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. Less than or equal to $500
b. More than $500 and less than or equal to $1,000
c. More than $1,000 and less than or equal to $1,500
d. More than $1,500 and less than or equal to $2,000
Answer:
Which lot sizing rule uses the economic order quantity (EOQ) calculation?
a. Both lot-for-lot (LFL) and periodic-order quantity (POQ) rules
b. Only fixed-order quantity (FOQ) rule
c. Only periodic-order quantity (POQ) rule
d. Both fixed-order quantity (FOQ) and periodic-order quantity (POQ) rules
Answer:
Consider the following information.
a. Which quarter, first or second, had the higher labor productivity (output quantity per
labor dollar input)?
b. Which quarter, first or second, had the higher material productivity (output quantity
per material dollar input)?
c. Which quarter, first or second, had the higher total productivity (dollar output per
total dollar input)?
Answer:
Consider the following assembly line information for manufacturing the latest cell
phone in Table 2. The firm wants to produce 80 cell phones per hour.
Table 2
The cycle time is _____ seconds.
a. 45
b. 60
c. 75
d. 100
Answer:
Which of the following is the correct sequence describing the evolution of operations
management?
a. Efficiency, customization, quality, service, sustainability, and time-based competition
b. Quality, efficiency, time-based competition, sustainability, customization, and service
c. Efficiency, quality, customization, time-based competition, service, and sustainability
d. Quality, service, customization, time-based competition, efficiency, and sustainability
Answer:
Based on Alternative Water SupplySingle Project case study, which of the following
statements is TRUE?
a. The Alternative Water Supply project completion time was 42 weeks.
b. Sustainability was not an issue in this case study.
c. The design for the intake and transmission main, along with the bid had to be
completed in 35 weeks.
d. Engineering design accounts for 50 percent of the total cost for the project designed
by Major Design Corporation (MDC).
Answer:
The total process (throughput) capacity in units per hour for the five stage process, A to
D, assuming 3 administrative clerks, 2 coding specialist, and 4 assistant managers on
duty is:
a. less than 10 units per hour.
b. more than 10 units but less than or equal to 20 units.
c. more than 20 units but less than or equal to 30 units.
d. more than 30 units but less than or equal to 40 units.
Answer:
A firm must make a choice between a manual and a semi-automatic production process
for a new product line. Following are the costs for each process:
a. Above what breakeven production quantity would the semi-automatic alternative be
preferred?
b. Which process is more economical for an annual production volume of 5,000 units?
c. Which process is more economical for an annual production volume of 9,000 units?
Answer:
Outsourcing is _____.
a. the same as offshoring
b. the opposite of vertical integration
c. the opposite of backward integration
d. the same as diversifying
Answer:
ISO 9000:2000 principles consist of all of the following EXCEPT:
a. involvement of people.
b. mutually beneficial supplier relationships.
c. zero defects.
d. system approach to management.
Answer:
In a decision tree, event nodes are denoted by _____.
a. rectangles
b. ovals
c. squares
d. circles
Answer:
To improve system reliability, one option is to:
a. use better components.
b. use more components in series.
c. use quality function deployment.
d. eliminate redundancy.
Answer:
In service organizations, capacity is more often viewed as _____.
a. the minimum rate of output per unit time
b. the units of resource availability
c. the ability to meet any customer demand
d. the amount of overtime scheduled
Answer:
Which one of the following statements is TRUE about vendor-managed inventory
(VMI)?
a. VMI is a form of outsourcing.
b. VMI accounts for substitutable products.
c. VMI results in lower customer inventories.
d. VMI is identical to pull systems.
Answer:
A pastry store wants to know how many dozens of muffins to bake each day. Every
dozen they sell fresh in the shop returns a profit of $5.00. Every dozen they bake but do
not sell on the day they are baked is given to a local charity at a loss of $00 a dozen.
The business is fairly stable in that they never sell less than 50 dozen nor more than 80
dozen muffins. Their sales history, rounded to the nearest ten dozen muffins is as
shown:
They want to run a ten-day simulation for production rates of 50, 60, 70, and 80 muffins
to determine the profit (loss) for each. They generated the following randomnumbers
for days 110 respectively: 63, 13, 67, 50, 71, 25, 44, 00, 56, and 68.
a. What range of random numbers corresponds to 70 muffins sold?
b. What is the profit for day 3 if they make 70 dozen muffins?
c. What is the average daily profit (for all ten days) corresponding to 60 dozen muffins
made?
Answer:
Southwest Airlines illustrates the application of lean principles when it _____.
a. reduces airplane turnaround time at airport gates
b. assigns airplane seats
c. serves all passengers in-flight dinners
d. charges a change of ticket fee for missing a scheduled flight
Answer:
A system design consisting of several parallel components that function independently
of each other and where the system fails only if all the parallel components fail is an
example of _____.
a. simplification
b. redundancy
c. deployment
d. sustainability
Answer:
Which of the following statements is TRUE of goods and services?
a. A variant is always a durable good with new features.
b. An automobile is a nondurable good.
c. Demand for goods is more difficult to predict than demand for services.
d. Normally, patents do not protect services.
Answer:
The county government has decided to redo the street and plans to block the street off
which causes considerable inconvenience to people. The project has three parallel paths
defined as follows: (i) path A-B-C-H to install street lights and electrical wiring that
takes 16 days, (ii) path A-D-E-H to install sidewalks with handicap capabilities that
takes 22 days, and (iii) path A-F-G-H to repave the street including storm drains that
takes 30 days. Which one of the following statements is TRUE?
a. The expected duration of the project is 30 + 22 + 16 = 68 days.
b. Path A-B-C-H is the critical path.
c. Path A-D-E-H has the largest slack time.
d. Path A-F-G-H is the critical path.
Answer:
Which of the following categories of the Malcolm Baldrige National Quality Award
Program examines how an organization fulfills its ethical, legal, and societal
responsibilities, and supports its key communities?
a. Leadership
b. Strategic planning
c. Customer focus
d. Results
Answer:
The Chester Table Company mass produces quality end tables for motels. They produce
5,000 end tables per week. The owner is trying to determine how many workers he
needs. The workers work 40 hours per week but are idle about three percent of the time
because of the cleaning of their area. Their performance rating is equal to one. The
owner has developed these time standards for operations per table:
Transporting the table through the plant = 2 minutes
Table top = 10 minutes
One leg = 4 minutes
Finishing = 5 minutes
a. How long does it take (in minutes) to produce one table?
b. What is the labor standard (in minutes) for this operation?
c. What is the minimum number of workers needed to produce 5000 tables in one
week?
Answer:
A manufacturing company needs to know whether to make in-house or buy a roller gear
assembly for its production of a new fax machine. The company expects to produce
9,000 units per year. The following estimates have been made:
The annual cost to make the roller gear assembly in-house is _____.
a. less than or equal to $30,000
b. more than $30,000 but less than or equal to $40,000
c. more than $40,000 but less than or equal to $50,000
d. more than $50,000 but less than or equal to $60,000
Answer:
Which of the following is NOT a statistical forecasting method?
a. Delphi
b. Exponential smoothing
c. Moving average
d. Linear regression
Answer:
How many administrative clerks should be hired assuming a target utilization of 90
percent?
a. One
b. Two
c. Three
d. Four
Answer:
The final step in using the House of Quality involves identifying those technical
features that meet any of the following criteria EXCEPT:
a. the strongest relationship to customer requirements.
b. the highest quality.
c. poor competitive performance.
d. strong selling points.
Answer:
Which of the following statements is NOT TRUE?
a. Inventory is any asset held for future use or sale.
b. When using ABC analysis, “C” items comprise of a small dollar value.
c. Stock keeping unit (SKU) is a single item or asset stored at multiple locations.
d. The lead time is the time between placement of an order and its receipt.
Answer:
Allowances include time for all of the following EXCEPT:
a. fatigue.
b. equipment breakdowns.
c. rest periods.
d. poor scheduling.
Answer:
Average safety capacity (%) is computed as:
a. Average resource utilization (%) − 100%.
b. 100% − Average resource utilization (%).
c. [maximum safety capacity (%) + minimum safety capacity (%)]/2.
d. 100% − maximum resource utilization (%).
Answer:
According to the input-output perspective, a value chain begins with _____.
a. feedback
b. processes
c. inputs
d. suppliers
Answer:
If A has a gross requirement to build 200 units and an on-hand inventory for A of 60,
determine the net requirement for D if its current on-hand inventory balance for D is
200 (all other components have no (zero) current inventory).
a. Less than or equal to 1,000 units
b. Greater than 1,000 but less than or equal to 1,500 units
c. Greater than 1,500 but less than or equal to 2,000 units
d. Greater than 2,000 but less than or equal to 2,500 units
Answer:
In ABC analysis, which of the following items typically comprise 60 to 80 percent of
total dollar usage but only 10 to 30 percent of the items?
a. A
b. B
c. C
d. B and C
Answer:
You are responsible for managing a project with the following activities (times are
given in weeks):
What is the total project (normal plus crash) cost?
a. Less than or equal to $60,000
b. Greater than $60,000 but less than or equal to $65,000
c. Greater than $65,000 but less than or equal to $70,000
d. Greater than $70,000
Answer:
_____ forecasts are needed to plan workforce levels, allocate budgets among divisions,
and schedule jobs and resources.
a. Long-range
b. Intermediate-range
c. Short-range
d. Demand planning
Answer:
Larger orders result in higher total holding cost but lower total ordering cost.
Answer:
A service-encounter design focuses on the interaction, directly and indirectly, between
the service provider(s) and a customer.
Answer:
A service encounter is any interaction between a customer and a service provider.
Answer:
Triage is a form of preemption.
Answer:
A Pelton turbine manufacturer currently has a 20 percent customer defection rate. Their
accounting department estimates the incremental contribution to profit and overhead as
40 percent. Customers purchase computers every four years at an average cost of
$2,000. In an effort to reduce the defection rate, the company is improving both the
quality of its computers and its post-sale service. Determine the increase in the average
value of a loyal customer if the defection rate drops to 10 percent.
Answer:
The average number of hotel rooms occupied per day during the month of March is
275. Rooms are booked on average for 2.5 days. On average, how many new bookings
occur each day?
Answer:
Answer:
In developing process control charts, if special causes are present, then they are not
representative of the true state of statistical control, and the calculations of the center
line and control limits will be biased.
Answer:
Discuss the role of technology in productivity.
Answer:
In sequencing a set of jobs on a single processor, different sequences will have different
makespans but the same average flow times.
Answer:
An assembly line normally operates two shifts a day, five days per week. Each shift can
produce 475 assemblies. What is the weekly capacity?
Answer:
A bottling machine fills soft drink bottles with an average of 12.000 ounces with a
standard deviation of 0.002 ounces. Determine the process capability index, Cp, if the
design specification for the fill weight of the bottles is 000 ounces plus or minus 0.015
ounces.
Answer:
The primary purpose of the Malcolm Baldrige National Quality Award Program is to
provide a framework for performance excellence through self-assessment to understand
an organization’s strengths and weaknesses, thereby setting priorities for improvement.
Answer:
In general, total ordering costs are equal to total inventory-holding cost for the optimal
solution to the economic order quantity (EOQ) model.
Answer:
Define lean thinking and the four principles of lean operating systems.
Answer:
Highgrove Industries must decide which process technology to adopt given the
information below.
Which one of the process technologies would you recommend they adopt based on
breakeven analysis if they wish to minimize demand risks?
Answer:
The constraint that requires the ending inventory from previous month plus current
production minus ending inventory of this month equals this month’s demand is known
as a demand requirement.
Answer:
Lean enterprise refers to approaches that focus primarily on the elimination of waste
throughout the value chain.
Answer: