side) is 12 and the earliest start time of 9–10 (lower left–hand side) is 13?

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A) 22 B) 23 C) 24 D) 25 E) 26

59) Activity 7–8 is directly preceded by two activities—activity 5–7 and activity 6–7. Activity 5–7 has an expected time of five and an ES time of six. Activity 6–7 has an expected time of seven and an ES time of seven. Activity 7–8 has an expected time of 10. The ES for activity 7–8 is

A) 11. B) 14. C) 21. D) 24. E) 25.

60) Which of the following is determined as a direct result of computing the earliest starting and finishing times for the activities of a project network?

A) expected project duration B) activity slack time C) which activities are on the critical path D) variance in project duration E) maximum project duration

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61)

Consider the portion of a project depicted by this graph:

What is the latest start time of activity 6–7 if the latest finish of activity 7–8 is 26, and the latest finish of activity 7–9 is 23?

A) 18 B) 17 C) 13 D) 12 E) 10

62) A node has one entering activity, a, and two leaving activities, b and c. Given the following information, determine the latest starting time for activity a: EFb = 15, EFc = 17, LFb = 24, LFc = 27; activity times are a = 4, b = 6, c = 8.

A) 14 B) 15 C) 16 D) 17 E) 18

63)

In project network analysis, “slack” refers to the difference between

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A) observed and predicted times. B) optimistic and pessimistic times. C) mean and modal times. D) finish and start times. E) latest and earliest times.

64) 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.

65) Given this information about activity 3-4: 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.

In the probabilistic approach to project network analysis, the time estimate annotated tm 66) for any activity is the

A) mean time. B) median time. C) most likely time. D) mode time. E) marginal time.

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67)

The basis for use of the beta distribution in PERT is

A) essentially theoretical. B) its features that make it attractive in practice. C) its symmetry. D) It is bimodal. E) It can easily be converted to a normal distribution.

68) 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 times

69) A PERT/CPM activity has an optimistic time estimate of three days, a most likely time estimate of eight days, and a pessimistic time estimate of 10 days. The expected time (in days) of this activity is

A) 7.0. B) 7.5. C) 8.0. D) 8.5. E) 10.0.

70) Activity 4-5 in a network diagram has an optimistic time estimate of five days, a most likely time estimate of seven days, and a pessimistic time estimate of 10 days. Its expected time (in days) is approximately

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A) 5. B) 6. C) 7. D) 8. E) 9.

71) There are four activities on the critical path, and they have standard deviations of 1, 2, 4, and 2 days. The standard deviation of the critical path is

A) 3. B) 5. C) 9. D) 16. E) 25.

72) There are four activities on the critical path. Coincidentally, their standard deviations are all equal to 4. The standard deviation of the critical path is therefore equal to

A) 2. B) 4. C) 8. D) 16. E) 64.

73) 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) loading.

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74)

In “crashing” a project, a 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) are the easiest to crash.

75)

At which point does crashing of a project cease?

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 the project is one-half completed E) when the team has been disbanded

76) Which of the following are advantages of PERT and CPM? (I) It is visual.(II) It is automatically updated.(III) Activities that need to be watched closely can be identified.

A) I and II B) II and III C) III only D) I and III E) I, II, and III

77) Which of the following are limitations of PERT and CPM?(I) Time estimates may include a fudge factor.(II) Important activities may be overlooked.(III) It is an after-the-fact analysis.

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A) I and II B) I, II, and III C) I and III D) II and III E) I only

78) Which of the following is not a limitation of PERT and similar project-scheduling techniques?

A) They force the manager to organize and quantify information. B) One or more important activities may be omitted from the network. C) Precedence relationships may not all be correct as shown. D) Time estimates may contain a "fudge factor." E) The use of a computer is essential for large projects.

79)

Gantt charts are most closely associated with

A) JIT. B) PERT. C) MRP. D) MRPII. E) Six Sigma.

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80)

A project is represented by the following diagram:

The expected duration of this project is:

A) 12. B) 17. C) 20. D) 36. E) 77.

81)

A project is represented by the following diagram:

The critical path for the network shown is:

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A) a-c-g. B) a-d-f-g. C) a-d-h-i. D) b-e-f-g. E) b-e-h-i.

82)

A project is represented by the following diagram:

The expected duration of this project is:

A) 13. B) 15. C) 20. D) 52. E) 81.

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83)

A project is represented by the following diagram:

The critical path for the network shown is:

A) 1-3-6-7. B) 1-2-4-7. C) 1-4-7. D) 1-3-4-7. E) 1-2-5-7.

84)

Consider the following work breakdown structure: Time Estimates (days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B,C

108

End

100

115

End

100

115

End

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What is the estimated expected (mean) time for activity E?

A) 91 days B) 99 days C) 100 days D) 101 days E) 115 days

85)

Consider the following work breakdown structure: Time Estimates (days)

Activity Start

Precedes A,B,C

Optimistic -

Most Likely -

Pessimistic -

108

End

100

115

End

100

115

End

What is the estimated standard deviation in the time for activity E?

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A) 2 days B) 3 days C) 4 days D) 16 days E) 24 days

86)

Consider the following work breakdown structure: Time Estimates (days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B,C

108

End

100

115

End

100

115

End

What is the estimated expected (mean) time for project completion?

A) 100 days B) 140 days C) 199 days D) 200 days E) 440 days

87)

Consider the following work breakdown structure:

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Time Estimates (days) Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B,C

108

End

100

115

End

100

115

End

What is the estimated slack time for activity A?

A) 0 days B) 20 days C) 40 days D) 60 days E) 100 days

88)

Consider the following work breakdown structure: Time Estimates (days)

Activity Start

Precedes A,B,C

Optimistic -

Most Likely -

Pessimistic -

108

End

100

115

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End

100

115

End

What is the probability that this project will be completed within 205 days?

A) .6826 B) .8413 C) .9544 D) .9772 E) .9987

89)

Consider the following work breakdown structure: Start

Finish

Duration (days)

Activity

Node

Optimistic

Most Likely

Pessimistic

What is the estimated expected (mean) time for activity D?

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A) 32 days B) 41 days C) 44 days D) 42 days E) 40 days

90)

Consider the following work breakdown structure: Start

Finish

Duration (days)

Activity

Node

Optimistic

Most Likely

Pessimistic

What is the estimated standard deviation in the time for activity D?

A) 0 days B) 2 days C) 3 days D) 4 days E) 12 days

91)

Consider the following work breakdown structure:

Activity A

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Start

Finish

Node 1

Node 2

Duration (days) Optimistic 41

Most Likely 50

Pessimistic 59

What is the estimated expected (mean) time for project completion?

A) 41 days B) 70 days C) 100 days D) 120 days E) 221 days

92)

Consider the following work breakdown structure: Start

Finish

Duration (days)

Activity

Node

Optimistic

Most Likely

Pessimistic

What is the estimated slack time for activity D?

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A) 0 days B) 19 days C) 20 days D) 79 days E) 80 days

93)

Consider the following work breakdown structure: Start

Finish

Duration (days)

Activity

Node

Optimistic

Most Likely

Pessimistic

What is the probability that this project will be completed within 130 days?

A) .8413 B) .90 C) .9544 D) .9772 E) .9987

94)

Consider the following work breakdown structure: Time Estimates (days)

Activity Start

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Precedes A,B

Optimistic -

Most Likely -

Pessimistic -

C,D

End

What is the estimated expected (mean) time for activity E?

A) 35 days B) 36 days C) 39 days D) 40 days E) 45 days

95)

Consider the following work breakdown structure: Time Estimates (days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B

C,D

End

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What is the estimated standard deviation in the time for activity E?

A) 1 day B) 2 days C) 3 days D) 4 days E) 5 days

96)

Consider the following work breakdown structure: Time Estimates (days)

Activity Start

Precedes A,B

Optimistic -

Most Likely -

Pessimistic -

C,D

End

What is the estimated expected (mean) time for project completion?

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A) 160 days B) 170 days C) 200 days D) 210 days E) 300 days

97)

Consider the following work breakdown structure: Time Estimates (days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B

C,D

End

What is the estimated slack time for activity D?

A) 0 day B) 30 days C) 40 days D) 50 days E) 100 days

98)

Consider the following work breakdown structure:

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Time Estimates (days) Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

A,B

C,D

End

What is the probability that the critical path for this project will be completed within 210 days?

A) .5000 B) .8413 C) .9544 D) .9772 E) .9987

99)

Consider the following work breakdown structure: Start

Finish

Activity A

Node 1

Node 2

to 11

tm 20

tp 29

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Time Estimates(wks)

What is the estimated expected (mean) time for activity E?

A) 31 weeks B) 38 weeks C) 39 weeks D) 40 weeks E) 43 weeks

100)

Consider the following work breakdown structure: Start

Finish

Time Estimates(wks)

Activity

Node

What is the estimated standard deviation in the time for activity E?

A) 0 week B) 1 week C) 2 weeks D) 3 weeks E) 4 weeks

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101)

Consider the following work breakdown structure: Start

Finish

Time Estimates(wks)

Activity A

Node 1

Node 2

to 11

tm 20

tp 29

What is the estimated expected (mean) time for project completion?

A) 35 weeks B) 39 weeks C) 50 weeks D) 104 weeks E) 105 weeks

102)

Consider the following work breakdown structure: Start

Finish

Activity

Node

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Time Estimates(wks)

What is the estimated slack time for activity E?

A) 0 weeks B) 3 weeks C) 9 weeks D) 11 weeks E) 12 weeks

103)

Consider the following work breakdown structure: Start

Finish

Time Estimates(wks)

Activity

Node

What is the probability that the critical path for this project will be completed within 52 weeks?

A) .1554 B) .3108 C) .3466 D) .6554 E) .8277

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104)

Consider the following work breakdown structure: Duration Estimates (Days)

Activity Start

Precedes U,V

Optimistic -

Most Likely -

Pessimistic -

W,X

End

What is the estimated expected (mean) time for activity Y?

A) 30 days B) 29 days C) 38 days D) 26 days E) 35 days

105)

Consider the following work breakdown structure: Duration Estimates (Days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

U,V

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W,X

End

What is the estimated standard deviation in the time for activity Z?

A) 3 days B) 2 days C) 4 days D) 8 days E) 5 days

106)

Consider the following work breakdown structure: Duration Estimates (Days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

U,V

W,X

End

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What is the estimated expected (mean) time for project completion?

A) 135 days B) 145 days C) 170 days D) 180 days E) 255 days

107)

Consider the following work breakdown structure: Duration Estimates (Days)

Activity

Precedes

Optimistic

Most Likely

Pessimistic

Start

U,V

W,X

End

What is the estimated slack time for activity W?

A) 0 day B) 25 days C) 35 days D) 45 days E) 85 days

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108)

Consider the following work breakdown structure: Duration Estimates (Days)

Activity Start

Precedes U,V

Optimistic -

Most Likely -

Pessimistic -

W,X

End

What is the probability that the critical path for this project will be completed within 200 days?

A) .8413 B) .9544 C) .9772 D) .9974 E) .9987

109)

Which of the following is not characteristic of good risk management?

A) estimating the likelihood of chance events occurring B) planning to eliminate chance events C) identifying potential chance events D) formulating contingency plans for chance events E) analyzing the consequences of chance events

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110) Which of the following leads to simulation being a useful tool with uncertain activity times?

A) paths that are not independent B) networks with each activity on only one path C) activity times that cannot be crashed D) noncritical paths that have no variability E) critical paths with activities with deterministic time estimates

111)

Which of the following is not an element of the project management triangle?

A) cost B) schedule C) resources D) quality E) performance objectives

112) If an activity is determined to be on the critical path, that means that unlike activities that are not on the critical path, it will affect project

A) direct costs. B) performance. C) quality. D) conflict. E) duration.

113) Activity J has a duration of 7 and an earliest finish time of 21. If J's latest start time is 16, this must mean that J's slack is

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A) 7. B) 4. C) 3. D) 2. E) 1.

114)

In which phase of the project life cycle is the work conducted?

A) initiating B) planning C) executing D) monitoring and controlling E) closing

115)

Which phase of the project life cycle happens in conjunction with project execution?

A) initiating B) planning C) executing D) monitoring and controlling E) closing

116) Which decision in project management has typical factors that include budget, availability of appropriate knowledge, and cost-benefit considerations?

A) deciding which projects to implement B) selecting the project manager C) selecting the project team D) planning and designing the project E) managing and controlling project resources

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117) Which decision in project management has typical factors that include establishing appropriate metrics for evaluating the project and managing equipment?

A) deciding which projects to implement B) selecting the project manager C) selecting the project team D) planning and designing the project E) managing and controlling project resources

118)

All of the following are areas of knowledge that a project manager should possess, except

A) managing integration. B) managing procurement. C) managing stakeholders. D) managing scope. E) managing operations.

119) All of the following are advantages to using a project management software package, except that

A) it imposes a methodology and a common project management terminology. B) it provides a logical planning structure. C) it can enhance communication among team members. D) it enables what-if scenarios. E) it can fix the occurrence of constraint violations.

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Answer Key Test name: Chap 17_14e 1) TRUE 2) TRUE 3) FALSE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) FALSE 9) FALSE 10) FALSE 11) FALSE 12) TRUE 13) TRUE 14) TRUE 15) FALSE 16) TRUE 17) FALSE 18) TRUE 19) FALSE 20) TRUE 21) TRUE 22) FALSE 23) FALSE 24) TRUE 25) TRUE 26) FALSE Version 1

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

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

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

117) E 118) D 119) D

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Ch. 18 Management of Waiting Lines TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Waiting lines occur even in underloaded systems because of variability in service rates and/or arrival rates. ⊚ ⊚

true false

2) A system has one service facility that can service 10 customers per hour. The customers arrive at a variable rate, which averages six per hour. Since there is excess capacity, no waiting lines will form. ⊚ ⊚

true false

The goal of waiting-line management is to eliminate customer waiting lines. ⊚ ⊚

true false

4) The cost of customer waiting is easy to estimate, the number waiting multiplied by the wait cost per minute. ⊚ ⊚

true false

5) In a theme park like Disney world, reservation systems are a win-lose situation since only those holding reservations are satisfied. ⊚ ⊚

true false

6) The point that minimizes total queuing system costs is that point where waiting costs and capacity costs are equal.

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⊚ ⊚

true false

7) A multiple-channel system assumes that each server will have its own waiting line, and line changing is not permitted. ⊚ ⊚

true false

8) A dental office with two professionals (one dentist, one hygienist) who work together as a team would be an example of a multiple-channel system. ⊚ ⊚

true false

A single-server, variable-service-time system is known as an M/D/1 system. ⊚ ⊚

true false

10) The most commonly used queuing models assume that the arrival rate can be described by a Poisson distribution. ⊚ ⊚

true false

11) The goal of queuing analysis is to balance the cost of providing a level of service capacity with the possible loss of business due to customers leaving the line or refusing to wait. ⊚ ⊚

true false

12) According to Little's law, the number of people in line depends on the time of day that they arrive.

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⊚ ⊚

true false

13) For a system that has a low utilization ratio, decreasing service capacity slightly will have only negligible effect on customer waiting time. ⊚ ⊚

true false

14) An approach to reducing the variability in processing times might include greater standardization. ⊚ ⊚

true false

15) The queuing models discussed in the text apply only to steady-state conditions. Steady state exists only when customers arrive at a steady rate; that is, without any variability. ⊚ ⊚

true false

16) In an infinite-source model, the average number being served is equal to the ratio of the arrival rate to the service rate. ⊚ ⊚

true false

17) In an infinite-source model, the average time in line is equal to the average number in line divided by the arrival rate. ⊚ ⊚

true false

18) In an infinite-source model, the system utilization is the ratio of the arrival rate to the service capacity.

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⊚ ⊚

19)

To reduce the average number waiting in line, it is important to increase utilization. ⊚ ⊚

20)

true false

All infinite-source queuing models require the system utilization to be less than 1.0. ⊚ ⊚

21)

true false

Queue discipline requires a security presence to maintain order. ⊚ ⊚

true false

22) Compared to a single-channel system with exponential service time, a single-channel system with a constant service time causes a reduction of 50 percent in the average number waiting in line. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 23) To reduce waiting times by actively managing system constraints, managers could consider: (I) using temporary workers.(II) shifting demand from high-demand periods to low-demand periods.(III) offering more service variety.(IV) discovering bottlenecks.

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A) I and III only B) I, II, and IV only C) III only D) II and IV only E) IV only

24) The value of standardizing some or all of a service is demonstrated by the shorter wait times observed in models with

A) constant demand rates. B) finite queues. C) infinite sources. D) finite sources. E) constant service times.

25) Which of the following would tend to increase the difference between the actual time customers spent waiting and the perceived time spent waiting by those customers? (I) Lots of experience with the service on the part of customers(II) Anxiety on the part of customers(III) A pleasant physical environment for the customers

A) I and II only B) I only C) II only D) III only E) I, II, and III

26)

In which of these settings would one be least likely to encounter first-come service?

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A) a fast-food restaurant B) a doctor's office C) a hotel check-in operation D) an emergency room E) a check out line

27) A customer growing frustrated with the wait and leaving the facility (without being served) is an example of

A) reneging. B) utilizing. C) balking. D) jockeying. E) departing.

28) Although it is generally the case that service systems have enough capacity, waiting lines result when exceeds capacity for periods of time.

A) homogeneity B) variability C) price D) demand E) heterogeneity

29)

Why is there waiting in an infinite-source queuing system?

A) poor scheduling of servers B) slow service C) low utilization D) variability in arrival and service rates E) multiple-phase processing

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30)

The goal of waiting-line management is to minimize

A) the sum of customer waiting costs and capacity costs. B) the sum of customer waiting time and service time. C) capacity costs. D) customer waiting time. E) idle servers.

31)

A basic difference between infinite-source and finite-source queuing models is the

A) number of servers. B) average waiting time. C) arrival distribution. D) size of potential calling population. E) processing rate.

32) If a manager increases system 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) No change.

33)

A single-phase queuing system is one which has a single

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A) channel. B) server. C) customer being served. D) operation. E) waiting line.

34) A single-channel queuing system has an average service time of eight minutes and an average time between arrivals of 10 minutes. The arrival rate is

A) 6 per hour. B) 7.5 per hour. C) 8 per hour. D) 10 per hour. E) 12.5 per hour.

35)

In a

system, customers enter the waiting line, receive service, and leave.

A) fast-track B) simulated C) queuing D) random E) non-random

36) Which of the following is not generally considered to be a measure of system performance in a queuing analysis?

A) the average number waiting in line B) the average number in the system C) system utilization D) the cost of servers plus customer waiting cost E) average serving time

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37)

The total cost curve

A) starts at zero and increases as service capacity increases. B) begins high and decreases as service capacity increases. C) starts high, declines, then increases again. D) remains relatively flat regardless of service capacity. E) starts at zero, increases rapidly, then declines slowly back to zero.

38) Little's law states that the average number of people in a waiting line is the average customer arrival rate multiplied by the

A) average time in the system. B) average waiting time. C) service time minus the waiting time. D) average number in line. E) waiting time.

39)

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) There really is no change since arrival rates are offset by service rates.

40) Each of the following is notation for a waiting-line model presented in the textbook except

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A) M/P/S. B) M/M/1. C) M/D/1. D) M/M/S.

41) 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 system utilization is

A) .24. B) .40. C) .67. D) 2.50. E) 1.25.

42) A multiple-channel queuing system with a Poisson arrival rate and exponential service time has an average arrival rate of four 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.

43) Which one of the following measures of system performance is a key measure with respect to customer satisfaction?

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A) average number of customers waiting in line B) system utilization C) average number of customers in the calling population D) probability of a server being busy E) capacity costs per hour

44) A single-channel 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 arrival rate will remain the same. The effect will be to

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.

45) When the waiting cost incurred likely varies based on some customer characteristic, an appropriate queuing model is

A) single channel, single phase. B) single channel, multiple phase. C) multiple channel, single priority. D) multiple channel, multiple phase. E) multiple channel, multiple priority.

46)

is one way of reducing perceived waiting time.

A) bonus B) gatekeeper C) reservation D) diversion E) number calling system

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47)

An alternative strategy to increase the capacity of a service system is

A) reducing the number of arrivals. B) increasing variability. C) increasing the processing rate. D) reducing the number of servers. E) reducing the processing rate.

48) A single-phase queuing system in which each arriving customer will be served by a threemember crew has four crews with three members each. The number of “servers” is

A) 3. B) 4. C) 7. D) 12. E) 1.

49) A multiple-channel system has customers arriving at an average rate of five per hour and an average service time of 40 minutes. The minimum number of servers for this system to be underloaded is

A) 2. B) 3. C) 4. D) 5. E) 6.

50) If a firm has reached the point at which further reducing waiting time is not economically feasible, reducing the is sometimes attractive.

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A) channels B) perceived service time C) capacity underload D) perceived waiting time E) system underutilization

51) A bank of 10 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 six minutes per machine. What is the probability that a machine will have to wait for service with two operators?

A) .654 B) .090 C) .346 D) .910 E) .016

52) A bank of 10 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 six minutes per machine. What is the average machine downtime with two operators?

A) .24. B) 3.46 minutes C) 6.25 minutes D) 7.71 minutes E) 9.46 minutes

53) A bank of 10 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 six minutes per machine. What is the average number of machines down when there is one operator?

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A) 1.49 B) 3.35 C) 4.40 D) 6.65 E) 8.51

54) A bank of 10 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 six 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

55) 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 four 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 percent probability of accommodating all of the waiting cars?

A) 10 B) 11 C) 12 D) 13 E) 14

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56) A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. What is the average time that player's card holders wait to be seated?

A) approx. 24 seconds B) approx. 55 seconds C) approx. 4 minutes D) approx. 40 minutes E) approx. 2 hours

57) A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. What is the average time that parties without player's cards wait to be seated?

A) approx. 24 seconds B) approx. 55 seconds C) approx. 4 minutes D) approx. 40 minutes E) approx. 2 hours

58) A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. On average, how many parties with player's cards are waiting to be seated?

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A) .000 B) .027 C) .061 D) 2.827 E) 5.688

59) A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. On average, how many parties without player's cards are waiting to be seated?

A) .000 B) .027 C) .061 D) 2.861 E) 5.688

60) A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. On average, how much longer do parties without player's cards spend in the system, compared to parties with the player's cards?

A) approx. 30 seconds B) approx. 4 minutes C) approx. 8 minutes D) approx. 32 minutes E) It is impossible to say without more information.

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61) Offering an “early bird” special at a restaurant to reduce waiting times during peak hours is an example of

A) demand shifting. B) queuing psychology. C) service phasing. D) service standardization. E) outsourcing.

62) A restaurant that implements a limited menu and a "no substitutions" policy during peak dining hours is practicing with respect to waiting-line management.

A) demand shifting B) queuing psychology C) service standardization D) service phasing E) outsourcing

63) Which of the following would reduce perceived waiting times most dramatically in a doctor's office?

A) putting all clocks out of sight B) removing couches C) having the patient fill out forms D) implementing a “no-cell-phone” policy E) keeping expected waiting times from the patients

64) In a multichannel system with multiple waiting lines, customers shifting among the waiting lines is an example of

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A) departing. B) utilizing. C) abandoning. D) balking. E) jockeying.

65)

This occurs when there is a temporary imbalance between supply and demand.

A) reorders B) inventory mismanagement C) delays D) backorders E) waiting line

66)

is a mathematical approach to analyzing waiting lines.

A) Chaos theory B) Matrix theory C) Coding theory D) Distribution theory E) Queuing theory

67)

A multiple-server system has all the following assumptions except.

A) Poisson arrival rate. B) exponential service time. C) first-come, first-served processing. D) customers form a single waiting line. E) servers all work at different rates

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68) The design of a service system often is used by management to of capacity in relation to the expected cost of customers waiting.

the cost

A) eliminate B) zeroize C) maximize D) minimize E) balance

69) The optimal capacity is one that capacity or server costs.

the sum of customer waiting costs and

A) eliminates B) zeroizes C) maximizes D) minimizes E) balances

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Answer Key Test name: Chap 18_14e 1) TRUE 2) FALSE 3) FALSE 4) FALSE 5) FALSE 6) FALSE 7) FALSE 8) FALSE 9) FALSE 10) TRUE 11) FALSE 12) FALSE 13) TRUE 14) TRUE 15) FALSE 16) TRUE 17) TRUE 18) TRUE 19) FALSE 20) TRUE 21) FALSE 22) TRUE 23) B 24) E 25) C 26) D Version 1

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

57) B 58) B 59) D 60) A 61) A 62) C 63) C 64) E 65) E 66) E 67) E 68) E 69) D

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Ch. 19 Linear Programming TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Linear programming techniques will always produce an optimal solution to an LP problem. ⊚ ⊚

LP problems must have a single goal or objective specified. ⊚ ⊚

true false

Constraints limit the alternatives available to a decision maker ⊚ ⊚

true false

4) Profit maximization could be an objective of an LP problem; but cost minimization cannot be the objective of an LP problem. ⊚ ⊚

The feasible solution space only contains points that satisfy all constraints. ⊚ ⊚

true false

The equation 5 x + 7 y = 10 is linear. ⊚ ⊚

true false

The equation 3 xy = 9 is linear.

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⊚ ⊚

true false

8) Graphical linear programming can handle problems that involve any number of decision variables. ⊚ ⊚

An objective function represents a family of parallel lines. ⊚ ⊚

10)

true false

The term isoprofit line means that all points on the line will yield the same profit. ⊚ ⊚

true false

11) The feasible solution space is the set of all feasible combinations of decision variables as defined by only binding constraints. ⊚ ⊚

12)

The value of an objective function always decreases as it is moved away from the origin. ⊚ ⊚

13)

true false

A linear programming problem can have multiple optimal solutions. ⊚ ⊚

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true false

14)

A maximization problem is limited by all greater than or equal to constraints. ⊚ ⊚

true false

15) If a single optimal solution exists to a graphical LP problem, it will exist at a corner point. ⊚ ⊚

true false

16) The simplex method is a general-purpose LP algorithm that can be used for solving only problems with more than six variables. ⊚ ⊚

true false

17) A change in the value of an objective function coefficient does not change the optimal solution. ⊚ ⊚

18)

true false

The term range of feasibility refers to a constraint's right-hand-side quantity. ⊚ ⊚

true false

19) 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. ⊚ ⊚

20)

true false

The term range of feasibility refers to coefficients of the objective function.

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⊚ ⊚

21)

Nonzero slack or surplus is associated with a binding constraint. ⊚ ⊚

22)

true false

In the range of feasibility, the value of the shadow price remains constant. ⊚ ⊚

true false

23) Every change in the value of an objective function coefficient will lead to changes in the optimal solution. ⊚ ⊚

true false

24) Nonbinding constraints are not associated with the feasible solution space; i.e., they are redundant and can be eliminated from the matrix. ⊚ ⊚

true false

25) When a change in the value of an objective function coefficient remains within the range of optimality, the optimal solution also remains the same. ⊚ ⊚

26)

true false

Using the enumeration approach, optimality is obtained by evaluating every coordinate. ⊚ ⊚

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true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 27) 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.

28) Which of the following is not a component of the structure of a linear programming model?

A) constraints B) decision variables C) parameters D) a goal or objective E) environmental uncertainty

29) Coordinates of all corner points are substituted into the objective function when we use the approach called

A) least squares. B) regression. C) enumeration. D) graphical linear programming. E) constraint assignment.

30)

Which of the following could not be a linear programming problem constraint?

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A) 1 A + 2 B ≤ 3 B) 1 A + 2 B ≥ 3 C) 1 A + 2 B = 3 D) 1 A + 2 B + 3 C + 4 D ≤ 5 E) 1 A + 2 B

31) For the products A, B, C, and D, which of the following could be a linear programming objective function?

A) Z = 1 A + 2 B + 3 C + 4 D B) Z = 1 A + 2 BC + 3 D C) Z = 1 A + 2 AB + 3 ABC + 4 ABCD D) Z = 1 A + 2 B ÷ C + 3 D E) Z = 1 A + 2 B − 1 CD

32) The logical approach, from beginning to end, for assembling a linear programming model begins with

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.

33) the

The region which satisfies all of the constraints in graphical linear programming is called

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A) optimum solution space. B) region of optimality. C) lower left hand quadrant. D) region of non-negativity. E) feasible solution space.

34) In graphical linear programming to maximize profit, the objective function is: (I) a family of parallel lines.(II) a family of isoprofit lines.(III) interpolated.(IV) linear.

A) I only B) II only C) III and IV only D) I, II, and IV only E) I, II, III, and IV

35)

Which objective function has the same slope as this one: $4 x + $2 y = $20?

A) $4 x + $2 y = $10 B) $2 x + $4 y = $20 C) $2 x − $4 y = $20 D) $4 x − $2 y = $20 E) $8 x + $8 y = $20

36) For a linear programming problem with the following constraints, which point is in the feasible solution space assuming this is a maximization problem? 14x x

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+ −

6y y

≤ ≤

42 3

A) x = 8, y = 5 B) x = −1, y = 1 C) x = 4, y = 4 D) x = 2, y = 1 E) x = 2, y = 8

37)

Which of the following choices constitutes a simultaneous solution to these equations?

3x 5x

+ +

4y 4y

= =

10 14

A) x = 2, y = .5 B) x = 4, y = −.5 C) x = 2, y = 1 D) x = y E) y = 2 x

38)

Which of the following choices constitutes a simultaneous solution to these equations?

3x 6x

+ +

2y 3y

= =

6 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

39)

What combination of x and y will yield the optimum for this problem?

Maximize Z = $3x + $15y Subject to: 2x + 4y ≤ 12 5x + 2y ≤ 10

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A) x = 9, y = 0 B) x = 0, y = 0 C) x = 0, y = 3 D) x = 1, y = 2.5 E) x = 0, y = 4

40) In graphical linear programming, when the objective function is parallel to one of the binding 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 constraint must be changed or eliminated.

41) For the constraints given below, which point is in the feasible solution space of this minimization problem? 14x x

+ +

6y 3y

≥ ≥

42 6

A) x = .5, y = 5 B) x = 0, y = 4 C) x = 2, y = 5 D) x = 1, y = 2 E) x = 2, y = 1

42)

What combination of x and y will provide a minimum for this problem?

Maximize Z = $3x + $15y Subject to: 2x + 4y ≥ 12 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

43) 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.

44) The theoretical limit on the number of constraints that can be handled by the simplex method in a single problem is

A) 1. B) 2. C) 3. D) 4. E) unlimited.

45)

A shadow price reflects which of the following in a maximization problem?

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A) marginal cost of adding additional resources B) marginal gain in the objective that would be realized by adding one unit of a resource C) net gain in the objective that would be realized by increasing an objective function coefficient D) marginal gain in the objective that would be realized by subtracting one unit of a resource E) expected value of perfect information

46)

In linear programming, a nonzero reduced cost is associated with a

A) decision variable in the solution. B) decision variable not in the solution. C) constraint for which there is slack. D) constraint for which there is surplus. E) constraint for which there is no slack or surplus.

47)

A constraint that does not form a unique boundary of the feasible solution space is a

A) redundant constraint. B) binding constraint. C) nonbinding constraint. D) feasible solution constraint. E) constraint that equals zero.

48) In linear programming, sensitivity analysis is associated with: (I) the objective function coefficient.(II) right-hand-side values of constraints.(III) the constraint coefficient.

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A) I and II only B) II and III only C) I, II, and III D) I and III only E) I only

49)

In a linear programming problem, the objective function was specified as follows:

Z=2 A+4 B+3 C 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.

50) 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.

51) In the graphical approach to linear programming, finding values for the decision variables at the intersection of corners requires the solving of

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A) linear constraints. B) surplus variables. C) slack variables. D) simultaneous equations. E) binding constraints.

52)

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.

53) 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) $1 A + $2 B = Z B) $12 A + $8 B = Z C) $2 A + $1 B = Z D) $8 A + $12 B = Z E) $4 A + $8 B = Z

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54) 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 Columbia bean constraint?

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

55) 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) 12 A + 8 B ≤ 4,800 B) 8 A + 12 B ≤ 4,800 C) 4 A + 8 B ≤ 3,200 D) 8 A + 4 B ≤ 3,200 E) 4 A + 8 B ≤ 4,800

Version 1

56) 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 and 0 B B) 0 A and 400 B C) 200 A and 300 B D) 400 A and 0 B E) 400 A and 400 B

57) 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 are optimal weekly profits?

A) $0 B) $400 C) $700 D) $800 E) $900

Version 1

58) 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)?

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

59) 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?

A) $2 L + $3 D = Z B) $2 L + $4 D = Z C) $3 L + $2 D = Z D) $4 L + $2 D = Z E) $5 L + $3 D = Z

60) 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?

Version 1

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

61) 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 and 0 D B) 0 L and 120 D C) 90 L and 75 D D) 135 L and 0 D E) 135 L and 120 D

62) 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?

Version 1

A) $0 B) $240 C) $420 D) $405 E) $505

63) 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

64) 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 1,500 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?

A) $4 R + $6 S = Z B) $2 R + $3 S = Z C) $6 R + $4 S = Z D) $3 R + $2 S = Z E) $5 R + $5 S = Z

Version 1

65) 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 1,500 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

66) 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 1,500 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 and 0 S B) 0 R and 240 S C) 180 R and 120 S D) 300 R and 0 S E) 180 R and 240 S

67) 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 1,500 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 are optimal daily profits? Version 1

A) $960 B) $1,560 C) $1,800 D) $1,900 E) $2,520

68) 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 1,500 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 soda, which resource is slack (not fully used)?

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

69) 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-100s this week and a maximum of 1,000 B200s. 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) $4.00 A + $1.00 B = Z B) $.25 A + $1.00 B = Z C) $1.00 A + $4.00 B = Z D) $1.00 A + $1.00 B = Z E) $.25 A + $.50 B = Z

70) 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-100s this week and a maximum of 1,000 B200s. 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) .25 A + .5 B ≤ 800 C) .5 A + .25 B ≤ 800 D) 1 A + .5 B ≤ 800 E) .25 A + 1 B ≤ 800

71) 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-100s this week and a maximum of 1,000 B200s. 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?

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A) 0 A and 0 B B) 0 A and 1,000 B C) 1,800 A and 700 B D) 2,500 A and 0 B E) 100 A and 1,600 B

72) 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-100s this week and a maximum of 1,000 B200s. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What are optimal weekly profits?

A) $10,000 B) $4,600 C) $2,500 D) $5,200 E) $6,400

73) A local bagel shop 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?

A) $.30 B + $.20 C = B) $.60 B + $.30 C = C) $.20 B + $.30 C = D) $.20 B + $.40 C = E) $.10 B + $.10 C =

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Z Z Z Z Z

74) 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-100s this week and a maximum of 1,000 B200s. 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-100s and 900 B-200s, 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

75) A local bagel shop 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

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76) A local bagel shop 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 and 0 C B) 0 B and 1,100 C C) 800 B and 600 C D) 1,100 B and 0 C E) 0 B and 1,400 C

77) A local bagel shop 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 are optimal profits for today's production run?

A) $580 B) $340 C) $220 D) $380 E) $420

78) A local bagel shop 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)? Version 1

A) flour (only) B) sugar (only) C) flour and yeast D) flour and sugar E) yeast and sugar

79) 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 $.40; and for a box of Classic crackers, $.50. What is the objective function?

A) $.50 D + $.40 C = Z B) $.20 D + $.30 C = Z C) $.40 D + $.50 C = Z D) $.10 D + $.20 C = Z E) $.60 D + $.80 C = Z

80) 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 $.40; and for a box of Classic crackers, $.50. What is the constraint for sugar?

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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

81) 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 $.40; and for a box of Classic crackers, $.50. Which of the following is not a feasible production combination?

A) 0 D and 0 C B) 0 D and 1,000 C C) 800 D and 600 C D) 1,600 D and 0 C E) 0 D and 1,200 C

82) 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 $.40; and for a box of Classic crackers, $.50. What are profits for the optimal production combination?

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A) $800 B) $500 C) $640 D) $620 E) $600

83) 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 $.40; and for a box of Classic crackers, $.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

84) 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 = $150 K + $300 Q B) Z = $500 K + $300 Q C) Z = $300 K + $150 Q D) Z = $300 K + $500 Q E) Z = $100 K + $90 Q

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85) 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) 200 K + 100 Q ≤ 18,000 B) 200 K + 90 Q ≤ 18,000 C) 300 K + 90 Q ≤ 18,000 D) 500 K + 100 Q ≤ 18,000 E) 100 K + 90 Q ≤ 18,000

86) 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?

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

87) 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? Version 1

A) $0 B) $30,000 C) $42,000 D) $45,000 E) $54,000

88) 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)?

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

89) A novice linear programmer is dealing with a three-decision-variable problem. To compare the attractiveness of various feasible decision-variable combinations, values of the objective function at corners are calculated. This is an example of

A) empiritation. B) explicitation. C) evaluation. D) enumeration. E) elicitation.

90) When we use less of a resource than was available, in linear programming that resource would be called non.

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A) binding B) feasible C) reduced cost D) linear E) enumerated

91) Once we go beyond two decision variables, typically the programming must be used.

method of linear

A) simplicit B) unidimensional C) simplex D) dynamic E) exponential

92) is a means of assessing the impact of changing parameters in a linear programming model.

A) Shadow pricing B) Simplex C) Slack D) Surplus E) Sensitivity analysis

93) It has been determined that, with respect to resource X, a one-unit increase in availability of X is within the range of feasibility for X and would lead to a $3.50 increase in the value of the objective function. This $3.50 value would be X's

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A) range of optimality. B) shadow price. C) range of feasibility. D) slack. E) surplus.

94) the decisions.

are limitations that restrict the alternatives available to those making

A) Variables B) Constraints C) Objectives D) Feasible E) Parameters

95) represent choices available to the decision maker in terms of the amounts of either inputs or outputs.

A) Decision variables B) Constraints C) Objectives D) Feasible E) Parameters

96) is/are a set of all feasible combinations of decision variables as defined by the constraints.

A) Decision variables B) Constraints C) Objectives D) Feasible solution space E) Parameters

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97)

is/are numerical constants used in linear programming.

A) Decision variables B) Constraints C) Objectives D) Feasible solution space E) Parameters

98) is/are a mathematical expression that can be used to determine the total profit for a given solution.

A) Decision variables B) Constraints C) Objective function D) Feasible solution space E) Parameters

99)

in Excel is a routine that performs necessary calculations.

A) Execute B) Perform C) Solver D) Run E) Calculate

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Answer Key Test name: Chap 19_14e 1) FALSE 2) TRUE 3) TRUE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) FALSE 9) TRUE 10) TRUE 11) FALSE 12) FALSE 13) TRUE 14) FALSE 15) TRUE 16) FALSE 17) FALSE 18) TRUE 19) TRUE 20) FALSE 21) FALSE 22) TRUE 23) FALSE 24) FALSE 25) TRUE 26) FALSE Version 1

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

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

87) D 88) A 89) D 90) A 91) C 92) E 93) B 94) B 95) A 96) D 97) E 98) C 99) C

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