1) Methods analysis cannot be done for new jobs (ones that do not yet exist) since it
requires observation of the process.
2) The overall objective of inventory management is to achieve satisfactory levels of
customer service while keeping inventory costs reasonable.
3) When a change in the value of an objective function coefficient remains within the
range of optimality, the optimal solution also remains the same.
4) In the range of feasibility, the value of the shadow price remains constant.
5) Important factors in purchasing include the cost of goods purchased, the quality of
goods and services, and the timing of deliveries of goods or services.
6) The output of the system cannot exceed the output of the bottleneck operation(s).
7) Moving from the aggregate plan to a master production schedule requires:
A.rough-cut capacity planning.
B.disaggregation.
C.suboptimization.
D.strategy formulation.
E.chase strategies.
8) Which closeness rating reflects the highest importance for two departments being
close to each other?
A.A
B.E
C.I
D.U
E.X
9) Cycle stock inventory is intended to deal with:
A.excess costs.
B.shortage costs.
C.stockouts.
D.expected demand.
E.quantity discounts.
10) Servers and channels are described with many acronyms except:
A.M/P/S.
B.M/M/1.
C.M/D/1.
D.M/M/S.
11) The process capability index (Cpk) may mislead if:
(I) the process is not stable.
(II) the process output is not normally distributed.
(III) the process is not centered.
A.I and II
B.I and III
C.II and III
D.II only
E.I, II, and III
12) Which of the following is a principle required for ethical behavior in purchasing?
(I) loyalty to employer
(II) justice to those you deal with
(III) faith in your profession
A.III only
B.I only
C.II only
D.I, II, and III
E.II and III only
13) The term ‘standardization” is closely associated with:
A.customization.
B.high cost.
C.longer lead times.
D.variety.
E.interchangeability.
14) The materials manager for a billiard ball maker must periodically place orders for
resin, one of the raw materials used in producing billiard balls. She knows that
manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per
day to carry a kilogram of resin in inventory. She also knows that the order costs for
resin are $100 per order, and that the lead time for delivery is four days. What is the
economic order quantity for resin?
A.50 kilograms
B.100 kilograms
C.250 kilograms
D.500 kilograms
E.1,000 kilograms
15) The operations manager for a local bus company wants to decide whether he should
purchase a small, medium, or large new bus for his company. He estimates that the
annual profits (in $000) will vary depending upon whether passenger demand is low,
medium, or high, as follows:
If he feels the chances of low, medium, and high demand are 30 percent, 30 percent,
and 40 percent respectively, what is the expected annual profit for the bus that he will
decide to purchase?
A.$15,000
B.$61,000
C.$69,000
D.$72,000
E.$87,000
16) A methods and measurement analyst wants to develop a time standard for a certain
task. In a preliminary study, he observed one worker perform the task six times with an
average observed time of 20 seconds and a standard deviation of two seconds.
What is the standard time for this task if the employee worked at a 20 percent faster
pace than average, and an allowance of 25 percent of job time is used?
A.20 seconds
B.25 seconds
C.26.7 seconds
D.30 seconds
E.32 seconds
17) In work sampling, how will increasing the permissible maximum error affect
sample size?
A.It will increase the number of observations needed.
B.It will decrease the number of observations needed.
C.It will have no effect on sample size.
D.It will sometimes increase and sometimes decrease the sample size, depending on the
analyst.
E.It is impossible to say without additional information.
18) A small business owner is contemplating the addition of another product line.
Capacity increases and equipment will result in an increase in annual fixed costs of
$50,000. Variable costs will be $25 per unit.
(A) What unit selling price must the owner obtain to break even on a volume of 2,500
units a year?
(B) Because of market conditions, the owner feels a revenue of $47 is preferred to the
value determined in part A. What volume of output will be required to achieve a profit
of $16,000 using this revenue?
19) In the additive model for seasonality, seasonality is expressed as a ______________
adjustment to the average; in the multiplicative model, seasonality is expressed as a
__________ adjustment to the average.
A.quantity; percentage
B.percentage; quantity
C.quantity; quantity
D.percentage; percentage
E.qualitative; quantitative
20) A quality analyst wants to construct a sample mean chart for controlling a
packaging process. He knows from past experience that whenever this process is under
control, package weight is normally distributed with a mean of 20 ounces and a
standard deviation of two ounces. Each day last week, he randomly selected four
packages and weighed each:
What is the mean of the sampling distribution of sample means when this process is
under control?
A.18 ounces
B.19 ounces
C.20 ounces
D.21 ounces
E.22 ounces
21) The owner of Darkest Tans Unlimited in a local mall is forecasting this month’s
(October’s) demand for the one new tanning booth based on the following historical
data:
What is this month’s forecast using the least squares trend line for these data?
A.1,250
B.128.6
C.102
D.158
E.164
22) The advertising manager for Roadside Restaurants, Inc., needs to decide whether to
spend this month’s budget for advertising on print media, television, or a mixture of the
two. She estimates that the cost per thousand “hits” (readers or viewers) will vary
depending upon the success of the new cable television network she plans to use, as
follows:
If she uses the Laplace criterion, which advertising strategy will she use?
A.print
B.mixed
C.television
D.either print or mixed
E.either mixed or television
23) A manager is trying to estimate the learning rate for a new job. The first unit took
16 hours and the fourth unit required about 13 hours. The learning rate is:
A.70 percent.
B.75 percent.
C.80 percent.
D.85 percent.
E.90 percent.
24) Which of the following is not among the chief reasons organizations fail?
A.overemphasis on short-term financial performance
B.emphasizing labor productivity in labor-intensive environments
C.poor internal communications
D.not investing in capital and human resources
E.overemphasis on product (or service) design
25) For the products A, B, C, and D, which of the following could be a linear
programming objective function?
A.Z = 1A + 2B + 3C + 4D
B.Z = 1A + 2BC + 3D
C.Z = 1A + 2AB + 3ABC + 4ABCD
D.Z = 1A + 2B/C + 3D
E.Z = 1A + 2B – 1CD