Archives: Quiz

What is the implied service rate at a bank teller’s window if demand is 26 customers per hour and the bank staffs are 3 tellers with an average utilization of 80%? a. Less than 5 customers per hour b. More […]

Webster Manufacturing Inc. is implementing a Just-in-Time (JIT) system and wants to know how many Kanbans to use for the initial setup of its JIT system. The daily demand is 400 units and each Kanban (i.e., container) holds 15 units. […]

Activity times are always estimated from historical data of similar work tasks to provide realism for a project. Answer: Define regression analysis and explain how it is an approach to forecasting. Answer: Regression Analysis is a method for building a […]

What are some management strategies to improve process designs? Answer: Explain the concept of reliability. Answer: Reliability is the probability that a manufactured good, piece of equipment, or system Management strategies to improve process designs usually focus on one or […]

Explain the structure and purpose of a decision tree. Answer: An order fulfillment process normally operates two shifts a day, five days per week. Under normal conditions, 380 orders can be processed per shift. What is the daily capacity? Answer: […]

Cycle time in assembly-line balancing is the maximum amount of time it takes to process a part at some workstation along the line. Answer: For a Marriott hotel call center, the expected service rate was 3.0 minutes per telephone call […]

A kiosk at an airport that allows passengers to check their baggage would be an example of a lean servicescape environment. Answer: Summarize the supply chain operations reference (SCOR) model. Answer: The supply chain operations reference (SCOR) model is a […]

Which of the following statements is NOT true of goods and services? a. Service encounters can be between a customer and a service provider. b. Services cannot be stored as inventory for future sale. c. A shoe is a durable […]

Time-based competition means providing new and innovative products that surprise and delight customers. Answer: A value chain describes the flow of customer information through a production system. Answer: F List the variety of economic and noneconomic issues to be considered […]

Give three examples of goods or services associated with each of the process types: project, job shop, flow shop, and continuous flow. Answer: Examples for project process: Examples for job shop process: Examples for flow shop process: Examples for continuous […]

Historically, the average proportion of defective bars has been 015. Samples will be of 100 bars each. Construct a p-chart using . Suppose a sample had 0.044 defectives. What would be the best action to take in this scenario? a. […]

When break-even analysis is applied to an outsourcing decision, the break-even quantity is _____. a. the ratio of fixed costs to the difference between variable outsourcing cost and variable in-house production cost b. the ratio of the difference between variable […]

Which of the following is NOT an advantage of simulation? a. It provides a convenient experimental laboratory. b. It can perform “what-if” studies. c. It does not disrupt the current process. d. It guarantees accuracy of outputs. Answer: William Green, […]

For a given cycle time in line balancing, assembly-line efficiency can be increased by _____. a. speeding the assembly line b. slowing the assembly line c. decreasing the number of workstations d. increasing the number of workstations Answer: Which level […]

Ayben is responsible for managing an advertising and promotion project using Program Evaluation and Review Technique (PERT) with the following activities (times are given in weeks). Draw the project network here. BLANK SPACES Using the table for the advertising and […]

Revenue management systems (RMS): a. consist of standard and static methods to forecast demand. b. rely solely on overbooking. c. are cost minimization models. d. maximize the revenue generated by a perishable asset. Answer: Cause-and-effect diagrams would help most in […]

All of the following are important criteria in choosing a forecasting method EXCEPT: a. the smoothing constant (α). b. the time span for which the forecast is made. c. the data requirements. d. the quantitative skills needed. Answer: Dell’s ability […]

Which of the following is NOT a best practice and prerequisite for implementing a just-in-time system? a. Maximizing the number of parts or items b. Good calibration of all gauges and testing equipment c. Clean and uncluttered workplaces d. Minimizing […]

In a production inventory, (a month’s production) + (beginning inventory) – (ending inventory) (number of lost sales for the month) = _____. a. overtime limits b. demand in the month c. increase in production d. decrease in production Answer: _____ […]

A high definition television manufacturer in Asia wants to develop a new smart television as fast as possible using Program Evaluation and Review Technique (PERT) and must complete the design and testing work first. The objective is to be the […]

Toyota classified waste into seven major categories. These categories include all of the following EXCEPT _____. a. motion b. ordering c. inventory d. waiting time Answer: A paint company has three sources for buying bright red pigment for their paints: […]

Total productive maintenance (TPM) seeks to do all of the following EXCEPT _____. a. maximizing equipment effectiveness b. creating worker ownership of equipment by involving them in maintenance activities c. fostering continuous improvement efforts d. enabling multiple products in small […]

Idle capacity exists in a _____ activity. a. bottleneck work b. booking c. nonbottleneck work d. nonphysical Answer: _____ have the primary responsibility to design and manage the processes and associated resources that create value for customers. a. Operations managers […]

Which of the following is NOT a part of Philip Crosby’s philosophy of quality? a. Quality means conformance to requirements, not elegance. b. The only performance standard that matters is profits. c. There is no such thing as a quality […]

The manager of a gas station along an interstate highway has observed that gasoline sales generally increase each week over the summer months as more families travel by car on vacations. He also believes that sales are sensitive to fluctuations […]

Which of the following statements is NOT TRUE regarding the fixed-period system (FPS)? a. The time between orders is constant, but the order quantity might vary. b. An order is time-triggered, not inventory-triggered. c. The optimal replenishment level includes the […]

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 […]

A family rents videos from a local video store. On an average, they spend $80 a month. The store’s contribution margin is 45 percent and the average customer defection is 40 percent. Determine the value of a loyal customer. a. […]

A company is seeking to develop a master production schedule for its product. Their beginning inventory is 1000 units, and they want to maintain a safety stock level of 1000 units. They produce the product in a fixed lot size […]

A critical part has a manufacturing specification (in cm) of 0.325 ± 010. Based on historic information, if this measurement is larger than 0.335 or smaller than 0.315 the product fails at a cost of $120. Determine the Taguchi loss […]

In order to increase value, an organization must do all of the following EXCEPT: a. increase perceived benefits while holding price or cost constant. b. increase perceived benefits while reducing price or cost. c. keep the proportion of price or […]

Which of the following is NOT a principal issue in service-encounter design? a. Process and job design b. Customer-contact behavior and skills c. Service-provider selection, development, and empowerment d. Recognition and reward Answer: According to the David Christopher, Orthopedic Surgeon, […]

A quality characteristic has a manufacturing specification (in cm) of 200 ± 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 […]

A coffee shop’s average transaction price is $4, and the contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of the loyal customer over […]

The forecasting error measurement that eliminates the measurement scale factor is the _____. a. mean square error (MSE) b. mean absolute deviation (MAD) c. root mean square error (RMSE) d. mean absolute percentage error(MAPE) Answer: A company has a project […]

_____ is the act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities. a. Measurement b. Forecasting c. Fulfillment d. Deployment Answer: In the context of the perspectives of a value chain, product […]

All the following are means to manage capacity by changingorstimulating demand EXCEPT: a. varying price of goods or services. b. adding peripheral goods and/or services. c. providing reservations. d. shifting work to slack periods. Answer: A fixed-period (FPS) inventory system: […]

A company manufactures tractors and lawnmowers. They have received an order for six deluxe custom riding lawnmowers for a local golf course. They must develop a cost estimate for the order. It is estimated that the first lawnmower will take […]

In ABC inventory analysis, which of the following is TRUE of class C items? a. Close control of Class C items (more than of class A or class B items) is required. b. Class C items are critical items that […]

E. Flynn Company uses a perpetual inventory system and had the following transactions during November: November 6: Purchased $5,800 of inventory on account, terms 2/10, n/30. November 8: Returned $800 of defective units and received full credit. November 15: Paid […]

The Grass is Greener Corporation provides $6,000 worth of lawn care on account during the month. Experience suggests that about 2% of net credit sales will not be collected. To record the potential bad debts, The Grass is Greener Corporation […]

When the amount of a contingent liability can be reasonably estimated and its likelihood is probable, the company should: A. include a description in the notes to the financial statements. B. record the estimated amount of the liability times the […]

A truck costing $12,000, on which $9,000 of accumulated depreciation has been recorded was sold for $2,000 cash. The entry to record this event would include a: A. gain of $1,000. B. loss of $1,000. C. credit to the Truck […]

Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem? A. Hiring a new CEO. B. Loss of a key patent. C. Announcing a new stock issue. D. Replacing an old product line. […]

You form a partnership with your best friend. You have contributed 65% of the capital and can claim 65% of the net income. At the end of the first year, you discover that your partner has run up $40,000 in […]

Bobby Darin is the only employee of Atlantic Records, Inc. During the first week of January, Darin earned $800 and had federal and state income tax withholdings of $40 and $15, respectively. FICA taxes are 7.65 percent on wages up […]

A company started the current year with assets of $700,000, liabilities of $350,000 and contributed capital of $200,000. During the current year, assets increased by $400,000, liabilities decreased by $50,000 and contributed capital increased by $275,000. There was no payment […]

Company X has net sales revenue of $436,000, cost of goods sold of $343,000, and all other expenses of $90,000. If interest expense is $10,000 and income tax expense is $1,000, the times interest earned ratio is closest to A. […]

In 2014, Lawrence Company had gross sales of $750,000 on account and granted sales discounts of $15,000. On January 1, 2014, the Allowance for Doubtful Accounts had a credit balance of $18,000. During 2014, $30,000 of uncollectible accounts receivable were […]

Cash sales rung up by cashiers totaled $117,000. Cash in the drawer was counted and found to be $119,000. The journal entry to record the day’s sales would include A. a debit to cash for $117,000. B. a credit to […]