In inventory models, high holding costs tend to favor high inventory Levels.
Answer:
The equation for exponential smoothing states that the new forecast is equal to the old
forecast plus the error of the old forecast.
Answer:
You time someone completing a single task the first time at 100 minutes and the fourth
time they do the task it takes 81 minutes. You should use an 81 percent learning curve
to estimate the length of time this worker will take to complete this task in the future.
Answer:
Poka-Yoke is roughly translated from Japanese as “Avoid Mistakes”.
Answer:
In a decision tree, the only time probabilities are applied to a decision node is when the
decision is being made by someone else such as your customer or your competitor.
Answer:
Two common measures to evaluate supply-chain efficiency are the consumer price
index and the beta flow system.
Answer:
The standard error of the estimate of a linear regression is not useful for judging the fit
between the data and the regression line when doing forecasts.
Answer:
The process when a company seeks to match the benefits of a successful position while
maintaining its existing position by adding new features, services and technologies into
its current portfolio it is called straddling.
Answer:
The deeper one looks into the product creation sequence, the more the requirements of
dependent demand items tend to become “lumpy”.
Answer:
A contract manufacturer is an organization capable of manufacturing and/or purchasing
all of the components needed to produce a finished product or device.
Answer:
Subcontracting is a common source of external capacity.
Answer:
Accurate medium-range planning increases the likelihood of operating within the limits
of a budget.
Answer:
When recovering from a defective service encounter a botched task calls for an apology.
Answer:
One of the competitive dimensions that form the competitive position of a company
when planning their strategies is cost.
Answer:
In job design, an attempt must be made to provide an optimal variety of tasks within
each job.
Answer:
While small business organizations can seek to achieve the Baldrige National Quality
Award health care organizations, like hospitals, can’t.
Answer:
Which of the following is the cost of quality classification for costs such as scrap,
rework or repair?
A.Appraisal costs
B.Prevention costs
C.External failure costs
D.Internal failure costs
E.Rework and wastage
Answer:
When considering outsourcing, what should firms be sure to avoid?
A.Losing control of non-core activities which don’t distinguish the firm
B.Allowing outsourcing to develop into a substitute for innovation
C.Giving the outsourcing partner the opportunity to become a strong competitor
D.Allowing employees transferred to the outsourcing partner to rejoin the firm
E.Adverse corporate tax implications of asset transfers to the outsourcing partner
Answer:
Which of the following cost categories includes any expense that is not incurred if an
investment is made but that must be incurred if the investment is not made?
A.Sunk costs
B.Avoidable costs
C.Opportunity costs
D.Variable costs
E.Fixed costs
Answer:
In designing a job it has been concluded that individuals or work groups require a
clearly defined, visible and meaningful set of work activities. This refers to which of the
following job design principles?
A.Automation of manual tasks
B.Task identity
C.Quality at the source
D.Temporary labor use
E.”Informating” ordinary workers
Answer:
According to the theory of constraints which of the following is a kind of time that
makes up the cycle time in production?
A.Quality time
B.Idle time
C.Research time
D.Just-in-time
E.Break time
Answer:
Which of the following is the planned-order release using an MRP program if the gross
requirement is 5,000 and the inventory on hand is 1,200?
A.5,000
B.4,500
C.3,800
D.1,200
E.None of the above
Answer:
A cost of quality classification is which of the following?
A.Material costs
B.Prevention costs
C.Variable overhead
D.Direct labor
E.Inventory costs
Answer:
Given a prior forecast demand value of 1,100, a related actual demand value of 1,000
and a smoothing constant alpha of 0.3, what is the exponential smoothing forecast
value?
A.1,000
B.1,030
C.1,070
D.1,130
E.970
Answer:
The general guidelines provided in the textbook on improving individual learning based
on learning curves includes which of the following?
A.Use a cumulative improvement factor
B.Use a unit improvement factor
C.Do one or very few jobs at a time
D.Explaining learning curve logarithm analysis to workers
E.Avoid feedback until the job is complete
Answer:
A company uses the straight-line method of depreciation to determine the annual
amount of an asset’s value to depreciate. If the cost of the item is $250,000, the salvage
Value is $10,000 and the estimated useful life is 8 years, which of the following is the
annual amount to be depreciated?
A.$10,000
B.$30,000
C.$32,500
D.$50,000
E.$240,000
Answer:
A process flowchart uses which of the following symbols to represent tasks or
operations in a flow diagram?
A.Rectangle
B.Arrow
C.Inverted triangle
D.Diamond
E.A dashed line
Answer:
Which of the following is a suggestion for managing queues that is mentioned in the
textbook?
A.Put up a serpentine lane to keep people from jumping ahead in line
B.Use humor to defuse a potentially irritating situation
C.Train your servers to be friendly
D.Assure customers that the wait is fair and inform them of the queue discipline
E.Tell people in the queue that each will be served as soon as possible
Answer:
In conducting aggregate operations planning there are a number of required inputs.
Which of the following are inputs considered external to the firm?
A.Competitors’ behavior and economic conditions
B.Market demand and inventory Levels
C.Subcontractor capacity and current workforce
D.Economic conditions and current physical capacity
E.Raw material availability and inventory Levels
Answer:
You have determined that a 75 percent learning curve is appropriate for a task. If the
initial timing of the person performing that job was 50 minutes and if you need the job
performed 500 times, how many minutes of work will be required?
A.25,000 minutes
B.3,184 minutes
C.1,895 minutes
D.1,379 minutes
E.636.8 minutes
Answer:
Which of the following methodologies takes the end product requirements from the
master production schedule and breaks them down into their component parts and
subassemblies to create a materials plan?
A.Rough-cut capacity planning
B.Materials requirement planning
C.Capacity requirements planning
D.Order scheduling
E.Inventory planning
Answer:
Which of the following is not a disadvantage of specialization?
A.Low wages due to ease of substitutability of labor
B.Difficulty in controlling quality because no one has responsibility for entire product
C.Boredom stemming from repetitive nature of work
D.Worker dissatisfaction leading to hidden costs
E.Little gratification from work itself because of small contribution to each item
Answer:
Which of the following is not a queue discipline discussed in the textbook?
A.First come, first served
B.Last in, first out
C.Limited needs
D.Shortest processing time
E.Best customer first
Answer:
A company’s production process has an 85 percent learning curve rate. The process has
produced 1,000 units to date. A process refinement is estimated to allow a future
learning curve rate for the identical product of 75 percent. However, the initial unit
made using the new process will take the same amount of time as the initial unit
produced using the old process. At what point, using the new process, will the
production rate exceed the production rate achieved by the old process?
A.By the 50th unit
B.By the 80th unit
C.By the 100th unit
D.By the 120th unit
E.By the 250th unit
Answer:
Which of the following forecasting methodologies is considered a causal forecasting
technique?
A.Market research
B.Historical analogy
C.Delphi Method
D.Input/output models
E.Simulation
Answer:
You are developing an “X-bar” chart based on sample means. You know the standard
deviation of the sample means is 4, the desired confidence level is 99 percent and the
average of the sample means is 20. Which of the following is your LCL?
A.36
B.24
C.9.68
D.16.79
E.30.32
Answer:
Which of the following forecasting methodologies is considered a time series
forecasting technique?
A.Box Jenkins technique
B.Econometrics
C.Leading indicators
D.Historical analogy
E.Simulation
Answer:
An assumption of learning curve theory is which of the following?
A.Unit time will decrease at a decreasing rate
B.Unit time will increase at a decreasing rate
C.Unit time will decrease at an increasing rate
D.Unit time will increase at an increasing rate
E.Unit time will hold constant
Answer:
“Dynamic models, usually computer-based, that allow the forecaster to make
assumptions about the internal variables and external environment in the model” is a
definition for which of the following forecasting methodologies?
A.Causal
B.Simulation
C.Focus forecasting
D.Shiskin Time series
E.Market research
Answer:
You have collected the data for a Time-Cost CPM Scheduling model analysis. The time
is in days and the project “direct costs” are given below.
The indirect costs for the project are determined on a daily duration basis. If the project
lasts 16 days the total indirect costs are $400, 15 days they will be $250, 14 days they
will be $200 and 13 days they will be $100. At what day do we achieve the lowest total
project cost (i.e., direct plus indirect costs)?
A.16 days
B.15 days
C.14 days
D.13 days
E.12 days
Answer:
A listing of immediate predecessor activities is important information in a single time
estimate CPM analysis for which of the following reasons?
A.It specifies the relationships in the CPM network of activities
B.It provides useful timing information
C.It includes cost information
D.It is the probability information required in the final step of CPM
E.None of the above
Answer:
Describe some of the generic differences between the production of goods and services?
Answer:
You are developing an “X-bar” chart based on sample means. You know the standard
deviation of the sample means is 4, the desired confidence level is 99.7 percent and the
average of the sample means is 24. What is your UCL?
Answer:
If the average aggregate inventory value is $4,000 and the cost of goods sold is
$104,000, what is the weeks of supply?
Answer:
In constructing a simulation model you decide that a particular property of the real
system should be represented by a fixed number. What is that property called?
Answer:
The Shingo system of quality control relies heavily on fail-safe procedures or devices
called what?
Answer:
Identify the five forces which help evaluate a firm’s competitive position in light of the
structure of its industry.
Answer:
What is the most common approach to determining the appropriate run length of a
simulation?
Answer:
If the pessimistic duration of an activity is 24, the most likely duration is 15 and the
optimistic duration is 6, what is the variance for the activity time when using CPM
analysis?
Answer: