Magnatree is a large company that has been working on a new product. This product
has tremendous potential, but Magnatree must move quickly. They have decided that
they will introduce the product in two months and have already started developing their
advertising campaign.
They are sure that the product will be a success, with a possibility that it will be a huge
success. They recently found out that another company, Shadycorp, has some unique
expertise that could significantly improve the new product. They contacted them and
Shadycorp offered to sell their expertise to Magnatree for $5 million. Magnatree needs
to make an immediate decision on Shadycorp’s offer or it will be too late to investigate
the use of the expertise in design of the new product. Without the expertise Magnatree
has a 20% chance of making the new product a huge success. With Shadycorp’s
expertise there will be a 40% chance of the new product being a huge success.
If the new product is a huge success, the net present value of its future profits is
expected to be $50 million. If it is merely a success, the net present value of its future
profits is expected to be $20 million.
(a) Construct a decision tree and solve it.
(b) Should Magnatree accept Shadycorp’s offer?
(c) What is the expected net present value of its future profits from the new product?
The authorized MPS is a statement of ______________________________.
a) manufacturing orders that have been authorized for release to the shop floor
b) which workers are authorized to work on which machines
c) what the company expects to build and when it expects to build it
d) authorized payments to vendors
e) where different end products are authorized to be manufactured
Engines Corp. builds two different types of motors. Model A has averaged 120,000
units annually, and Model B has average 230,000 units annually. The firm has
historically used 80,000 direct labor hours and 210,000 hours of machine time per year
to build Model A. Also, 250,000 annual direct labor hours have been allocated to Model
B, along with 60,000 hours of annual machine time. Calculate the four relevant CPOPF
planning factors.
The system of Kanbans used to coordinate delivery of goods by suppliers can include
all of the following except
a) Filled containers delivered by the supplier
b) Purchase approvals by the production manager
c) Mail boxes for each supplier
d) Empty containers with a Kanban
e) Bar-coded Kanbans
In Excel, to center a label that continues across several cells, highlight the cells, go to
Format/Cell/Alignment, and click on _____________________.
a) Center
b) Center across selection
c) Justify
d) Fill
e) General
What is the governmental agency that has inspectors who check for safety conditions?
a) ISO
b) OSHA
c) FCC
d) IRS
e) HEW
The approach that details the tasks of a job and how to do them is
____________________.
a) work measurement
b) job evaluation
c) methods analysis
d) job design
e) work sampling
Today’s operations management is characterized by:
a) its use of the internet.
b) its reliance on the intranet.
c) its increased use of cross-functional decision making.
d) its use of cross-functional job sharing.
e) its use of interchangeable parts.
The standard deviation is an example of what?
a) Traditional statistical tools
b) Fishbone diagramming
c) Acceptance sampling
d) Experimental design
e) Statistical process control
If a firm is using a linear program to determine production amounts of its chairs and
tables, which of the following constraints must be in the model?
a) non-negativity
b) labor hours
c) machine hours
d) profit maximization
e) wood availability
What is a process batch?
a) the quantity of finished goods that can be sold
b) the quantity of items moved at the same time from one resource to the next
c) the quantity of work-in-process inventory
d) the quantity produced at a resource before the resource is switched over to produce
another product
e) the set of machines used to make products
The role of production employees in JIT includes all of the following except
a) Be actively engaged in improving the production process
b) Monitor quality
c) Record data
d) Follow clearly defined and limiting work rules
e) Act on the information they have
Where was the just-in-time philosophy developed?
a) Germany
b) United States
c) Canada
d) Japan
e) Italy
TQM team meetings take place
a) After work
b) During lunch breaks
c) When the boss calls them
d) When all the other work is finished
e) During time in the workday set aside for them
What percentage of total non-farm jobs in the U.S. economy comes from
service-producing industries?
a) 20%
b) 50%
c) 60%
d) 80%
e) 95%
In Excel, the command to print row and column headings is checked under which
menu/submenu?
a) Print
b) Page Setup
c) Tools
d) View
e) Insert
Describe what steps one should use if the Solver Results box says, ‘The conditions for
Assume Linear Model are not satisfied’?
Redundant components are often used when product failure
________________________
For what entities can productivity be measured?
Capacity planning problems are notorious in ER and other organizations that experience
______________.
The probability of shipping a lot or batch of products whose proportion of defective
items is greater than LTPD is called consumer’s risk because
______________________.
What is the load-distance score formula?
What are four dimensions of manufacturing quality?