A company is seeking to develop a master production schedule for its product. Their
beginning inventory is 1000 units, and they want to maintain a safety stock level of
1000 units. They produce the product in a fixed lot size of 1200 units. Information
regarding weekly demand is shown below:
Answer:
John, an operations manager at Clan Corp. must set up an assembly line to assemble a
computer mouse. The precedence diagram below is defined with task times in
parentheses and stated in minutes. There are 480 minutes of assembly time per shift and
there is one shift. The forecast (output rate) is 60 units per shift.
a. Compute the cycle time per unit in minutes.
b. Compute the minimum number of workstations required.
c. Use the longest-task-time heuristic to balance the assembly line.
d. Compute the efficiency of your assembly line.
Answer:
In an exponential smoothing model, larger values of alpha (i.e., closer to 1) place less
emphasis on recent data.
Answer:
Using the sales data on a particular model of a DVD player shown below in Table 4,
answer question #19.
Table 4
The sales forecast for July using the data in Table 4, forecasts sales for May as 36.25,
and a simple exponential smoothing model with a smoothing constant of 0.40 is:
a. less than or equal to 35.
b. more than 35 but less than or equal to 40.
c. more than 40 but less than or equal to 50.
d. more than 50 but less than or equal to 55.
Answer:
_____ layout is used for high volumes of demand and setup requirements.
a. Product
b. Process
c. Cellular
d. Fixed-position
Answer:
A company currently has no items in inventory. The demand for the next four months is
200, 400, 250, and 350 units. Assuming a level production rate of 250 units per month,
determine the months in which backorders or stockouts will materialize.
a. Only in month 1
b. In months 2 and 4
c. In months 2, 3, and 4
d. In months 2 and 3
Answer:
A small software company hired a Customer Service Representative (CSR) to handle
technical support questions. It is estimated that during peak periods, the CSR would
receive four alls per hour and follow a Poisson distribution. Based on past experience, a
CSR can handle an average of five (5) calls per hour during the same time period and
follow an exponential distribution.
a. Determine the probability that the CSR is idle.
b. Determine the probability that three customers are in the system, waiting or being
served.
c. Determine the average number of callers waiting for service (on hold).
d. Determine the average number of callers in the system.
e. Determine the average time a caller spends waiting for service (on hold).
f. Determine the average time a caller spends in the system (waiting time plus service
time).
g. Determine the probability that an arriving call will have to wait for service.
Answer:
A coffee shop’s average transaction price is $4 and its contribution margin is 60 percent.
A typical customer makes a purchase once a week or 52 times per year, and the
management estimates the value of the loyal customer over the buying life cycle as
$720. The customer defection rate is _____.
a. less than or equal to 0.10
b. more than 0.10 and less than or equal to 0.15
c. more than 0.15 and less than or equal to 0.20
d. more than 0.20 and less than or equal to 0.25
Answer:
A manufacturer is considering some expansion alternatives. One is to increase the
capacity at their current location. A second set of alternatives is to build a new plant at
one of two possible locations. The projected operating costs have been estimated as
follows:
If the forecast of additional demand for the next year is 25,000 units, which alternative
should be selected to minimize costs?
a. Expand at current location
b. Location A
c. Location B
d. None of the above
Answer:
Which of the following statements in the Zappos case discussion is TRUE?
a. High quality shoes are produced in factories owned by Zappos in Asia.
b. The order entry process is a support service.
c. The only type of service encounter design used by Zappos is customer to Web service
(i.e., human to and from technology).
d. The return process is a primary service.
Answer:
A cement company is considering how to expand its capacity, and they are examining
the use of overtime or subcontracting on a quarterly basis as possible options. They
have the following information about their operation:
Aggregate demand = 30,000; 25,000; 27,000; and 31,000
Maximum capacity = 25,000 units
Labor standard = 2.45 hours/unit
Cost of overtime = $10.50/hour
Cost of subcontracting = $25.00/unit
Answer:
Table 2
For the data in Table 2, which forecast is better using the mean absolute deviation
(MAD) criterion?
a. Forecast 1
b. Forecast 2
c. Forecast 1 and 2 are identical, with equal MADs
d. Neither forecast 1 nor forecast 2
Answer:
A product requires the following tasks to make it on an assembly line. Assume 7.6
hours per workday and 5 workdays per week.
Answer:
Uncertainty refers to not knowing what will happen in the future. Which of the
following LEAST applies to uncertainty?
a. There is no sequence of decisions.
b. Little or no data is available.
c. Some data are very expensive.
d. Some data are time-consuming to obtain.
Answer:
The job that represents the bottleneck in this process is that of the _____.
a. service technician
b. inspector
c. billing clerk
d. shipping clerk
Answer:
The operational structure of a value chain deals with the _____.
a. management hierarchies
b. customer services and returns
c. configuration of resources
d. order tracking reports
Answer:
Collecting continuous data is usually easier than collecting discrete data.
Answer:
The following five jobs, along with their processing time and due dates, are given
below.
Using the earliest due date (EDD) rule, the average tardiness for the five jobs is _____.
a. less than or equal to 5 days
b. more than 5 but less than or equal to 10 days
c. more than 10 but less than or equal to 15 days
d. more than 15 but less than or equal to 20 days
Answer:
A company assembles microcomputers for sale to computer stores. They are trying to
decide which lot sizing approach to use for developing their MRP schedules: lot-for-lot
(LFL), fixed-order quantity (FOQ) using the EOQ approach, or periodic-order quantity
(POQ). The setup cost is $1000 per order, the inventory-carrying cost is $2.50 per week
per unit, and the annual demand for the computers is 10,000 units. The company is
using a 50-week work year and disregarding the effects of initial inventory and safety
stock. The estimated net requirements the microcomputers for the next six weeks are:
a. Using the LFL method, what is the size of the production lot for Week 2?
b. What is the total cost using the LFL method?
c. What is the economic order quantity (EOQ)?
d. What is the ending inventory in Week 3 using the EOQ approach?
e. What is the total cost using the EOQ method?
f. What is the periodic-order quantity (POQ)?
g. What is the beginning inventory in Week 4 using the POQ approach?
h. What is the total cost using the POQ method?
Answer:
In the context of service-encounter design, _____ simply means giving people authority
to make decisions based on what they feel is right, to have control over their work, to
take risks and learn from mistakes, and to promote change.
a. deployment
b. flexibility
c. empowerment
d. credence
Answer:
Which of the following is NOT a similarity between the elements of a decision problem
and a decision tree?
a. Time
b. States of nature
c. Alternatives
d. Probabilities
Answer:
In the value chain model for a hospital, patients, drugs, and staff would be considered as
_____.
a. suppliers
b. inputs
c. transformation processes
d. outputs
Answer:
The words “product family,” “budget allocation,” and “long-term” fit best with which
level of the generic framework for resource planning?
a. Aggregate planningLevel 1
b. DisaggregationLevel 2
c. ExecutionLevel 3
d. Shop floor controllingLevel 4
Answer:
Peterson Enterprises uses a fixed-order quantity inventory control system. The firm
operates 50 weeks per year and has the following characteristics for an item:
Demand = 50,000 units/year
Ordering cost = $35/order
Holding cost = $2/unit/year
Lead time = 3 weeks
Standard deviation in weekly demand = 125 units
Answer:
For General Motors’ supply chain, the _____ is the push-pull boundary.
a. supplier
b. logistic provider
c. dealer
d. customer
Answer:
A method of randomly observing work over a period of time to obtain a distribution of
the activities that an individual or a group of employees performs is called _____.
a. learning curve analysis
b. time study
c. work sampling
d. work measurement
Answer:
Perform a capacity analysis of the process given below. The numbers in parenthesis (#)
are the time in minutes to complete one unit of work. Demand on the process averages
20 units per hour and each unit must be worked on by all four stages. Administrative
clerk(s) do Stage A work. The assistant manager(s) do Stages C and D work and are
cross-trained to do both jobs. The coding specialist(s) do Stage B work.
Theprocess(throughput)capacity in units per hour for the four stage process, A to D,
assuming 2 administrative clerks, 3 coding specialists, and 3 assistant managers on duty
is _____.
a. less than 10 units per hour
b. more than 10 units but less than or equal to 20 units
c. more than 20 units but less than or equal to 30 units
d. more than 30 units but less than or equal to 40 units
Answer:
A company is setting up an assembly line to produce cellular phones. They intend to use
line balancing with the longest-task-time heuristic. They know the demand per hour is
40 phones and the productive time per hour is 54 minutes. Displayed below is the data
they have collected regarding task precedence and times.
a. What is the cycle time?
b. What is the theoretical minimum number of workstations?
c. What tasks are assigned to the first workstation?
d. How many workstations are needed for the entire line?
e. What is the assembly-line efficiency?
Answer:
_____ is a strategy that waits until demand has increased to a point where additional
capacity is necessary.
a. Capacity lag
b. Capacity lead
c. Capacity reduction
d. Capacity match
Answer:
A food processing company makes meatloaf to be sold in the frozen food section of
supermarkets.
Each week, the recipe used changes based on the current cost of ingredients. Ingredients
and current costs are as shown below:
For each batch made, at least 300 pounds of pork and 100 pounds of hamburger are
required. No more than 200 pounds of wheat filler can be used per batch, and the
amount of corn filler has to range between 50 and 150 pounds. Moreover, each batch
must contain at least 500 pounds of meat and no more than 200 pounds of filler.
a. What is the objective function if the company seeks to minimize costs?
b. If x1 is the amount of pork used, what are the constraints associated with it?
c. If x3 is the amount of wheat filler used, what are the constraints associated with it?
Answer:
A manufacturing company wants to accelerate a project it has underway for a new
product in order to beat its competitors to the market. They use the Critical Path Method
(CPM) to develop the project that has the following activities, durations (in weeks), cost
(in dollars), and precedence relationships:
a. How many paths are in the network?
b. What is the latest finish (LF) time for activity g?
c. What is the slack in weeks for activity c?
d. What is the critical path for this project?
e. What is the duration of the critical path in weeks?
f. What activity should be crashed first in order to accelerate the project?
g. What is the final project duration in weeks assuming it is crashed as far as possible?
h. What is total cost to crash the project as far as possible?
Answer:
All of the following statements are true regarding dependent demand EXCEPT:
a. it is one of the underlying concepts of materials requirements planning (MRP).
b. its concept can be understood by examining the bill of materials.
c. it can be calculated only by forecasting.
d. it is directly related to the demands of other stock-keeping units (SKUs).
Answer:
Table 1SPC Problem Data
Given the previous results and analysis for the R-chart, one would:
a. conclude that the R-chart is in statistical control, and proceed to develop the x-bar
chart.
b. conclude that the R-chart is not in statistical control, and proceed to develop the x-bar
chart.
c. investigate sample # 3 as it is outside the R-chart control limits and redo the R-chart.
d. conclude that the variation is not random, and therefore all samples should be
investigated.
Answer:
Differentiate between verification and validation. Discuss the most objective and
scientific means of validation.
Answer:
Starbucks successfully implemented lean principles.
Answer:
Aggregate forecasts are generally much easier to develop whereas detailed forecasts
require more time and resources.
Answer:
The time to rest and travel between games for baseball umpire crews is an important
factor in developing their schedule.
Answer:
Service design must be addressed from two perspectivesthe service delivery system and
the service encounter.
Answer:
Differentiate between custom, option, and standard goods and services. Also, give a
goods and a service example of each.
Answer:
A hinge manufacturing company employs a Kanban system for a component part. The
daily demand is 900 hinges. Each container has a wait time of 0.05/day, and a
processing time of 0.37 days. The container size is 60 hinges, and the safety factor (α) is
10%. Given this data, the number of Kanbans necessary for this system is _____.
a. less than 4 Kanbans
b. more than 4 but less than or equal to 8 Kanbans
c. more than 8 but less than or equal to 12 Kanbans
d. more than 12 but less than or equal to 16 Kanbans
Answer:
Pipelines have limited use and accessibility and are used primarily for products like oil
and natural gas.
Answer:
Production Kanbans trigger the movement of parts.
Answer:
Estate planning is an example of a low-contact system.
Answer:
Numerical control (NC) machine tools enable the machinist’s skills to be duplicated by
a programmable device (originally punched paper tape) that controls the movements of
a tool used to make complex shapes.
Answer:
Consider the following assembly line information for manufacturing the latest cell
phone in Table 2. The firm wants to produce 80 cell phones per hour.
Table 2
Is this a good assembly-line balancing solution? Explain. What do you recommend?
Answer:
A company is able to process 100 customer statements (bills) per day per processing
clerk. It has to process 270 customer statements per day. How many full-time
processing clerks are needed if the company wants a processing clerk utilization rate as
close to .90 as possible?
Answer:
An assembly line with 28 operations is to be balanced. The total amount of time
required for all 28 operations is 39 minutes. The longest operation takes 2.2 minutes
and the shortest takes 0.8 minutes. The line will operate for 450 minutes per day.
Answer:
The reason that many Japanese firms captured major shares of world markets in the
1970s was a result of their focus on quality rather than efficiency.
Answer: