Ops Exam 2

Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of product is $10, and the selling price for the finished product is $25. Which of the following is the number of units that has to be produced and sold to break even?

1,000 units

A medical clinic has two doctors and each can treat 25 patients a day. The doctors see walk-in patients whose arrival times cannot be controlled, and also patients who have made appointments. Knowing the expected number of walk-ins per day, appointments are scheduled to utilize the doctors fully. The following table gives the expected number of walk-ins for a particular week: Day:Mon.Tue.Wed.Th.Fri.Expected Walk-ins:45 35 40 45 40 What is the total number of appointments that can be scheduled during this week?

45

______ is not a strategy for reduction of customer-induced variability.

Adapt to customer skill levels

Which of the following is not an infrastructure criteria used in facility location analysis?

Adequate low cost labor

A process flowchart uses which of the following symbols to represent flows of material or customers in a flow diagram?

Arrow

Which of the following basic types of process structures is one in which equipment or work processes are arranged according to the progressive steps by which the product is made?

Assembly line

Which of the following basic types of production layout formats is one in which equipment or work processes are arranged according to the progressive steps by which the product is made?

Assembly line layout

Which of the following best describes the term "cycle time"?

Average time between completions of successive units

To reduce process throughput time, you might try which of the following actions?

Change the sequence of activities.

Which of the following is not considered an input to the layout decision in facility layout analysis?

Cost per square foot of alternative facilities

Explain what cross docking is, and the advantages of using LTL freight and cross docking

Cross docking uses smaller shipments for local deliveries instead of consolidating in one big warehouse.

Which of the following is not a strategy to manage demand?

Cross-training employees.

Which of the following refers to the physical presence of the customer in a service system?

Customer contact

______ variability is not one of the five sources of customer-induced variability.

Demand

Which of the following is not a strategy for managing capacity?

Developing complementary services.

A process flowchart uses which of the following symbols to represent a decision point in a flow diagram?

Diamond

Which of the following is not an example of the differential pricing policy?

Difference in hospital fees for walk-in and scheduled services.

Which of the following is not a step in developing a manufacturing cell layout?

Disposing of leftover machinery and outsourcing ungrouped processes

In class we discussed 4 types of Manufacturing process strategies; Make-to-Stock, Assemble-to-Order, Make-to-Order, and Engineer-to-Order. Define each one of these, and describe both the advantages and disadvantage of these strategies.

Do this!!!!

Which of the following is not considered a major work flow structure?

Fabrication

A make-to-order firm will work with the customer to design the product and then make it from purchased materials, parts, and components.

False

A manufacturing cell groups identical machines together to work on products having similar shapes and processing requirements.

False

A service operation by its very nature is a make-to-stock type of production process.

False

A service system with a high degree of customer contact is less difficult to control than a low degree of customer contact service system.

False

An example of segmenting demand is seen when movie theaters offer matinee prices before 6:00 p.m.

False

As a general rule, manufacturing workstations should not be very close together.

False

Blocking in production processes is when activities in a stage must continue because there is no place to deposit completed items.

False

Cross-docking is a practice used in the international shipping industry that facilitates port utilization.

False

Implicit services are not part of the service package.

False

In facility location decision making, the factor-rating system is one of the least used general location techniques.

False

Make-to-order production processes are well suited for high-volume production of a standardized product.

False

Quality of life in a host community is not a major factor in making the facility location decision.

False

The customer is (or should be) the second most important focal point of all decisions in a service organization.

False

The time needed to respond to a customer's order is called the customer response time.

False

When a make-to-order production process is used, production is based on forecasts.

False

Work-center layouts allocate dissimilar machines into cells to work on products that have dissimilar processing requirements.

False

A process flowchart uses symbols to represent which of the following?

Flows of material or customers

In the service-system design matrix, an Internet and on-site technology service encounter is expected to have which of the following?

High production efficiency

Which of the following is not Plant location Method we discussed?

Hub and Spoke Method

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

Immigration rules

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following costs should not be included in the analysis?

Incidental costs

A process flowchart uses which of the following symbols to represent storage areas or queues in a flow diagram?

Inverted triangle

An advantage of a make-to-stock process is which of the following?

It features rapid delivery of a standard product.

For a chase demand strategy which of the following does not have a high trade-off?

Labor-skill level.

In class we discussed managing capacity in a service organization. We discussed the Level Capacity and Chase Demand Strategies. Define and describe both strategies and provide example of firms that utilize these strategies and how each are implemented

Level Capacity Strategy: This strategy seeks to even out demand so that it is spread out evenly. A firm that uses level capacity is a doctor's office or a high end restaurant. You have to make appointments at a doctors office and make reservations at a restaurant. This evens out the demand because they will only take a certain amount of appointments or reservations at a time. It does not use employees at their full capacity because there is down time and customers do not have to wait typically. Working conditions are pleasant and the day is scheduled and organized. Chase Demand Strategy: This strategy seeks to boost demand instead of smoothing it out. An example is call centers or fast food chains. Employees are always being used because there is a high demand and customers usually have to wait. Working conditions are hectic and often stressful.

The long-term relationship among the inventory, throughput, and flow time of a production system in steady state is called which of the following?

Little's law

In the service-system design matrix, a face-to-face total customization service encounter is expected to have which of the following?

Low production efficiency

In the service-system design matrix, a mail contact service encounter is expected to have which of the following?

Low sales opportunity

What transportation mode has very high initial investment costs but gives a very low cost per mile for products that are highly specialized and require no packaging?

Pipeline

Which of the following is not a basic type of production layout format?

Process layout

Which of the following is not a basic type of process structure?

Product-process matrix

A process flowchart uses which of the following symbols to represent tasks or operations in a flow diagram?

Rectangle

Which of the following is not part of "the service triangle"?

Service encounter

Which one of the following is not a major factor distinguishing service design and development from manufacturing design and development?

Service operations can be protected by patents; manufacturing operations cannot.

Which of the following is a characteristic that can be used to guide the design of service systems?

Services cannot be inventoried.

In the design of retail service layouts, the term "ambient conditions" does not refer to which of the following?

Staffing

Which of the following production process terms best describes the situation when activities in a stage of production must stop because there is no work?

Starving

In the design of retail service layouts, the term "ambient conditions" could refer to which of the following?

Temperature

Explain what the Hub and Spoke model of distribution is, and the advantages of using this model

The Hub and Spoke model of distribution is a combination of consolidation and cross-docking. The warehouse is a hub that sorts goods. The hubs are in strategic locations so that travel is reduced. Goods are sorted at hubs into consolidation areas that are specific to the location they will be transported to. The advantage is that they simplify shipment processes. Another advantage is that they are closer to customers.

Airplane Activity

The airplane exercise showed how the pull/one piece flow system differed from the push/batch production system. The pull system definitely had the advantage in this exercise. It increased throughput and decreased inventory stack up around bottlenecks. The better production and lower inventory numbers were due to the ability of the stations to help each other if needed. They also did not get ahead of each other since they had to rely on the station after them to begin before they could start on the next plane. This helped work in process inventory not to stack up. In the end, the pull system reduced work in process costs and increased output due to the tactics mentioned above. The push system in the case of this exercise did not work very well. It reduced throughput and increased inventory stack up. People got ahead of each other and work in process inventory stacked up due to bottlenecks. Ultimately, this system increased work in process costs and decreased outputs. This exercise fits into the waste elimination and lean principles because it shows how the pull system reduces waste and employs lean principles. The pull system reduced costs by decreasing work in process inventory. It also reduced waste by as less inventory was sitting around not being used. Overall, due to using these lean principles and eliminating waste, the pull system was able to increase output and decrease costs.

In class we did the Airplane exercise, describe what the exercise was trying to convey about the manufacturing process, and what the advantages of smaller batch sizes are, and also how those changes can effect a manufacturing process and ultimately improve the customer experience.

The airplane exercise was showing the contrast between a push and pull system. The push system had batches of three and caused stations to get ahead of one another and therefore cause a stack up of inventory. It also could not produce planes as fast and decreased throughput. The pull system was batches of one and stations could not start on a new batch until the station ahead of them started on theirs. This practically eliminated the stack up of work in process inventory. It also produced planes much faster and increased throughput. In this case, the pull system worked the best and was able to satisfy more customer orders. The smaller batches created less stress for the stations and they were able to help the bottleneck stations.

Which of the following is a major factor that distinguishes service design and development from manufacturing design and development?

The service package is the major output of the development process.

Which of the following is not a characteristic of yield management?

There is one homogeneous customer class.

Explain the chart below and the relationships between all parties

This is showing the relationship between support systems, the customer, and employees when is comes to the service strategy. The service strategy would not be complete without the three functions below it. In order for it to work well, the customer, employees, and support systems need to be running smoothly together.

In class we discussed 5 types of material movement: Trucking, Rail, Ocean, Plane, and Pipeline. Describe each and provide the advantages and disadvantages of each.

Trucking: Trucks carry material using roads and highways. Trucking is advantageous because it is flexible. The disadvantage is that you cannot carry much material with a truck. Rail: Trains carry material using rail systems. Rail is advantageous because it is low cost. The disadvantage is that it takes longer for transportation and every track is different making timing variable. Ocean: Boats carry material using water. Ocean is advantageous because is is low cost and you can transport a high capacity. The disadvantage is that transportation is slow and limited due to water only being accessible by some locations. Plane: Planes carry material using the air. Plane is advantageous because it is super fast. The disadvantage is that transportation is extremely expensive. Pipeline: Pipes carry materials. Pipeline is advantageous because costs per mile are low and no packaging is needed. The disadvantage is that it is limited to liquids, gas, and solids in slurry form and the initial building costs for the pipeline are high.

A "process" is any part of an organization that takes inputs and transforms them into outputs that, hopefully, are of greater value to the organization than the original inputs.

True

A drawback to increased consumer participation is the fact that service quality is no longer completely under the control of the provider of the service.

True

A favorable business climate in facility location decision making might include local government providing basic skill training for prospective members of the workforce.

True

A project layout is characterized by a relatively low number of production units in comparison with workcenter and assembly-line formats.

True

A third-party logistics company is a firm that manages all or part of another company's product delivery operations.

True

A workcenter is a basic production layout format in which similar equipment or functions are grouped together.

True

An explicit service is readily observable by the senses.

True

An implicit service implies psychological benefits that the customer may sense only vaguely.

True

An important aspect of service products is that they cannot be inventoried.

True

Assemble-to-order means moving the customer order decoupling point from finished goods to components.

True

Assembly-line balancing means assigning all necessary tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time and so that idle time across all workstations is minimized.

True

Benchmarking refers to the practice of comparing the production metrics of one firm with the production metrics of another.

True

Buffering in a production process refers to a storage area between stages of production activity where output of a stage is placed prior to being used in a "downstream" stage.

True

Cross-docking is an approach used in consolidation warehouses, where large shipments are broken down into small shipments for local delivery in an area.

True

Engineer-to-order firms will work with the customer to design the product and then make it from purchased materials, parts, and components.

True

Facility location analysis considers proximity to customers important to timeliness of deliveries.

True

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of high technical skills.

True

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of low wage costs and/or skill levels.

True

For the purposes of assembly-line balancing, cycle time is found by dividing production time per day by the required units of output per day.

True

Hub-and-spoke systems combine the idea of consolidation and that of cross-docking.

True

If you want to reduce process flow time, one solutions is to perform activities in the process in parallel.

True

In designing a production layout a flexible line layout might have the shape of a "U".

True

In designing a production line, a mixed-model line layout is used by JIT manufacturers.

True

In facility location decision making, the educational and skill levels of the labor pool must match the company's needs.

True

Pacing in production processes refers to the fixed timing of the movement of items through the process.

True

Poka-yokes are procedures that block the inevitable mistake from becoming a service defect.

True

Service capacity is defined in terms of an achievable level of output per unit time.

True

Services typically have multiple site locations to maintain close contact with customers.

True

Setup time is the time required to prepare a process to produce a particular item.

True

The Association for Operations Management defines logistics as "the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities."

True

The essential issue in satisfying customers in the make-to-stock environment is to balance the level of finished inventory against the level of service to the customer.

True

The focus in the make-to-stock environment is on providing finished goods where and when the customers want them.

True

The local government's willingness to invest in upgrading infrastructure to the levels required by a company is an important issue in a company's decision of where to locate a new facility.

True

The objective of a mixed-model line layout is to meet the demand for a variety of products and avoid building high inventories.

True

The objective of a retail service layout is to maximize net profit per square foot of store space.

True

The objective of facility location analysis is to select the site with the lowest total cost.

True

The term "assembly line" refers to progressive assembly linked by some material handling device.

True

Using part-time personnel at fast-food restaurants allows capacity to vary with demand.

True

Yield management is a strategy that manages both demand and capacity.

True

Which of the following basic types of process structures is one in which similar equipment or functions are grouped together?

Work center

Which of the following is a basic type of process structure?

Work center

Which of the following basic types of production layout formats is one that has similar equipment or functions are grouped together?

Workcenter layout

A good overbooking strategy should ______.

balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations

Suppose that you have two processes A and B for producing a widget.Process A has a fixed cost of $10,000 and per unit variable cost of $80.00. Process B has a fixed cost of $30,000 and the per unitvariable cost is $40.00. The widget sells for $100 regardless of production process used. During the next three years (your planning horizon for the widgets) you expect the economy to be pretty good with sales of widgets to be at least 700 units per year. You will

choose Process B, since it will have higher net profit than process A in the next three years.

Consider a three sequentially stepped process named as Process A, Process B and Process C. Input comes into Process A. Output form A goes into Process B. Output from B goes into Process C. Output of C is the final output. Suppose that it takes 2 minutes per unit in Process A, 3 minutes per unit in Process B and 1 minute per unit in Process C. Suppose further that Process A receives input at the rate of 30 per hour. Where would you place a buffer?

in front of Process B

The purpose of differential pricing is to ______.

make off-peak usage attractive

A restaurant that features special lunchtime combo meals is providing all of the following benefits, except: ______.

promotes off-peak demand

A health club's offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is ______.

promoting off-peak demand

Bars that offer happy hours in the afternoon are using the strategy of ______.

promoting off-peak demand

Faced with variable demand and a perishable capacity, a service manager can smooth demand by ______.

using reservations and appointments

Several approaches to demand management exist, but only ______ seeks to maximize revenue.

yield management