High-quality products and services are the most profitable.
An example of an intangible cost, as it relates to location decisions, is the quality of
education.
The term renewal has been created to describe the return of business activity to the
purchasing firm.
The transportation model is an excellent tool for minimizing shipping costs among
existing facilities, but it is not useful when firms consider new facility locations.
The two characteristics of the waiting line itself are whether its length is limited or
unlimited and the discipline of the people or items in it.
Service blueprinting is a process analysis technique that focuses on the customer and
the provider’s interaction with the customer.
Continuous improvement is based on the philosophy that every aspect of an operation
can be improved.
One guideline for determining the arrangement and space allocation of a retail store is
to place high-impulse and high-margin items such as housewares and beauty aids in
prominent locations.
Harley Davidson
A) utilizes job shops to make each of its modules
B) uses product focused manufacturing
C) uses a large number of modules to build a small number of different bikes
D) uses work cells to feed its assembly line
E) All of the above are true.
An assembly line consists of 21 tasks grouped into 5 workstations. The sum of the 21
task times is 85 minutes. The largest assigned cycle time is 20 minutes. The efficiency
of this line is
A) 4.2 percent
B) 17 percent
C) 85 percent
D) 100 percent
E) none of the above
Lead time for computers is 7 days with daily demand of 5 computers and a safety stock
of 1 day. Each kanban holds 8 computers. What is the correct number of kanbans?
A) not enough information
B) 1
C) 5
D) 7
E) 8
Balancing low-cost storage with low-cost material handling is important in a(n)
A) fixed-position layout
B) process-oriented layout
C) office layout
D) repetitive and product-oriented layout
E) warehouse layout
A firm is considering two location alternatives. At location A, fixed costs would be
$4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs
would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is
expected to be 10 million units, which plant offers the lowest total cost?
A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units.
B) Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units.
C) Plant A, because it is cheaper than Plant B for all volumes.
D) Plant B, because it has the lower variable cost per unit.
E) Neither Plant A nor Plant B, because the crossover point is at 10 million units.
The following jobs are waiting to be processed at your work center, which cleans valve
body castings. Job numbers are assigned sequentially upon arrival in the facility (a
missing number means that job does not require your work center). All dates are
specified as days from Today.
a. In what sequence should the jobs be processed according to the FCFS scheduling
rule?
b. In what sequence should the jobs be processed according to the EDD scheduling
rule?
c. In what sequence should the jobs be processed according to the SPT scheduling rule?
d. In what sequence should the jobs be processed according to the LPT scheduling rule?
e. In what sequence should the jobs be processed according to the critical ratio
scheduling rule?
Product Focused processes
A) allow more customization, but are not very efficient
B) are desirable because resource needs increase slowly with the complexity of a
process
C) are processes that are specialized for relatively few products or customer groups
D) apply only to service firms, not to manufacturers
E) are profitable because customers demand flexibility, not specialization
Which of the following best describes “experience differentiation”?
A) immerses consumers in the delivery of a service
B) uses people’s five senses to enhance the service
C) complements physical elements with visual and sound elements
D) consumers may become active participants in the product or service
E) All of the above are elements of experience differentiation.
Which of the following is not a concern of suppliers as they prepare to enter into JIT
partnerships?
A) Suppliers feel that they would be less at risk if they contracted with more than one
customer.
B) Suppliers are concerned that customers will present frequent engineering changes
with inadequate lead time to deal with them.
C) Suppliers feel that their processes are suited for larger lot sizes than the customer
wants.
D) Suppliers are concerned that frequent delivery of small quantities is economically
prohibitive.
E) All of the above represent JIT supplier concerns.
Contract requirements state that a project must be completed within 180 working days,
or it will incur penalties for late completion. Analysis of the activity network reveals an
estimated project time of 145 working days with a project variance of 400. What is the
probability that the project will be completed before the late-payment deadline?
A) 0.0401
B) 0.4599
C) 0.8056
D) 0.9599
E) near 1.0000, or almost certain
Which one of the following is not common to repetitive and product-oriented layouts?
A) a high rate of output
B) specialization of labor
C) ability to adjust to changes in demand
D) low unit costs
E) All are common to product-oriented layouts.
What are the three phases of a project? Describe each in a sentence or two.
What makes short-term scheduling of strategic importance?
A manufacturing company is considering two alternative locations for a new facility.
The fixed and variable costs for the two locations are found in the table below. For
which volume of business would the two locations be equally attractive? If the
company plans on producing 50,000 units, which location would be more attractive?
Compare an intermittent process to a continuous process on the basis of variety,
volume, equipment utilization, and inventory.
What is the impact of exchange rates on location decisions?
What does the part-period balancing lot-sizing technique attempt to do in deciding the
lot sizes?
A transportation firm spends 60 percent of its sales in the supply chain, and has a net
profit margin of 6 percent. The company is about to invest $100,000 in one of two
ventures. One venture is advertising-based, and is expected to increase revenues (sales)
by $600,000 (after spending the $100,000). The other venture applies the money in
supply-chain efficiencies that are expected to save $200,000 (again, after spending the
$100,000). Which of these two ventures offers the larger increase in profit to the firm?
Use Table 11.3, reproduced below.
Karla’s candle factory is considering two different machines. Machine A is highly
automated with FC of $25,000 and VC of $.1/candle. Machine B is actually no machine
but rather hand labor with FC of $10,000 and VC of $.5/candle. If demand for Karla’s
candles is 25,000, which machine should she pick?