1) The optimum level of inspection occurs when we catch at least 98.6 percent of the
defects.
2) The term failure as applied to reliability means that a part or item does not function
at all.
3) The optimization of the supply chain uses a mathematical model to determine the
optimal number of business organizations to be included in the chain.
4) 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.
5) Although inventories are maintained, the goal of lean operations is to minimize
safety stock.
6) Capacity decisions often involve a long-term commitment of resources which, when
implemented, are difficult or impossible to modify without major added costs.
7) The simplex method is a general-purpose LP algorithm that can be used for solving
only problems with more than six variables.
8) The sample standard deviation of forecast error is equal to the square root of MSE.
9) Many operations management decisions can be described as trade-offs.
10) Broadly defined, quality refers to the ability of a product or service to occasionally
meet or exceed customer expectations.
11) Total quality management attempts to involve everyone in an organization in the
effort to achieve quality.
12) Nonbinding constraints are not associated with the feasible solution space; i.e., they
are redundant and can be eliminated from the matrix.
13) Every business organization is part of at least one supply chain.
14) Consider the following decision scenario:
*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
15) Consider the following work breakdown structure:
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
16) The quality manager for Microelectronics, Inc., is concerned about the quality of
the batch of several thousand Z-box games which his company is about to ship. If,
based on his acceptance sample, he decides to ship this batch without inspection, which
type error would be possible?
A.inspector’s error
B.producer’s error
C.Type I error
D.Type II error
E.both Type I and Type II errors
17) 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.
18) 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.
19) Consider the following decision scenario:
*PV for profits ($000)
The maximin strategy would be:
A.buy.
B.lease.
C.rent.
D.high.
E.low.
20) 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 consultantsCharlie, Betty, Johnny, and Rickto
complete any of the four projects, as follows:
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
21) 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
22) 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
23) At XYZ Corp., the aggregate planning unit reflects the fact that 50 percent of its
output is product version A, 30 percent is version B, and 20 percent is version C.
Suppose that over the coming year forecasted total demand (in planning units) is for
10,400 units. Once the production plan is disaggregated, what will the weekly forecast
for version A be (assume 52 weeks per year)?
A.1,000
B.200
C.400
D.100
E.50
24) Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?
A.4
B.3
C.5
D.6
E.12
25) 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
26) Which of the following questions is not answered by value stream mapping?
A.Where does waste occur?
B.Which processes or subprocesses exhibit 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?
27) A quality analyst wants to construct a control chart for determining whether three
machines, all producing the same product, are under control with regard to a particular
quality variable. Accordingly, he sampled four units of output from each machine, with
the following results:
What is the estimate of the process mean for whenever it is under control?
A.16
B.19
C.20
D.21
E.23
28) An AOQ curve shows:
A.the maximum quality.
B.average outgoing quality relative to incoming quality.
C.how well a sampling plan can discriminate between good and bad lots.
D.the actual quality level.
E.”good” quality.
29) 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.
30) Using the cost information given in the following table, assign work crews to jobs
so that total cost is minimized.
31) Given the following process control data for a quality attribute (three samples of
size 400 each):
If the process proportion of defectives is unknown, what are the upper and lower
control limits for an alpha risk of .10? .05? .01?
32) A stent for use in coronary surgery requires a special coating. Specifications for this
coating call for it to be at least 0.05 millimeters but no more than 0.15 millimeters.
Suppose the long-run average of this coating process is 0.09 millimeters. Further
suppose this process’s standard deviation is 0.015 millimeters. What proportion of the
output from this process will fail to meet specifications?
33) Suppose that you are the manager of a production department that uses 400 boxes
of rivets per year. The supplier quotes you a price of $8.50 per box for an order size of
199 boxes or less, a price of $8.00 per box for orders of 200 to 999 boxes, and a price of
$7.50 per box for an order of 1,000 or more boxes. You assign a holding cost of 20
percent of the price to this inventory. What order quantity would you use if the
objective is to minimize total annual costs of holding, purchasing, and ordering?
Assume ordering cost is $80/order.
34) The manager of a bakery orders three “cake-to-go” wedding cakes every Saturday
to accommodate last-minute purchases. Demand for the cakes can be described by a
Poisson distribution that has a mean of 2. The cakes cost $10 each to prepare, and they
sell for $26 each. Any cakes that haven’t been sold by the end of the day are sold for
half price the next day. Usually, half of those are sold and the rest are tossed. What
stocking level would be appropriate?
35) Consider the following work breakdown structure:
What is the estimated expected (mean) time (in weeks) for project completion?
36) Consider the following information:
What is the anticipated efficiency?
37) A new car dealer has been using exponential smoothing with an alpha of .2 to
forecast weekly new car sales. Given the data below, would a naive forecast have
provided greater accuracy? Explain. Assume an initial exponential forecast of 60 units
in period 2 (i.e., no forecast for period 1).