Operations Management Exam 1
Which of the following could represent inventory in a restaurant process? 20 seconds 10,000 dollars per day 30 eggs 20 customers per hour
30 eggs
Average labor utilization equals labor content ______ (cycle time multiplied by number of employees). multiplied by divided by
Average labor utilization = labor content / (cycle time * number of employees)
Which of the following items would be considered resources in a restaurant? multiple choice Recipes Food Brand image Chefs
Chefs
A process is replicated in another country where wages are 50 percent lower. Staffing and processing times are identical. What would be the effect on the costs of direct labor? multiple choice Costs of direct labor would be 50 percent lower. Costs of direct labor would be the same. Costs of direct labor would be 50 percent higher. Cannot determine from the given information.
Costs of direct labor would be 50 percent lower.
You manage the finances for a restaurant. Which flow unit would you be most interested in? Food Currency Customers
Currency
Which of the following inefficiencies in a grocery store's operations results from inflexibility? multiple choice Leftover fruits and vegetables Delivery delays from the warehouse A surge in customer arrivals at one time Employee work schedules set a week in advance
Employee work schedules set a week in advance
Which of the following items would be considered an input in the operations of a soft drink manufacturer? multiple choice Brand image Bottling machines Empty bottles Workers
Empty bottles
Is the capacity of the bottleneck larger than, equal to, or smaller than the capacity of the process? multiple choice Larger than Equal to Smaller than The answer depends on the specific process under consideration.
Equal to
A computer server experiences large fluctuations in the amount of data requests it receives throughout the day. Because of this variation, Little's Law does not apply. True False
False
Increasing the batch size on a resource with setups always increases the capacity of the process. True False
False
Little's Law is very general, so it is not necessary that flow rate and flow time use the same time units. True False
False
Specialization increases the costs of labor because specialists will command a higher wage rate. True False
False
Specialization typically lead to a higher average labor utilization. True False
False
True or false: A process manager participates in a process.
False A process manager observes a process.
True or false: A process is self-contained and does not accept inputs or produce outputs. True False
False A process takes inputs and produces outputs. It is not self-contained.
True or false: Some processes do not require inputs.
False A process takes inputs and then performs activities on them that will yield outputs.
True or false: In a worker-paced line each worker always works at the same rate.
False A worker can work at his/her own pace.
True or false: How far you have to drive to the store to buy an item impacts the consumption utility you associate with it.
False Consumption utility does not take into account convenience
True or false: The price of an item impacts the consumption utility you associate with it.
False Consumption utility measures how much you like it, and does not take into account price.
True or false: Utilization can be greater than 100%.
False Flow rate can not be greater than capacity.
If a restaurateur wanted to know how many dollars his/her restaurant made per day, which process metric would he/she need? Flow rate Flow time Inventory
Flow rate
If a university president wanted to know how many students graduated from their university each year, which process metric would he/she need? Inventory Flow time Flow rate
Flow rate
A manager of a car wash wants to know how long his/her facility takes to wash a car. What process metric does he/she need? Flow time Flow rate Inventory
Flow time
Little's Law states that Inventory = Flow Rate ______________×_______________.
Flow time
If a plant manager can reduce the time it takes to manufacture a part (i.e. the Flow Time) and the Flow Rate stays the same, what does Little's Law predict will happen to Inventory? Go up Go down Stay the same
Go down
The batch size is tripled on a resource that has a setup time. What is the likely impact on the resource's capacity? multiple choice Decrease by 1/3 Decrease by less than 1/3 Increase by less than 300 percent Increase by 300 percent
Increase by less than 300 percent
Which of the following actions does not relate to off-loading the bottleneck? multiple choice Reassigning activities to other, nonbottleneck resources Automating some of the activities at the bottleneck Increasing wages for production workers Outsourcing some of the bottleneck activities
Increasing wages for production workers
If a supply chain manager of a clothing retailer wanted to know how big a warehouse they would typically need to store sweaters, which process metric would he/she need? Inventory Flow rate Flow time
Inventory
Which metric is most difficult to calculate directly? Inventory Flow rate Flow time
Inventory
Little's Law states there is a relationship between: (Choose all that apply) Inventory Flow time Output Throughput
Inventory Flow time Throughput
Suppose a resource has setup times and a setup time must be incurred each time the resource switches production to a different product. Requiring the resource to make a new product (that requires its own setup) is likely to have what effect on the process? multiple choice Inventory for existing products remains the same, but the process must now carry inventory of the new product. Inventory of all products is likely to increase. Inventory of existing products decreases even though the process must now carry inventory of the new product. Inventory of products with short setup times will decrease, while inventory of products with long setup times will increase.
Inventory for all products is likely to increase.
Which of the following is most likely to be a concern if batches are very large? multiple choice The flow rate will be too high. Utilization will be too high. Inventory will be too high. Too much time will be spent on product changeovers.
Inventory will be too high.
If cycle time stays constant but inventory goes down what will happen to lead time? It will stay the same It will go up It will go down
It will go down
______________ ______________ identifies and analyzes all the activities involved in serving one unit of demand or, put differently, in providing one unit of supply.
Process Analysis
_______________ _______________identifies and analyzes all the activities involved in serving one unit of demand or, put differently, in providing one unit of supply.
Process analysis
If a process is demand constrained, what should you focus on to improve profits? Capacity at the bottleneck Reducing variable costs Reducing fixed costs
Reducing variable costs Reducing fixed costs
For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing the main operation of a gas station? Instructions: You may select more than one answer. check all that apply Sales dollars Number of gasoline pumps Number of employees Number of customers served
Sales dollars Number of customers served
Which of the following statements about takt time and cycle time is true? multiple choice Takt time only depends on demand, not capacity. Cycle time does depend on capacity. Takt time only depends on capacity, not demand. Cycle time depends on demand. Takt time and cycle time only depend on capacity. Takt time and cycle time only depend on demand.
Takt time only depends on demand, not capacity. Cycle time does depend on capacity.
True or false: The process flow diagram is a graphical representation of the inputs to the process, outputs from the process, and the resources involved in the process.
True A process flow diagram highlights the key components of a process: (1) the resources, (2) the inputs, and, (3) the outputs.
Which of the following operational decisions correspond(s) to the price component of the consumer utility function? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) check all that apply When will the demand be fulfilled? What are the shipping charges to the customer? What is the product or service to be delivered? Where will the demand be fulfilled?
What are the shipping charges to the customer?
Consider a process consisting of three resources. Assume there exists unlimited demand for the product. Resource 1 has a processing time of 2 minutes per unit. Resource 2 has a processing time of 3 minutes per unit. Resource 3 has a processing time of 7 minutes per unit. Tri -> Rec (Res. 1) -> Tri -> Rec (Res. 2) -> Tri -> Rec (Res. 3) The three resources are staffed by different workers individually. The flow diagram is shown above. a. What is the capacity of resource 2? b. What is the bottleneck in the process? c. What is the utilization of resource 2? d. How long does it take the process to produce 205 units starting with an empty system, assuming this is a worker-paced process
a. 0.333 units per minute b. Resource 3 c. 43 percent d. 1,440 minutes
It takes 5 barbers to serve one customer. a. What is the capacity of the barber expressed in customers per hour? b. Assuming the demand for the barber is 6 customers per hour, what is the flow rate? c. Assuming the demand for the barber is 6 customers per hour, what is the utilization? d. Assuming the demand for the barber is 6 customers per hour, what is the cycle time?
a. 12.00 customers per hour b. 6.00 customer per hour c. 50.00 percent d. 10.00 minutes per customer
The local driver's license center processes applications for driver's license renewals through the following three steps. First, the customer registers with the receptionist, who updates the customer's information in the database. This first step takes 2 minutes per customer. Then, the customer visits one of 1 cashiers to pay the associated fees for the license renewal. This takes 4 minutes per customer because several forms must be printed from the computer and signed by the customer. Finally, the customer visits one of 3 license processing stations where the customer's picture is taken and the license is printed. This final step takes 13 minutes per customer. a. Assuming unlimited demand, what is the flow rate of the process in customers per hour? b. If demand is 5 customers per hour, what is the utilization of the receptionist? c. If demand is 5 customers per hour, what is the cycle time (minutes) of the process? d. If the system starts empty and operates worker paced, how long does it take to complete the processing of 7 customers? e. Assuming unlimited demand, what would the new flow rate be if the center added one server to the bottleneck resource?
a. 14 per hour b. 17 percent c. 12.00 minutes d. e.
Companies seeking external help with managing and improving their operations often hire ______________ _______________.
consulting companies/firms
Demand is driven by the _______________ utility of the product or service, its price, and the associated inconvenience for customers.
consumption
Specialization usually leads to __________ set-ups. fewer more
fewer
A process that is efficient is one where labor utilization is as ______ as possible. high low
high
A process that is efficient is one where labor utilization is as ______ as possible. low high
high
For a given level of costs, the higher the revenue the ______ the profits.
higher
According to economic theory, a consumer buys an SUV--instead of a passenger car--because she or he expects to achieve the highest ______________ from buying an SUV.
utility
The table below shows the time stamps of 10 customers who visited a local bank branch from 9:00 a.m. to 9:45 a.m. What is the flow rate of customers? Customer Time In Time Out 1 9:02 9:13 2 9:02 9:30 3 9:04 9:18 4 9:08 9:26 5 9:13 9:31 6 9:16 9:24 7 9:20 9:31 8 9:22 9:44 9 9:23 9:45 10 9:28 9:41 Flow rate of customers:
0.2222 per minute Flow rate = 10 customers / 45 minutes
Which are not flow units of a restaurant? Customers Dollars Food Cash registers
Cash registers
When an operation improves its efficiency, its revenue will always stay constant, while its costs will go down. True False
False
True or false: The flow rate for a process should be greater than the demand rate.
False Flow rate should be no greater than the demand rate.
True or false: A process that is demand constrained can have utilization of 100%.
False If process is demand constrained then flow rate will be less than capacity.
True or false: When average price exceeds variable cost the firm is profitable.
False Profit also depends on fixed costs. Profits = Flow rate * (Average price - Variable cost) - Fixed costs
What are the key questions the manager of a process should ask? (Check all that apply) Multiple select question. Is the process performing well? How long has the process been in operation? How can we make the process better? How many steps does the process have?
Is the process performing well? How can we make the process better?
If inventory goes up but flow time stays constant what will happen to cycle time? It will stay the same It will go down It will go up
It will go down
If cycle time stays constant but inventory goes down what will happen to lead time? It will stay the same It will go down It will go up
It will go down Lead time is the time between a customer placing their order and that order being filled. Lead time, like flow time, is the time a flow unit (a customer order) takes to get through the process. Lead time (and flow time) are expressed in units of time.
If inventory is measured in kilograms, then when applying Little's Law the flow rate can be measured in ______ multiple choice Units per kilogram Minutes per kilogram Kilograms per second Kilograms per kilometer
Kilograms per second
For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing the main operation of a local accounting firm? multiple choice Number of accountants Number of tax returns completed Number of customers with past-due invoices Number of reams of paper received from suppliers
Number of tax returns completed
Suppose a new restaurant, John's Burgers, offers better tasting food that is custom-made, take less time to prepare, and cost less than what McDonald's offers. John's Burgers _______________ _______________ McDonald's.
Pareto dominates
A car manufacturer has designed a "special edition" version of its popular two-door coupe. This special edition has increased horsepower compared to the standard model and a sports suspension. Which dimension of the customer utility function is particularly emphasized with the special edition coupe? multiple choice Performance Fit Price Timing
Performance
A process flow diagram indicates where a flow unit is processed. both where a flow unit is processed and where it is held in inventory. where a flow unit is held in inventory.
both where a flow unit is processed and where it is held in inventory.
