1) 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.
2) Mission statements should be as specific as possible regarding exactly how they will
be accomplished.
3) Learning curves are mostly relevant for complex, new activities that have not been
done often.
4) Pareto analysis (using the 80/20 rule) is one method of determining when preventive
maintenance activities should be performed.
5) In lean operations, input resources arrive for processing only after the preceding
batch has been completed.
6) Medical malpractice claims are an example of how poor quality can affect an
organization through liability.
7) A moving average forecast tends to be more responsive to changes in the data series
when more data points are included in the average.
8) 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.
9) 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.
10) 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. If she were to order 6,000 bills at
a time, what would be the dollar value of the average inventory level?
A.$3,000
B.$6,000
C.$12,500
D.$300,000
E.$600,000
11) 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
12) 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
13) Consider the following information:
The number of runs up and down for the preceding data is:
A.3
B.4
C.5
D.6
E.none of these.
14) Ron has noted that the first accounting problem he did in a set of similar problems
took him one hour, and the ninth problem took 24 minutes.
(A) Estimate Ron’s learning curve.
(B) About how long did it take Ron to do his set of 10 problems?
15) 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.
16) Which of the following is associated with consumer’s risk?
A.LTPD
B.AQL
C.AOQL
D.SPC
E.Cpk
17) A manager wants to analyze the learning curve associated with producing one of his
company’s products. Accordingly, he has gathered the following data:
How long did it take to produce the first unit?
A.5 hours
B.6 hours
C.6.25 hours
D.6.33 hours
E.6.5 hours
18) Having facilities, personnel, and operations located around the world is called:
A.nondomestic operations.
B.diversified operations.
C.globalization.
D.worldwide presence.
E. virtual organization.
19) Over the past five years, a firm’s sales have averaged 250 units in the first quarter of
each year, 100 units in the second quarter, 150 units in the third quarter, and 300 units
in the fourth quarter. What are appropriate quarter relatives for this firm’s sales? Hint:
Only minimal computations are necessary.
20) Activity D has an optimistic time of three days, a pessimistic time of nine days, and
a most likely time of four days. Determine its expected time and variance.
21) Consider these data regarding the multiple-server, priority service queuing model:
Service Rate: 2 per hour (Poisson)
Number of Servers: 5
What is the average time in line for a high-priority item?
22) Determine the processing sequence for the six jobs shown in the following table
using Johnson’s rule. Calculate total throughput time. Can the makespan be reduced by
splitting the latest job? If so, by how much?
23) The All Seasonings Company uses 3,200 glass jars at one of its jar-filling
workstations each eight hours of production. The cycle time for a standard container,
which holds 90 jars, averages 45 minutes. If management uses an efficiency factor of 20
percent, how many containers should be used?
24) Demand for a component averages 80 units per week, with a weekly standard
deviation of demand of 14 units. The current supplier of this component offers a
four-week lead time. Stockout risk is to be kept at 8 percent. Assume that it costs $50 to
hold one unit in inventory for a year. Suppose the annual cost for the items would be
$500 higher if they were purchased from another vendor, but that vendor would offer a
two-week lead time. Would it be better to go with the more-expensive but
more-responsive vendor?