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1) Using third-party logistics involves using your organization's logistics function to
ship to customers that are not officially part of the supply chain.
2) Standardization refers to the extent to which there is absence of variety in a product,
service, or process.
3) In decision theory, states of nature refer to possible future conditions.
4) An example of an external factor that influences effective capacity is government
safety regulations.
5) Increasing compensation is always a way to improve worker satisfaction.
6) Nonzero slack or surplus is associated with a binding constraint.
7) The more current capacity exceeds desired capacity, the greater the opportunity for
profit.
8) A fundamental tenet of the lean philosophy is that workers are paid based on
seniority.
9) Two professors at a nearby university want to coauthor a new textbook in either
economics or statistics. They feel that if they write an economics book, they have a 50
percent chance of placing it with a major publisher, and it should ultimately sell about
40,000 copies. If they cannot get a major publisher to take it, then they feel they have
an 80 percent chance of placing it with a smaller publisher, with ultimate sales of
30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40
percent chance of placing it with a major publisher, and it should result in ultimate sales
of about 50,000 copies. If they cannot get a major publisher to take it, they feel they
have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of
35,000 copies.
What is the probability that the statistics book would wind up being placed with a
smaller publisher?
A..6
B..5
C..4
D..3
E.0
10) Why is there waiting in an infinite-source queuing system?
A.poor scheduling of servers
B.slow service
C.low utilization
D.variability in arrival and service rates
E.multiple-phase processing
11) Retail businesses often engage in ____________, the tendency to locate in close
proximity to one another.
A.centering
B.strategizing
C.clustering
D.localcasting
E.macromarketing
12) A multiple-channel system has customers arriving at an average rate of five per
hour and an average service time of 40 minutes. The minimum number of servers for
this system to be underloaded is:
A.2
B.3
C.4
D.5
E.6
13) The head of operations for a movie studio wants to determine which of two new
scripts they should select for their next major production. (Due to budgeting constraints,
only one new picture can be undertaken at this time.) She feels that script 1 has a 70
percent chance of earning about $10,000,000 over the long run, but a 30 percent chance
of losing $2,000,000. If this movie is successful, then a sequel could also be produced,
with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing
$1,000,000. On the other hand, she feels that script 2 has a 60 percent chance of earning
$12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel
would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of
losing $4,000,000. Of course, in either case, if the original movie were a flop, then no
sequel would be produced.
What is the expected value of selecting script 2?
A.$15,000,000
B.$9,060,000
C.$8,400,000
D.$7,200,000
E.$6,000,000
14) An electronics firm produces two models of pocket calculators: the A-100 (A),
which is an inexpensive four-function calculator, and the B-200 (B), which also features
square root and percent functions. Each model uses one (the same) circuit board, of
which there are only 2,500 available for this week's production. Also, the company has
allocated a maximum of 800 hours of assembly time this week for producing these
calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200
requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a
maximum of 4,000 A-100s this week and a maximum of 1,000 B-200s. Profits for the
A-100 are $1.00 each, and profits for the B-200 are $4.00 each. What is the objective
function?
A.$4.00A + $1.00B = Z
B.$0.25A + $1.00B = Z
C.$1.00A + $4.00B = Z
D.$1.00A + $1.00B = Z
E.$0.25A + $0.50B = Z
15) Which is not an area of significant difference between manufacturing and service
operations?
A.cost per unit
B.uniformity of output
C.labor content of jobs
D.customer contact
E.measurement of productivity
16) The chair of the operations management department at Quality University wants to
construct a p-chart for determining whether the four faculty teaching the basic P/OM
course are under control with regard to the number of students who fail the course.
Accordingly, he sampled 100 final grades from last year for each instructor, with the
following results:
What is the sample proportion of failures (p) for Prof. D?
A.0
B..04
C..11
D..13
E..16
17) Determine the center of gravity location for the following destinations and shipping
quantities:
18) Which of the following questions is least appropriate during value analysis?
A.How can we reduce the cost of parts?
B.How can we improve the performance of the product?
C.How can we incorporate more cultural values in the design of our global system?
D.Can we find a way to use less energy in the production of our product?
E.Could a given component in our product be simplified or combined with another?
19) A software company is weighing whether to release a new version of its software.
The company can go ahead and release the version now and correct flaws with
subsequent patches or upgrades, or it can wait until the new version is reasonably
bug-free. This is an example of:
A.life cycle analysis.
B.value analysis.
C.vaporware.
D.concurrent engineering.
E.design for production.
20) Focusing a supply chain on ________________ is a modern way of ensuring
high-quality inputs and a ready supply of process-improvement ideas.
A.lowest cost per unit sourced
B.close, collaborative ties with suppliers
C.suppliers that emphasize continuous-flow production
D.ISO 14000 customers
E.partners pursuing similar strategies
21) Which term most closely relates to associative forecasting techniques?
A.time series data
B.expert opinions
C.Delphi technique
D.consumer survey
E.predictor variables
22) In trend-adjusted exponential smoothing, the trend-adjusted forecast consists of:
A.an exponentially smoothed forecast and a smoothed trend factor.
B.an exponentially smoothed forecast and an estimated trend value.
C.the old forecast adjusted by a trend factor.
D.the old forecast and a smoothed trend factor.
E.a moving average and a trend factor.
23) A p-chart would be used to monitor:
A.average shrinkage.
B.dispersion in sample data.
C.the fraction defective.
D.the number of defects per unit.
E.the range of values.
24) Larger samples will require wider x-bar control limits because there is more data.
25) The owner of Firewood To Go is considering buying a hydraulic wood splitter
which sells for $50,000. He figures it will cost an additional $100 per cord to purchase
and split wood with this machine, while he can sell each cord of split wood for $125. If,
for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per
day, and actual output is expected to be 32 cords per day, what would be its efficiency?
A.100 percent
B.80 percent
C.75 percent
D.70 percent
E.0 percent