Flow units waiting in the process without being worked on are often referred to as ______________ inventory.
buffer
When the demand rate increases, the takt time ____. decreases increases stays the same
decreases
If the cycle time increases--and everything else remains constant--average labor utilization ______. decreases increases
decreases Average labor utilization = Labor content / (Cycle time * Number of employees)
You can off-load the bottleneck by ______ the processing time it spends per flow unit. decreasing increasing
decreasing
A process flow diagram is a graphical way to _______ the process. develop design describe
describe
Fill in the blank: A process flow diagram is used to ______ a process. describe develop design
describe
The time to complete setup activities ______ depend on the number of units subsequently produced. does not does
does not
For inventory to accumulate in a process the bottleneck must be _______. downstream upstream
downstream
Flow rate is measured in "____________ units per unit of _____________."
flow time
The target capacity for a resource is the smallest capacity that does not reduce the ______ of the process. flow rate flow time inventory
flow rate
Being able to line balance without having to observe a fixed sequence should ________ average labor utilization. decrease have no impact on increase
increase
When available time goes up, the takt time ________. increases decreases stays the same
increases
When labor content goes up, target manpower ________. stays the same increases decreases
increases
As cycle time increases, the time to make Q units __________. stays the same increases decreases
increases Time to make Q units = Cycle time * Q
Resources help the flow units to move from being a unit of _____________ to a unit of ______________.
input output
Flow units waiting in the process without being worked on are often referred to as buffer ______________.
inventory
If shipping company A offers longer delivery times than shipping company B and has higher delivery costs then it ____ on the efficient frontier. is is not
is not
The later the departure time for a patient for the same arrival time the ______ the flow time. shorter longer
longer
The more a resource is idle the ____ its utilization. higher lower
lower
The flow unit is the basic unit that ________ a process. moves through resides in supports a assists in
moves through
The processing time of a resource is how long that particular resource takes to complete processing __________ flow unit.
one
The ___________ time of a resource is how long that particular resource takes to complete one flow unit.
processing
The output rate when producing equals one divided by the ______ time processing flow
processing
The output rate when producing equals one divided by the ______ time flow processing
processing "output rate when producing" directly related to the processing time: Output rate when producing = 1/Processing time
At a step with a setup, inventory accumulates when that step is in _______. setup production
production
Companies employ individuals to manage the ____________ needed to serve their customers.
resources
Suppose the flow rate is 100 customers per hour, the average price is $10, the variable cost is $8, and the fixed cost is $50 per hour. What is the profit? $200 per hour $1,000 per hour $150 per hour
$150 per hour Profits = Flow rate * (Average price - Variable cost) - Fixed costs Profits = 100 * (10-8) - 50
Assuming the production increases with demand, if the sales department can increase the number of customers that request a product per day (i.e. the Flow Rate) and the time needed to make that product stays the same, what will happen to Inventory according to Little's Law prediction? Go up Go down Stay the same
Go up
Which of the following questions would be asked in a process analysis of a college admissions office? multiple choice When was the college founded? How long does it take the office to process an application? How much is the yearly tuition at the college? How long does it take the average student to complete a degree program at the college?
How long does it take the office to process an application?
You are sitting in a restaurant and the waiter brings you the food you ordered a while ago. If you think about you being the flow unit in the process of the restaurant, which step of this process will be downstream relative to your current position in the process? multiple choice Waiting to order Being seated at a table Paying the bill Reviewing the menu
Paying the bill
Think about the head chef of a restaurant and his/her view of the restaurant as a process. Which scope would he/she NOT have? (Check all that apply.) Training new cooks Seating customers Preparing meals Bussing tables
Seating customers Bussing tables
Which could be an appropriate unit for a processing time? Seconds/customer Seconds Minutes Minutes/burger
Seconds/customer Minutes/burger
You observe a vehicle registration department at your local township. Assume that all employees are ready to work at 9 a.m. You arrive at 9 a.m. sharp and are the first customer. Is your time through the empty process longer or shorter than the flow time averaged across all customers that arrive over the course of the day? multiple choice Longer than the average flow time Shorter than the average flow time
Shorter than the average flow time
The goal of SMED is a setup process whose time can be described with how many digits? Double Triple Single
Single
Which of the following contribute to labor content? The time an unmanned machine spends working on a flow unit The time the flow unit spends as buffer inventory The time a worker spends inspecting a flow unit The time a working works on the flow unit
The time a worker spends inspecting a flow unit The time a worker works on the flow unit
You should choose a flow unit based upon what you want to ____________ and _____________.
Track & Measure
If the batch size is increased, inventory increases, which implies that flow units are likely to spend more time in the process. True False
True
If the flow rate of a process increases, then the utilization of a resource with a setup time must also increase. True False
True
True or false: To calculate total idle time, one must know the amount of idle time per flow unit.
True
True or false: A process flow diagram outlines a directional flow in the process.
True A process flow diagram indicates the path a flow unit takes from upstream resources to downstream resources.
True or false: A process metric is quantitative.
True A process metric is something that can be measured
True or false: If price and convenience of two products are equal, the product customers associate with the highest consumption utility is likely to have the highest demand.
True Demand is driven by price, inconvenience, and consumption utility.
True or false: The bottleneck step in a process can change depending upon the batch size set at a step with a setup.
True The batch size at a step with a setup dictates its capacity. Too small a batch size can make a step with a setup the bottleneck.
True or false: The flow rate for a process can be less than the demand rate.
True The factor limiting the flow rate is the process capacity and capacity can be less than the demand rate.
True or false: In the case of an interventional radiology unit, there is only one flow unit for the process.
True The patient is provided with care in the interventional radiology unit.
True or false: The utilization of a process is defined as the ratio between the flow rate and the process capacity.
True The utilization of a process is defined as the ratio between the flow rate and the process capacity.
True or false: A pizza delivery chain offering a 30-minutes or less guarantee on their pizza orders impacts the inconvenience component of utility.
True Timing, or how long you wait for a product or service, is a sub-component of inconvenience.
True or false: An online retailer offering same-day shipping impacts the inconvenience component of utility.
True Timing, or the amount of time one waits for a product or service, is one of the major sub-components of inconvenience.
Your ______________ utility measures how much you like a product or service, ignoring the effects of price and the inconvenience associated with acquiring the product.
consumption
The amount of work that goes into serving one customer is called labor _______________.
content
Costs of direct labor measure the labor cost associated with serving one _____________.
customer
In the context of a business where products and services are offered to customers, demand is created by the _____________ .
customer
A production ________________ is a repeating sequence of produced units.
cycle
An organization that wants to fulfill customer orders more quickly should make the cycle time of their fulfillment process __________. stay the same increase decrease
decrease
Being able to line balance without having to observe a fixed sequence will __________ idle time. decrease increase have no impact on
decrease
If the flow time for a process goes down then the time to finish X units starting with empty inventory buffers will ________. increase decrease stay the same
decrease
If the flow time for a process goes down then the time to finish X units starting with empty inventory buffers will ________.
decrease Time to finish X units starting with an empty system = Time through an empty process + [(X-1) * Cycle time]
As processing time increases, the output rate when producing ________. decreases increases
decreases
As processing time increases, the output rate when producing ________. increases decreases
decreases
Takt time is solely driven by ____________ rate.
demand
When a flow rate is less than the capacity the process is referred to as ____________ constrained.
demand
A process can have a capacity that is ____________ the capacity of a bottleneck. greater than equal to less than
equal to
To satisfy all demand we want cycle time to be _______ takt time. greater than equal to less than
equal to
When calculating the utilization of a step with a setup the denominator to use is ________. flow rate when producing capacity
flow rate when producing Utilization of resource without setup time is - Utilization = Flow rate/Capacity Utilization of resource with setup time is - Utilization = Flow rate/Output rate when producing
The time a flow unit spends in a process, from start to finish, is know as _____. inventory time processing time wait time flow time
flow time
In a process flow diagram, triangles are used to represent ________ waiting in a system.
flow units
Setups of small duration (e.g. 9 minutes or less) enable _______. higher flow rates frequent changeovers smaller batch sizes reduced inventory
frequent changeovers smaller batch sizes reduced inventory
For a given level of costs, the higher the revenue the ______ the profits. higher lower
higher
The higher the desired capacity at a resource, the ______ the target manpower. lower higher
higher
The more patients that arrive in a ten-hour span the _____ the flow rate. lower higher
higher
The time a resource is paid but not working is referred to as _____________ time.
idle
The time when a process is doing nothing is known as ____________ time.
idle
If the cycle time increases, but no new resources are added to the process, then the time needed to serve 100 customers will ______. increase decrease stay the same
increase
If the cycle time increases, but no new resources are added to the process, then the time needed to serve 100 customers will ______. stay the same decrease increase
increase
When takt time is less than cycle time target, manpower should ________. decrease stay the same increase
increase
When takt time is less than cycle time target, manpower should ________. increase decrease stay the same
increase
When wages per unit of time go up but flow rate stays the same, costs of direct labor _________. decrease increase stay the same
increase Costs of direct labor = Wages per unit of time flow rate
When takt time is less than cycle time target, manpower should ________. decrease increase stay the same
increase Target manpower = Labor Content/Takt time
To increase profit a firm can do the following: increase flow rate increase average price increase inventory decrease average cost
increase flow rate increase average price decrease average cost
To increase the capacity of a process, one should __________. Multiple choice question. increase the capacity of the bottleneck resource regardless of where it is located in the process increase the capacity of the first resource in the process because then flow units can get to the second resource more quickly increase the capacity of the last resource in the process so flow units can exit the process more quickly
increase the capacity of the bottleneck resource regardless of where it is located in the process
At a resource with a setup, increasing the batch size ______ the capacity of the resource. decreases increases
increases
At a resource with a setup, increasing the batch size ______ the capacity of the resource. increases decreases
increases
Arrows in a process flow diagram can indicate _______. (Check all that apply.) movement of resources inputs movement of people outputs
inputs outputs
If takt time is 30 seconds and cycle time is 40 seconds then all demand ____ satisfied. is not is
is not
The larger the average flow rate, the ______ the average inventory level.` larger smaller
larger
Flow rate can be _______________ process capacity. (Check all that apply) greater than less than equal to
less than equal to
SmartPhones are made on a 40-step assembly process. All 40 steps are connected through a conveyor belt and all of the 40 steps must work at the same rate even if some of them have more capacity than others. Is this process a machine-paced process or a worker-paced process? multiple choice Machine-paced Worker-paced
machine-paced
Customers with different preferences for the same type of goods are in different ____________ segments.
market
Understanding how customers derive utility from products and services is the primary function of ____________.
marketing
Determining customers wants and preferences is the primary function of ______.
marketing Matching supply with demand is the goal of operations management.
Over the course of a day, fans pour into a NASCAR venue at the rate of 8,000 people per hour. The average rate at which fans leave the venue ______. multiple choice must be less than 8,000 people per hour must be exactly 8,000 people per hour must be more than 8,000 people per hour could be more or less than 8,000 people per hour
must be exactly 8,000 people per hour
If takt time is less than cycle time then we are ______ demand. satisfying all demand not satisfying all demand
not satisfying all demand
We refer to the improvement strategy of moving work away from the bottleneck step as _____. outsourcing balancing the bottleneck automating off-loading the bottleneck
off-loading the bottleneck Outsourcing helps in off-loading the bottleneck, however, these are two independent terms and cannot be used interchangeably. Off-loading the bottleneck by reassigning activities to another resource is called line balancing.
A process metric is something that we can measure that informs us about the ___________ and capability of a process.
performance
Inflexibility is the inability of an operation to _____________ and cheaply change in response to new information.
quickly One of the three system inhibitors
The primary purpose of the "Single-Minute Exchange of Die" philosophy is to multiple choice reduce the setup time for a resource. increase the flow rate of a process. decrease the utilization of a process. eliminate resources that have setup times.
reduce the setup time for a resource.
The need to perform a setup at a step ________ its capacity. increases reduces
reduced
A production cycle is a _____________ sequence of produced flow units.
repeating
______________ are shown as rectangular boxes in the process flow diagram.
resources or activities
An appropriate unit for takt time is: (Select all that apply.) hours seconds/burger hours/customers minutes
seconds/burger hours/customers Takt time = 1/demand rate Takt time is measure entirely driven by demand; it is our goal to design a process that meets exactly its demand rate.
At a step with a setup, inventory falls when that step is in _______. setup production
setup
The goal of single-minute exchange of die (SMED) is to reduce the ____________ time.
setup SMED - reengineer the setup process so that the setup time can be achieved in nine (a single digit) for fewer minutes.
Specialization typically _________ the training period. shortens lengthens
shortens
A small batch size at a step with a setup will lead to a ______ amount of inventory. small large
small
The process capacity is found by looking for the ____________ capacity in the process.
smallest
The target capacity for a resource is the ______ capacity that does not reduce the flow rate of the process. largest smallest
smallest
The three sources of inefficiency are also called the three ______ inhibitors. a. people b. Pareto c. System
system
When quantity demanded goes up, ________. takt time decreases labor content decreases labor content increases target manpower increases
takt time decreases target manpower increases
You observe a bank and notice that a customer leaves the bank about every five minutes. These five minutes between customers are multiple choice the capacity of the process. the processing time of the last resource. the cycle time. the lead time.
the cycle time.
Price includes the ____________ cost of owning the product or receiving the service.
total transaction costs, financing costs, shipping costs, etc.
A process is a set of activities that takes a set of inputs and ___________. fixes them does nothing with them turns them into a set of outputs examines them to see if they are defective
turns them into as set of outputs
Customers buy products that maximize their _________.
utility
Economic theory suggests that a consumer's choice of a good or service is based on where he or she expects to achieve the highest ______.
utility
One of the components of utility is consumption ______________.
utility Utility --> consumption utility, price inconvenience
When 25 customers arrive between 8 am and 9 am and 10 arrive between 9 am and 10 am we are experiencing ______________ in demand.
variability - preditable or unpredictable changes in demand or the supply process One of the three system inhibitors
When a computer manufacturer makes 250 personal computers on Monday and 100 on Tuesday, it is experiencing a _______________ in supply.
variance, variability, variation, etc. Variability corresponds to changes in either demand or supply over time.
The three sources of inefficiency are ____________, ______________, and _______________.
waste variability inflexibility
_______________ is the inhibitor that refers to the consumption of resources or inputs that do not add value to the customer.
Waste
Consider a two-step process where the first step produces at a rate of 2 units per minute for the first 30 minutes of an hour and then goes into setup for the second 30 minutes of an hour. The second step produces at a rate of 1 unit per minute for the entire hour. Assuming the beginning inventory in a buffer before step 2 is zero, after one hour the inventory in that buffer will be _______. 120 units 0 units 30 units 60 units
0 units
What is the maximum utilization a resource can achieve? multiple choice A value equal to the demand A value equal to the capacity There is no maximum utilization. 1.00
1.00
If, on average, 10 customers arrive per hour to a store, then ____________ customers must depart per hour.
10
Which has a higher flow rate? 10 customers arriving over two hours or 10 customers arriving over three hours? 10 customers arriving over two hours 10 customers arriving over three hours
10 customers arriving over three hours
The table below provides the time stamps for the 8 people who called a reservation desk for a ferry service between 8:00 am and 8:38 am. Based on the data in the table, what is the flow time of callers? Caller Time In Time Out 1 8:00 8:10 2 8:05 8:16 3 8:09 8:20 4 8:11 8:17 5 8:16 8:35 6 8:20 8:27 7 8:25 8:38 8 8:09 8:12 Flow time of callers:
10.0 minutes To calculate the flow time of callers, subtract the callers departure time from his or her arrival time. 80 minutes divided by 8 callers = 10.0 minutes
A chemical process involves adding various agents to a vat and then waiting for the agents to react to make a final compound. The vat holds up to 1000 gallons. Chemical agents are added to the vat at a rate of 4.5 gallons per minute. Once the agents have been added to the vat, the reaction takes 85 minutes no matter the actual number of gallons in the batch. After the batch is complete, the vat must be cleaned. Cleaning always takes 15 minutes. What is the setup time of this process? multiple choice 15 minutes 85 minutes 100 minutes 222.22 minutes
100 minutes
Consider a four-step serial process with the number of workers at each step and processing times given in the following table. Process Step # of workers T per cust. (min) 1 1 8 2 7 12 3 2 9 4 2 9 Assuming that the process starts out empty and is worker-paced, how long will it take (in minutes) to serve 15 customers?
150 minutes to serve 15 customers
CodeDeskInc matches programmers with freelance jobs. It has 34 employees who staff its online chat room. It receives, on average, 235 chat requests per hour, and the average chat session takes 5 minutes to complete (i.e., from start to finish). On average, how many chat sessions are active (i.e., started but not completed)?
20 chat sessions Flow rate = 235 chats divided by 34 employees = 6.91 Flow time = 5 minutes divided by 60 minutes = 0.083 hour Inventory = Flow rate * Flow time 6.91 * 0.083 = 0.5760 * 34 employees = 20 chats
Which of the following are not flow time? (Check all that apply.) Multiple select question. 20 seconds .75 hours 20 customers 30 eggs
20 customers 30 eggs
Consider a two-step process where the first step produces at a rate of 2 units per minute for the first 30 minutes of an hour and then goes into setup for the second 30 minutes of an hour. The second step produces at a rate of 1 unit per minute for the entire hour. Assuming the beginning inventory in a buffer before step 2 is zero, the highest level of inventory in that buffer during the hour will be _______. 60 units 30 units 90 units 0 units
30 units
A machine makes three different components used in a gyroscope. Call these components A, B, and C. The following repeating schedule is used to make components: make 100 units of A, make 50 units of B, and then make 200 units of C. How many components are made in the production cycle? multiple choice 50 100 200 350
350
A campus deli serves 250 customers over its busy lunch period from 11:30 a.m. to 1:30 p.m. A quick count of the number of customers waiting in line and being served by the sandwich makers shows that an average of 15 customers are in process at any point in time. What is the average amount of time that a customer spends in process? Average amount of time:
7.2 minutes To solve the problem, use Little's Law. Inventory = Flow rate * Flow time. 15 people in line (average inventory) = 2.0833 flow rate * flow time The flow rate is 250 customers divided by 120 minutes = 2.0833 customers/minute Flow time = 15 / 2.0833 = 7.2 minutes
A consulting company must hire 17 new associates per year to replace those who have left the company for other positions or have retired. The company employs 124 associates overall. How long is the average associate employed at the consulting company?
7.3 years 17 associates = 124 new employees * flow time
If the demand rate for a process is 80 units per hour and the rate of the bottleneck in a process is 90 units per hour then the target capacity is _____ units per hour. 100 80 90
80
LaVilla is a village in the Italian Alps. Given its enormous popularity among Swiss, German, Austrian, and Italian skiers, all of its beds are always booked in the winter season and there are, on average, 750 skiers in the village. On average, skiers stay in LaVilla for 9 days. How many new skiers are arriving, on average, in LaVilla every day?
83 skiers per day 750 beds divided by 9 days = 83 skiers per day
Which could be an appropriate unit for a demand rate? Days Cars Cars per day Hamburgers
Cars per day
If you maintain inventory at a constant level and keep the throughput rate constant: Cycle time will decrease Customer delivery dates become more reliable You are following a push operating system Your processes are operating under normal conditions
Customer delivery dates become more reliable
Throughput, sometimes referred to as output rate, is expressed in units produced per hour. True False
False
True or false: If Little's Law predicts that patients will spend 2 hours in the emergency room then EVERY patient will spend 2 hours.
False Little's Law only predicts averages. Half the patients may spend 1 hour and other other half 3 hours.
True or false: Inventory can be calculated by dividing the total number of customers that arrived during a period of time by the length of that period of time.
False That is how you calculate average flow rate.
True or false: A process can only have one scope. True False
False The scope of a process is often determined by the perspective of the person managing it. If there are different managers, or individuals at different levels of management then there may be multiple scopes.
True or false: You should measure the inputs to a restaurant process in customers and the outputs in dollars.
False You should stick with one flow unit when measuring a process.
Think of a restaurant as a process. Which would be a combination of inputs and outputs for such a process? Check all that apply. Multiple select question. Hungry customers become satisfied customers Investments by the owner(s) of the restaurant become revenues Ingredients become satisfied customers Ingredients become meals
Hungry customers become satisfied customers Investments by owner(s) of the restaurant become revenues Ingredients become meals
If cycle time goes up what will happen to lead time? It will go up It will go down It will stay the same
It will go up
A process has high fixed costs and low variable costs. It is currently capacity-constrained. Will the impact of an efficiency improvement be small or large? multiple choice Small Large
Large
What are the subcomponents of inconvenience in a customer utility function? multiple choice Location and price Price and volume Location and time Time and performance
Location and time
Which of the following items would be considered an input in the operations of a doctor's office? multiple choice Examination table Nurse Needle Stethoscope
Needle
What happens to the target manpower if the labor content is doubled? multiple choice The target manpower increases by 50 percent. The target manpower doubles. The target manpower decreases by 50 percent. The target manpower decreases by a factor of 2.
The target manpower doubles.
What is the relationship between the processing time at a resource and its capacity? multiple choice They are the same. They are reciprocals of each other. They are multiples of each other. They are not related.
They are reciprocals of each other.
A national restaurant chain has just opened a sit-down location at Chicago's O'Hare International Airport. Next to the sit-down location, it has also established a "to-go" section where travelers can purchase premade sandwiches and salads, as well as drinks and snacks. Which dimension of the customer utility function is particularly emphasized with the "to-go" section? multiple choice Performance Fit Price Timing
Timing
______________ _______________ time is the amount of idle time per flow unit added up across all resources.
Total idle
Henry Ford proclaimed about the Model T, "You can have any color you want, as long as it is black." Which of the following best reflects his motivation for this position? multiple choice He believed that customers didn't actually like other colors, so why go through the hassle of making different color cars? With more than one color, the process would have switchover times and that could reduce the overall utilization of the process. He wanted to establish "black" cars as part of his company's brand image at that time. Assembling nonblack cars takes longer than black cars. He understood that increasing inventory in a process can lead to a longer flow time through the process.
With more than one color, the process would have switchover times and that could reduce the overall utilization of the process.
Atlas Inc. is a toy bicycle manufacturing company producing a five-inch small version of the bike that Lance Armstrong rode to win his first Tour de France. The assembly line at Atlas Inc. consists of seven work stations, each performing a single step. Stations and processing times are summarized here: Step 1 (25 sec.): The plastic tube for the frame is cut to size. Step 2 (25 sec.): The tube is put together. Step 3 (30 sec.): The frame is glued together Step 4 (30 sec.): The frame is cleaned. Step 5 (25 sec.): Paint is sprayed onto the frame. Step 6 (45 sec.): Wheels are assembled. Step 7 (35 sec.): All other parts are assembled to the frame. Under the current process layout, workers are allocated to the stations as shown here: Worker 1: Steps 1 and 2 Worker 2: Steps 3 and 4 Worker 3: Step 5 Worker 4: Step 6 Worker 5: Step 7 Assume the workers are paid $15 per hour. Each bicycle is sold for $6 and includes parts that are sourced for $1. The company has fixed costs of $200 per hour. Despite Lance Armstrong's doping confession, there exists substantially more demand for the bicycle than Atlas can supply. a. What is the cost of direct labor for the bicycle? b. How much profit does the company make per hour? c. What would be the profits per hour if Atlas would be able to source the parts 8 percent cheaper ($0.92 for the parts of one unit)? d. What would be the profits per hour if Atlas were able to reduce the processing time at the bottleneck by 5 seconds per unit (assume unlimited demand)?
a. $1.25 per unit b. $25.00 per hour c. $29.80 per hour d. $43.00 per hour e. $52.27 per hour
Identify the three system inhibitors that make it complicated to match supply with demand, while making a profit. a. Waste of inputs or resources b. Flexible supply at certain times c. Inflexible supply at certain times d. Variability in supply and demand
a. Waste of inputs or resources c. Inflexible supply at certain times d. Variability in supply and demand
Process scope defines the set of ________ included in the process. activities outputs inputs
activities
Consider a process consisting of three resources. Assume there exists unlimited demand for the product, and that all activities are always performed in the following sequence. Resource 1 has a processing time of 8 minutes per unit. Resource 2 has a processing time of 5 minutes per unit. Resource 3 has a processing time of 7 minutes per unit. All three resources are staffed by one worker and each worker gets paid $11 per hour. a. What is the cost of direct labor? b. What is the labor content? c. What is the average labor utilization? d. Assume the demand rate is 15 units per hour. What is the takt time? e. Assume the demand rate is 15 units per hour. What is the target manpower? f. If one additional worker worker could be hired, to which resource should the additional resources be assigned? Calculate the process capacity. g. If they take 1 minute of task time from one resource and give it to another resource (so the labor content remains the same), What would be the new capacity of the process (units per hour)? Assume that there is still only 1 worker per station. h. What would be the capacity of the process is they integrated the work so that all workers so all three tasks (units per hour)? Assume that there is still only 1 worker per station.
a. $4.40 per unit b. 20 minutes per unit c. 83.33 percent d. 4.00 minutes per unit e. 5.00 employees f. g. 8.6 units per hour h.
A community health system's nurse team consists of 12 nurses working in the local community. It takes a nurse 1 hours to complete one patient visit (including travel time and breaks). Nurses work 9 hours per workday. a. What is the capacity of the nurse team over the course of a 9-hour workday? b. Assuming the demand for the nurses is 60 patients per day, what is the utilization of the nurse team? c. Assuming the demand for the nurses is 60 patients per day, what is the cycle time?
a. 108.0 visits per 9 hour workday b. 56 percent c. 9.0 minutes per patient
Imagine US is a startup that offers high-definition 3-D prenatal ultrasounds for high-end customers. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parentheses): Activity 1: Welcome a patient and explain the procedure. (10 minutes) Activity 2: Prep the patient (e.g., show them to the room, apply ultrasound gel). (4 minutes) Activity 3: Take images. (14 minutes) Activity 4: Analyze images. (12 minutes) Activity 5: Discuss diagnostic with patient. (24 minutes) a. They have three workers. Suppose they are to assign activities to workers such that each activity is assigned to only one worker and each worker must be assigned consecutive tasks. What would be the maximum capacity of this process (patients per hour)? b. Suppose tasks are assigned to three workers and now workers are able to do multiple tasks and their assigned tasks do not need to be consecutive. What would be the maximum capacity of this process (patients per hour)?
a. 2.31 patients per hour b. 2.81 patients per hour
The calculation of labor content requires ______ all of the processing times for serving one flow unit. adding multiplying
adding
The White Tooth Device Company is a manufacturer of high-end electric toothbrushes. For each toothbrush, there are a sequence of assembly steps performed by five workers. Each worker does two tasks. Workers are paid $23 per hour. Worker Task Time (seconds) A 1 46 A 2 39 B 3 19 B 4 18 C 5 27 C 6 12 D 7 13 D 8 14 E 9 40 E 10 31 a. What is the labor content of a toothbrush? b. What is the cost of direct labor for a toothbrush ($)? c. What is the utilization (as a percent) of worker A? d. What is the average labor utilization of this process? e. Suppose demand is 40 toothbrushes per hour. What is the take time (seconds)? f. Suppose the takt time is 50 seconds. What is the target manpower? g. Suppose one additional employee could be hired. The new employee can be assigned to the same set of tasks as one of the current workers. For example, the new worker could do tasks 1 and 2 (like worker A) or tasks 7 and 8 (like worker D). What would be the capacity of the process (toothbrushes per hour) after hiring the new worker? h. Referencing the original problem statement, suppose the company changes the assignment of tasks as follows. Worker A does Task 1. Worker B does Tasks 2 and 3. Worker C does Tasks 4, 5, 6 and 7. Worker D does Tasks 8 and 9. Worker E does Task 10. What will the new process capacity be (in toothbrushes per hour)? i. Referencing the original problem statement, suppose the company changes to an integrated work strategy where each worker performs all 10 tasks himself/herself (i.e., each worker builds an entire toothbrush). What will the new process capacity be (in toothbrushes per hour)?
a. 259 b. 2.71 c. 100% d. 0.61 e. 90 f. g. 50.7 toothbrushes per hour h. i.
Bruno Fruscalzo decided to set up a small production facility in Sydney to sell to the local restaurants who want to offer gelato on their dessert menu. To start simple, he would offer only three flavors of gelato: fragola (strawberry), chocolato (chocolate), and bacio (chocolate with hazelnut). After a short time, he determined his demand and setup times, as shown in the table below. Fragola Chacolato Bacio Demand (kg/hr) 5 15 10 Setup time (min) 30 40 20 Bruno first produces a batch of fragola, then a batch of chocolato, then a batch of bacio, and then he repeats that sequence. For example, after producing bacio and before producing fragola, he needs 30 minutes to set up the ice cream machine, but he needs only 20 minutes to switch from chocolato to bacio. When running, his ice cream machine produces at the rate of 48 kgs per hour no matter which flavor it is producing (and, of course, it can produce only one flavor at a time). a. Suppose they operate with a production cycle of 180 kgs (30 kg of fragola, 90 kgs of chacolato, and 60 kgs of bacio). What is the capacity of the gelato-making process (in kgs per hr)? b. Suppose they operate with a production cycle of 180 kgs (30 kg of fragola, 90 kgs of chacolato, and 60 kgs of bacio). What is the utilization of the gelato-making process? c. Suppose they operate with a production cycle of 180 kgs (30 kg of fragola, 90 kgs of chacolato, and 60 kgs of bacio). What is the average inventory of chacolato? d. Suppose Bruno wants to minimize the amount of each flavor produced at one time while still satisfying the demand for each of the flavors. (He can choose a different quantity for each flavor.) If we define a batch to be the quantity produced in a single run of each flavor, how many kgs should he produce in each batch? e. given your answer to part (d), how many kgs of fragola should be make with each batch?
a. 34 kgs per hour b. c. d. 120.0 kgs e. 20.0 kgs
A machine makes two components; call them types A and B. It takes 590 seconds to switch production between the component types. During that time, no production occurs. When in production, each unit of A or B requires 0.5 second to be completed. The two components, A and B, are combined in an assembly process to make a final product; call it C. The assembly step can combine the two components into 1 unit every 4 seconds, or 15 units per minute. a. Suppose the machine rotates between one batch of 2360 units of A and 2360 units of B. In that case, what is the capacity of the machine in component pairs per minute, where a component pair is one unit of A and one unit of B? b. Suppose the machine rotates between one batch of 2360 units of A and 2360 units of B. What is the utilization of the machine? c. Suppose the machine rotates between one batch of 2360 units of A and 2360 units of B. What is the average inventory of B components? d. If the production schedule could be adjusted with the goal of minimizing inventory in the process, how many units of A should be produced before switching to component B? Assume the same number of units of B would be produced as well.
a. 40 component pairs per minute b. 25 percent c. d. 393 units
Sarah's Organic Soap Company makes four kinds of organic liquid soap: "regular," "lavender," "citrus," and "tea tree." Demands for the four scents are 200, 130, 55, and 40 kgs per hour, respectively. Sarah's production process can produce any soap at the rate of 500 kgs per hour, but 1.6 hours are needed to switch between scents. During those switchover times, the process doesn't produce any soap. Sarah's wants to choose a production schedule that (i) cycles repeatedly through the four scents, (ii) meets the required demand, and (iii) minimizes the amount of inventory held. a. Suppose Sarah's produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. How much soap (kgs) can Sarah's produce per hour? b. Suppose Sarah's produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. What is the utilization (%) of the process? c. Suppose Sarah's produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. How much inventory (kgs) do they have on average of lavender soap? d. How many kgs of "regular" should Sarah's produce before switching over to another scent?
a. 454 kgs/hr b. c. 3522.0 kgs d. 8,533 kgs
Mr. K's is a very popular hair salon. It offers high-quality hairstyling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described next (the time required for each activity is shown in parentheses): Activity 1: Welcome a guest and offer homemade herb tea (11 minutes). Activity 2: Wash and condition hair (11 minutes). Activity 3: Neck, shoulder, and back stress-release massage (11 minutes). Activity 4: Design the hairstyle and do the hair (24 minutes). Activity 5: Check out the guest (7 minutes). Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following: S1 does Activity 1, S2 does activities 2 and 3, and S3 does activities 4 and 5. a. What is the labor content? b. What is the average labor utilization? c. At a wage rate of $21 per hour, what is the cost of direct labor per customer? d. Mr. K considers hiring a new employee to help any one (and only one) of the servers without changing the tasks performed by each server. What will be the new cost of direct labor? e. Returning to the three-worker scenario, Mr. K contemplates redesigning the assignment of tasks to servers. For this, Mr. K is evaluating the reassignment of Activity 5 from S3 to S1. What will be the new cost of direct labor? f. Returning to the original question, Mr. K is thinking to add one additional worker to the process. The worker would be assigned to do the same set of tasks as one of the current workers. First, decide which set of tasks would benefit from one additional worker, then calculate the process capacity (customers per hour)? g. Returning to the original question, Suppose 4 minutes of processing time from activity 4 could be moved to activity 3 while keeping the task assignments the same. What would be the capacity of this new process (customers per hour)? h. Returning to the original question, Suppose each worker could be trained to complete all activities and they could all work independently of each other. What would be the capacity of this process (customers per hour)?
a. 64.00 minutes per customer b. c. $32.55 per customer d. e. $25.20 per customer f. 2.72 customers per hour g. 2.22 customers per hour h. 2.81 customers per hour
To increase the capacity of a process on must increase the capacity of the resource that is the ________________.
bottleneck
Inventory ______ accumulate between workers in a worker-paced line. cannot can
can
If we know the flow rate and capacity of each labor resource that work in a process, we ______ compute the average labor utilization across employees. cannot can
can Average labor utilization = Labor Content Cycle Time * Number of employees
For a process that is ____________ constrained the bottleneck resource will have 100% utilization.
capacity
If process capacity is 60 units per hour and customers desire 80 units per hour then the process is _____________ constrained.
capacity
When the flow rate is less than the demand rate the process is referred to as ______________ constrained.
capacity
When the flow rate is less than the demand rate the process is referred to as _______________ constrained.
capacity
You observe a long line at the airport security. The process currently is multiple choice capacity-constrained. demand-constrained. unconstrained. linearly constrained.
capacity-contrained