Scheduling hourly work times using the “first-hour principle” ensures that no excess
labor will be used during the work shift.
A project layout is characterized by a relatively low number of production units in
comparison with process and product layout formats.
“Supply chain” refers to processes that move information and material to and from the
manufacturing and service processes of the firm.
Best operating level is usually a multiple of the level of capacity for which a process
was designed.
Pacing in production processes refers to the fixed timing of the movement of items
through the process.
You are managing a project and need to cut the cost of the project. You decide to
transfer workers to another job to cut the project’s costs. Costs associated with
transferring the workers are an example of project indirect costs.
Target customers are specified during “Phase 0: Planning” of the generic product
development process.
In practice, achieving a perfectly balanced plant is usually desirable but impossible.
Compared with a service operation, a manufacturing operation’s capacity is which of
the following?
A. More dependent on time and location
B. Subject to more volatile demand fluctuations
C. Utilization more directly impacts quality
D. Demand can be smoothed by inventory policies
E. More capable of reacting to demand fluctuations
Which of the following is one of the main purposes of an MRP system?
A. Educate personnel in basic work rules.
B. Determine the amount of materials needed to produce each end item.
C. Stimulate the work force.
D. Decrease labor requirements.
E. Increase inventory accuracy.
Plant A is located at the (X, Y) coordinates of (200, 500) and has a volume of shipping
of 400 units a day. Plant B is located at the (X, Y) coordinates of (300, 100) and has a
volume of shipping of 300 units a day. Using the centroid method, which of the
following is the X coordinate for the new plant location?
A. About 208
B. About 227
C. About 243
D. About 389
E. X coordinate cannot be computed from the data given.
In modeling a simulation, random numbers from 00 to 99 are assigned with the
intervals determined from frequency distributions for each behavior occurrence.
Assume there are two behaviors, X and Y, out of 50 tallies. On behavior X you record
20 tallies, and on behavior Y you record 30 tallies. Which of the following is a correct
random-number interval for behavior X?
A. 00 to 19
B. 01 to 20
C. 00 to 39
D. 41 to 61
E. 45 to 100
Which of the following computational methods are used to calculate learning curve
statistics?
A. Simple compounding
B. Exponential smoothing
C. Logarithms
D. Calculus
E. Negative recursive multiplication
Assuming no safety stock, what is the reorder point (R) given an average daily demand
of 78 units and a lead time of 3 days?A. 421
B. 234
C. 78
D. 26
E. 312
See Equation 20.4; 78 x 3 = 234.
Which of the following values for z should we use in as a safety stock calculation if we
want a service probability of 98 percent?A. 1.64
B. 1.96
C. 2.05
D. 2.30
E. None of these
Using the Excel function NORMSINV, the z score for a 98 percent service probability
is 2.05.
In the design of retail service layouts, the term “ambient conditions” could refer to
which of the following?
A. Signs
B. Symbols
C. Artifacts
D. Lighting
E. Speed of service
A material requirements planning system is an example of which of the following
scheduling systems?
A. Infinite loading, backward scheduling
B. Finite loading, backward scheduling
C. Infinite loading, forward scheduling
D. Finite loading, forward scheduling
E. None of these
Which of the following is a major factor that distinguishes service design and
development from manufacturing design and development?
A. The service process and service product can be developed independently.
B. The service package has the same legal protection available to manufactured goods.
C. The service package is the major output of the development process.
D. Manufacturing is far more capital intensive than services.
E. Capacity decisions are much more critical in manufacturing operations.
Given a prior forecast demand value of 1,100, a related actual demand value of 1,000,
and a smoothing constant alpha of 0.3, what is the exponential smoothing forecast
value?
A. 1,000
B. 1,030
C. 1,070
D. 1,130
E. 970
You want to determine the upper control line for a -chart for quality control purposes.
You take several samples of a size of 100 items in your production process. From the
samples, you determine the fraction defective is 0.05 and the standard deviation is 0.01.
If the desired confidence level is 99.7 percent, which of the following is the resulting
UCL value for the line?
A. 0.39
B. 0.08
C. 0.06
D. 0.05
E. None of these
A company wants to forecast demand using the simple moving average. If the company
uses three prior yearly sales values (i.e., year 2011 = 130, year 2012 = 110, and year
2013 = 160), which of the following is the simple moving average forecast for year
2014?
A. 100.5
B. 122.5
C. 133.3
D. 135.6
E. 139.3
Which of the following is the cost of quality classification for costs such as scrap,
rework, or repair?
A. Appraisal costs
B. Prevention costs
C. External failure costs
D. Internal failure costs
E. Rework and wastage
Which of the following is not an analytical tool used in Six-Sigma quality improvement
programs?
A. Flowcharts
B. Run charts
C. Control charts
D. Pareto diagrams
E. Decision diagrams
Which of the following is not a measure of operations and supply chain management
efficiency used by Wall Street?
A. Inventory turnover
B. Revenue per employee
C. Receivable turnover
D. Earnings per share
E. Asset turnover
What transportation mode has very high initial investment costs but gives a very low
cost per mile for products that are highly specialized and require no packaging?
A. Highway
B. Rail
C. Water
D. Pipeline
E. Air
An example of a trading bloc is which of the following?
A. Central American Free Trade Agreement countries
B. Free trade zones
C. ISO-9000 companies
D. American Production and Inventory Control Society
E. Walmart and its suppliers
You are hired as a consultant to decide if your client should purchase a new, highly
specialized piece of equipment. The product to be produced by this equipment is
forecast to have a total worldwide demand of 15,000 units over the entire product life.
The initial investment to acquire and install the equipment is $256,000. The variable
cost to produce each unit will be $15, and the selling price for the finished product will
be $30. Which of the following best describes the situation the firm is facing?
A. The company will recover its initial investment.
B. The company’s total margin will be less than its investment.
C. It is a good investment.
D. The break-even is lower than the 15,000 units that are expected to sell.
E. All of these
Time series forecasting models make predictions about the future based on analysis of
past data.