A high definition television manufacturer in Asia wants to develop a new smart
television as fast as possible using Program Evaluation and Review Technique (PERT)
and must complete the design and testing work first. The objective is to be the first to
market the most innovative smart television on the planet and capture the first adopter
market share. The manufacturer has determined the following activities, precedence
relationships, and time estimates in days for the project:
There are _____ possible paths in this project network.
a. one
b. two
c. three
d. four
Answer:
In relating operations management and the customer benefit package (CBP), which is
the correct timing sequence?
a. Operating system processes lead to customer needs and expectations, which lead to
customer benefit package.
b. Customer benefit package leads to customer needs and expectations, which lead to
operating system processes.
c. Customer needs and expectations lead to customer benefit package, which leads to
operating system processes.
d. Customer needs and expectations lead to operating system processes, which lead to
customer benefit package.
Answer:
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 = 59407 + 509 (Week) + 16463 (Price/gallon)
Answer:
The basic purpose of a(n) _____ is to coordinate the flow of materials, services, and
information among its elements to maximize customer value.
a. product layout
b. servicescape
c. supply chain
d. assembly line
Answer:
The table below includes processing times and due dates for five jobs.
Using the earliest due date (EDD) rule, the average flow time for the five jobs is _____.
a. more than 10 but less than or equal to 20 days
b. more than 20 but less than or equal to 30 days
c. more than 30 but less than or equal to 40 days
d. more than 40 days
Answer:
For a Marriott hotel call center, the expected service rate was 3.0 minutes per telephone
call per customer service representative (CSR). With 3 telephone CSRs on-duty during
the 6:30 to 7:00 a.m. time period, and assuming a 90% target CSR labor utilization rate,
how many telephone calls can these 3 CSRs handle during this time period?
a. More than 5 but less than or equal to 10 customers per hour
b. More than 10 but less than or equal to 15 customers per hour
c. More than 15 but less than or equal to 20 customers per hour
d. More than 20 customers per hour
Answer:
Which of the following is NOT a component of revenue management system (RMS)?
a. Marketing
b. Forecasting
c. Pricing
d. Allocating
Answer:
A Pacific Northwest lumber company is considering the expansion of one of its mills.
The question is whether to do it now, or wait for one year and re-consider. If they
expand now, the major factors of importance are the state of the economy and the level
of interest rates. The combination of these two factors results in five possible situations.
If they do not expand now, only the state of the economy is important, and three
conditions characterize the possibilities. The following table summarizes the situation:
a. Using decision tree analysis, what is the expected value (EV) for expanding?
b. Using decision tree analysis, what is the expected value (EV) for not expanding?
c. Based on expected value (EV), what should the company’s decision(s) be?
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
The economic order quantity (EOQ) rounded to the next highest number is:
a. less than 25 pumps.
b. more than 25 but less than or equal to 35 pumps.
c. more than 35 but less than or equal to 45 pumps.
d. more than 45 but less than or equal to 55 pumps.
Answer:
A company currently has no items in inventory. The demand for the next four months is
200, 400, 250, and 350 units. Determine the level production rate if a level strategy is
selected with the goal of ending Period 4 with 100 units in inventory.
a. 300
b. 325
c. 450
d. 350
Answer:
A pharmacy lab is used for only two high volume prescriptions, A and B. The time per
setup (in minutes), processing time (in seconds), and order size (in units) is given
below. Using the information, determine the total capacity required for this lab (i.e.,
how much work in minutes do these two jobs require) in minutes. One setup is incurred
per order.
a. Less than 2000 minutes
b. Equal to or greater than 2000 but less than 2200 minutes
c. Equal to or greater than 2200 but less than 2400 minutes
d. Greater than 2400 minutes
Answer:
Any particular combination of decision variables is referred to as a(n) _____.
a. objective
b. solution
c. constraint
d. coefficient
Answer:
All of the following are common objectives of layout studies EXCEPT to:
a. minimize delays in materials handling and customer movement.
b. minimize the number of workstations.
c. provide for good housekeeping and maintenance.
d. maintain flexibility.
Answer:
Based on the information shown below in Table 5, develop a forecast for June using
both the two-period moving average model and the exponential smoothing model with
α = 0.10. For the exponential smoothing model, assume the forecast for February is
800.
Table 5
The exponential smoothing model forecast for March is:
a. less than or equal to 840.
b. more than 840 but less than or equal to 850.
c. more than 850 but less than or equal to 860.
d. more than 870 but less than or equal to 880.
Answer:
Which of the following is NOT one of the 5Ss?
a. Set in order
b. Sort
c. Standardize
d. Single-piece flow
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.
What is the current labor utilization of the coders at Stage B if two coding specialists
are currently on duty?
a. Less than 90 percent
b. More than 90% but less than or equal to 95%
c. More than 95% but less than or equal to 100%
d. More than 100% but less than or equal to 105%
Answer:
Which of the following is an aggregate planning decision option?
a. Staff schedules
b. Disaggregation
c. Shop floor control
d. Market forecasts
Answer:
A supplier is producing a machined part for the transmission of a vehicle. The upper
specification limit is 0.125 cm, and the lower specification limit is 0.085. The process
standard deviation for the process that makes this part is 0.008, and the process average
is 105. What conclusion can be drawn from these process capability data?
a. The process is centered and capable.
b. The process is not centered and capable.
c. The process is centered and not capable.
d. The process is not centered and not capable.
Answer:
Dell computers and travel agent services are examples of _____ goods and services.
a. Custom
b. Option
c. Standard
d. processed
Answer:
A Proctor and Gamble factory process fills boxes with detergent. Construct an
appropriate set of control charts to monitor the process. Historical data for fill weight
(in ounces) of eight samples is presented below. A sample size of six was used.
For the Proctor and Gamble detergent box problem, the upper control limit for the range
chart is _____.
a. less than or equal to 0.6
b. more than 0.6 but less than or equal to 0.7
c. more than 0.7 but less than or equal to 0.8
d. more than 0.8
Answer:
An assembly line with 28 activities is to be balanced. The total amount of time required
for all 28 activities is 39 minutes. The line will operate for 300 minutes per day. What
must the cycle time be to achieve an output rate of 250 units/day?
a. 1.39 minutes
b. 11.2 minutes
c. 1.2 minutes
d. 0.89 minutes
Answer:
The chief disadvantage of the shortest processing time (SPT) rule is:
a. it maximizes the average flow time.
b. it maximizes the number of jobs in the system.
c. long-duration jobs may have excessive completion times.
d. average job lateness and average job tardiness are excessive.
Answer:
An assembly line with 28 activities is to be balanced. The total amount of time required
for all 28 activities is 39 minutes. The line will operate for 450 minutes per day. What
must the cycle time be to achieve an output rate of 400 units/day?
a. 1.39 minutes
b. 11.54 minutes
c. 1.125 minutes
d. 0.89 minutes
Answer:
If the forecast annual production volume is 5,000 units, which technology alternative
should the firm choose?
a. Manual
b. Semi-automatic
Answer:
Which one of the following statements is FALSE?
a. Cannibalization of parts for use and repair of other equipment is part of a reverse
logistics supply chain.
b. Social sustainability includes a commitment from an organization to improve the
quality of life through industrycommunity partnerships.
c. Increasing revenues by converting wastes to byproducts is an environmental activity
to enhance supply chain management.
d. Efficiencies associated with manufactured goods recovery can yield increases in
customer loyalty and improve the new customer’s uptime.
Answer:
Which of the following has the highest goods content?
a. Buying furniture
b. Computer repair service
c. Automobile loans
d. Symphony performance
Answer:
Indications in a control chart of an out-of-control situation include all of the following
EXCEPT:
a. a shift in the average value.
b. the same number of points above and below the center line.
c. points that lie outside upper and lower control limits.
d. a cyclical pattern in the chart.
Answer:
Graeme manages a candy store in a high traffic shopping mall where he has collected
the following information:
•Weekly demand for small candy boxes = 90 boxes
•Cost to place one purchase order with the box supplier = $19.80
•Cost to hold one box for one year in inventory = $2.45
•Lead time = 2 weeks
•Weeks in a year = 52 weeks
The economic order quantity (EOQ) is:
a. less than 100 boxes.
b. more than 100 but less than or equal to 150 boxes.
c. more than 150 but less than or equal to 200 boxes.
d. more than 200 boxes.
Answer:
In ABC inventory analysis, which of the following is TRUE of class A items?
a. Class A items need not be closely controlled.
b. Class A items account for 5 to 15 percent of the total dollar value.
c. Class A items account for a relatively small percentage of total items.
d. Class A items have a relatively low volume and low unit costs compared to Class C
items.
Answer:
In the following profit table, di represents decision variables and Si represents states of
nature.
a. If management assigns probabilities as follows: S1 = 0.15; S2 = 0.25; S3 = 0.40; and
S4 = 0.20, determine the expected value for d2.
b. Determine the expected value for d3.
c. Assuming the largest expected value for a decision variable is 24.00; determine the
value of perfect information.
Answer:
A lumber company sells 8-foot 2×4’s to construction companies in three states. They
have historical sales demand (in thousands) for the past 26 weeks, as shown below:
They are interested in determining the average number of sales per category for the next
five weeks using simulation. They generated the following random numbers for weeks
1-5 respectively: 63, 13, 67, 50, and 71.
a. Based on a scale of 099, what random number range should be allocated to sales
category of 1120?
b. What is the average sales corresponding to week 2?
c. What is the average sales over all five weeks?
Answer:
Outsourcing is the opposite of vertical integration.
Answer:
A tardiness measure can be either zero (0) or a positive number.
Answer:
C&M Machining is developing plans for a dedicated production line and needs to
determine how many drill presses will be needed. Engineering estimates are that one
drill press will be able to process 150 parts per hour. Daily demand is 4,000 parts. C&M
operates one 8-hour shift per day. How many drill presses are needed to meet the
capacity requirements?
Answer:
An airline performed 4000 preflight inspections during one month. Each inspection
checks 50 items. What is the maximum number of defects that could occur during a
year if the process is operating at a six-sigma level?
Answer:
The decision to purchase a good or service or a customer benefit package is based on an
assessment by a customer of the perceived benefits in relation to its price.
Answer:
The five dimensions of service quality measurement pertain to behavioral
characteristics, which are easier to measure than physical and technical characteristics.
Answer:
When timing a work activity with multiple tasks, the general rule is to take the largest
sample size estimate and use it for all activities or tasks.
Answer:
Explain the concept of interlinking and its significance.
Answer:
The GAP model recognizes five ways to mismanage the creation and delivery of high
levels of quality. Describe each of the five problem areas (GAPS).
Answer:
Define a process. Also, differentiate among a core process, a support process, and a
general management process.
Answer:
Poor quality that might result from a broken tool or an employee who is ill would be an
example of special cause variation.
Answer:
Productivity is the ratio of the input of a process to the output.
Answer:
For the following assembly-line data, balance the line for an output of 30 units in a 5
hour shift. Use the “longest-task-time-first” rule.
Answer:
The most relevant definition of quality for an operations manager is conformance to
specifications.
Answer:
Radio-frequency identification (RFID) tags are used to track stock-keeping units in
supply chains.
Answer: