1) Departmental budgeting is an example of aggregate planning.
2) Removing the seasonal component from a data series (deseasonalizing) can be
accomplished by dividing each data point by its appropriate seasonal relative.
3) Delayed differentiation and modular design are tactics for mass customization.
4) 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.
5) The process of dismantling and inspecting a competitor’s product to discover product
improvement is called benchmarking.
6) Suppliers are not included in quality assurance and quality improvement efforts in
TQM; they should worry about their own problems.
7) In the lean approach, inventories are reduced gradually, instead of eliminating
inventories as rapidly as possible.
8) Quality function deployment is a structured approach that guarantees that the
highest-quality product or service will be designed.
9) Poor quality has a positive effect on productivity because it usually takes longer to
produce a good part.
10) 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.
11) Lumpy demand for components results primarily from the periodic scheduling of
batch production.
12) Wage and salary increases that are not accompanied by productivity increases tend
to exert inflationary pressures on a nation’s economy.
13) 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
14) 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.
15) Activity 7-8 is directly preceded by two activitiesactivity 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
16) 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)?
17) 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 optimal solution 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.
18) 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.
19) 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.
20) 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.
21) 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?
22) 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:
For what range of probability that demand will be high, will she decide to lease the
large facility?
A.0-.25
B.0-.33
C..25-.5
D..33-1
E..5-1
23) 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
24) 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.
25) 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.
A..40
B..45
C..50
D..57
E..60
26) 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
27) A car rental agency uses 96 boxes of staples a year. The boxes cost $4 each. It costs
$10 to order staples, and carrying costs are $.80 per box on an annual basis.
Determine:
(A) the order quantity that will minimize the sum of ordering and holding boxes of
staples
(B) the annual cost of ordering and carrying the boxes of staples
28) A quality inspector for Alpha-Beta Co. is concerned about the quality of the batch
of several thousand blank DVD disks which his company produced this week and is
preparing to ship. If he uses an acceptance sampling plan of n = 5 and c = 2, what will
be the average outgoing quality for batches with 40 percent defectives?
A..1270
B..2730
C..3174
D..6826
E..7270
29) 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
30) A job had an observed time of 10 minutes, a performance rating of .90, and an
allowance factor of 20 percent of job time. Twenty-five cycles were timed. 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.