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1) Because price is not a factor in the EOQ formula, quantity discounts will not affect
EOQ calculations.
2) An 80 percent learning curve means that with each doubling of repetitions there will
be a 20 percent decrease in time per unit.
3) Most people encounter operations only in profit-making organizations.
4) TQM expands the traditional view of quality beyond looking only at the quality of
the final product or service to looking at the quality of every aspect of the process.
5) An advantage of decentralized purchasing is the attention given to local needs.
6) Preventive maintenance is generally scheduled on the basis of:
A.planned inspections.
B.passage of time.
C.number of operating hours.
D.all of the choices.
E.none of the choices.
7) Which sequencing rule is designed specifically to minimize job tardiness?
A.S/O
B.EDD
C.FCFS
D.SPT
E.LPT
8) Organizations should work to improve process capability so that quality control
efforts can become more:
A.effective.
B.efficient.
C.necessary.
D.unnecessary.
E.widespread.
9) Which of the following is associated with producer's risk?
A.LTPD
B.AQL
C.AOQL
D.SPC
E.Cpk
10) A shop that makes candles offers a scented candle, which has a monthly demand of
360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20
days a month. Assume that demand is uniform throughout the month. Setup cost is $60
for a run, and holding cost is $2 per box on a monthly basis.
Determine the following:
(A) the economic run size
(B) the maximum inventory
(C) the number of days in a run
11) A campaign manager for a political candidate must arrange the shipment of 150
cartons of campaign buttons from three button producers to three campaign
headquarters. The supplies and demands, and the per-carton transportation costs, are
shown below:
Which of the following is a constraint for the customer (campaign headquarters)?
A.2X11 + 9X21 + X31 = 20
B.5X12 + 3X22 + 8X32 = 70
C.X11 + X12 + X13 = 50
D.X12 + X22 + X32 = 70
E.all of the choices
12) Suppose a decision maker is confronted with the following transportation model
scenario:
What is the total cost of the optimal solution?
A.$600
B.$620
C.$640
D.$660
E.$680
13) In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering
cost is $15, EOQ is approximately:
A.11
B.20
C.24
D.28
E.375
14) An electronics firm produces two models of pocket calculators: the A-100 (A),
which is an inexpensive four-function calculator, and the B-200 (B), which also features
square root and percent functions. Each model uses one (the same) circuit board, of
which there are only 2,500 available for this week's production. Also, the company has
allocated a maximum of 800 hours of assembly time this week for producing these
calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200
requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a
maximum of 4,000 A-100s this week and a maximum of 1,000 B-200s. Profits for the
A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What is the assembly
time constraint (in hours)?
15) Job shops tend to be __________ while continuous processes tend to be
__________.
A.in services; in manufacturing
B.short-term and capital intensive; long-term and labor intensive
C.small scale and flexible; large-scale and inflexible
D.standardized; customized
E.low cost-per-unit; high cost-per-unit
16) Unbalanced systems are evidenced by:
A.top-heavy operations.
B.labor unrest.
C.bottleneck operations.
D.increasing capacities.
E.assembly lines.
17) The average time before breakdown of a machine is normally distributed and has a
mean of nine weeks and a standard deviation of 1.5 weeks. If breakdown cost averages
$1,500 and preventive maintenance costs $500, what is the optimal preventive
maintenance interval?
A.3.8 weeks
B.8.4 weeks
C.9.6 weeks
D.6.9 weeks
E.7.2 weeks
18) A bank of 10 machines requires regular periodic service. Machine running time and
service time are both exponential. Machines run for an average of 44 minutes between
service requirements, and service time averages six minutes per machine. What is the
average machine downtime with two operators?
A.1.71 minutes
B.3.46 minutes
C.6.25 minutes
D.7.71 minutes
E.9.46 minutes
19) Suppose a country's productivity last year was 84. If this country's productivity
growth rate of 5 percent is to be maintained, this means that this year's productivity will
have to be:
A.88.2.
B.79.8.
C.82.8.
D.78.9.
E.4.2.
20) The more __________ a company's supply chain, the more difficult it is to ensure
that the supply chain is managed ethically.
A.interconnected
B.global
C.visible
D.shortened
E.competitive
21) A control chart used to monitor the number of defects per unit is the:
A.p-chart.
B.R-chart.
C.x-bar chart.
D.c-chart.
E.Gantt chart.
22)
23) A restaurant prepares Peking duck daily at a cost of $18 per duck. Each duck
generates revenue of $47 if sold. Demand for Peking duck can be described by a
Poisson distribution with a mean of 4.2 ducks per day. Unsold ducks at the end of each
day are converted to duck soup at an additional cost of $5 over and above the resulting
value as soup. How many ducks should be prepared each day?
24) A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past eight
periods, demand has been as follows. Are the results acceptable? Explain.
25) Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with
an average of 15 gallons/day and a standard deviation of two gallons/day. Harry has just
fired the manager and taken over operating the restaurant himself. Harry has asked you
to help him decide how to reorder cooking oil in order to achieve a service level which
is seven times the risk of stockout (7/8). Lead time is eight days. Assume that cooking
oil can be ordered as needed.
26) Given the following work sampling data, based upon 100 random observations of a
particular worker:
For a confidence level of 95.44 percent and a maximum error of .04, what should be the
sample size for estimating the proportion of time spent performing activity A?
27) A company produces two products (A and B) using three resources (I, II, and III).
Each product A requires 1 unit of resource I and 3 units of resource II and has a profit of
$1. Each product B requires 2 units of resource I, 3 units of resource II, and 4 units of
resource III and has a profit of $3. Resource I is constrained to 40 units maximum per
day; resource II, 90 units; and resource III, 60 units.
What is the constraint for resource I?
28) What is the probability that this project will take more than 10 weeks to complete if
the activity means and standard deviations are as shown below?
29) Consider the following information about sites A, B, and C:
What are total costs for site A for a quantity of 5,000 units per year?
