1) The sum of times of the longest path in a network indicates expected project
completion time, and the activities represent the critical activities.
2) One factor in determining how many cycles to time in a time study is the degree of
variation that is present in the observed times.
3) Reliability can be defined in terms of a particular point in time or in terms of length
of service.
4) Three key philosophies in TQM are continuous improvement, involvement of
everyone in the organization, and customer satisfaction.
5) MRP works best if the inventory items have dependent demand.
6) Using the product tree shown, determine the following:
(A) The quantity of component K that will be needed to assemble 80 units of P,
assuming no on-hand inventory of any components exists.
(B) The quantity of component K needed to assemble 80 units of P, given on-hand
inventory of 30 As, 50 Bs, and 20 Cs.
[Add closing parens in figure where needed.]
7) Professor Very Busy needs to allocate time next week to include time for office
hours. He needs to forecast the number of students who will seek appointments. He has
gathered the following data:
What is this week’s forecast using the naive approach?
A.45
B.50
C.52
D.65
E.78
8) A decision maker’s worst option has an expected value of $1,000, and her best option
has an expected value of $3,000. With perfect information, the expected value would be
$5,000. What is the expected value of perfect information?
A.$5,000
B.$4,000
C.$3,000
D.$2,000
E.$1,000
9) A project consists of nine major activities, as shown below. There are three separate
paths in the network: a-c-f, b-d-g, and e-h-i.
(A) What is expected project duration time?
(B) Determine the probability that the project will take more than 35 weeks to
complete. (All times are in weeks.)
10) 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 is her expected value of perfect information?
A.$16,000
B.$26,000
C.$46,000
D.$48,000
E.$50,000
11) Which of the following is not a benefit of effective supply chain management?
A.lower inventory costs
B.higher productivity
C.shorter lead times
D.greater customer loyalty
E.larger number of suppliers
12) Marketing depends on operations for information regarding:
A.productivity.
B.lead time.
C.cash flow.
D.budgeting.
E.corporate intelligence.
13) The more __________ demand is, the more the aggregate plan will tend to reflect
the ____________ strategy.
A.stable; level
B.aggregated; outsourcing
C.variable; level
D.complex; uncommitted
E.stable; chase
14) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner
transfer facility in a prime location near Washington, D.C. They estimate it will cost
$50 per prisoner to process the paperwork at this new location. The county is paid a $75
commission for each new prisoner they process. How many prisoners would they have
to process annually to make a profit of $100,000 at this new location?
A.5,000
B.8,000
C.2,000
D.4,000
E.6,000
15) Which of the following is not a reason why capacity decisions are so important?
A.Capacity limits the rate of output possible.
B.Capacity affects operating costs.
C.Capacity is a major determinant of initial costs.
D.Capacity is a long-term commitment of resources.
E.Capacity affects organizations’ images.
16) Computer-aided manufacturing refers to the use of computers in:
A.product design.
B.decision making.
C.data analysis.
D.quality control.
E.process control.
17) The quality manager for Frozen Pizzas, Inc., is concerned about the quality of the
lot of several thousand pizzas which his company produced this week, and is now ready
to ship. If he uses an acceptance sampling plan of n = 8 and c = 1, what is the
probability that, if this lot is 15 percent defective, it will be rejected and completely
inspected prior to shipment?
A..8948
B..8131
C..6572
D..5033
E..3428
18) The priority rule where jobs are processed according to the smallest ratio of due
date to processing time is:
A.CR.
B.EEDD.
C.FCFS.
D.S/O.
E.SPT.
19) In MRP, under lot-for-lot ordering, planned-order receipts are:
A.identical to scheduled receipts.
B.identical to planned-order releases.
C.open orders (that is, ordered before the first time bucket, but not delivered yet).
D.gross requirements.
E.available-to-promise inventory.
20) One local hospital has just enough space and funds currently available to start either
a cancer or heart research lab. If administration decides on the cancer lab, there is a 20
percent chance of getting $100,000 in outside funding from the American Cancer
Society next year, and an 80 percent chance of getting nothing. If the cancer research
lab is funded the first year, no additional outside funding will be available the second
year. However, if it is not funded the first year, then management estimates the chances
are 50 percent it will get $100,000 the following year, and 50 percent that it will get
nothing again. If, however, the hospital’s management decides to go with the heart lab,
then there is a 50 percent chance of getting $50,000 in outside funding from the
American Heart Association the first year and a 50 percent change of getting nothing. If
the heart lab is funded the first year, management estimates a 40 percent chance of
getting another $50,000 and a 60 percent chance of getting nothing additional the
second year. If it is not funded the first year, then management estimates a 60 percent
chance for getting $50,000 and a 40 percent chance for getting nothing in the following
year. For both the cancer and heart research labs, no further possible funding is
anticipated beyond the first two years.
What is the expected value for the decision alternative to select the heart lab?
A.$100,000
B.$60,000
C.$50,000
D.$40,000
E.$20,000
21) 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, $.50.
What is the objective function?
A.$.50D + $.40C = Z
B.$.20D + $.30C = Z
C.$.40D + $.50C = Z
D.$.10D + $.20C = Z
E.$.60D + $.80C = Z
22) Given the following process control data for a normally distributed quality variable
(three samples of size four each):
If the process is known to have a mean of 15 and a standard deviation of 3, what are the
three-sigma upper and lower control limits for an x-bar chart?
23) Refer to the following data for jobs waiting to be processed at a single work center
(jobs are shown in order of arrival):
What is the average completion time for the slack per operation (S/O) priority rule
schedule? Average job tardiness? Average number of jobs at the center?
24) Develop a material requirements plan for end item P and its components, given the
following tree. Assume that all lead times are one week, and that lot-for-lot ordering is
used except for item F, which is ordered in multiples of 400 units.
One hundred units of P should be available at the start of week 4 and at the start of
week 8. Beginning inventories are: 20 Ps, 100 As, and 200 Fs.
Scheduled receipts are: 800 Fs at the start of week 1.
25) Consider the following work breakdown structure:
What is the probability that the critical path for this project will be completed within 75
weeks? 80 weeks? 85 weeks? 90 weeks?
26) A shop owner uses a reorder point approach to restocking a certain raw material.
Lead time is six days. Usage of the material during lead time is normally distributed
with a mean of 42 pounds and a standard deviation of four pounds. When should the
raw material be reordered if the acceptable risk of a stockout is 3 percent?
