1) Lot-for-lot ordering in MRP provides coverage for some predetermined number of
periods (such as two or three) that extend beyond the orders already received for those
periods.
2) The service function of purchasing interfaces with many areas, including legal,
accounting, and engineering functions.
3) Forming strategic partnerships is beneficial for two or more business organizations
that have the same products or services.
4) One of the potential benefits of self-directed teams is higher quality.
5) According to Deming, it is the systems that management puts into place that are
primarily responsible for poor quality, not employees.
6) The value of outputs is measured by the prices customers are willing to pay for goods
or services.
7) Operations, marketing, and finance function independently of each other in most
organizations.
8) The bill of materials contains information on lead times and current inventory
position on every component required to produce the end item.
9) Capacity requirements planning is an important feature in MRP+.
10) A Gantt chart is a basic scheduling tool that is most useful in low-volume systems.
11) The equation 5x + 7y = 10 is linear.
12) The optimum level of inspection minimizes the sum of inspection costs and the cost
of passing defectives.
13) An approach to reducing the variability in processing times might include greater
standardization.
14) The degree to which a product or service satisfies its intended purpose is
determined by design, conformance to design, cost, and reputation of the producer.
15) Which of the following is not usually necessary in order to have an effective MRP
system?
A.a computer and software
B.an accurate bill of materials
C.lot-for-lot ordering
D.an up-to-date master schedule
E.integrity of file data
16) Which one of the following is not common to product layouts?
A.a high rate of output
B.specialization of labor
C.low unit costs
D.ability to adjust to changes in demand
E.special-purpose technology
17) The dean of a school of business is forecasting total student enrollment for this
year’s summer session classes based on the following historical data:
What is this year’s forecast using the naive approach?
A.2,000
B.2,200
C.2,800
D.3,000
E.4,300
18) Which of the following is not a performance driver?
A.quality
B.cost
C.stability
D.velocity
E.flexibility
19) Some companies attempt to maximize the revenue they receive from fixed
operating capacity by influencing demands through price manipulation. This is an
example of:
A.illegal price discrimination.
B.collusion.
C.volume analysis.
D.revenue management.
E.outsourcing.
20) Project risk events tend to be unlikely __________ a project, but that’s also when
they tend to be the __________.
A.early in; most costly
B.late in; least costly
C.late in; most costly
D.before the beginning of; most complex
E.at the conclusion of; least complex
21) Which of the following is not a measure of the reliability of the supply chain?
A.supply chain response time
B.on-time delivery
C.fill rate
D.lead time variability
E.improving e-fulfillment statistics
22) The first, and perhaps most important, step in constraint management is to
____________ the most pressing constraint.
A.improve
B.support
C.identify
D.elevate
E.modify
23) A company is designing a product layout for a new product. It plans to use this
production line eight hours a day in order to meet projected demand of 480 units per
day. The tasks necessary to produce this product are:
If the company wants the output rate to be equal to demand, what is the minimum
number of workstations needed?
A.3
B.4
C.5
D.6
E.7
24) Aggregate planners attempt to balance:
A.demand and inventories.
B.demand and costs.
C.capacity and inventories.
D.capacity and costs.
E.capacity and demand.
25) QRS Corp. is designing a product layout for a new product. They plan to use this
production line 10 hours a day in order to meet forecasted demand of 900 units per day.
The following table describes the tasks necessary to produce this product:
For output to equal forecasted demand, what should be the actual cycle time for this
production?
A.32 seconds
B.38 seconds
C.40 seconds
D.76 seconds
E.152 seconds
26) Which of the following statements about CAD is not true?
A.It increases the productivity of designers.
B.It uses computer graphics.
C.It requires a good database.
D.Some systems permit engineering or cost analysis of proposed designs.
E.It is used successfully by all manufacturing companies.
27) Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it
will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a
patient’s blood analyzed, while the actual cost of a blood analysis would be $5.00. How
many HIV blood analyses would he have to perform in order to break even?
A.12,000
B.2,400
C.3,000
D.1,000
E.5,000
28) The Skulls, a student social organization, has two different locations under
consideration for constructing a new chapter house. The Skulls’ president, a POM
student, estimates that due to differing land costs, utility rates, etc., both fixed and
variable costs would be different for each of the proposed sites, as follows:
If it is estimated that 30 persons will be living in this new chapter house, which location
should the Skulls select?
A.Alpha Ave.
B.Beta Blvd.
C.either Alpha Ave. or Beta Blvd.
D.reject both Alpha Ave. and Beta Blvd.
E. become a virtual organization
29) Suppose a decision maker is confronted with the following transportation model
scenario:
What is the total cost of the optimal solution?
A.$1,300
B.$1,345
C.$1,354
D.$1,410
E.$1,455
30) A system of lights used at each workstation to signal problems or slowdowns is:
A.a command and control center.
B.automation.
C.andon.
D.a pull system.
E.kanban.
31) Dairy items, fresh fruit, and newspapers are items that:
A.do not require safety stocks.
B.cannot be ordered in large quantities.
C.are subject to deterioration and spoilage.
D.require that prices be lowered every two days.
E.have minimal holding costs.
32) A manager assembled the following information about an infinite-source waiting
line system: five servers, an arrival rate of six per hour, and a service time of 20
minutes. The manager has determined that the average number of customers waiting for
service is .04. Determine each of the following:
(A) the system utilization
(B) the average waiting time in line in minutes
(C) the average time in the system
(D) the average number in the system
33) 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 B?
34) If the value for average outgoing quality increases, this means that __________
defective units are being passed on.
35) Data on demand over the last few years are available as follows:
What are this and next year’s forecasts using the least squares trend line for these data?
36) Consider the following linear programming problem:
Determine the optimum amounts of x and y in terms of cost minimization. What is the
minimum cost?
37) Consider the following information about sites A, B, and C:
For the preferred site for 20,000 units per year, what would be your cost savings
compared to each of the other two sites?
38) 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 are the corner points of the feasible solution space?
39) A firm uses acceptance sampling to evaluate batches of inputs. Ideally, the defect
rate would be no more than 3.5 percent. The firm knows that on occasion, batches with
that defect rate or higher might be rejected. However, if the defect rate is less than or
equal to 3.5 percent, the firm would like there to be very little chance of that batch
being rejected. This value, 3.5 percent, is the firm’s: