1) If a pattern appears when a dependent variable is plotted against time, one should use
time series analysis instead of regression analysis.
2) Organizations facing seasonal changes in demand are prevented from using
aggregate planning techniques.
3) Safety time is sometimes used in MRP rather than safety stock quantities.
4) Demand can be altered in aggregate planning by promotion and producing additional
product using overtime.
5) One motivation for an organization to redesign its product or service is to avoid the
alternative of downsizing the organization.
6) The output of a process may not conform to specifications even though the process
may be statistically “in control.”
7) The use of models will guarantee the best possible decisions.
8) A systems approach means that we concentrate on efficiency within a subsystem and
thereby assure overall efficiency.
9) Six sigma programs have both management and technical components.
10) The type of layout in which workers, materials, and equipment are moved to the
product as needed is:
A.process.
B.product.
C.fixed-position.
D.batch.
E.mass.
11) A small firm makes three products, which all follow the same three-step process,
which consists of milling, inspection, and drilling. Product A requires 6 minutes of
milling, 5 minutes of inspection, and 4 minutes of drilling; product B requires 2.5
minutes of milling, 2 minutes of inspection, and 2 minutes of drilling; and product C
requires 5 minutes of milling, 4 minutes of inspection, and 8 minutes of drilling. The
department has 20 hours available during the next period for milling, 15 hours for
inspection, and 24 hours for drilling. Product A contributes $6.00 per unit to profit,
product B contributes $4.00 per unit, and product C contributes $10.00 per unit.
Use the following computer output to find the optimum mix of products in terms of
maximizing contributions to profits for the next period.
PROBLEM TITLE: LINEAR PROGRAMMING
PROBLEM IS A MAX WITH 3 VARIABLES AND 3 CONSTRAINTS.
NUMBER OF ITERATIONS: 2
OPTIMAL SOLUTION:
OBJECTIVE FUNCTION VALUE = 2,070
DECISION VARIABLE SECTION:
SLACK VARIABLES SECTION:
12) Which of the following are assumptions or requirements of the transportation
method?
(I) Goods are the same, regardless of source.
(II) There must be multiple sources.
(III) Minimum quantities must be shipped from each source.
(IV) Shipping costs per unit do not vary with the quantity shipped.
A.I and IV
B.II and III
C.I, II, and IV
D.I and III
E.I, II, III, and IV
13) Which of the following most closely describes job enlargement?
A.horizontal loading
B.increasing the level of responsibility associated with a job
C.transferring workers through a series of jobs to increase their scope of experience
D.increasing the amount of workspace assigned to a worker
E.assigning two jobs to the same worker
14) The assurance that processes are performing in an acceptable manner is the focus
of:
A.variability analysis.
B.quality assurance.
C.capability assessment.
D.quality control.
E.acceptance sampling.
15) With regard to suppliers, lean systems typically require:
A.delivery of large lots at regular intervals.
B.buyer inspection of goods and materials.
C.multiple sources from which to purchase.
D.long-term relationships and commitments.
E.the lowest price possible.
16) One local hospital has just enough space and funds currently available to start either
a cancer or heart research lab. If administration decides on the cancer lab, there is a 20
percent chance of getting $100,000 in outside funding from the American Cancer
Society next year, and an 80 percent chance of getting nothing. If the cancer research
lab is funded the first year, no additional outside funding will be available the second
year. However, if it is not funded the first year, then management estimates the chances
are 50 percent it will get $100,000 the following year, and 50 percent that it will get
nothing again. If, however, the hospital’s management decides to go with the heart lab,
then there is a 50 percent chance of getting $50,000 in outside funding from the
American Heart Association the first year and a 50 percent change of getting nothing. If
the heart lab is funded the first year, management estimates a 40 percent chance of
getting another $50,000 and a 60 percent chance of getting nothing additional the
second year. If it is not funded the first year, then management estimates a 60 percent
chance for getting $50,000 and a 40 percent chance for getting nothing in the following
year. For both the cancer and heart research labs, no further possible funding is
anticipated beyond the first two years.
What would be the total payoff if the heart lab were funded in both the first and second
years?
A.$100,000
B.$60,000
C.$50,000
D.$40,000
E.$20,000
17) Aggregate planning requires which of the following information?
(I) a forecast of expected demand
(II) current levels of inventory
(III) policies regarding employment levels
A.II only
B.I and II only
C.I and III only
D.I, II, and III
E.II and III only
18) In the quantity discount model, with carrying cost stated as a percentage of unit
purchase price, in order for the EOQ of the lowest curve to be optimum, it must:
A.have the lowest total cost.
B.be in a feasible range.
C.be to the left of the price break quantity for that price.
D.have the largest quantity compared to other EOQs.
E.have smaller ordering costs than the others.
19) Detecting nonrandomness in errors can be done using:
A.MSEs.
B.MAPs.
C.control charts.
D.correlation coefficients.
E.strategies.
20) Everything else being equal, a firm considering outsourcing can be reasonably
certain that:
A.total costs will be lower.
B.its supplier probably has more expertise in whatever is being outsourced.
C.it can maintain tight control over knowledge.
D.proprietary information will not be disclosed.
E.control over operations will be maintained.
21) Consider the following work breakdown structure:
What is the estimated expected (mean) time for activity E?
A.31 weeks
B.38 weeks
C.39 weeks
D.40 weeks
E.43 weeks
22) RFID chips:
(I) are used to track goods in distribution.
(II) are used to track job progress in production.
(III) are used to provide special instructions to operators.
(IV) can be used in inventory record keeping.
A.II and III only
B.I and II only
C.II, III, and IV
D.I, II, and IV
E.IV only
23) Excitement characteristics are categories in the _________ model.
A.bipolar
B.Kano
C.Pareto
D.quality
E.service matrix
24) A firm is trying to decide between two location alternatives, Albany and Baltimore.
Albany would result in annual fixed costs of $60,000, labor costs of $7 per unit,
material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit
of $50. Baltimore would have annual fixed costs of $80,000, labor costs of $6 per unit,
material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit
of $48.
(A) At an annual volume of 9,000, which would yield the higher profit?
(B) At what annual volume would management be indifferent between the two
alternatives in terms of annual profits?
25) The new owner of a beauty shop is trying to decide whether to hire one, two, or
three beauticians. She estimates that profits next year (in thousands of dollars) will vary
with demand for her services, and she has estimated demand in three categories, low,
medium, and high.
If she feels the chances of low, medium, and high demand are 50 percent, 20 percent,
and 30 percent respectively, what are the expected annual profits for the number of
beauticians she will decide to hire?
A.$54,000
B.$55,000
C.$70,000
D.$80,000
E.$135,000
26) Given the following data for jobs awaiting processing at a manufacturing cell in
which jobs are first processed by machine A, then by machine B:
In developing the sequence which will minimize throughput time, what is the initial job
to be placed in the schedule sequence?
27) 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 C?
28) Consider the following information about sites A, B, and C:
For what range of output would you prefer site B?
29) Consider the data below:
Using exponential smoothing with alpha = .2, and assuming the forecast for period 11
was 80, what would the forecast for period 14 be?
30) Consider the following information:
How should overtime capacity be utilized?
31) Consider the following work breakdown structure:
What activities make up the critical path?
32) Given the following data for jobs awaiting processing at a manufacturing cell in
which jobs are first processed by machine A, then by machine B:
If these jobs were scheduled in the sequence shown, when would idle time occur at
machine B?
33) .
Feedback: The sample proportion is a reasonable estimate of the population proportion.
34) Refer to the following data for jobs waiting to be processed at a single work center
(jobs are shown in order of arrival):
What is the schedule sequence using the first come, first served priority rule?
35) Eight instances of a worker doing a task were observed as follows:
How many observations would be needed to be 95.44 percent confident that the
maximum error in the observed time is one second? Assume that the standard deviation
of the task time is two seconds.