1) Preventive maintenance is additional maintenance done immediately after a
breakdown has occurred to help prevent any further breakdowns.
2) The elimination of idle time on both bottleneck and non-bottleneck operations must
be accomplished to optimize output.
3) Retail businesses generally prefer locations that are not near other retailers, as this
reduces their competition.
4) Slack time is equal to LS-ES or LF-EF.
5) Using the EOQ model, the higher an item’s carrying costs, the more frequently it will
be ordered.
6) Aggregate planners typically use mathematical techniques such as linear
programming and linear decision rules for planning.
7) Your benchmark organization must be chosen from your industry in order for its
methods to be applicable to your business.
8) The T in the model TAF = S + T represents the time dimension (which is usually
expressed in weeks or months).
9) Work sampling provides a detailed elemental breakdown of a task for purposes of
establishing reliable time standards.
10) In cost-volume analysis, costs that vary directly with volume of output are referred
to as fixed costs because they are a fixed percentage of output levels.
11) A location analysis has been narrowed down to three locations. The critical factors,
their weights, and the ratings for each location are shown below:
If the decision rule is to select the location with the greatest composite score exceeding
80, management should choose:
A.location A
B.location B
C.location C
D.either location B or location C
E.to reject all locations.
12) Suppose a decision maker is confronted with the following transportation model
scenario:
In the optimal solution, destination A receives how many units?
A.0
B.35
C.70
D.95
E.120
13) The identification of parent items is called:
A.paternity.
B.pegging.
C.requirement I.D.
D.relationship tracking.
E.master scheduling.
14) For service firms such as banks and supermarkets, location decisions are critical
elements of __________ strategy.
A.marketing
B.pricing
C.promotional
D.efficiency
E.effectiveness
15) In MRP, the gross requirements of a given component part are calculated from:
A.net requirements + amount on-hand.
B.gross requirements of the immediate parent.
C.planned orders of the end item.
D.net requirements of end item.
E.planned orders of the immediate parent.
16) For an organization to grow its market share, it must:
A.advertise using multimedia.
B.reduce prices.
C.exceed minimum standards of acceptability for its products or services.
D.establish an Internet Web site.
E.broaden its mission statement.
17) A quality inspector for Alpha-Beta Co. is concerned about the quality of the batch
of several thousand blank DVD disks which his company produced this week and is
preparing to ship. If he uses an acceptance sampling plan of n = 5 and c = 2, what is the
probability that, if this batch is 40 percent defective, it will be rejected and receive 100
percent inspection prior to shipment?
A..1270
B..2730
C..3174
D..6826
E..7270
18) Previously, management calculated the number of kanban cards allowed by using a
value of 1.3 for X. Assuming nothing else (e.g., usage rates, container capacities, etc.),
which of the following values for X would indicate management’s belief that the system
has become more efficient?
A.2.6
B.2.3
C.1.5
D.1.4
E.1.2
19) Two widely used metrics of variation are the __________ and the _________.
A.mean; standard deviation
B.productivity ratio; correlation
C.standardized mean; assignable deviation
D.randomized mean; standardized deviation
E.normal distribution; random variation
20) The weekly output of a fabrication process is shown below, together with data for
labor and material inputs. Standard selling price is $125 per unit. Overhead is charged
weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and
an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor
productivity?
A.1.463
B.1.457
C.1.431
21) The Operations Manager for Shadyside Savings & Loan orders cash from her home
office for her very popular “BIG BUCKS” automated teller machine, which only
dispenses $100 bills. She estimates that this machine dispenses an average of 12,500
bills per month, and that carrying a bill in inventory costs 10 percent of its value
annually. She knows that each order for these bills costs $300 for clerical and armored
car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at
a time, what would be the average monthly total costs, EXCLUDING the value of the
bills?
A.$625
B.$1,250
C.$2,500
D.$3,125
E.$37,500