The manager of a gas station along an interstate highway has observed that gasoline
sales generally increase each week over the summer months as more families travel by
car on vacations. He also believes that sales are sensitive to fluctuations in the price of
gasoline. He developed the following regression model:
Sales ($) = $59,407 + $509 (Week) + 16,463 (Price/gallon)
Which oneof the following statements is TRUE?
a. Sales decrease as a function of time.
b. A $0.10 increase in the price of gas reduces weekly sales by 1,646 gallons.
c. As the price of a gallon of gas increases, sales increase.
d. None of the above is true.
Answer:
Which of the following suggests a process that is NOT in control?
a. Points follow a smooth pattern from the lower control limit to the upper control limit.
b. The number of points above and below the center line is about the same.
c. Points fall randomly above and below the center line.
d. No points are outside the control limits.
Answer:
Which of the following is NOTa key input in a single-period inventory model?
a. Probability distribution of demand
b. Probability that demand is less than the optimal order quantity
c. Cost per item of overestimating demand
d. Cost per item of underestimating demand
Answer:
_____ inventory consists of partially completed products in various stages of
completion that are awaiting further processing.
a. Raw materials
b. Work-in-process (WIP)
c. Cycle
d. Safety stock
Answer:
_____ is the ratio of the output of a process to the input.
a. Productivity
b. Flexibility
c. Variability
d. Reliability
Answer:
The three issues that are at the core of operations management include all of the
following EXCEPT_____.
a. cost
b. quality
c. tangibility
d. efficiency
Answer:
A support process could be any of the following EXCEPT _____.
a. assembling automobiles
b. purchasing materials and supplies
c. managing inventory
d. installing a product
Answer:
Which one of the following statements is FALSE?
a. Boeing’s new 787 Dreamliner airplane has encountered many startup and supply
chain coordination problems.
b. General Motors pushes finished goods from its dealers to the customers.
c. Zappos uses third-party logistics for customer deliveries, return, and inbound
shipping.
d. Federal Express has over one million pickup and delivery sites and therefore, is a
good example of multisite management.
Answer:
A manufacturing company is trying to determine the best lot sizing approach to take
when developing a market requirements planning (MRP) schedule: lot-for-lot (LFL),
fixed-order quantity (FOQ) using the economic order quantity (EOQ), or periodic-order
quantity (POQ). The ordering cost is $504 per order, the inventory-carrying cost is $1
per week per unit, and the annual demand for the product is 15,000 units. They are
using a work schedule for a 50-week work year. They are disregarding the effects of
initial inventory and safety stock at the present time. The estimated net requirements for
their product for the next six weeks are:
a. Using LFL, what is the size of the production lot in week 3?
b. Using LFL, what is the total cost for this method?
c. What is the EOQ needed?
d. What is the beginning inventory in week 4 using the FOQ method?
e. What is the total cost for using the FOQ approach?
f. What is the POQ size for production lots?
g. What is the ending inventory for week 5 using the POQ method?
h. What is the total cost using the POQ approach?
Answer:
The values of mean absolute deviation (MAD) and mean square error (MSE) depend on
the measurement scale of the time-series data.
Answer:
_____ are warehouses that act as intermediaries between factories and customers,
shipping directly to customers or to retail stores where products are made available to
customers.
a. Distribution centers
b. Inventories
c. Databases
d. Retail shops
Answer:
The center line (p-bar) for a p-chart is 0.50 with an ULC = 0.65 and a LCL = 0.35. The
results of the next eight sample means are 0.45, 0.60, 0.39, 0.44, 48, 0.58, 0.54, and
0.64. Which of the following is the best action to take?
a. Collect eight additional samples and then decide.
b. Wait and collect more data by increasing the sample size.
c. Investigate assignable causes because four observations are above the center line.
d. Investigate assignable causes because there is a bad trend (run).
Answer:
Which of the following principles is NOT part of the 5Ss?
a. Synchronize
b. Set in order
c. Shine
d. Sustain
Answer:
Which one of the following is NOT an example of biztainment?
a. iPhone applications
b. Automobile leasing
c. Virtual product demonstrations
d. Virtual factory tours
Answer:
A tool used to help determine how a process works and what it is supposed to do is a
_____.
a. run chart
b. cause-and-effect diagram
c. scatter diagram
d. flowchart
Answer:
A hospital is evaluating whether to outsource or perform in-house a large set of blood
and urine laboratory tests. The fixed cost of the laboratory located in the hospital is
$800,000, and the weighted average variable cost per test if performed in-house is
$28.75. A third-party lab located one city block from the hospital will perform the same
tests and distribute the results electronically to the hospital at a price of $32.00. If the
annual volume last year was 250,000 tests, the hospital should:
a. outsource these lab tests to this third-party lab.
b. offshore these lab tests to this third-party lab.
c. perform these lab tests in-house at the hospital.
d. reduce fixed costs $200,000 and then outsource.
Answer:
Six Sigma efforts use all of the following concepts and methods EXCEPT:
a. process control such as reducing variation.
b. process improvement such as mistake-proofing.
c. large order sizes such as batching.
d. advanced statistical tools such as multiple regression.
Answer:
A company is considering two alternative technologies for manufacturing a product.
The cost data are shown below.
The breakeven volume is _____.
a. less than or equal to 200 units
b. more than 200 but less than or equal to 300 units
c. more than 300 but less than or equal to 400 units
d. more than 400 units
Answer:
Product safety is an example of a(n) _____ sustainability practice.
a. environmental
b. social
c. economic
d. technological
Answer:
Which of the following statements is TRUE about common cause variations?
a. They can be controlled and described in a non-statistical method.
b. They appear at random, and individual sources cannot be identified or explained.
c. They account for about 10 to 15 percent of the observed variation in a process.
d. They arise from external sources that are not inherent in the process.
Answer:
The recognized leader and benchmark for successful Six Sigma implementation is
_____.
a. Sears, Roebuck and Co.
b. Starbucks
c. General Electric
d. Target
Answer:
A(n) _____ is a one-time variation that is explainable.
a. cyclical pattern
b. random variation
c. irregular variation
d. seasonal variation
Answer:
The time needed to process a given set of jobs is called:
a. flow time.
b. ready time.
c. makespan.
d. due date.
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
Using the longest-task-time rule, the efficiency of an assembly-line balance is _____.
a. Less than 65%
b. more than 65% but less than 75%
c. more than 75% but less than 85%
d. more than 85% but less than 95%
Answer:
Kelly opens an aquarium store in a lively shopping mall and finds business to be
booming, but she often stocks out of key items customers want. She decides to
experiment with inventory control methods such as using a fixed order quantity (FQS)
and/or fixed order period (FPS) systems. The Fluval 303 pump, a high margin and
profitable pump, is one of her best sellers, but it stocks out frequently. She collects the
following data about the pump’s sales.
Demand = 10 units per week Store operates 45 weeks/year
Order cost = $30/order Lead time = 3 weeks
Item cost = $80/pump Standard deviation of weekly demand = 4 units
Inventory-holding cost = 15% per year Desired service level = 90 percent
If the current order quantity used by Kelly is 20 pumps per order, how much money can
she save by adopting an economic order quantity (EOQ) policy?
a. Less than $50
b. More than $50 but less than or equal to $100
c. More than $100 but less than or equal to $150
d. more than $150
Answer:
A new surgical facility called Cut & Sew is opening in neighborhoods throughout the
United States. They are job shops that handle a variety of outpatient surgical
procedures. Their process is set up so that one doctor cuts and another sews. They have
five patients to sequence for tomorrow. Since the weather forecast is for a warm and
sunny day, they would also like to play golf tomorrow. They want to sequence their
patients with the objective of minimizing the time from the beginning of the first job
until the finish of the last job. The patients and estimated times are as follows:
Using Johnson’s rule to sequence the patients, and if your uncle is patient B, he will be
finished with surgery in _____.
a. less than or equal to 5 hours
b. more than 5 but less than or equal to 10 hours
c. more than 10 but less than or equal to 15 hours
d. more than 15 but less than or equal to 20 hours
Answer:
You are responsible for managing a project with the following activities (times are
given in weeks):
What is the critical path and expected completion time for this project?
a. B-D-G; 12 weeks
b. A-D-G; 12 weeks
c. B-G; 10 weeks
d. A-F-G; 14 weeks
Answer:
The following five jobs, along with their processing time and due dates, are given
below.
Using the shortest processing time (SPT) rule, the average flow time 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:
_____ is the quantitative modeling of cause-and-effect relationships between internal
and external performance criteria.
a. Learning
b. Strategic planning
c. Interlinking
d. Forecasting
Answer:
A flower shop has one employee in the front of the store to sell flowers out of a cooler.
On Saturdays customers arrive every six minutes, on average. The employee can serve
a customer every five minutes, on average. The owner of the store feels that if there are
more than four customers in the store at one time, additional customers may not come
in because the wait appears too long.
a. What is the chance of four or more customers being in the store at one time?
b. What is the total time (in minutes) a customer spends in the store?
c. What is the average number of customers in the store?
Answer:
Given the diagram below, determine the system reliability if the individual component
reliabilities are: A = 0.96, B = 0.90, C = 0.98, and D = 0.94.
a. Equal to or greater than 0.92 but less than 0.94
b. Equal to or greater than 0.94 but less than 0.96
c. Equal to or greater than 0.96 but less than 0.98
d. Greater than 0.98
Answer:
Flow time is the amount of time a job spends in a shop or factory.
Answer:
An airline seat is an example of an asset held for future use or sale.
Answer:
With interlinking models, managers can objectively make internal decisions that impact
external outcomes.
Answer:
Scheduling applies to all aspects of the value chain.
Answer:
Self-managed teams perform entire jobs, rather than specialized, assembly-line work.
Answer:
ISO 9000:2000 definition of quality system standards is based on the premise that
certain generic characteristics of management practice can be standardized and that a
well-designed, well-implemented, and carefully managed quality system provides
confidence that the outputs will meet customer expectations and requirements.
Answer:
Complementary goods and services are those that require different resources than the
organization’s other goods and services.
Answer:
Offering complementary goods or services is an example of a short-term capacity
strategy.
Answer:
Briefly discuss the four performance perspectives of the Balanced Scorecard Model.
Answer:
MySQL database system is an example of soft technology.
Answer:
A value chain can be considered a “cradle-to-grave” input-output model of the
operations function.
Answer:
Focused factories are often devoted to a specific technology or particular market
segments or customers.
Answer:
An automobile company that installs satellite radio at the dealership instead of at the
factory is applying a postponement strategy.
Answer:
Define work measurement and what it leads to from an operations perspective.
Answer:
Excel Solver can handle basic linear programming but not the special transportation
problem.
Answer:
Larger sample sizes allow smaller changes in process characteristics to be detected with
higher probability.
Answer:
A service facility like a hospital cannot use material requirements planning concepts
and methods such as bills of labor (BOL) and the concept of dependent demand.
Answer:
Explain how the center of gravity is determined.
Answer:
Appointments can be viewed as a reservation of service time and capacity.
Answer: