The economic life of a machine is the period over which it provides the best method for
performing its task.
Answer:
SAP modules are updated twice each year.
Answer:
When stocked items are sold, the optimal inventory decision using marginal analysis is
to stock that quantity where profit from the sale or use of the last unit is equal to or
greater than the losses if the last unit remains unsold.
Answer:
The key difference between a fixed-order quantity inventory model where demand is
known and one where demand is uncertain is in computing the reorder point.
Answer:
Theoretically, all schedules are feasible when finite loading is used.
Answer:
Following a straddling strategy, firms will broaden their capabilities and effectively
compete with more focused firms in markets requiring low cost for success.
Answer:
Internal rate of return refers to the corporate tax rate imposed by the internal revenue
service.
Answer:
The term “freeze window” refers to the practice of building quality into the process and
not identifying quality by inspection.
Answer:
A learning curve shows the increase in time required for each successive unit
completed.
Answer:
Quality function deployment is an engineering analysis whose purpose is to simplify
products and processes.
Answer:
A manufacturing cell consists of an innovative power supply and data communications
interface that has revolutionized the control and reporting function in factories.
Answer:
All European companies require that their vendors meet ISO 9000 standards as a
condition for obtaining contracts.
Answer:
Widespread use of computers in business led to development of methods like material
requirements planning (MRP) to rationalize manufacturing in the 1970s.
Answer:
Safety stock is not necessary in any fixed-time period system.
Answer:
The difference between the number of units currently included in the master schedule
and the number of units in firm customer orders is often called “available to promise”.
Answer:
The aggregate operations planning variable “production rate” refers to the number of
units completed per unit of time.
Answer:
Services typically have multiple site locations close to customer markets.
Answer:
If the fraction defective is 0.4 based on a sample size of 100, the standard deviation
used in the “p” chart is about 0.10.
Answer:
Which of the following is not one of the major strategic operations and supply
competitive dimensions that form a company’s competitive position?
A.Cost or price
B.Delivery speed
C.Delivery reliability
D.Management acumen
E.Coping with changes in demand
Answer:
Which of the following is not considered a major process flow structure?
A.Project
B.Workcenter
C.Assembly line
D.Fabrication
E.Continuous Flow
Answer:
Which of the following is one of Dr. Eli Goldratt’s rules of production scheduling for
optimized production technology?
A.Utilization and activation of a resource are not the same
B.Do not allow bottlenecks to govern the flow of the line
C.An hour lost at a bottleneck saves an hour for the entire system
D.Balance the capacities, not the flows
E.The Level of utilization of a bottleneck resource is not determined by its own
potential but by some other constraint in the system
Answer:
You want to develop a three-sigma “R” chart. You know the average range is 12 based
on several samples of size 6. Which of the following is the resulting LCL?
A.20.0
B.18.3
C.7.02
D.5.6
E.0.0
Answer:
You have the following time and cost information below for use in a Time-Cost CPM
Scheduling model.
What are the three costs per unit of time to expedite each activity?
A.A=$300, B=$200, C=$300
B.A=$100, B=$200, C=$400
C.A=$200, B=$200, C=$200
D.A=$100, B=$400, C=$300
E.A=$200, B=$300, C=$400
Answer:
A reason that firms must develop more new products than ever is which of the
following?
A.Product life cycles are shorter
B.Commitments to joint venture partners
C.They are replacing old customers with new ones
D.To amortize heavy investments in development labs
E.The increased difficulty of defending patents and trade names
Answer:
Which of the following is the stage in the operations consulting process that
immediately follows problem analysis?
A.Design, develop and test alternative solutions
B.Develop systematic performance measures
C.Present final report
D.Assure client satisfaction
E.Implement changes
Answer:
Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of
product is $10 and the selling price for the finished product is $25. Which of the
following is the number of units that has to be produced and sold to break-even?
A.500 units
B.667 units
C.790 units
D.900 units
E.1,000 units
Answer:
A simple project listing of five activities, their predecessors and their respective time
estimates are presented below:
Using the Single Time Estimate CPM procedure, what is the Latest Finish Time for the
last activity in this project (i.e., the total time to complete the project)?
A.10 days
B.7 days
C.8 days
D.12 days
E.9 days
Answer:
A small company has either a good day of sales with an average of $50,000 or a bad
day with an average of only $10,000 for the day. To simulate these outcomes, random
numbers from 00 to 99 should be assigned with the intervals determined from the
frequency distribution. If, during the last 50 days, that the vendor had 15 good days and
35 bad days, which of the following is a correct random number interval for a bad day?
A.00 to 49
B.15 to 35
C.30 to 99
D.15 to 99
E.00 to 60
Answer:
Assume a fixed cost for a process of $120,000. The variable cost to produce each unit
of product is $35 and the selling price for the finished product is $50. Which of the
following is the number of units that has to be produced and sold to break-even?
A.5,000 units
B.6,000 units
C.8,000 units
D.11,000 units
E.12,000 units
Answer:
Which of the following is not an infrastructure criteria used in facility location analysis?
A.Adequate school system
B.Adequate health care
C.Adequate transportation
D.Adequate low cost labor
E.Adequate public utility systems
Answer:
A company’s production process has an 80 percent learning curve rate. The process has
produced 1,000 units to date. A process refinement is estimated to allow a future
learning curve rate for the identical product of 75 percent. However, the initial unit
made using the new process will take the same amount of time as the initial unit
produced using the old process. At what point, using the new process, will the
production rate exceed the production rate achieved by the old process?
A.By the 50th unit
B.By the 80th unit
C.By the 100th unit
D.By the 120th unit
E.By the 250th unit
Answer:
Which of the following is a dynamic lot-sizing technique that calculates the order
quantity by comparing the carrying cost and the setup (or ordering) costs for various lot
sizes and then selects the lot in which these are most nearly equal?
A.Economic Order Quantity
B.Lot for lot
C.Least total cost
D.Least unit cost
E.ABC analysis
Answer:
In acceptance sampling, the value for the acceptance number (c) is determined by the
interaction of the acceptable quality level (AQL), the lot tolerance percent defective
(LTPD), the probability of rejecting a high quality lot (alpha) and the probability of
accepting a low quality lot (beta).
Answer:
Objectives of inventory management under an MRP system include which of the
following?
A.Improve customer service
B.Reduce the cost of capital
C.Calibrate operating efficiencies
D.Minimize lot sizes
E.Reduce inventory to zero
Answer:
The Malcolm Baldrige award selection process helps improve quality and productivity
by which of the following means?
A.Stimulating foreign based suppliers of American companies to improve quality
B.Reporting quality levels among American firms
C.Identifying American firms with the most difficult quality problems
D.Providing feedback to applicants by the examiners
E.Helping Baldrige award winners increase their sales
Answer:
Heavy sales of umbrellas during a rain storm is an example of which of the following?
A.A trend
B.A causal relationship
C.A statistical correlation
D.A coincidence
E.A fad
Answer:
One of the characteristics that distinguish a manufactured product from a service
product is which of the following?
A.Customers are always directly involved in creating the output
B.Customers often directly interact with manufacturing workers
C.A manufactured product is a tangible, physical item
D.Customers can purchase the identical service product from a number of outlets
E.A service product is superficial
Answer:
The dimension of design quality that concerns secondary characteristics is which of the
following?
A.Features
B.Serviceability
C.Reliability
D.Reputation
E.Perceived quality
Answer:
What are the three financial measures of the firm’s ability to make money?
Answer:
What are some of the possible factors that stimulate learning?
Answer:
What are the three systems archetypes discussed in the text?
Answer:
In Goldratt’s approach to project management, what is the longest set of sequential tasks
called?
Answer:
What are the main distinctions between service supply chains and manufacturing supply
chains?
Answer:
Why are learning curves useful in business?
Answer:
What three pieces of data are needed to use the exponential smoothing method of
forecasting the future?
Answer:
The formula (Throughput time = Work-in-process/Throughput Rate) is known as what?
Answer:
Describe the role of service guarantees from the marketing and the operations
perspective?
Answer:
Three fast-food chains are discussed in the text. McDonald’s traditional process is
make-to-stock; Wendy’s has a make-to-order process and Burger King has a process
which is a hybrid of the other two. Discuss the advantages and disadvantages of each of
these approaches. Why do you suppose that each of these approaches can survive in the
fast food industry?
Answer: