Management Chapter 14 During Which Phase The Product Life Cycle

155

PRODUCTS AND PROCESSES

CHAPTER 14

ANSWERS TO PROBLEMS

14.1

14.3

Heat treat in-house Purchase services

Fixed cost Variable cost Volume (units) Total cost Unit cost

156

14.4

Corner store: Fixed cost =

$0.00,

variable cost = $0.99 per pound

14.5

14.6

a

. CEP buying/semi. $0 + $2.00x = $5,000 + $1.30x

b

. CEP semi/auto $5,000 + $1.30x = $15,000 + $0.60x

d

i

. Unit cost

=

$2.00

Buy

Process A

Process B

157

14.7

14.8

Part Number

$

Percent Cumulative

percent

14.9

14.13

14.14

Reason Number Percent Cumulative

percent

158

MULTIPLE CHOICE QUESTIONS

1

. The process of making something less complex or less difficult is called:

a:

standardization

b:

simplification

c:

specialization

d:

any of the above

e:

none of the above

2

. Which of the following statements regarding standardization is true?

I

. All products made to a given specification will be interchangeable.

II

. A range of standard specifications can be established so that the range covers the

majority of uses for the item.

III

. Standardization results in a larger variety of parts.

a: I and II are true

b:

II and III are true

c:

I and III are true

d:

I, II and III are true

e:

none of the above is true

3

. The establishment of a common size for electric light sockets is an example of:

a: simplification

b:

diversification

c:

standardization

d:

product focus

e:

none of the above

4

. The concentration of effort in a given field of endeavor is called:

a: simplification

b:

concentration

c:

standardization

d:

specialization

5

. Specialization increases output and decreases costs by:

a:

enabling labor to develop speed and dexterity

b:

reducing setup time for each part

c:

allowing a company to make a wide variety of different products

d:

a and b above only

e:

none of the above

159

6. During which phase of the product life cycle does the unit cost of the product decrease?

a. Introduction

b. Growth

c. Maturity

d. Decline

7

. Standardization can reduce costs by:

a:

reducing inventories

b:

increasing lot sizes

c:

allowing the use of general purpose equipment

d:

all the above

e:

a and b only

8

. Which of the following statements is true?

I

. Serving similar customers with similar demand characteristics is an example of

market focus.

II

. A company specializing in assembling cars is an example of process focus.

III

. A focused factory specializes in a wide product mix.

a:

I only is true

b:

I and II only are true

c:

I and III only are true

d:

II and III only are true

e: all the above are true.

9

. Which of the following is an objective of product design?

a: to design a product that will function as expected in the marketplace

b:

to design a product for minimum processing cost

c: to design a product that will have minimum design costs

d:

all the above

e:

a and b above

10. During which phase of the product life cycle do profits start to decline?

a. Introduction

b. Growth

c. Maturity

d. Decline

11

. Which of the following are advantages of simultaneous engineering?

I

. Time to market is reduced.

II

. Avoids the need for marketing and design to work together.

III

. Less communication is necessary.

a:

I only is true

b:

I and II only are true

c:

I and III only are true

d:

II and III only are true

e:

all the above are true

160

12

. Which of the following statements is/are true?

a:

product design is a major factor in determining the cost of a product

b:

product design is a major factor in the quality of a product

c:

product design is a trial and error process

d:

a and b above only

e:

all the above are true

13

. General-purpose equipment:

a:

is designed for maximum flexibility

b:

is used extensively in intermittent manufacturing

c:

is designed and used to produce one or a few specific parts

d:

a and b only are true

e:

none of the above are true

14

. Which of the following is a characteristic of special-purpose machinery?

a:

it can perform a variety of operations on a variety of work pieces

b:

capital costs are low compared to general purpose machinery

c:

it generally produces better quality than general purpose machinery

d:

all the above

e:

none of the above

15

. In designing a process, which of the following needs to be considered?

a:

the volume to be produced

b:

the degree of customer involvement

c:

the desired quality level

d:

all the above

e:

none of the above

16

. Which of the following statements is best about flow manufacturing?

I

. Work stations are located in the sequence needed to make the product.

II

. Work flows at a relatively constant rate.

III

. They can produce a wide variety of different products.

IV

. There is little buildup of inventory.

a

. all the above

b

. I, II and III are true

c

. I, II and IV are true

d

. II, III and IV are true

e

. I, III and IV are true

17. Which product design principle permits the practice of postponement?

a. Simplification

b. Standardization

c. Modularization

d. Specialization

161

18

. In a particular process, the fixed costs are calculated at $40,000 and the variable costs at $1.50 per unit.

If 10,000 units are to be produced, what is the average cost per unit?

a:

$1.50

b:

$2.00

c:

$4.00

d:

$5.50

e:

none of the above

19

. Which of the following are reasons a firm would buy a product rather than make it in its factory?

a:

secrecy of design

b:

utilizing idle workforce

c:

providing known and competitive prices

d:

all the above

e:

a and b only

20. A plant specializing on a limited, concise, manageable set of products, technologies, volumes, and

markets is known as a:

a. Focused factory

b. 3PL

c. Job shop

d. Work cell

21

. What is the Cost Equalization Point for the two processes shown?

Process A Process B

Fixed cost

$30.00

$120.00

Variable cost

$3.00

$2.00

a:

$90.00

b:

90 units

c:

100 units

d:

120 units

e:

none of the above

22

. Intermittent manufacturing:

a:

is particularly suited to the production of low-volume items

b:

processes items in lots or batch

c:

generally uses general purpose machinery

d:

all the above

e:

none of the above

23

. The cost equalization point:

a:

is used to show the potential profit of a process

b:

shows the lot size where costs are minimized

c: is used to select the lowest cost of two or more alternative processes

d:

is the point where unit cost of a process are at a minimum

e: uses all the above

162

24

. Some purposes of continuous process improvement are:

a:

the reduction of worker fatigue and effort without reduction of levels of output

b:

the improvement of production processes and procedure

c:

the improvement of factory, department, and work-station layout to improve

work flows

d:

improvement of levels of worker safety

e:

all the above

25

. In selecting a process for continuous improvement study, which of the following factors should be

considered?

a:

human

b:

economic

c:

marketing

d:

all the above

e

. a and b only

26

. Which of the following steps in a continuous improvement study ensures all elements of a job are

studied?

a: install

b:

select

c:

record

d:

examine

e:

none of the above

27. An analysis for ranking problems from most significant to least significant is called a:

a. Pareto

b. Cause-and-effect

c. Flow chart

d. Mass customization

28. A diagram used to illustrate the main causes and sub-causes leading to a problem or symptom is a:

a. Pareto

b. Cause-and-effect

c. Root cause

d. Flow chart

29. A management style that enables workers to make improvements in their workplace is:

a. Cross-training

b. Employee empowerment

c. Management by objective

d. Human resource enrichment

30. A graphical representation of the steps and operations in a process is a:

a. Pareto

b. Cause-and-effect

c. Root cause

d. Flow chart

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Answers.