ISDS Final Conceptual: DSM Plus Definitions
Which of the following international operations strategies involves a high degree of centralization?
Global strategy
Standardization is an appropriate strategy in which stage of the product life cycle?
Maturity
Which of the following is the best example of a pure service?
Counseling A pure service is an activity that produces an intangible product, such as attending a concert or receiving counseling. An intangible product is experienced (e.g., attend a concert) rather than consumed like a good (e.g., purchase a tube of toothpaste).
The difference between a multinational corporation (MNC) and an international business is that __________.
the multinational firm owns or operates facilities in a variety of countries The difference between a multinational corporation (MNC) and an international business is that the multinational firm owns or operates facilities in a variety of countries. Multinational corporations have extensive involvement in the international locations often owning or controlling facilities in more than one country. International businesses, on the other hand, simply engage in cross-border transactions. International businesses do not own or control facilities in more than one country. The difference between international and multinational corporations is around the scope of operations not the age of operations.
The service sector has lower productivity improvements than the manufacturing sector because __________.
the service sector is usually more labor intensive than the manufacturing sector The service sector has lower productivity improvements than the manufacturing sector because the service sector is usually more labor intensive than the manufacturing sector. Productivity in the service sector is difficult to improve for a number of reasons including the fact that service-sector work is labor intensive, typically unique to each customer's demands, often includes an intellectual task completed by professionals, often difficult to mechanize and automate, and often difficult to evaluate overall quality. previous
A law firm has a staff of four employees working 8 hours a day for a total payroll cost of $640. In addition, the law firm has overhead expenses of $800 per day. Due to a recent software change, the same employees are able to process 14 case files a day rather than 8 using the old software system. What is the multifactor productivity of this revised operation?
.0097 case files per dollar The formula for multifactor productivity is: Output / Total Inputs (e.g. labor costs + machine costs + material costs + overhead costs) In this case: Productivity = 14 case files per day / $640 + $800 = 14 case files per day / $1440 = 14/1440- SO Productivity = .0097
Two car wash employees are paid $7.50 an hour each and are capable of washing 12 cars per hour, using $1 of water and $2 of soap and other cleaning supplies. What is the multifactor productivity of this operation?
.667 cars per dollar The formula for multifactor productivity is: Output / Total Inputs (e.g., labor costs + machine costs + material costs + overhead costs) In this case: Productivity = 12 cars per hour / $7.50 + $7.50 + $1 + $2 = Productivity = 12 cars per hour/ $18 total inputs = Productivity = 12 / 18 Productivity = .667
An insurance adjuster processes the claims of six policy holders in an eight hour work day. The adjuster uses $5 in gasoline and $3 in forms and office supplies to complete the work. What is her labor productivity?
.75 claims per hour The formula for single factor productivity is: Productivity = Units Produced / Labor Hours Used In this case: Productivity = 6 policy claims / 8 hours Productivity = 6 / 8 = .75 claims per hour
A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is:
0.684 The approximate seasonal index for July is 0.684. The seasonal index is calculated by dividing a month's actual average demand by the average demand over all months. Thus, in this case: Step 1 - Calculate average historical demand. To do this, we must first obtain the actual demand during July (in this case 110, 150, 130) and divide by the number of months on record (in this case 3). Thus, average July demand is calculated as 110 + 150 + 130 = 390/3 = 130 Step 2 - Calculate seasonal index by taking monthly average (130) and dividing by average demand over all months (190). Seasonal index for July is 130/190 = 0.684
Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naïve forecast?
1.0 The smoothing constant that would make an exponential smoothing forecast equivalent to a naïve forecast is 1.0. A smoothing constant value of 1.0 suggests that the forecast for the next period is exactly the same as the forecast for this period's demand, which is the same as the naïve forecast model. A smoothing constant is a weighting factor applied in an exponential smoothing forecast to improve accuracy. The smoothing constant can range from 0 to 1, but most frequently the forecaster chooses a value between .1 and .5.
A project's critical path is composed of activities A (variance .33), B (variance .67), C (variance .33), and D (variance .17). What is the standard deviation on the critical path?
1.22 The standard deviation on the critical path is 1.22. To calculate the standard deviation you take the square root (√) of the sum of the critical path activity variances. In this case, Standard deviation = √.33+.67+.33+.17 Standard deviation = √1.5 Standard deviation = 1.22
Given an actual demand of 103, a previous forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the next period would be:
100.6 The forecast for the next period would be 100.6. The simple exponential smoothing forecast model uses the following equation: Last period's forecast + α(Last period's demand - last period's forecast), where α = the smoothing constant. Therefore, in this case: Last period's forecast = 99 α = .4 Last period's demand = 103 99 + .4 (103 - 99) = 100.6
Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January?
1000 units The seasonally-adjusted sales forecast for January is 1000 units. To calculate a seasonally-adjusted sales forecast you take the product forecast (in this case 800) and multiply that by the monthly index (in this case 1.25). Thus, 800 * 1.25 = 1000.
If demand is 106 during January, 120 in February, 134 in March, and 142 in April, what is the 3-month simple moving average for May?
132 The 3-month moving average for May is 132. The moving average is calculated by summing the relevant monthly demand reports and dividing by the months included in the model. In this case, we are calculating a three month moving average for May so we will use the months of February (120), March (134), and April (142) in our calculation. Therefore: 120+134+142 = 396 396/3 = 132 Moving Average = 132
Gibson Valves produces cast bronze valves on an assembly line. If 1600 valves are produced in an 8-hour shift, the productivity of the line is __________.
200 valves/hr The formula for single-factor productivity is: Productivity = Units Produced / Labor Hours Used In this case: Productivity = 1600 covers / 8 hours = 200 valves per hour
The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is:
3.5 The Mean Absolute Deviation (MAD) is 3.5. The mean absolute deviation is designed to provide a measure of overall forecast error for the model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods. The last four months sales were 8, 10, 15, and 9 units. The forecasts for these same months were 5, 6, 11, and 12 units. Forecast errors are calculated using the equation demand - forecast. In this case, that would be 8 - 5 = 3; 10 - 6 = 4; 15 - 11 = 4; 9 - 12 = -3. Therefore: 3+4+4+3 = 14 14/4 = 3.5
An activity on a PERT network has these time estimates: optimistic =2, most likely = 3, and pessimistic 8. Its expected time and variance (if it is a critical activity) are:
3.67 and 1 The expected time and variance (if it is a critical activity) are 3.67 and 1, respectively. Expected time (t) is calculated using the following formula: t = (a + 4m + b) / 6, where a = optimistic time estimate (in this case 2); m = most likely time estimate (in this case 3); and b = pessimistic time estimate (in this case 8). Therefore; t = (2 + 4*3 + 8) / 6 t = 22 / 6 t = 3.67 Variance (v) is calculated using the following formula: v = [(b-a) / 6]^2, where b= pessimistic time estimate (in this case 8) and a = optimistic time estimate (in this case 2). Therefore; v = [(b-a) / 6]^2 v = [(8-2) / 6]^2 v = [6/6]^2 v = [1]^2 v = 1
Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation?
4 The mean absolute deviation is 4. The mean absolute deviation is designed to provide a measure of overall forecast error for the model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods. In this case, 1+4+8+3 = 16 16/4 = 4
A time-series trend equation is 25.3 + 2.1X. What is your forecast for period 7?
40.0 The forecast for period 7 is 40. This is determined by solving the equation 25.3 + 2.1X, where X = time period. In this case we are interested in period 7. Therefore: 25.3 + 2.1(7) =40 25.3 + 14.7 = 40
Given the following data about monthly demand, what is the approximate forecast for May using a four month moving average? November = 39 December = 36 January = 40 February = 42 March = 48 April = 46
44 The four-month moving average is 44. The moving average is calculated by summing the relevant monthly demand reports and dividing by the months included in the model. In this case, we are calculating a four month moving average for May so we will use the months of January (40), February (42), March (48), and April (46) in our calculation. Therefore: 40+42+48+46 = 176 176/4 = 44 Moving Average = 44
An activity on a PERT network has these time estimates: optimistic = 2, most likely = 5, and pessimistic = 10. Its expected time is:
5.33 The expected time is 5.33. Expected time (t) is calculated using the following formula: t = (a + 4m + b)/6, where a = optimistic time estimate (in this case 2); m = most likely time estimate (in this case 5); and b = pessimistic time estimate (in this case 10). Therefore; t = (2 + 4*5 + 10)/6 t = 32/6 t = 5.33
Given an actual demand of 61, a previous forecast value of 58, and an alpha of .3, the exponential smoothing forecast for the next period would be:
58.9 The forecast for the next period would be 58.9. The simple exponential smoothing forecast model uses the following equation: Last period's forecast + α(Last period's demand - last period's forecast), where α = the smoothing constant. Therefore, in this case: Last period's forecast = 58 α = .3 Last period's demand = 61 58 + .3(61 - 58) = 58.9
Given last periods forecast of 65, and last periods demand of 62, what is the simple exponential smoothing forecast with an alpha of .4 for the next period?
63.8 The forecast for the next period would be 63.8. The simple exponential smoothing forecast model uses the following equation: Last periods forecast + α(Last periods demand - last periods forecast), where α = the smoothing constant. Therefore, in this case: Last periods forecast = 65 α = .4 Last periods demand = 62 65 + .4 (62 - 65) = 63.8
The service sector makes up approximately what percentage of all jobs in the United States?
80%
Which of the following is the best example of competing on low-cost leadership?
A firm produces its product with less raw material waste than its competitor The best example of competing on low-cost leadership is a firm that produces its product with less raw material waste than its competitor. Achieving competitive advantage by competing on low-cost leadership requires that a business achieve maximum value for customers by driving down costs while still providing quality goods and services to customers. One way to drive down costs is to improve efficiency by creating less material waste or scrap during the production process. Being first to market or building reliable products are ways to achieve a competitive advantage in the marketplace, but they are not consistent with a low-cost strategy.
Which of the following will more likely locate near their customers?
A medical clinic A medical clinic will more likely locate near their customers. Medical clinics provide services and, therefore, will locate closer to customers. It is important for service-based businesses to pay attention to location and convenience with regard to customer preference. Insurance company headquarters and automobile manufacturers are not directly involved with their customers and, therefore, can locate closer to the raw materials (whether those are intellectual assets such as knowledge or physical materials such as steel). previous
The critical path for the network activities shown below is _______ with duration _______. Activity. Duration Immediate Predecessors A. 4 B 2 A C 7 D 4 A E 5 B,C,D
A-D-E; 13 The critical path for the network activities shown below is A-D-E with duration 13. Critical path activities are those activities that will delay the entire project if they are not completed on time. In this case, activity A is an immediate predecessor for A and D and the final activity is E. The sum of the duration for this network is 13 (4+4+5 = 13).
The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate:
Bias hese forecasts illustrate bias. Bias is a form of measurement error that occurs when forecasts are consistently greater or less than actual values. Trend projections fit a trend line to a series of historical data points and then projects the line into the future to help forecast future demand. While we were given prior demand, we were not given data to make future projections. Qualitative methods of forecasting rely on experience and intuition rather than historical data.
Which of the following is least likely to be a cost leadership competitive advantage?
Broad product line Having a broad product line is least likely to be a cost leadership competitive advantage. Cost leadership strategies focus on achieving maximum value for the customer by driving down costs and keeping a focus on quality and value for the customer. Having a broad (or expansive) product line increases costs due to storage costs, stocking fees, etc. Proper inventory management and mass production, on the other hand, can be effective ways to drive down costs.
Which of these statements regarding time-cost tradeoffs in CPM networks is true?
Crashing shortens the project duration by assigning more resources to one or more of the critical tasks. The true statement is that crashing shortens the project duration by assigning more resources to one or more of the critical tasks in a project. Any activity can be crashed if the duration of time can be reduced by adding resources (additional labor, materials, etc.); if the amount of time won't be reduced there is no need to crash a project. Crashing projects can occur with single (or multiple) critical paths.
A forecast that projects a company's sales is a(n):
Demand forecast A forecast that projects a company's sales is a demand forecast. Demand forecasts (also called sales forecasts) are projections of demand for a company's products or services. Demand forecasts impact a company's production, capacity, and scheduling systems.
The EF of an activity is the:
ES + Activity time The EF of an activity is the ES + Activity time. EF, or early finish, is the earliest an activity can be completed and is determined by identifying the early start time (ES) and adding in the amount of time it will take to complete the activity (Activity Time). The equation LF - Activity Time is used to identify the late start (LS) of an activity and is used to identify the latest start time an activity can have and still finish on time. The equation Min{LS of all immediate following activities} is used to determine the latest finish (LF) of an activity.
Which of the following is determined during the forward pass?
Early Start The forward pass involves determining the Early Start. The early start and finish times are determined during the forward pass, which is a process used to determine all of the early start times and finish times for activities in a project. The backward pass is a process that finds all the late start and finish times.
Which of the following is not a typical service attribute?
Easy to store Being easy to store is not a typical service attribute. Services usually are characterized as intangible (a ride in an airline seat) as opposed to a tangible good (a car).
The person who introduced standardized, interchangeable parts was __________.
Eli Whitney Eli Whitney is recognized for popularizing the use of interchangeable parts in the manufacturing process, which was possible due to his focus on standardization and quality control. Frederick Taylor: research impacted multiple areas of management including human resource management, planning, motion study, and ergonomics. Henry Ford: work was focused on improvements in the assembly line manufacturing process They ^^ also had an impact on operations management
Quantitative methods of forecasting include
Exponential smoothing Quantitative methods of forecasting include exponential smoothing. Consumer market surveys and sales force composites are both considered qualitative methods.
Which of the four major categories of quality costs is particularly hard to quantify?
External failure costs External failure costs are particularly hard to quantify. External failure costs are those costs that occur after delivery of defective parts or services and include the costs of returned goods, product liability claims, decreased customer satisfaction, etc. These costs are difficult to quantify because the costs occur after the production cycle (and external to the business) and some outcomes such as lost goodwill and final costs to society are difficult to pinpoint precisely. Costs associated with scrap and rework belong to the internal failure costs category. Internal failure costs represent costs that result from production of defective parts or services before delivery to customers. Prevention costs represent the costs associated with attempting to reduce the costs of defective parts or services. Prevention costs can include training costs or quality improvement program costs. Internal failure costs and prevention costs can be reasonably estimated.
Which of the following is not part of value-chain analysis?
Financial management Financial management is not part of the value-chain analysis. Value-chain analysis is used to identify activities that represent existing (or potential) strengths for a business that may be used to develop a competitive advantage. These strengths represent areas where a business adds value for a customer and can focus on product research, design, human resources, supply-chain management, process innovation, or quality management.
The "father" of scientific management is __________.
Frederick W. Taylor The father of scientific management is Frederick W. Taylor. Frederick Taylor's research impacted multiple areas of management including human resource management, planning, motion study and ergonomics
Which of the following is true?
Functional strategies are shaped by corporate strategy. Strategy represents how an organization expects to achieve its mission and goals and is an activity that starts at the corporate level rather than the department level. Once the corporate strategy is determined (e.g., differentiation, cost focused, or response) --> each functional area develops its mission and strategy to help support the corporate mission and strategy.
Which of the following statements regarding Gantt charts is true?
Gantt charts are visual devices that show the duration of activities in a project. The true statement is that gantt charts are visual devices that show the duration of activities in a project. Gantt charts are not a precedence diagraming activity or method (such as AON or AOA networks) that create timelines and present the sequence in which activities should be performed. Instead, Gantt charts graphically specify all of the tasks involved in a project and how much time should be spent doing each activity. The four standard spines of Methods, Materials, Manpower, and Machinery are part of cause and effect diagrams and are typically used in the quality control process.
What is the only internationally recognized quality standard?
ISO 9000 ISO 9000 is the only internationally recognized quality standard. ISO 9000 is a set of quality standards developed by the International Organization for Standardization (ISO). The ISO 9000 quality standards focus on quality management procedures, documentation, and thorough leadership. TQM, or total quality management, is an approach to quality management that focuses on the entire business process from suppliers to customers. ISO 14000 is a quality management approach that focuses on a series of environmental standards across five core elements. The five core elements include environmental management, auditing, performance evaluation, labeling, and life cycle assessment.
Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?
Immediate rivals, potential entrants, customers, suppliers, and substitute products Porter's Five Forces Model is used to evaluate competition on immediate rivals, potential entrants, customers, suppliers, and substitute products. The five force model is a useful framework to examine competition because it helps operation managers to fully consider the range of external factors that could impact the success of the business.
Increases in productivity are difficult to achieve if __________.
Increases in productivity are difficult to achieve if the task is more personal. This is because the amount of inputs (effort, materials, etc.) required to produce a single output are variable.
Which of the following is not one of the basic functions of the management process?
Inspecting is not one of the basic functions of the management process. The management process consists of planning, organizing, staffing, leading, and controlling.
Which of the following statements about time-series forecasting is true?
It is based on the assumption that the analysis of past demand helps predict future demand. The statement indicating that time-series forecasts are based on the assumption that the analysis of past demand helps predict future demand is true. While time-series forecasts do utilize past demand in the predictive model, the approach does not make the assumption that future demand will be the same as past demand. Time-series forecasts include trends, seasonality, cycles, and random variation so forecasts can increase, decrease, or stay the same as past demand.
Which of the following is correct?
KSFs are often necessary, but not sufficient for competitive advantage.
The LS of an activity is the:
LF - Activity time The LS of an activity is the LF - Activity time. LS, or Late Start, is the latest an activity can be started and is determined by identifying the late finish time (LF) and subtracting from it the amount of time it will take to complete the activity (Activity Time). The equation Min{LS of all immediate following activities} is used to determine the latest finish (LF) of an activity.
Which of the following is a basic assumption of PERT?
No activity in the network must be repeated. PERT analysis assumes that no activity in the network must be repeated. PERT assumes that critical and non-critical path activities must be completed. CPM assumes that activity times are known with certainty.
Which of the following statements concerning the operations management decision is relevant to services?
Labor standards vary depending on customer requirements. The statement most relevant to services is that labor standards vary depending on customer requirements. Services are specifically designed to meet the expectations of the customer and, therefore, labor standards will vary depending on customer expectations and prior experiences.
Which of the following OM strategic decisions pertains to the sensible location of processes and materials in relation to each other?
Layout design Layout design strategic decisions pertain to sensible location of processes and materials in relation to each other. Specifically, layout design decisions focus on understanding material flows and inventory requirements so that the delivery of inputs aligns with the manufacturing or transformation process so that outputs are created without waste. Supply-chain management decisions are focused on what is to be made and what is to be purchased and primarily focuses on the relationship between the buyer (company) and supplier. Goods and services design deals with the transformation process.
Which of the following appears to provide the best opportunity for increases in productivity?
Management Management provides the best opportunity for increases in productivity. Management is responsible for ensuring that labor and capital are used effectively to increase productivity. Management contributes approximately 52% of the annual increase in productivity. Labor contributes approximately 10% of the annual increase in productivity. Capital contributes 38% of the annual increase in productivity. Thus, effective management is one of the best tools to improve productivity.
Which of the following is not one of the 10 strategic OM decisions listed in the text?
Marketing Marketing is not one of the 10 strategic OM decisions listed in the text. The 10 strategic decisions that influence the OM process are goods and services design, quality, process and capacity design, location selection, layout design, human resources and job design, supply-chain management, inventory, scheduling, and maintenance.
The primary purpose of the mean absolute deviation (MAD) in forecasting is to:
Measure forecast accuracy The primary purpose of the mean absolute deviation in forecasting is to measure forecast accuracy. The mean absolute deviation is designed to provide a measure of overall forecast error for the model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods. While the mean absolute deviation does provide a measure of forecast errors and forecast accuracy, it does not eliminate forecast errors or seasonally adjust forecasts.
Which of the international operations strategies involves a focus on cost reductions and high local responsiveness?
Multidomestic- The international operations strategy that involves a focus on cost reductions and high local responsiveness is a multidomestic strategy. A multidomestic strategy has decentralized authority with substantial autonomy at each business. These businesses are typically franchises or joint ventures with substantial independence. The primary advantage of a multidomestic strategy is local responsiveness. The term transnational describes the condition where raw materials, people, and ideas cross national boundaries to create economies of scale that allow the company to pursue all three operation strategies—differentiation, low cost, and response. Businesses that adopt a transnational strategy recognize that core competence can exist anywhere in the company—not just in the home country of the business. A global strategy is a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning process.
Which time-series model assumes that demand in the next period will be equal to the most recent period's demand?
Naïve approach The time-series model that assumes demand in the next period will be equal to the most recent period's demand is the Naïve approach. The Naïve approach is the simplest forecasting method because it assumes that future demand will equal the last period's demand. The moving average approach, on the other hand, uses the average demand across the most recent periods of data (e.g. quarterly, annually, etc.) to forecast future demand. The exponential smoothing approach is a complicated forecasting approach that uses statistical weights for individual data points.
A firm producing a good is more likely to have which set of the following characteristics compared to a firm providing a service?
Objective quality standards, tangible product, and located away from customers A firm producing a good is more likely to have objective quality standards, tangible products, and be located away from customers compared to a firm producing a service. Organizations that produce goods typically have many objective quality standards (e.g., amount of waste product, number of units produced), they usually have tangible products (e.g., car, toaster oven, clothing item) and may need to locate closer to raw materials and labor force rather than customers. Organizations that provide services, on the other hand, utilize more subjective quality standards (opinion regarding a haircut), do not have tangible products (a haircut), and needs to be located near customers.
Which of the following statements regarding PERT analysis is true?
Only critical activities contribute to the project variances. The true statement is that only critical activities contribute to the project variances. Project variance represents the sum of the critical path activity variances only. It does not represent the variances of activities that do not fall on the critical path. Additionally, in PERT analysis, each critical path activity has three estimates of duration - optimistic time, pessimistic time, and most likely time
The three phases involved in the management of large projects are:
Planning, scheduling, and controlling The three phases involved in the management of large projects are planning, scheduling, and controlling. The planning phase involves defining the scope of the project, setting goals, and organizing the team. The scheduling phase involves aligning resources (people, money, supplies) for specific activities. The controlling phase involves monitoring the use of resources and adjusting goals and timelines to meet time and cost specifications.
Forecasts are usually classified into three categories including:
Short-range, medium-range, and long-range Forecasts are usually classified into three categories including short-range, medium-range, and long range. Short-range forecasts have a time span of up to 1 year, but are generally less than 3 months. This type of forecast is used to schedule jobs, determine workforce levels, and plan purchases. Medium-range forecasts have a time span that ranges from 3 months to 3 years. This type of forecast is used to plan production cycles, determine budgets, and make operation level decisions. Long-range forecasts have a time span that is longer than 3 years. Long range forecasts are used in planning for new products, capital expenditures, and facility planning. Strategic, tactical, and operational are terms used to describe levels and types of goals and objectives. Departmental, organizational, and industrial are terms used to describe hierarchical divisions or levels within (departmental and organizational) or outside (industrial) of a business.
__________ is the amount of time an individual activity in a network can be delayed without delaying the entire project.
Slack Time Slack Time is the amount of time an individual activity in a network can be delayed without delaying the entire project. Total slack, on the other hand, represents the amount of time shared among non-critical path tasks on the same non-critical path
Which of the following uses three types of participants: decision makers, staff personnel, and respondents?
The Delphi method The Delphi method uses three types of participants: decision makers, staff personnel, and respondents to make forecasts. Sales force composites are a forecasting technique based on salespersons' estimates of expected sales. Executive opinions are a forecasting technique that uses the opinion of a small group of high-level managers to form a group estimate of demand.
A regression model is used to forecast sales based on advertising dollars spent. The regression line is y=500+35x and the coefficient of determination is .90. Which is the best statement about this forecasting model?
The correlation between sales and advertising is positive. The best statement about this forecasting model is that the correlation between sales and advertising is positive. In this example the relationship between coefficients is expressed as a positive (+), which indicates a positive correlation between sales and advertising. The equation does not give us enough information to predict an exact relationship between dollars spent on advertising and ultimate sales.
The critical path for the network activities shown below is _______ with duration _______
The critical path for the network activities shown below is B-C-E with duration 12. Critical path activities are those activities that will delay the entire project if they are not completed on time. In this case, activity B is an immediate predecessor for activities C, D, and E. The sum of the duration for this network is 12 (4+6+2 = 12). previous
An activity has an optimistic time of 15 days, a most likely time of 18 days, and a pessimistic time of 27 days. What is the expected time?
The expected time is 19 days. Expected time (t) is calculated using the following formula: t = (a + 4m + b)/6, where a = optimistic time estimate (in this case 15); m = most likely time estimate (in this case 18); and b = pessimistic time estimate (in this case 27). Therefore; t = (15 + 4*18 + 27)/6 t = 114/6 t = 19
Which of the following activities takes place most immediately once the organization's mission has been developed?
The functional areas develop their supporting missions. The activity that takes place most immediately once the organization's mission has been developed is that the functional areas develop their supporting missions. Once the corporate mission is determined, each functional area (e.g., marketing, finance/accounting, and production/operations) develops its supporting mission.
Which is not true regarding the differences between goods and services?
The statement tangible goods are generally produced and consumed simultaneously; services are not is not true. In fact, services are generally intangible, produced and consumed simultaneously, unique for each customer, have a high degree of customer interaction, and are typically knowledge based.
PERT analysis computes the variance of the total project completion time as:
The sum of the variances of all activities on the critical path. PERT analysis computes the variance of the total project completion time as the sum of the variances of all activities on the critical path. PERT (Program Evaluation and Review Technique) analysis is a technique used to help project managers monitor and control large, complex projects.
An activity has an optimistic time of 11 days, a most likely time of 15 days, and a pessimistic time of 23 days. What is its variance?
The variance for this activity is 4. Variance (v) is calculated by using the following formula: v = [(b-a) / 6]^2, where b = pessimistic time estimate (in this case 23) and a = optimistic time estimate (in this case 11). Therefore: v = [(b-a) / 6]^2 v = [(23-11) / 6]^2 v = [12 / 6]^2 v = [2]^2 v = 4
An activity on a PERT network has these time estimates: optimistic = 1, most likely = 2, and pessimistic = 5. Its variance is:
The variance is 0.444. The variance is 0.444. Variance is calculated using the following formula: variance = [(b-a)/6]2, where a = optimistic time estimate (in this case 1) and b = pessimistic time estimate (in this case 5). Therefore; variance = [(5-1)/6]2 = 0.444
A simple CPM network has five activities, A, B, C, D, and E. A is an immediate predecessor of C and of D. B is also an immediate predecessor of C and of D. C and D are both immediate predecessors of E. Given the above scenario, which of the following is correct?
There are four paths in this network. Given the above scenario, there are four paths in the network. In this network, the four paths are A-C-E, A-D-E; B-C-E, B-D-E.
Which of the following international operations strategies allows a firm to pursue all three operations strategies?
Transnational strategy The international operations strategy that allows a firm to pursue all three operations strategies is transnational strategy. The term transnational describes the condition where raw materials, people, and ideas cross national boundaries to create economies of scale that allow the company to pursue all three operation strategies—differentiation, low cost, and response. Businesses that adopt a transnational strategy recognize that core competence can exist anywhere in the company—not just in the home country of the business. A multidomestic strategy has decentralized authority with substantial autonomy at each business. These businesses are typically franchises or joint ventures with substantial independence. The primary advantage of a multidomestic strategy is local responsiveness. A global strategy is a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning process.
Which of the following is false regarding control charts?
Values above the upper control limit always imply that the product's quality is exceeding expectations. The false statement is that values above the upper control limit always imply that the product's quality is exceeding expectations. Control charts are graphic presentations of data over time that show target values, upper limit, and lower limit for the process being controlled. These values are used to monitor and evaluate quality. The upper and lower limits are chosen so that the majority of the data points will fall within the parameters of these two limits. Thus, simply because a value falls above the upper limit does not necessarily imply the product is exceeding expectations.
The person who is most noted for his contributions to quality control in operations management was __________.
W. Edwards Deming
WBS stands for which of the following project management tools?
Work Breakdown Structure WBS stands for Work Breakdown Structure. Work Breakdown Structure is a method used to break down projects into individual activities and costs. This is an important step in understanding and defining project timelines and deliverables.
A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using __________.
a Pareto chart This manager is most likely using a Pareto chart. Operations managers can use Pareto charts as a problem-solving tool to organize errors and identify solutions. In this example, operations managers have identified that the top two causes of production errors are raw material impurities (70 percent of defects result from impurities in raw materials) and human error (15% of defects are from human error). Thus, managers should focus on these two issues as they strive for continuous improvement. The Taguchi Quality Loss Function focuses on identifying costs associated with customer dissatisfaction, repair costs, and warranty costs. Cause-and-effect diagrams typically focus on the four Ms—material, machinery, manpower, and methods. In cause-and-effect diagrams, these factors serve as sources and possible inspection points for quality-improvement initiatives. However, cause-and-effect diagrams do not typically organize errors by identifying relative contribution (in percentage terms) to production problems.
Dummy activities__________
are used when two activities have identical starting and ending events. Dummy activities are used when two AOA network activities have identical starting and ending events. Dummy activities are frequently used in AOA networks, but not in AON networks. Dummy activities are not considered critical activities because they consume no resources or time.[{/Link}]
In a PERT network, non-critical activities that have little slack need to be monitored closely__________
because near-critical paths could become critical paths with small delays in these activities Tasks are considered critical path tasks when they will delay the entire project if they are not completed on time.
The Beta distribution is used in project management to _______.
calculate expected activity times The Beta distribution is used in project management to calculate expected activity times. The beta distribution is used to calculate expected activity times by weighting three time estimates including the optimistic time of an activity, the pessimistic time of an activity, and the most likely time for an activity.
A successful TQM program incorporates all of the following except __________.
centralized decision-making authority A successful TQM program incorporates all of the following except centralized decision-making authority. Total quality management is an entire approach to managing a business that focuses on implementing policies and practices that lead to continuous improvement in every aspect of the business from product development to service delivery. Standard total quality management practices include decentralized decision making, empowering employees to make decisions, training employees, and benchmarking.
The ability of an organization to produce goods or services that have some uniqueness in their characteristics is __________.
competing on differentiation The ability of an organization to produce goods or services that have some uniqueness in their characteristics is competing on differentiation. A differentiation strategy requires that organizations distinguish their product or services in a way that customers perceive as uniquely adding value (e.g., BMW is marketed as the Ultimate Driving Machine). Businesses can also compete with a low-cost strategy that emphasizes low costs and maximum value for customers or a response based strategy that emphasizes flexibility, quick response time, and reliability. previous
The degree or strength of a relationship between two variables is shown by the__________
correlation coefficient The degree or strength of a relationship between two variables is shown by the correlation coefficient. The coefficient can vary in strength (represented with a number from 0 to 1) and in direction (represented with a + or - sign). Thus, correlations can range from perfectly negative (-1.0) to perfectly positive (+1.0) and anywhere in between. The mean absolute deviation is designed to provide a measure of overall forecast error for the model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods. The alpha is a constant applied in an exponential smoothing forecast to improve accuracy. The smoothing constant can range from 0 to 1, but most frequently the forecaster chooses a value between .1 and .5.
The fundamental purpose of an organization's mission statement is to __________.
define the purpose of the organization The fundamental purpose of an organization's mission statement is to define the purpose of the organization. The mission statement outlines the primary reason for existing and clearly defines the purpose of a business. While mission statements help focus a business, it does not specify operational issues like organizational structure, functional areas, or reporting relationships.
The ability of an organization to produce services that, by utilizing the consumers' five senses, have some uniqueness in their characteristics is __________.
experience differentiation The ability of an organization to produce services that, by utilizing the consumers' five senses, have some uniqueness in their characteristics is experience differentiation. Experience differentiation is defined as engaging customers' five senses so that they become immersed in the product. Product differentiation is a type of differentiation that relies on distinguishing the offerings of an organization in a way that customers perceive as adding value by being unique. Response-based competitive advantage focuses on flexibility and quick response to individual customer demands.
The capital investment each year in the United States usually __________.
increases
Productivity increases when __________.
inputs decrease while outputs remain the same Productivity can be improved in one of two ways: reducing inputs while keeping output the same or increasing output and using fewer inputs. Both approaches increase productivity and build efficiency.
For a given product demand, the time-series trend equation is 53 - 4X. The negative sign on the slope of the equation:
is an indication that product demand is declining The negative sign on the slope of the equation is an indication that product demand is declining. A negative slope indicates a downward trend for the regression line, which would indicate that demand is declining across time periods. While the regression equation, like other quantitative methods, includes statistical error, this is not indicated in the negative slope. Furthermore, a negative slope is mathematically possible.
With respect to PERT and CPM, slack__________
is the amount of time a task may be delayed without changing the overall project completion time. With respect to PERT and CPM, slack is the amount of time a task may be delayed without changing the overall project completion time. Latest start is the term used to describe the latest time an activity can be started without delaying the entire project. Latest finish is the term used to describe the latest time an activity can be completed and not delay the completion time of the entire project.
Three critical productivity variables are __________.
labor, capital, and management Three critical productivity input variables are labor, capital, and management. While other variables such as technology and raw materials can influence and be used to measure productivity, labor, capital, and management are considered the three most critical factors to productivity improvement.
An activity map __________.
links competitive advantage, key success factors, and supporting activities An activity map links competitive advantage, key success factors, and supporting activities. Activity maps are used to link the three critical components of an operations strategy—the core competencies that create the firm's competitive advantage, the key success factors (i.e., those activities or factors that are considered instrumental to achieving competitive advantage), and support activities (i.e., specific behaviors and strategies that lead to achieving the identified success factors). Creating an activity map allows firms to create a graphic illustration of the key behaviors that build a firm's strategy.
Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a__________
long-range time horizon Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a long-range time horizon. Long-range forecasts have a time span that is longer than 3 years. Long range forecasts are used in planning for new products, capital expenditures, and facility planning. Short-range forecasts have a time span of up to 1 year, but are generally less than 3 months. Short-range forecasts are used to schedule jobs, determine workforce levels, and planning purchases. Medium-range forecasts have a time span that ranges from 3 months to 3 years. Medium-range forecasts are used to plan production cycles, determine budgets, and make operation level decisions.
The critical path of a network is the__________
longest time path through the network. The critical path of a network is the longest time path through the network. Critical path activities are those activities that will delay the entire project if they are not completed on time. Identifying and understanding the critical path is one of the most challenging aspects of managing and controlling a project.
Among the ethical and social challenges facing operations managers are __________.
maintaining a sustainable environment
The total of all outputs produced by the transformation process divided by the total of the inputs is __________.
multifactor productivity
An operations task performed at Hard Rock Café is __________.
preparing employee schedules The Three Major Business Functions are: 1. Marketing: designed to generate demand and take orders for products and services 2. Finance/accounting: focused on understanding how organizations are performing, paying bills, and collecting money 3. Production/operations: focused on the process organizations use to turn raw materials into a final product or service. Operations tasks involve any activity that relates to the creation of goods and services. In this case, preparing employee schedules ensures that staff are working to provide adequate service for customers.
The tracking signal is the__________
ratio of cumulative error/MAD The tracking signal is the ratio of the cumulative error/MAD. A tracking signal is a measure of how well a forecast is predicting actual demand values. The standard formula used to provide a tracking signal is dividing the cumulative error by the mean absolute deviation. This is represented as Tracking signal = cumulative forecast error/mean absolute deviation The mean absolute deviation (MAD) is designed to provide a measure of overall forecast error for the forecast model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods. The standard error of the estimate is designed to provide a measure of variability around the regression line.
Time-series patterns that repeat themselves after a period of days or weeks are called __________
seasonality Time-series patterns that repeat themselves after a period of days or weeks are called seasonality. Seasonality is a data pattern that repeats itself after a period of time (days, weeks, months, quarters, etc.). Trend is a gradual upward or downward movement of the data over time. Cycles are patterns in data that occur over longer time horizons such as multiple years.
A firm can effectively use its operations functions to yield competitive advantage through all of the following except __________.
setting equipment utilization goals A firm can effectively use its operations functions to yield competitive advantage through all of the following except setting equipment utilization goals. Organizations can achieve a competitive advantage through one of three primary strategies: differentiation, low cost, or response. A differentiation strategy requires that organizations distinguish their product or services in a way that customers perceive as adding value (e.g., BMW is marketed as the Ultimate Driving Machine). A low-cost strategy requires that organizations distinguish their products or services in a way that emphasizes low costs and maximum value for customers. A responsive strategy requires that organizations distinguish their products or services by being able to customize products or offer a variety of products to meet customer demand.
SWOT analysis refers to __________.
strengths, weaknesses, opportunities, and threats
Productivity measurement is complicated by __________.
the lack of precise units of measurement Productivity represents the ratio of outputs to inputs. Outputs are the goods or services produced by a business, while inputs represent the resources used to create outputs such as labor, capital, or materials. Without precise units of measurement for inputs and outputs, it is difficult for operations managers to improve efficiency. Unfortunately, because many jobs are knowledge based (vs. manufacturing), it is difficult to identify precise input and output measures.