The production engineering group at the Singapore plant of a computer company has
been put in charge of the production of a new type of printer. The printer will be built
via an assembly line. The plant manager must design the assembly line for the printer.
He has been advised that the assembly line must be ready in four weeks for a test run.
He has decided to use the Critical Path Method and has identified these activities,
determined their precedence relationships, and estimated normal times:
a. How many paths are there in the network?
b. What is the duration of path b-d-e-g-i in days?
c. What is the earliest finish (EF) time for activity “e”?
d. What is the slack in days for activity “d”?
e. What is the critical path?
f. What is the duration of the critical path in days?
Answer:
Staff scheduling needs all of the following EXCEPT:
a. flow time estimates.
b. accurate forecasting.
c. staffing levels required by time period.
d. determining available personnel.
Answer:
In reference to quality cost classifications, activities such as training and equipment
design would fall in _____ category.
a. prevention costs
b. appraisal costs
c. internal failure costs
d. external failure costs
Answer:
A(n) _____ produces finished-goods inventory in advance of customer demand using a
forecast of sales.
a. single minute exchange of dies (SMED)
b. push system
c. Kanban
d. pull system
Answer:
_____ are the total demand for an item derived from all of its parents.
a. Explosions
b. Gross requirements
c. Scheduled receipts
d. Planned order receipts
Answer:
Which of the following is NOT a key assumption of the multiple-server queuing
model?
a. The waiting line has two or more identical servers.
b. The arrivals wait in two or more lines.
c. The mean service rate, µ is the same for each server.
d. No balking or reneging is allowed.
Answer:
Inventory position is computed using all the following EXCEPT:
a. on-hand quantity.
b. scheduled receipts.
c. backorders.
d. lead-time demand.
Answer:
A retail store sells a popular cosmetic called Rochelleand the store manager is given
$100,000 by the corporate office to improve store performance any way she thinks best.
The “base case” information is a price of $30 per bottle, a contribution margin of 0.50, a
customer defection rate of 17%, and a repurchase frequency of 3 times a year. If these
improvement funds could be used to either (a) increase the contribution margin to 0.58
or (b) reduce the customer defection rate to 15% or (c) increase the repurchase
frequency to 4 times per year, what is the best way to spend these improvement funds
by answering the next two multiple choice questions? (Assume all other
variablesremain at the base case level for each of the three improvement options.) VLC
= P*CM*RF*BLC
You may want to use the table below to help organize your computations and answer.
The value of a loyal customer (VLC) for improvement option (a) is _____.
a. less than or equal to $100
b. more than $100 and less than or equal to $200
c. more than $200 and less than or equal to $300
d. more than $300 and less than or equal to $400
Answer:
Common cause variation:
a. is a natural part of the technology and process design and cannot be controlled.
b. is easily detectable with statistical methods and control charts.
c. cannot be reduced even if better technology, process design, or training is provided.
d. can be reduced through corrective action, which is the responsibility of the workers
who run the processes.
Answer:
Shea is in charge of the “advertising program” for the Boston Red Sox baseball team
during their spring training in Fort Myers, Florida. She has defined the advertising
program as a project with the following characteristics. The goal is to fill all stadium
seats during the spring training season or she may not have the same job next yearthe
pressure is on!
If activity C is delayed by three weeks, the revised earliest project completion time is:
a. 9 weeks.
b. 10 weeks.
c. 11 weeks.
d. 12 weeks.
Answer:
Which of the following is NOT an activity handled by a return facilitator?
a. Recommending a new supplier
b. Repairing the manufactured good
c. Requesting money back for a customer
d. Invoking the service guarantee
Answer:
You are responsible for managing an advertising project with the following activities
(times are given in weeks).
Draw the project network here. BLANK SPACES
What is the total project (normal plus crash) cost?
a. Less than or equal to $60,000
b. Greater than $60,000 but less than or equal to $65,000
c. Greater than $65,000 but less than or equal to $70,000
d. Greater than $70,000
Answer:
A(n) _____ produces only what is needed at upstream stages in the supply chain in
response to customer demand signals.
a. responsive supply chain
b. efficient supply chain
c. push system
d. pull system
Answer:
A company that makes construction equipment is exploring different lot sizing
approaches to its master requirement planning (MRP) schedule: lot-for-lot (LFL),
fixed-order quantity (FOQ) using the EOQ, and periodic-order quantity (POQ). It costs
$100 to set up the production line to produce hydraulic jacks, and the carrying cost per
unit per week is $1. Annual demand is expected to be 1550 jacks. For planning
purposes, the company uses a 50-week work year and disregards the effects of initial
inventory and safety stock. The net requirements for hydraulic jacks for the next six
weeks are:
a. Using a LFL approach, what is the lot size in week 3?
b. What is the total cost for the LFL method?
c. What is the fixed-order quantity (FOQ) using the EOQ approach?
d. What is the beginning inventory for week 5 using the FOQ approach?
e. What is the total cost using the FOQ method?
f. What is the periodic-order quantity?
g. What is the ending inventory for week 4 using the POQ method?
h. What is the total cost using the POQ approach?
Answer:
The time to check out guests at a hotel front desk was measured over the course of
several weeks. Management believes that the target time for checking out guests should
be between 2 and 3 minutes with a target of 2.5 minutes. The data gathered for the
actual process had a mean time of 2.75 minutes with a standard deviation of 0.45
minutes. Find and interpret Cp, Cpl, Cpu, and Cpk in the context of this situation.
Which one of the following statements is TRUE?
a. The process is centered and not capable.
b. The process is centered and capable.
c. The process is not centered and capable.
d. The process is not centered and not capable.
Answer:
If the forecast volume is less than 600 units, which technology alternative should the
company choose?
a. Technology alternative A
b. Technology alternative B
Answer:
Which of the following statements is TRUE of service facilities?
a. They are in close proximity to customers.
b. They rely on physical inventory.
c. They take advantage of patents.
d. They are located close to raw materials, suppliers, and labor.
Answer:
Which of the following statements is TRUE about exponential smoothing technique?
a. It uses a weighted average of past time-series values.
b. It includes seasonal effects.
c. It has the typical values of alpha in the range of 0.6 to 0.9.
d. It will not overshoot the actual values if a negative trend exists.
Answer:
The Eugene plant of Basic Computers Inc. (BCI) wants to develop a net requirements
schedule for one model of microcomputers. The beginning inventory is 500 units, and
they like to carry 50 units as safety stock. The estimated demand for the next 6 weeks is
200, 250, 300, 375, 400, and 600 units.
Answer:
An ice cream shop is quite busy after the neighborhood high school lets out each day.
From 3 pm to 5 pm customers arrive at the rate of 50 per hour, on average. Currently,
the clerk can serve one customer per minute, on average. The store manager can buy an
electrically heated scoop with an automatic ice cream ejector which will decrease the
serving time to one customer per 45 seconds, on average.
a. What is the current time (in minutes) spent waiting in line?
b. What will the waiting time (in minutes) become using the automatic ice cream
ejector?
c. What fraction of time is the clerk currently idle?
d. What fraction of time will the clerk be idle using the automatic ice cream ejector?
e. How many customers, on average, are in the shop under the current system?
f. How many customers would be in the shop, on average, using the automatic ice
cream ejector?
Answer:
Graeme manages a candy store in a high traffic shopping mall where he has collected
the following information:
•Weekly demand for small candy boxes = 90 boxes
•Cost to place one purchase order with the box supplier = $19.80
•Cost to hold one box for one year in inventory = $2.45
•Lead time = 2 weeks
•Weeks in a year = 52 weeks
The current ordering policy for the candy store is 360 boxes so the average inventory level
(i.e.,
cycle inventory) is:
a. less than or equal to 100 boxes.
b. more than 100 but less than or equal to 150 boxes.
c. more than 150 but less than or equal to 200 boxes.
d. more than 200 but less than or equal to 250 boxes.
Answer:
A _____ layout is an arrangement based on self-contained groups of equipment needed
to produce a particular set of goods or services.
a. product
b. process
c. cellular
d. fixed-position
Answer:
Describe how the following criteria are applied to a decision problem in which the
object is maximization.
a. Maximax
b. Maximin
c. Minimax regret
Answer:
Rose is in charge of the advertising program for Proctor & Gamble’s new laundry
detergent. She has defined the advertising program as a project with the following
characteristics. The goal is to complete the project on time and within budget, or she
may not have this job next yearthe pressure is on!
Draw the project network in the space below if you want. BLANK SPACES
Britt is managing this project, and his bossRose gives him $5,000 to speed up the
original completion time (i.e., project improvement dollars). The best action is to:
a. spend it on activity G first.
b. spend it on activity F first.
c. spent it on activity C first.
d. spend one-half of it on activity C and one-half on activity E.
Answer:
The ability to respond quickly to changes in the volume and type of demand is called
_____.
a. learning
b. service quality
c. demand variability
d. volume flexibility
Answer:
Alico Steel manufactures steel tubes that are used in gas grills for residential customers.
The tube’s overall length is crucial to assure a proper fit, and this dimension has been
targeted as an important dimension to be stabilized for the steel tube manufacturing
process. Gas grill performance and customer safety are key objectives and highlight the
importance of producing high quality steel tubes. Tubes are cut from rolls of steel
tubing using a punch press. The tubes are measured using an operationally defined
method, and Table 1 below summarizes the results. Appendix B with all factors for
control charts will be given as a separate class handout.
Table 1 Tube Length (in centimeters)
Sample Observations 1 to 6
Number Average x-bar Average range (R)
1 12.90 0.35
2 13.30 0.50
3 12.87 0.32
4 10.93 0.44
5 11.43 0.91
6 11.93 0.42
7 12.90 0.29
8 13.03 0.58
9 13.70 0.21
10 13.70 0.11
Total 126.69 4.13
(a) The center line for the trial R-chart is _____.
The center line for the trial X-chart is _____.
The trial UCL for the R-chart is _____.
The trial LCL for the R-chart is _____.
(b) Assuming that special causes for out-of-control situations in (a) are investigated and
corrected using the seven tools of quality management, find the “final set of revised
control limits” (i.e., take out any special cause sample(s) from your trial charts and
recompute the following). (6 points)
The center line for the final revised R-chart is _____. (1 point each)
The center line for the final revised X-chart is _____.
The final revised UCL for the R-chart is _____.
The final revised LCL for the R-chart is _____.
The final revised UCL for the x-bar chart is _____.
The final revised LCL for the x-bar chart is _____.
(c)Plot the X-chart below and make sure you label the chart correctly. (8 points)
(d) Is the process in statistical process control (SPC)? Justify and explain using facts.
What action would you take given your “management by fact” data analysis? (6 points)
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Answer:
A _____ is a statement of how many finished items are to be produced and when they
are to be produced.
a. capacity requirements plan (CRP)
b. master production schedule (MPS)
c. material requirements plan (MRP)
d. shop floor control
Answer:
Which one of the following statements is TRUE with regard to the case study
BankUSA: Credit Card Division?
a. Service upsets represented 17 percent of total transactions.
b. Current performance reports indicate that the credit card division is meeting 99.2
percent of its service requirements.
c. The relationship between customer satisfaction and operating costs is negatively
correlated.
d. The ultimate (real) service level for this organization is internal performance metrics.
Answer:
You are responsible for managing an advertising project with the following activities
(times are given in weeks).
Draw the project network here. BLANK SPACES
Which of the following activities has the largest amount of slack?
a. Activity A
b. Activity B
c. Activity C
d. Activity D
Answer:
A hardware company is interested in developing a net requirement schedule for one of
its products, a claw hammer. The beginning inventory for the product is 1500 units, and
the safety stock is 300 units. The weekly demand over a six-week planning horizon is
400, 850, 560, 900, 600, and 700 units.
Answer:
A quality characteristic has a manufacturing specification (in cm) of 20 ± 05. Historical
data indicate that if the quality characteristic takes on values larger than 0.25 cm or
smaller than 0.15 cm, the product fails and a cost of $75 is incurred. Based on this data,
answer the question below. The Taguchi loss function is _____.
a. L(x) = 75 (x 0.05)2
b. L(x) = 30,000 (x 0.20)2
c. L(x) = 30,000 (0.15 − 0.25)2
d. L(x) = 1,500 (0.15 − 0.25)2
Answer:
A paint company has the following aggregate demand requirements and cost data for
the upcoming year by quarter.
Table 2
Using the data in Table 2, determine the inventory holding and backorder costs for the
year if the paint company wants to use a pure level strategy, ending Quarter 4 with no
inventory.
a. $8,400
b. $32,400
c. $28,500
d. $27,600
Answer:
A work order includes all of the following EXCEPT:
a. the quantity to be produced.
b. the processing requirements.
c. resources needed.
d. worker’s health status.
Answer:
Consider the following project network. Time estimates are in weeks.
Complete the following table and questions 6, 7, and 8:
In the previous project network, the critical path activities are:
a. A,B, and C.
b. A,B,C,D, and F.
c. A,B,D, and F.
d. B,C,D, and F.
Answer:
Which of the following is NOT a major activity in designing a goods-producing or
service-providing process?
a. Utilizing reengineering methods
b. Designing value street map for the current process
c. Developing process performance criteria
d. Defining appropriate performance measures
Answer:
If the number of containers is reduced to one, how many parts must it hold?
a. Less than 25 parts
b. More than 25 but less than or equal to 50 parts
c. More than 50 but less than or equal to 100 parts
d. More than 100 but less than or equal to 150 parts
Answer:
Bar codes are the modern successor to RFID tags.
Answer:
Jeff Camm, the president of Biometrics, Inc. has received the following data from his
accountant:
How is the productivity changing in Jeff’s firm?
Answer:
Explain the purpose of visual controls and give examples.
Answer:
Bishop Manufacturing is implementing the economic order quantity (EOQ) inventory
control system, and they need a good estimate of the cost to process a purchase order
(PO). It takes 5 total labor hours to process a PO. The average number of stock-keeping
units (SKUs) on a PO is 2.2. The average wage for people working in the purchasing
department is $22 per hour, plus employee benefits of $3 per hour. Fixed costs for the
purchasing department are $250,000 per year assuming a 2,000 hour per employee per
year workweek. Given this information a good estimate of the cost to order one SKU is
_____.
a. $5.00
b. $56.82
c. $113.36
d. $125.00
Answer:
Configurations of standard parts, subassemblies, or services that can be selected by
customers from a limited set are called make-to-order goods and services.
Answer:
Which one of the following statements concerning the Bracket InternationalThe RFID
Decision case study is TRUE?
A)Bracket International won back the Wolf Furniture work using RFID systems.
B)Misreads are zero for RFID technology.
C)The maturity phase of the product/firm/technology life cycle is where a “fast
follower” executes their adoption of technology.
D)Bar coding took 10 seconds to scan per item, while RFID took zero seconds to scan
per item.
Answer:
A value chain views an organization from an integrative perspective of goods and
services, while a supply chain focuses mainly on the physical movement of goods and
materials.
Answer:
Quality control ensures that a good or service conforms to specifications and meets
customer requirements.
Answer:
If a single variable is used to represent the change in production level, only positive
changes would be permitted, because of the nonnegativity requirement.
Answer:
Resource management deals primarily with managing inventories in a value chain.
Answer:
The slack for an activity is equal to its latest finish time minus its earliest start time.
Answer:
Discuss six issues that make global value chains more difficult to manage than small
domestic value chains.
Answer:
Cell phones are good examples of how goods and services are bundled together for
long-term profits.
Answer:
Define critical path and explain how it is identified once a project schedule is
calculated.
Answer:
Explain judgmental forecasting, including grass roots forecasting and the Delphi
Method.
Answer:
Return facilitators specialize to getting reusable packaging/shipping material
(containers, crates, and pallets) back to manufacturers.
Answer:
In the Baldrige Award criteria, the strategic planning category focuses on how an
organization selects, gathers, analyzes, manages, and improves its data, information,
and knowledge assets.
Answer:
List the seven operating characteristics of a single-channel waiting line (no formulas).
Answer: