1) Services often don’t fit simple yield measurements.
2) The Baldrige award can only be won by manufacturing organizations.
3) 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.
4) The task of identifying risks should involve everyone associated with the project.
5) The Laplace criterion treats states of nature as being equally likely.
6) 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.
7) Among decision environments, uncertainty implies that states of nature have
wide-ranging probabilities associated with them.
8) One way of reducing the number of suppliers to the organization is to limit contacts
to two tiers of suppliers.
9) Vendor analysis examines the function of purchased parts and materials with a view
toward improvement or cost reduction.
10) Although PERT and CPM were originally developed for somewhat different types
of projects, they are now nearly identical in terms of analysis and procedures.
11) Tracking productivity measures over time enables managers to judge organizational
performance and decide where improvements are needed.
12) 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
13) 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
14) 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
15) 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:
If she uses the maximin 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
16) Consider these data regarding the multiple-server, priority service queuing model:
Service Rate: 2 per hour (Poisson)
Number of Servers: 5
What is the overall average arrival rate?
17) The basis for a statistical process control chart is a(the):
A.process capability.
B.sampling distribution.
C.control limit.
D.sample range.
18) 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
19) 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:
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?
A.a
B.b
C.c
D.d
E.e
20) 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 combination of inventories, overtime, part time, and back orders.
E.price adjustments.
21) 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.
22) 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.
23) 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:
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
24) 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
25) The method for evaluating location alternatives that minimizes shipping costs
between multiple sending and receiving locations is:
A.locational cost-profit-volume analysis.
B.transportation model analysis.
C.factor rating analysis.
D.linear regression analysis.
E.MODI analysis.
26) 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.
27) 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.
28) Given the information below, assign departments to locations in a 3 x 3 grid, with
department F in the lower right-hand corner.
29) A manager has prepared a forecast of expected aggregate demand for the next six
months. Develop an aggregate plan to meet this demand given this additional
information: A level production rate of 100 units per month will be used. Back orders
are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding
costs are $1 per unit per month in ending inventory. Determine the cost of this plan if
regular time cost is $20 per unit and beginning inventory is zero.
30) Given the following data, develop a linear regression model for y as a function of x.
31) A company produces two products (A and B) using three resources (I, II, and III).
Each product A requires 1 unit of resource I and 3 units of resource II and has a profit of
$1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of
resource III and has a profit of $3. Resource I is constrained to 40 units maximum per
day; resource II, 90 units; and resource III, 60 units.
What is the optimum production combination and its profits?
32) Consider the following information about sites A, B, and C:
For what range of output would you prefer site C?
33) A company produces two products (A and B) using three resources (I, II, and III).
Each product A requires 1 unit of resource I and 3 units of resource II and has a profit of
$1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of
resource III and has a profit of $3. Resource I is constrained to 40 units maximum per
day; resource II, 90 units; and resource III, 60 units.
What is the constraint for resource III?