Aims Final Study Guide

A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is a. three times as large b. one-third as large c. nine times as large d. one-ninth as large e. cannot be determined

b. one-third as large

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50 b. $2.00 c. $3.00 d. $150.00 e. not enough data to determine

c. $3.00

Which of the following statements regarding control of service inventories is true? a. Service inventory is a fictional concept, because services are intangible. b. Service inventory needs no safety stock, because there's no such thing as a service stockout. c. Effective control of all goods leaving the facility is one applicable technique. d. Service inventory has carrying costs but not setup costs. e. All of the above are true.

c. Effective control of all goods leaving the facility is one applicable technique.

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic? a. Gross Requirements b. Scheduled Receipts c. Projected On Hand d. Net Requirements e. Planned Order Receipts

c. Projected On Hand

In sensitivity analysis, a zero shadow price (or dual value) for a resource ordinarily means that a. the resource is scarce b. the resource constraint was redundant c. the resource has not been used up d. something is wrong with the problem formulation e. none of the above

c. the resource has not been used up

One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are) a. modular bills b. time phasing c. time fences d. lot sizing e. closed loop system

c. time fences

Which of the following is not an assumption of the economic order quantity model shown below? Q= (square root of) 2*D*S/ H a. Demand is known, constant, and independent. b. Lead time is known and constant. c. Quantity discounts are not possible. d. Production and use can occur simultaneously. e. The only variable costs are setup cost and holding (or carrying) cost.

d. Production and use can occur simultaneously.

If demand is not uniform and constant, then stockout risks can be controlled by a. increasing the EOQ b. placing an extra order c. raising the selling price to reduce demand d. adding safety stock e. reducing the reorder point

d. adding safety stock

Enterprise resource planning (ERP) a. seldom requires software upgrade or enhancement b. does not integrate well with functional areas other than operations c. is inexpensive to implement d. automates and integrates the majority of business processes e. all of the above

d. automates and integrates the majority of business processes

In job shop (make-to-order) operations, the master production schedule is usually expressed in a. end items b. modules c. kits d. customer orders e. warehouse orders

d. customer orders

Demand for a given item is said to be dependent if a. it originates from the external customer b. there is a deep bill of material c. the finished products are mostly services (rather than goods) d. there is a clearly identifiable parent e. the item has several children

d. there is a clearly identifiable parent

An item's holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 weeks. EPP is a. .005 b. 60 c. 72 d. 100 e. 200

e. 200

Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E? a. 4 b. 100 c. 200 d. 250 e. 300

e. 300

The minimum record accuracy required for successful MRP is approximately a. lower than 90% b. 90% c. 95% d. 97% e. 99%

e. 99%

Which of the following is consistent with a pure chase strategy? a. vary production levels to meet demand requirements b. vary work force to meet demand requirements c. vary production levels and work force to meet demand requirements d. little or no use of inventory to meet demand requirements e. All of the above are consistent with a pure chase strategy.

e. All of the above are consistent with a pure chase strategy.

Which of the following are elements of inventory holding costs? a. housing costs b. material handling costs c. investment costs d. pilferage, scrap, and obsolescence e. All of the above are elements of inventory holding cost.

e. All of the above are elements of inventory holding cost.

Enterprise resource planning (ERP) a. has been made possible because of advances in hardware and software b. uses client/server networks c. creates commonality of databases d. uses business application-programming interfaces (BAPI) to access their database e. All of the above are true of ERP.

e. All of the above are true of ERP.

A linear programming problem has two constraints 2X + 4Y = 100 and 1X + 8Y <=100, plus non- negativity constraints on X and Y. Which of the following statements about its feasible region is true? a. The points (100, 0) and (0, 25) both lie outside the feasible region. b. The two corner points are (33-1/3, 8-1/3) and (50, 0). c. The graphical origin (0, 0) is not in the feasible region. d. The feasible region is a straight line segment, not an area. e. All of the above are true.

e. All of the above are true.

Which of the following statements about the basic EOQ model is true? a. If the ordering cost were to double, the EOQ would rise. b. If annual demand were to double, the EOQ would increase. c. If the carrying cost were to increase, the EOQ would fall. d. If annual demand were to double, the number of orders per year would increase. e. All of the above statements are true.

e. All of the above statements are true.

Which of the following statements best compares modular bills and phantom bills? a. Both pertain to assemblies that are not inventoried. b. There is no difference between the two. c. Both pertain to assemblies that are inventoried. d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills. e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

The region which satisfies all of the constraints in graphical linear programming is called the a. area of optimal solutions b. area of feasible solutions c. profit maximization space d. region of optimality e. region of non-negativity

b. area of feasible solutions

The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order entry, purchasing, and direct interface with customers and suppliers is a. MRP II b. enterprise resource planning c. the master production schedule d. closed-loop MRP e. not yet technically possible

b. enterprise resource planning

A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is a. unchanged b. increased by less than 50% c. increased by 50% d. increased by more than 50% e. cannot be determined

b. increased by less than 50%

A maximizing linear programming problem has two constraints: 2X + 4Y < = 100 and 3X + 10Y <= 210, in addition to constraints stating that both X and Y must be nonnegative. The corner points of the feasible region of this problem are a. (0, 0), (50, 0), (0, 21), and (20, 15) b. (0, 0), (70, 0), (25, 0), and (15, 20) c. (20, 15) d. (0, 0), (0, 100), and (210, 0) e. none of the above

a. (0, 0), (50, 0), (0, 21), and (20, 15)

The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are a. 115 b. 175 c. 240 d. 690 e. 700

a. 115

A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level? a. 41 b. 55 c. 133 d. 140 e. 165

a. 41

Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E? a. 50 b. 100 c. 150 d. 200 e. 300

a. 50

Which of the following best differentiates material requirements planning (MRP) from finite capacity scheduling (FCS)? a. FCS recognizes the finite nature of capacity while MRP does not. b. FCS works in services while MRP does not. c. MRP requires time buckets while FCS does not. d. FCS is an input into traditional MRP systems. e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.

a. FCS recognizes the finite nature of capacity while MRP does not.

A linear programming problem has two constraints 2X + 4Y<= 100 and 1X + 8Y <= 100. Which of the following statements about its feasible region is true? a. There are four corner points including (50, 0) and (0, 12.5). b. The two corner points are (0, 0) and (50, 12.5). c. The graphical origin (0, 0) is not in the feasible region. d. The feasible region includes all points that satisfy one constraint, the other, or both. e. The feasible region cannot be determined without knowing whether the problem is to be minimized or maximized.

a. There are four corner points including (50, 0) and (0, 12.5).

Which of the following best describes a gross material requirements plan? a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started b. an intermediate range plan for the scheduling of families of products c. a chart illustrating whether capacity has been exceeded d. a table that corrects scheduled quantities for inventory on hand e. a schedule showing which products are to be manufactured and in what quantities

a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

The fixed-period inventory model requires more safety stock than the fixed-quantity models because a. a stockout can occur during the review period as well as during the lead time b. this model is used for products that have large standard deviations of demand c. this model is used for products that require very high service levels d. replenishment is not instantaneous e. setup costs and holding costs are large

a. a stockout can occur during the review period as well as during the lead time

The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. a. bill of material b. master production schedule c. inventory records d. assembly time chart e. net requirements chart

a. bill of material

Disaggregation a. breaks the aggregate plan into greater detail b. transforms the master production schedule into an aggregate plan c. calculates the optimal price points for yield management d. converts product schedules and labor assignments to a facility-wide plan e. is an assumption required for the use of the transportation model in aggregate planning

a. breaks the aggregate plan into greater detail

Which of the following aggregate planning strategies is a "demand option"? a. changing price b. subcontracting c. varying production levels d. changing inventory levels e. using part-time workers

a. changing price

In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of a. end items b. modules c. kits d. customer orders e. warehouse orders

a. end items

A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 80, 50, 40, and 90 units. Last quarter, the firm produced 60 units. If it uses level scheduling, the firm will. a. hire workers to permit production of 65 units per quarter for the next four quarters b. hire 20 workers c. have an increase in inventory of 20 units in the next quarter d. have a decrease in inventory of 5 units in the next quarter e. change its workforce each quarter so that inventory does not change

a. hire workers to permit production of 65 units per quarter for the next four quarters

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will a. increase by about 41% b. increase by 100% c. increase by 200% d. increase, but more data is needed to say by how much e. either increase or decrease

a. increase by about 41%

By convention, the top level in a bill of material is a. level 0 b. level 1 c. level T d. level 10 e. level 100

a. level 0

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. lot-for-lot b. EOQ c. part-period balancing d. the Wagner-Whitin algorithm e. All of the above are appropriate for the situation.

a. lot-for-lot

Which of the following lot-sizing techniques results in the lowest holding costs? a. lot-for-lot b. EOQ c. part-period balancing d. Wagner-Whitin algorithm e. the quantity discount model

a. lot-for-lot

In MRP, system nervousness is caused by a. management's attempt to continually respond to minor changes in production requirements b. the use of the lot-for-lot approach c. management's marking part of the master production schedule as "not to be rescheduled" d. the use of phantom bills of material e. management's attempt to evaluate alternative plans before making a decision

a. management's attempt to continually respond to minor changes in production requirements

The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

a. master production schedule

Planning tasks associated with loading, sequencing, expediting, and dispatching typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. mission-related planning e. strategic planning

a. short-range plans

Which of the following actions is consistent with the use of pure level strategy? a. use inventory to meet demand requirements b. vary the amount of subcontracting to meet demand requirements c. vary production levels to meet demand requirements d. vary work force to meet demand requirements e. none of the above

a. use inventory to meet demand requirements

For the two constraints given below, which point is in the feasible region of this maximization problem? (1)14x+6y<42 (2)x-y<3 a. x=2,y=1 b. x=1,y=5 c. x=-1,y=1 d. x=4,y=4 e. x=2,y=8

a. x=2,y=1

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total annual inventory costs. a. $400 b. $800 c. $1200 d. zero; this is a class C item e. cannot be determined because unit price is not known

b. $800

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order a. all 4000 units at one time b. 200 units per order c. every 20 days d. 10 times per year e. none of the above

b. 200 units per order

A production order quantity problem has daily demand rate = 10 and daily production rate = 50. The production order quantity for this problem is approximately 612 units. The average inventory for this problem is approximately a. 61 b. 245 c. 300 d. 306 e. 490

b. 245

A linear programming problem has three constraints: 2X + 10Y <= 100 4X + 6Y <= 120 6X + 3Y >= 90 What is the largest quantity of X that can be made without violating any of these constraints? a. 50 b. 30 c. 20 d. 15 e. 10

b. 30

The feasible region in the diagram below is consistent with which one of the following constraints? a. 8X1+4X2≤160 b. 8X1+4X2≥160 c. 4X1+8X2≤160 d. 8X1-4X2≤160 e. 4X1-8X2≤160

b. 8X1+4X2≥160

Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is ______ weeks. a. 6 b. 9 c. 12 d. 18 e. 28

b. 9

Which of the following statements about aggregate planning is false? a. Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity. b. Aggregate planning produces a plan detailing which products are made and in what quantities. c. Yield management is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. The transportation method is an optimizing technique for aggregate planning.

b. Aggregate planning produces a plan detailing which products are made and in what quantities.

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? a. One hundred is the reorder point, and 14 is the order quantity. b. Fourteen is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. Fourteen is the safety stock, and 100 is the reorder point. e. None of the above is true.

b. Fourteen is the reorder point, and 100 is the order quantity.

Which of the following statements regarding the production order quantity model is true? a. It applies only to items produced in the firm's own production departments. b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant. d. It minimizes the total production costs. e. It minimizes inventory.

b. It relaxes the assumption that all the order quantity is received at one time.

A maximizing linear programming problem with variables X and Y and constraints C1, C2, and C3 has been solved. The dual values (not the solution quantities) associated with the problem are X = 0, Y = 0, C1 = $2, C2 = $0.50, and C3 = $0. Which statement below is false? a. One more unit of the resource in C1 would add $2 to the objective function value. b. One more unit of the resource in C2 would add one more unit each of X and Y. c. The resource in C3 has not been used up d. The resources in C1 and in C2, but not in C3, are scarce. e. All of the above are true.

b. One more unit of the resource in C2 would add one more unit each of X and Y.

A linear programming problem contains a restriction that reads "the quantity of S must be no less than one-fourth as large as T and U combined." Formulate this as a constraint ready for use in problem solving software. a. S/(T+U) >= 4 b. S-.25T-.25U >= 0 c. 4S <= T+U d. S >= 4T/4U e. none of the above

b. S-.25T-.25U >= 0

Which of the following statements regarding Amazon.com is false? a. The company was opened by Jeff Bezos in 1995. b. The company was founded as, and still is, a "virtual retailer" with no inventory. c. The company is now a world-class leader in warehouse management and automation. d. The company uses both United Parcel Service and the U.S. Postal Service as shippers. e. Amazon obtains its competitive advantage through inventory management.

b. The company was founded as, and still is, a "virtual retailer" with no inventory.

Which of the following statements is true about the MRP plan when using lot-for-lot ordering? a. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. e. All of the above are true.

b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.

Which of the following statements regarding lot-sizing is true? a. EOQ principles should be followed whenever economical. b. Too much concern with lot-sizing results in false accuracy. c. Lot-for-lot cannot be modified for scrap allowance or process constraints. d. The Wagner-Whitin algorithm simplifies lot size calculations. e. All of the above are true

b. Too much concern with lot-sizing results in false accuracy.

Which of the following sets of constraints results in an unbounded maximizing problem? a. X+Y>100andX+Y<50 b. X+Y>15andX-Y<10 c. X+Y<10andX>5 d. X<10andY<20 e. All of the above have a bounded maximum.

b. X+Y>15andX-Y<10

Distribution resource planning (DRP) is a. a transportation plan to ship materials to warehouses b. a time-phased stock replenishment plan for all levels of a distribution network c. a shipping plan from a central warehouse to retail warehouses d. material requirements planning with feedback loop from distribution centers e. a material requirements planning package used exclusively by warehouses

b. a time-phased stock replenishment plan for all levels of a distribution network

Which of these is among the demand options of aggregate planning? a. subcontracting b. back-ordering during high-demand periods c. changing inventory levels d. varying workforce size e. All of the above are demand options.

b. back-ordering during high-demand periods

The phrase "demand related to the demand for other products" describes a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

b. dependent demand

Which choice below best describes the counterseasonal demand option? a. producing such products as lawnmowers and sunglasses during the winter b. developing a mix of products that smoothes out their demands c. lowering prices when demand is slack d. using subcontractors only when demand is excessive e. the breaking of the aggregate plan into finer levels of detail

b. developing a mix of products that smoothes out their demands

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n) a. modular bill b. engineering change notice c. resource requirements profile d. lead time-offset product structure document e. planning bill

b. engineering change notice

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. demand options e. strategic planning

b. intermediate-range plans

Firms making many different final products use __________ to facilitate production scheduling. a. planning bills b. modular bills c. phantom bills d. overdue bills e. none of the above

b. modular bills

Using the graphical solution method to solve a maximization problem requires that we a. find the value of the objective function at the origin b. move the iso-profit line to the highest level that still touches some part of the feasible region c. move the iso-cost line to the lowest level that still touches some part of the feasible region d. apply the method of simultaneous equations to solve for the intersections of constraints e. none of the above

b. move the iso-profit line to the highest level that still touches some part of the feasible region

Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency e. assumes that the most frequently used items must be counted more frequently

b. provides a measure of inventory accuracy

A master production schedule contains information about a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

b. quantities and required delivery dates of final products

For the lot-sizing technique known as lot-for-lot to be appropriate a. future demand should be known for several weeks b. setup cost should be relatively small c. annual volume should be rather low d. item unit cost should be relatively small e. the independent demand rate should be very stable

b. setup cost should be relatively small

Dependence on an external source of supply is found in which of the following aggregate planning strategies? a. varying production rates through overtime or idle time b. subcontracting c. using part-time workers d. back ordering during high demand periods e. hiring and laying off

b. subcontracting

In aggregate planning, which one of the following is not a basic option for altering demand? a. promotion b. subcontracting c. back ordering d. pricing e. All are demand options.

b. subcontracting

Which of the following aggregate planning strategies might direct your client to a competitor? a. using part-time workers b. subcontracting c. changing inventory level d. varying production rates through overtime or idle time e. varying work force size by hiring or layoffs

b. subcontracting

Aggregate planning is capacity planning for a. the long range b. the intermediate range c. the short range d. typically one to three months e. typically three or more years

b. the intermediate range

Material requirements plans specify a. the quantities of the product families that need to be produced b. the quantity and timing of planned order releases c. the capacity needed to provide the projected output rate d. the costs associated with alternative plans e. whether one should use phantom bills of material or not

b. the quantity and timing of planned order releases

ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high d. more time should be spent on class "C" items because there are more of them e. an item is critical if its unit price is high

b. there are usually a few critical items, and many items which are less critical

An advantage of the fixed-period inventory system is that a. the supplier will be more cooperative b. there is no physical count of inventory items when an item is withdrawn c. no inventory records are required d. orders usually are for smaller order quantities e. the average inventory level is reduced

b. there is no physical count of inventory items when an item is withdrawn

Which of these aggregate planning strategies adjusts capacity to match demand? a. back ordering b. using part-time workers c. counterseasonal product mixing d. changing price e. None of the above is a capacity option.

b. using part-time workers

What combination of x and y will yield the optimum for this problem? Maximize $3x + $15y, subject to (1) 2x + 4y < 12 and (2) 5x + 2y < 10. a. x=2,y=0 b. x=0,y=3 c. x=0,y=0 d. x=1,y=5 e. none of the above

b. x=0,y=3

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and firing costs will be a. $500 b. $2,500 c. $7,500 d. $7,000 e. $12,500

c. $7,500

A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 16 b. 70 c. 110 d. 183 e. 600

c. 110

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is _____ days. a. 6 b. 9 c. 13 d. 17 e. cannot be determined

c. 13

If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, 90 percent service level will require safety stock of approximately a. 7 units b. 10 units c. 13 units d. 16 units e. 26 units

c. 13 units

In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per unit per month, the economic order quantity is approximately a. 24 b. 100 c. 141 d. 490 e. 600

c. 141

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. The standard deviation of demand during lead time is approximately a. 15 units b. 100 units c. 154 units d. 500 units e. 13,125 units

c. 154 units

The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are a. 20 b. 120 c. 180 d. 240 e. 440

c. 180

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately a. 139 b. 174 c. 184 d. 365 e. 548

c. 184

Which of the following represents valid constraints in linear programming? a. 2X ≥ 7X*Y b. 2X*7Y≥500 c. 2X+7Y≥100 d. 2X2+7Y≥50 e. All of the above are valid linear programming constraints.

c. 2X+7Y≥100

The typical time horizon for aggregate planning is a. less than a month b. up to 3 months c. 3 to 18 months d. over one year e. over 5 years

c. 3 to 18 months

The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are a. 150 b. 170 c. 300 d. 320 e. 440

c. 300

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately a. 28 units b. 30 units c. 49 units d. 59 units e. 114 units

c. 49 units

Given the following bill of material If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed? a. 3 b. 40 c. 70 d. 90 e. 110

c. 70

Which of the following statements about aggregate planning is true? a. The development of mathematical models has allowed aggregate planners to discontinue use of trial-and-error methods. b. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. c. A pure chase strategy allows lower inventories when compared to pure level scheduling. d. Disaggregation turns the master production schedule into an intermediate term master plan. e. All of the above are true.

c. A pure chase strategy allows lower inventories when compared to pure level scheduling.

Which of the following statements regarding aggregate planning is true? a. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. b. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. c. In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon. d. Because service firms have no inventory, the pure chase strategy does not apply. e. All of the above are true.

c. In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon.

Which of the following is false concerning enterprise resource planning (ERP)? a. It attempts to automate and integrate the majority of business processes. b. It shares common data and practices across the enterprise. c. It is inexpensive to implement. d. It provides and accesses information in a real-time environment. e. All of the above are true.

c. It is inexpensive to implement.

MRP II is accurately described as a. MRP software designed for services b. MRP with a new set of computer programs that execute on microcomputers c. MRP augmented by other resource variables d. an enhancement of MRP that plans for all levels of the supply chain e. a new generation of MRP software that extends MRP to planning and scheduling functions

c. MRP augmented by other resource variables

A linear programming problem contains a restriction that reads "the quantity of Q must be no larger than the sum of R, S, and T." Formulate this as a constraint ready for use in problem solving software. a. Q+R+S+T <= 4 b. Q >= R+S+T c. Q-R-S-T <= 0 d. Q/(R+S+T) <= 0 e. none of the above

c. Q-R-S-T <= 0

Which of the following statements regarding Wheeled Coach is false? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

Low level coding means that a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above

c. a component item is coded at the lowest level at which it appears in the BOM structure

Which of the following is not one of the four things needed for aggregate planning? a. a logical overall unit for measuring sales and output b. a method for determining costs, such as hiring, firing, and inventory costs, associated with production schedules c. a mathematical model that will minimize costs over the intermediate planning period d. an aggregate demand forecast for an intermediate planning period e. All of these are needed for aggregate planning.

c. a mathematical model that will minimize costs over the intermediate planning period

What combination of a and b will yield the optimum for this problem? Maximize $6a + $15b, subject to (1) 4a + 2b < 12 and (2) 5a + 2b < 20. a. a=0,b=0 b. a=3,b=3 c. a=0,b=6 d. a=6,b=0 e. cannot solve without values for a and b

c. a=0,b=6

A bill of material lists the a. times needed to perform all phases of production b. production schedules for all products c. components, ingredients, and materials required to produce an item d. operations required to produce an item e. components, ingredients, materials, and assembly operations required to produce an item

c. components, ingredients, and materials required to produce an item

Which of the following is not an ingredient for controlling labor cost in services? a. accurate scheduling of labor-hours to assure quick response to customer demand b. an on-call labor resource that can be added or deleted to meet unexpected demand c. contract overseas labor to obtain a lower wage scale d. flexibility of individual worker skills that permits reallocation of available labor e. flexibility in rate of output or hours of work to meet changing demand

c. contract overseas labor to obtain a lower wage scale

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand Q= (square root of) 2*D*S/ H a. is smaller the smaller is the holding cost per unit b. is zero c. is one-half of the economic order quantity d. is affected by the amount of product cost e. All of the above are true.

c. is one-half of the economic order quantity

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that a. the January requirement is below level production of 420 units b. level production is approximately 1000 units per day c. level production of 420 units per day is below the January requirement d. level production is approximately 420 units per month e. the firm must hire workers between December and January

c. level production of 420 units per day is below the January requirement

The following table is an example of a(n) Week 1 2 3 4 5 Clothes Washer200 100 Clothes Dryer300,100, 100 100 Upright Freezer 200 500 a. aggregate plan b. load report c. master production schedule d. capacity plan e. inventory record

c. master production schedule

Which of the following is not an advantage of level scheduling? a. stable employment b. lower absenteeism c. matching production exactly with sales d. lower turnover e. more employee commitment

c. matching production exactly with sales

A firm makes two products, Y and Z. Each unit of Y costs $10 and sells for $40. Each unit of Z costs $5 and sells for $25. If the firm's goal were to maximize sales revenue, the appropriate objective function would be a. maximize $40Y = $25Z b. maximize $40Y + $25Z c. maximize $30Y + $20Z d. maximize 0.25Y + 0.20Z e. none of the above

c. maximize $30Y + $20Z

In linear programming, a statement such as "maximize contribution" becomes a(n) a. constraint b. slack variable c. objective function d. violation of linearity e. decision variable

c. objective function

Linking a part requirement with the parent component that caused the requirement is referred to as a. net requirements planning b. a time fence c. pegging d. kanban e. leveling

c. pegging

In level scheduling, what is kept uniform from month to month? a. product mix b. inventory levels c. production/workforce levels d. demand levels e. sub-contracting levels

c. production/workforce levels

Which of the following is not associated with manipulation of product or service demand? a. price cuts or discounts b. promotion c. subcontracting d. counterseasonal products or services e. advertising

c. subcontracting

A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles. Some assemblies and parts are common to many end items. To relieve the MPS of performing order releases on these common parts, the firm might choose to use the __________ technique. a. Wagner-Whitin b. economic part period c. supermarket d. gross material requirements e. resource requirements profile

c. supermarket

A material requirements plan contains information with regard to all of the following except a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. the capacity needed to provide the projected output rate d. inventory on hand for each final product e. inventory on hand for each subassembly

c. the capacity needed to provide the projected output rate

A shadow price (or dual value) reflects which of the following in a maximization problem? a. the marginal gain in the objective realized by subtracting one unit of a resource b. the market price that must be paid to obtain additional resources c. the increase in profit that would accompany one added unit of a scarce resource d. the reduction in cost that would accompany a one unit decrease in the resource e. none of the above

c. the increase in profit that would accompany one added unit of a scarce resource

Which of the following aggregate planning models is based primarily upon a manager's past experience? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

c. the management coefficients model

If a load report (resource requirements profile) shows a work center scheduled beyond capacity a.the company must add capacity by enlarging the facility b. the company must add capacity by such tactics as overtime and subcontracting c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting d. the aggregate plan must be revised e. the Wagner-Whitin algorithm should be used to rebalance the load

c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting

The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level e. ordering cost and carrying cost

c. timing and quantity of orders

Most inventory models attempt to minimize a. the likelihood of a stockout b. the number of items ordered c. total inventory based costs d. the number of orders placed e. the safety stock

c. total inventory based costs

A master production schedule specifies a. the raw materials required to complete the product b. what component is to be made, and when c. what product is to be made, and when d. the labor hours required for production e. the financial resources required for production

c. what product is to be made, and when

What combination of x and y will yield the optimum for this problem? Minimize $3x + $15y, subject to (1) 2x + 4y < 12 and (2) 5x + 2y < 10. a. x=2,y=0 b. x=0,y=3 c. x=0,y=0 d. x=1,y=5 e. none of the above

c. x=0,y=0

A linear programming problem has three constraints: 2X + 10Y <= 100 4X + 6Y <= 120 6X + 3Y <= 90 What is the largest quantity of X that can be made without violating any of these constraints? a. 50 b. 30 c. 20 d. 15 e. 10

d. 15

The feasible region in the diagram below is consistent with which one of the following constraints? a. 8X1+4X2≥160 b. 4X1+8X2≤160 c. 8X1-4X2≤160 d. 8X1+4X2≤160 e. 4X1-8X2≤160

d. 8X1+4X2≤160

Which of the following statements about ABC analysis is false? a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. e. All of the above statements are true.

d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings

Which of the following statements about aggregate planning is true? a. Advertising/promotion is a way of manipulating product or service supply. b. Work station loading and job assignments are examples of aggregate planning. c. Overtime/idle time is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. All of the above are true.

d. Aggregate planning uses the adjustable part of capacity to meet production requirements.

Which of these statements about the production order quantity model is false? a. The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous. b. Because receipt is noninstantaneous, some units are used immediately, not stored in inventory. c. Average inventory is less than one-half of the production order quantity. d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity. e. None of the above is false.

d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.

Dependent demand and independent demand items differ in that a. for any product, all components are dependent-demand items b. the need for independent-demand items is forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.

d. All of the above are true.

Which of the following statements about the basic EOQ model is false? a. If the setup cost were to decrease, the EOQ would fall. b. If annual demand were to increase, the EOQ would increase. c. If the ordering cost were to increase, the EOQ would rise. d. If annual demand were to double, the EOQ would also double. e. All of the above statements are true.

d. If annual demand were to double, the EOQ would also double.

Which choice best describes level scheduling? a. Daily production is variable from period to period. b. Subcontracting, hiring, and firing manipulate supply. c. Price points are calculated to match demand to capacity. d. Inventory goes up or down to buffer the difference between demand and production. e. Seasonal demand fluctuations are matched without hirings or layoffs.

d. Inventory goes up or down to buffer the difference between demand and production.

Which of the following statements regarding Anheuser-Busch is false? a. Aggregate planning is a major part of its competitive edge. b. All four stages of beer production are integrated into the aggregate plan. c. High facility utilization complements its successful aggregate planning. d. Its aggregate planning focuses entirely on facilities, ignoring employee issues. e. Even with excellent aggregate planning, its plants need to have high utilization.

d. Its aggregate planning focuses entirely on facilities, ignoring employee issues.

Which of the following statements regarding MRP in services is true? a. MRP is for manufacturing only, and is not applicable to services. b. MRP can be used in services, but only those that offer very limited customization. c. MRP does not work in services because there is no dependent demand. d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. e. None of the above is true

d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.

A linear programming problem has two constraints 2X + 4Y>= 100 and 1X + 8Y <= 100. Which of the following statements about its feasible region is true? a. There are four corner points including (50, 0) and (0, 12.5). b. The two corner points are (0, 0) and (50, 12.5). c. The graphical origin (0, 0) is in the feasible region. d. The feasible region is triangular in shape, bounded by (50, 0), (33-1/3, 8-1/3), and (100, 0). e. The feasible region cannot be determined without knowing whether the problem is to be minimized or maximized.

d. The feasible region is triangular in shape, bounded by (50, 0), (33-1/3, 8-1/3), and (100, 0).

Which of the following statements about quantity discounts is false? a. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. b. In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available. c. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. d. The larger annual demand, the less attractive a discount schedule will be. e. The smaller the ordering cost, the less attractive a discount schedule will be.

d. The larger annual demand, the less attractive a discount schedule will be.

A linear programming maximization problem has been solved. In the optimal solution, two resources are scarce. If an added amount could be found for only one of these resources, how would the optimal solution be changed? a. The shadow price of the added resource will rise. b. The solution stays the same; the extra resource can't be used without more of the other scarce resource. c. The extra resource will cause the value of the objective to fall. d. The optimal mix will be rearranged to use the added resource, and the value of the objective function will rise. e. none of the above

d. The optimal mix will be rearranged to use the added resource, and the value of the objective function will rise.

A maximizing linear programming problem with variables X and Y and constraints C1, C2, and C3 has been solved. The dual values (not the solution quantities) associated with the problem are X = 0, Y = $10, C1 = $2, C2 = $0.50, and C3 = $0. Which statement below is true? a. One more unit of the resource in C1 would reduce the objective function value by $2. b. One more unit of the resource in C2 would add one-half unit each of X and Y. c. The resources in C1 and C2 have not been used up. d. The optimal solution makes only X; the quantity of Y must be zero. e. All of the above are true.

d. The optimal solution makes only X; the quantity of Y must be zero.

Which of the following combinations of constraints has no feasible region? a. X+Y>15andX-Y<10 b. X+Y>5andX>10 c. X>10andY>20 d. X+Y>100andX+Y<50 e. All of the above have a feasible region.

d. X+Y>100andX+Y<50

A linear programming problem contains a restriction that reads "the quantity of X must be at least three times as large as the quantity of Y." Which of the following inequalities is the proper formulation of this constraint? a. 3X >=Y b. X <=3Y c. X+Y >= 3 d. X-3Y >=0 e. 3X <=Y

d. X-3Y >=0

Which of the following is the term used for medium range capacity planning with a time horizon of three to eighteen months? a. material requirements planning b. short-range planning c. strategic planning d. aggregate planning e. none of the above

d. aggregate planning

Among the advantages of cycle counting is that it a. makes the annual physical inventory more acceptable to management b. does not require the detailed records necessary when annual physical inventory is used c. does not require highly trained people d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory e. does not need to be performed for less expensive items

d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory

"Yield management" is best described as a. a situation where management yields to labor demands b. a situation where the labor union yields to management demands c. a process designed to increase the rate of output d. capacity allocation to different classes of customers in order to maximize profits e. management's selection of a product mix yielding maximum profits

d. capacity allocation to different classes of customers in order to maximize profits

Which of the following aggregate planning strategies is a "capacity option"? a. influencing demand by changing price b. counterseasonal product mixing c. influencing demand by extending lead times d. changing inventory levels e. influencing demand by back ordering

d. changing inventory levels

The purpose of safety stock is to a. replace failed units with good ones b. eliminate the possibility of a stockout c. eliminate the likelihood of a stockout due to erroneous inventory tally d. control the likelihood of a stockout due to the variability of demand during lead time e. protect the firm from a sudden decrease in demand

d. control the likelihood of a stockout due to the variability of demand during lead time

The corner point solution method requires a. finding the value of the objective function at the origin b. moving the iso-profit line to the highest level that still touches some part of the feasible region c. moving the iso-profit line to the lowest level that still touches some part of the feasible region d. finding the coordinates at each corner of the feasible solution space e. none of the above

d. finding the coordinates at each corner of the feasible solution space

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. In following the chase strategy, the firm will a. add 100 units to inventory in the next period b. add 200 units to inventory in the next period c. hire workers to make up the 100 unit difference d. fire workers to make up the 200 unit difference e. implement a lower price point to increase demand

d. fire workers to make up the 200 unit difference

The EOQ model with quantity discounts attempts to determine a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price c. whether to use fixed-quantity or fixed-period order policy d. how many units should be ordered e. what is the shortest lead time

d. how many units should be ordered

In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket a. signals the need to purchase that end item in that period b. implies that value was scheduled by the MPS c. signals the need for a negative planned order receipt in that period d. is impossible e. All of the above are true.

d. is impossible

All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle d. it states that all items require the same degree of control e. it states that there are the critical few and the trivial many inventory items

d. it states that all items require the same degree of control

Which of the following uses regression to incorporate historical managerial performance into aggregate planning? a. transportation method b. simulation c. linear decision rule d. management coefficients model e. keiretsu

d. management coefficients model

A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n) a. net requirements document b. resource requirements profile c. aggregate plan d. master production schedule e. Wagner-Whitin finite capacity document

d. master production schedule

All of the following are advantages of enterprise resource planning (ERP) except it a. creates commonality of databases b. increases communications and collaboration worldwide c. helps integrate multiple sites and business units d. requires major changes in the company and its processes to implement e. can provide a strategic advantage over competitors

d. requires major changes in the company and its processes to implement

Which of the following is not one of the four main types of inventory? a. raw material inventory b. work-in-process inventory c. maintenance/repair/operating supply inventory d. safety stock inventory e. All of these are main types of inventory.

d. safety stock inventory

The proper quantity of safety stock is typically determined by a. minimizing an expected stockout cost b. carrying sufficient safety stock so as to eliminate all stockouts c. meeting 95% of all demands d. setting the level of safety stock so that a given stockout risk is not exceeded e. minimizing total costs

d. setting the level of safety stock so that a given stockout risk is not exceeded

A disadvantage of the fixed-period inventory system is that a. it involves higher ordering costs than the fixed quantity inventory system b. additional inventory records are required c. the average inventory level is decreased d. since there is no count of inventory during the review period, a stockout is possible e. orders usually are for larger quantities

d. since there is no count of inventory during the review period, a stockout is possible

The number of units projected to be available at the end of each time period refers to a. net requirements b. scheduled receipts c. the projected usage of the item d. the amount projected to be on hand e. the amount necessary to cover a shortage

d. the amount projected to be on hand

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

d. the transportation method

Which of the following aggregate planning methods does not work if hiring and layoffs are possible? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

d. the transportation method

Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to minimize holding costs e. All of the above are functions of inventory.

d. to minimize holding costs

The primary purpose of the basic economic order quantity model shown below is Q= (square root of) 2*D*S/ H a. to calculate the reorder point, so that replenishments take place at the proper time b. to minimize the sum of carrying cost and holding cost c. to maximize the customer service level d. to minimize the sum of setup cost and holding cost e. to calculate the optimum safety stock

d. to minimize the sum of setup cost and holding cost

Which of the following aggregate planning strategies is known to lower employee morale? a. yield management b. counterseasonal product and service mixing c. changing inventory levels d. varying work force size by hiring or layoffs e. back ordering during high demand periods

d. varying work force size by hiring or layoffs

For the two constraints given below, which point is in the feasible region of this minimization problem? (1)14x+6y>42 (2)x-y>3 a. x=-1,y=1 b. x=0,y=4 c. x=2,y=1 d. x=5,y=1 e. x=2,y=0

d. x=5,y=1

Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory.

e. All of the above are functions of inventory.

Which of the following is not consistent with a pure level strategy? a. varying the use of subcontracting b. variable work force levels c. little or no use of inventory to meet demand requirements d. varying production levels and/or work force to meet demand requirements e. All of the above are inconsistent with the pure level strategy.

e. All of the above are inconsistent with the pure level strategy

Capacity planning in closed-loop MRP a. utilizes feedback about workload from each work center b. may make use of resource requirements profiles (load reports) c. may smooth work center loads with such tactics as overlapping and lot splitting d. does not add capacity, but rather seeks effective use of existing capacity e. All of the above are true.

e. All of the above are true.

Which of the following regarding enterprise resource planning (ERP) is true? a. It involves an ongoing process for implementation. b. It can incorporate improved, reengineered "best processes." c. It has a software database that is off-the-shelf coding. d. ERP systems usually include MRP, financial and human resource information. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the gross material requirements plan is true? a. It shows total demand for an item. b. It shows when an item must be ordered from a supplier or when production must be started. c. It combines a master production schedule with the time-phased schedule. d. It requires several inputs, including an accurate bill of material. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the reorder point is true? a. The reorder point is that quantity that triggers an action to restock an item. b. There is a reorder point even if lead time and demand during lead time are constant. c. The reorder point is larger than d x L if safety stock is present. d. The fixed-period model has no reorder point. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding aggregate planning in services is false? a. When outputs are intangible, aggregate planning deals mainly with human resources requirements and managing demand. b. Perishability of inventory is an important consideration of planning. c. Aggregate planning in some service industries can be simpler than in manufacturing. d. Labor is the primary aggregate planning vehicle. e. Level scheduling is far more common than chase.

e. Level scheduling is far more common than chase.

Distortion in MRP systems can be minimized when safety stock is held at the a. purchased component or raw material level b. work-in-process level c. finished goods level d. a and b e. a and c

e. a and c

An iso-profit line a. can be used to help solve a profit maximizing linear programming problem b. is parallel to all other iso-profit lines in the same problem c. is a line with the same profit at all points d. none of the above e. all of the above

e. all of the above

The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above

e. all of the above

Yield management is most likely to be used in which one of the following situations? a. a fast food restaurant with wide demand fluctuations during the day b. a dental clinic that wants to fill its appointment book c. a firm with a good counterseasonal product mix d. a shipping company that can change its fleet size easily e. an airline attempting to fill "perishable" seats at maximum revenue

e. an airline attempting to fill "perishable" seats at maximum revenue

ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality b. unit price c. the number of units on hand d. annual demand e. annual dollar volume

e. annual dollar volume

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _____ weeks. a. 6 b. 7 c. 8 d. 10 e. cannot be determined

e. cannot be determined

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock? a. 8 units b. 10 units c. 16 units d. 64 units e. cannot be determined without lead time data

e. cannot be determined without lead time data

The bill of material contains information necessary to a. place an order to replenish the item b. calculate quantities on hand and on order c. convert net requirements into higher level gross requirements d. convert gross requirements into net requirements e. convert (explode) net requirements at one level into gross requirements at the next level

e. convert (explode) net requirements at one level into gross requirements at the next level

Which of these is not a characteristic that makes yield management attractive? a. demand can be segmented b. service can be sold in advance of consumption c. capacity is easily changed d. variable costs are low and fixed costs are high e. demand fluctuates

e. demand fluctuates

Which of the following is not a requirement of a linear programming problem? a. an objective function, expressed in terms of linear equations b. constraint equations, expressed as linear equations c. an objective function, to be maximized or minimized d. alternative courses of action e. for each decision variable, there must be one constraint or resource limit

e. for each decision variable, there must be one constraint or resource limit

When quantity discounts are allowed, the cost-minimizing order quantity a. is always an EOQ quantity b. minimizes the sum of holding and ordering costs c. minimizes the unit purchase price d. may be a quantity below that at which one qualifies for that price e. minimizes the sum of holding, ordering, and product costs

e. minimizes the sum of holding, ordering, and product costs

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be? a. about 18 b. about 24 c. about 32 d. about 38 e. more than 40

e. more than 40

Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones? a. housing costs b. material handling costs c. labor cost d. parts cost e. pilferage, scrap, and obsolescence

e. pilferage, scrap, and obsolescence

Aggregate planning for service firms that provide intangible output deals mainly with a. smoothing the production rate and finding the optimal size of the workforce b. yield management c. centralized purchasing d. centralized production e. planning for human resource requirements and managing demand

e. planning for human resource requirements and managing demand

Which of the following attempts to manipulate product or service demand? a. inventories b. part-time workers c. subcontracting d. overtime/idle time e. price cuts

e. price cuts