Archives: Quiz

1) As a general rule, continuous processing systems produce products for inventory rather than for customer order. 2) A benefit of the lean philosophy is the flexibility to respond quickly to changing customer requirements. Answer: TRUE Lean systems can be […]

1) Traffic management refers to truck movement within our parking areas. 2) Kanban focuses on specific part numbers; CONWIP does not. Answer: TRUE This makes CONWIP more suitable for a mixed-product environment. 3) Strategic partnering is encouraged when two or […]

1) One of the main advantages of standardization is that it increases the potential variety of products. 2) Scheduling and maintaining equipment are operational decisions. Answer: TRUE Maintenance would be a form of corrective or preventive action to ensure the […]

1) Productivity is defined as the ratio of input to output. 2) People who work in the field of operations should have skills that include both knowledge and people skills. Answer: TRUE Operations management requires a blend of knowledge and […]

1) Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods (such as two or three) that extend beyond the orders already received for those periods. 2) The service function of purchasing interfaces with many areas, including legal, […]

1) Trend-adjusted exponential smoothing requires selection of two smoothing constants. 2) Flexible manufacturing systems bring the benefits of automation to continuous processes. Answer: FALSE FMS can bring the benefits of flexibility to continuous processes. 3) An advantage of a “chase” […]

1) The standard time for a job can be obtained by multiplying the normal time by an appropriate allowance factor. 2) Process layouts feature departments or other functional groupings of personnel or equipment. Answer: TRUE Departmental or functional grouping is […]

1) Work sampling can be used to estimate the proportion of time a machine is idle. 2) Predetermined time standards are usually based on observing one very efficient worker performing the task. Answer: FALSE Predetermined time standards are based on […]

1) According to Little’s law, the number of people in line depends on the time of day that they arrive. 2) Project management software eliminates conflicts when there are shared resources. Answer: FALSE Project management software simply points to conflicts, […]

1) The sum of times of the longest path in a network indicates expected project completion time, and the activities represent the critical activities. 2) One factor in determining how many cycles to time in a time study is the […]

1) Ergonomics is the use of computers and robots in the workplace. 2) The learning curve is a basic tool for mass production-type activities because it can deal with large volumes of output. Answer: FALSE In mass production, learning curves […]

1) The goal of queuing analysis is to balance the cost of providing a level of service capacity with the possible loss of business due to customers leaving the line or refusing to wait. 2) Productivity is directly related to […]

1) For service and retail stores, a prime factor in location analysis is customer access. 2) Studies on worker efficiency and time of day suggest that the greatest efficiency is at the end of the day when workers are “warmed […]

1) Constraints limit the alternatives available to a decision maker; removing constraints adds viable alternative solutions. 2) The rate of demand is an important factor in determining the ROP. Answer: TRUE The demand rate multiplied by the lead time is […]

1) If an 80 percent curve is appropriate for a task and the first unit takes 10 hours, the average time for the first two units would be eight hours. 2) Limited WIP lowers inventory carrying costs but reduces flexibility. […]

1) When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill. 2) “Balance delay” is another name for the percentage of idle time in a process layout. Answer: […]

1) A learning curve for an overqualified worker is higher than that for an average worker. 2) The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. Answer: TRUE Quantitative techniques have limitations […]

1) The process of dismantling and inspecting a competitor’s product to discover improvements is called reverse engineering. 2) The value of an objective function decreases as it is moved away from the origin. Answer: FALSE The value increases as the […]

1) MRP II did not replace or improve the basic MRP. 2) If a system depends on two subsystems functioning when activated, the reliability of that system is equal to that of the less reliable subsystem. Answer: FALSE The reliability […]

1) Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations. 2) Cost of inspectors, testing, test equipment, and labs are examples of prevention costs. Answer: FALSE These are appraisal costs. 3) […]

1) Modern quality management emphasizes finding and correcting mistakes before they reach the customercatching the errors before they are shipped. 2) Quality of conformance refers to the degree to which goods and services conform to the intent of the designers […]

1) Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations. 2) An 80 percent learning curve means that with each doubling of repetitions there will be a 20 percent decrease in time […]

1) The primary purpose of statistical process control is to detect a defective product before it is shipped to a customer. 2) Repetitive processing systems usually produce goods specifically for customer orders rather than for inventory. Answer: FALSE Repetitive processing […]

1) Flexible acceptance sampling revises the sampling plan in response to actual results. 2) Decentralized purchasing can usually offer quicker response than centralized purchasing. Answer: TRUE Centralized purchasing can be more efficient, but decentralized purchasing can offer faster response. 3) […]

1) A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain. 2) Ideally, preventive maintenance will be performed before a breakdown or failure. Answer: TRUE This will result in the longest possible […]

1) When the task is fairly complex and has a longer duration, it will take a larger number of repetitions before improvement is observed. 2) When orders exceed our capacity, priority rules are used to select which orders will be […]

1) Activities not on the critical path have a slack time equal to zero. 2) An inventory buffer adds value and lowers cost in all supply chains. Answer: FALSE Many buffers increase costs across supply chains. 3) The fixed-order-interval model […]

1) Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy. 2) Line balancing is a major factor in the design and scheduling of low-volume systems […]

1) The optimum level of inspection occurs when we catch at least 98.6 percent of the defects. 2) The term failure as applied to reliability means that a part or item does not function at all. Answer: FALSE Failure means […]

1) Profit maximization, like cost minimization, could be an objective of an LP problem, but neither would be an actual decision variable. 2) If a point on a control chart falls outside one of the control limits, this suggests that […]

1) Because courtesy is subjective, it cannot be considered a factor in service quality. 2) Product layouts involve high utilization of labor and equipment. Answer: TRUE They’re used in high volume, standardized operations. 3) One therblig is the equivalent of […]

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. Answer: FALSE Aggregate […]

1) Services often don’t fit simple yield measurements. 2) The Baldrige award can only be won by manufacturing organizations. Answer: FALSE It can and has been won by service organizations. 3) The purpose of benchmarking is to establish a standard […]

1) In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage. 2) Mission statements should be as specific as possible regarding exactly how they will be accomplished. […]

1) The PDSA cycle forms the conceptual basis for continuous improvement. 2) To save money, it is essential that designers revise the production capabilities to meet the requirements of the new products. Answer: FALSE Saving money requires designers to ensure […]

1) Regardless of superior quality, consumers will not pay premium prices. 2) Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs. Answer: TRUE These are appraisal costs. 3) Control limits used on process control charts are […]

1) the two major types of receivables are interest receivable and taxes receivable. 2) qtopia electric company uses the direct method to prepare its statement of cash flows. it has reported operating expenses of $63,000 on its income statement for […]

1) if the historical cost of inventory is less than its current replacement cost, the business must write down the inventory cost. 2) a corporation is a separate legal entity and is organized independently of its owners. Answer: true 3) […]

1) benchmarking is often done by comparing a company against either a key competitor or against the industry average. 2) the unrealized holding gains and losses on available-for-sale investments are recorded as an adjustment to the unrealized holding gainavailable-for-sale account […]

1) gross pay is the total amount of compensation earned by an employee, after the deductions are made. 2) the amount of net cash flow from operating activities will be different in the direct and indirect methods when preparing the […]

1) on a multi-step income statement, both merchandisers and service companies report operating expenses in two categoriesselling expenses and administrative expenses. 2) the office supplies expense account is a temporary account. Answer: true 3) an asset account is increased by […]

1) operating activities on a statement of cash flows include activities that create revenue or expense in the entity’s business. 2) steve is an employee of panache inc. panache pays a portion of his health insurance premium, and also contributes […]

1) establishing controls for efficiency of the payroll process is one of the two key controls for payroll. 2) allen moving pictures company uses the indirect method to prepare its statement of cash flows. the treasury stock account had a […]

1) the investing activities section of the statement of cash flows includes activities that affect the long-term asset section of the balance sheet. 2) the balance sheet shows whether or not a business is earning profits. Answer: false 3) grace […]

1) benefits are extra compensationitems that are not paid directly to an employee. 2) if a merchandiser uses the periodic inventory system, it is necessary to conduct a physical count of inventory to determine the quantity of inventory on hand. […]

1) qtopia electric company uses the direct method to prepare its statement of cash flows. it has reported cost of goods sold of $85,000 on its income statement for the year 2015. if the balance in accounts payable, for inventory […]

1) the direct method of preparing the statement of cash flows provides a clearer way of analyzing cash flow information than the indirect method. 2) the post-closing trial balance shows the net income for the period just ended. Answer: false […]

1) the public company accounting oversight board oversees the work of auditors of public companies. 2) held-to-maturity investments are categorized as long-term assets on the balance sheet, irrespective of the maturity date. Answer: false 3) the asset turnover ratio is […]

1) plant assets are long-lived, tangible assets used in the operation of a business. 2) reversing entries are dated on the first day of the new accounting period. Answer: true 3) generally accepted accounting principles (gaap) require the use of […]

1) on the maturity date, the bondholder is paid the face amount of the bond plus the last interest payment. 2) burglar alarms, fire alarms, and security cameras improve internal control. Answer: true 3) cash in the bank is more […]