MGMT 333 Exam 4

Which of the following is an alternate name for the Cause and Effect diagram?

Ishikawa diagram

Which of the following statements about the standard error of the estimate is true?

It measures the scatter of the data points around the line

The authority to produce or deliver additional parts comes from succeeding operations in a

Kanban system

A vendor using advance ticket sales to forecast demand for stadium concessions for a professional football game would most likely use which of the following?

Linear regression

Jidoka

authority to stop the production line

Sales and operations planning (a.k.a. aggregate planning) makes decisions on how to

balance supply and demand over a time horizon of 2 to 18 months integrating financial and operations planning.

The process of identifying other organizations that are best at some facet of your operations, analyzing your performance versus theirs in order to establish a standard against which to judge performance, and identifying a model for learning how to improve is known as:

benchmarking

A quality improvement technique that involves the share of thoughts and ideas in a way that encourages unrestrained collective thinking is:

brainstorming

Aggregate planning is a ______ function.

intermediate range

Andon

lights signal quality problems

Ishikawa diagram, which is named after

the professor who invented it.

Flow charts are used to document

the relevant process.

The type of operation typically performed by a job shop is:

unit or small batch production

In using the chase strategy, variations in demand could be met by:

varying output during regular time by changing employment levels

Which of the following statements are true about starting exponential smoothing forecasts?

- Use an average of several values to start off the initial forecast for the forecast series - Use a naive forecast for F2 to start off the Forecast series

Which of these provides input to the Material Requirements Plan? (Choose all that apply) - Bill of Materials - Lead Times - Inventory Records - Master Production Schedule

(All of the above) - Bill of Materials - Lead Times - Inventory Records - Master Production Schedule

Available-to-Promise: (choose all that apply) - Tells the sales force how many products are available to sell - Coordinates production and sales efforts - Takes into account current inventory, confirmed orders, and scheduled production - Helps to determine when production is scheduled

(All of the above) - Tells the sales force how many products are available to sell - Coordinates production and sales efforts - Takes into account current inventory, confirmed orders, and scheduled production - Helps to determine when production is scheduled

Exponential smoothing takes which of the following things into account (choose all that apply)?

(All of the above) - The forecast from the previous period - The demand from the previous period - The error in forecast from the previous period - A smoothing constant

The Cpk measure uses which of the following as inputs?

(All of the above) - Upper specification limit - Lower specification limit - Three sigma - The average

Forecasts can be made more accurate by: (choose all that apply)

(All of the above) - Using a shorter time horizon - Aggregating to product families or locations - Using multiple sources of information - Gathering data closer to the customer

Quantitative Methods

- Time series - Associative forecasts

Components of Time Series Data

- Trend - Cycle - Seasonal pattern - Irregular (Special Cause) variation - Random variations

Good reasons to reduce your setup times in a factory are: (Choose all that apply) - A down machine has no output - Throughput increases after a machine change-over - Setup times are constant and cannot be controlled - Long setup times create additional inventory

- A down machine has no output - Long setup times create additional inventory

What step immediately follows Market demand? - Final materials requirements plan - Final capacity requirements plan - MRP - Master production schedule - Aggregate plan

- Aggregate plan

At which step in MRP II would you establish workforce levels? - Market demand - Final capacity requirements plan - MRP - Master production schedule - Aggregate planning

- Aggregate planning

Which of these is not part of the aggregate planning process? - Workers needed - Business process improvement - Production rate - On-hand inventory

- Business process improvement

Rough-cut capacity planning: - Looks at specific products to be run in specific factories - Analyzes both labor and equipment capacity throughout the organization - Examines total capacity by measuring average factory output - Determines if the MRP is feasible or not

- Examines total capacity by measuring average factory output

What is the key output of MRP II? - Final requirement plans for materials and capacity - Master production schedule - Market demand - Capacity requirements planning - Aggregate plan

- Final requirement plans for materials and capacity

Total Quality Management: (Choose all that apply)

- Is managed proactively - Focuses on the customer

Which of the following statements about the master schedule are true?

- It is different from the aggregate plan - It allows marketing to make valid delivery commitments

The key to an effective ERP system is: - It has additional modules for supply chain management - It tracks supplier orders - It uses one shared database for all departments and functions - A separate system is used for each department

- It uses one shared database for all departments and functions

Qualitative Methods

- Jury of executive opinion - Delphi method - Sales force composite - Consumer Market Survey

At which step in the MRP II are requirements for component parts and sub-assemblies determined? - Final capacity requirements plan - MRP - Master production schedule - Capacity requirements planning - Market demand

- MRP

What is the key driver (or first input) of MRP II? - Market demand - Capacity requirements planning - Aggregate plan - Master production schedule - Material requirements plan

- Market demand

S&OP Responsibilities

- Marketing and sales - Manufacturing - Materials management - Customer service - Finance - Engineering - Human resources

At which step in MRP II would you establish the completion dates and quantities for producing end items? - Market demand - Final capacity requirements plan - MRP - Master production schedule - Aggregate planning

- Master production schedule

The best approach to successfully implementing an ERP system is: - Pilot the program on a small scale and then transfer throughout the organization - Merge with a company that already has an effective ERP system - Create ERP software that is customized for your company's supply chain - Install software throughout the organization and then switch from the old system

- Pilot the program on a small scale and then transfer throughout the organization

The aggregated production plan (choose all that are correct) - Plans by product group or family - Is an example of intermediate-range planning - Looks out for a period of about one year - Forecasts customer demand

- Plans by product group or family - Is an example of intermediate-range planning - Looks out for a period of about one year

What are the costs of quality?

- Prevention cost - Appraisal cost (Inspection cost) - Internal failure cost - External failure cost

Time Fences: (choose all that apply) - Are derived directly from the aggregate plan - Provide stability and predictability to factory operations - Determine when a customer order can be cancelled without penalty - Determine when changes to the MPS can be made

- Provide stability and predictability to factory operations - Determine when changes to the MPS can be made

Aggregated Planning Inputs

- Resources - Demand Forecasts - Policies - Costs

The S&OP requires input from: (choose all that apply) - Sales - Operations - Transportation - Finance

- Sales - Operations - Finance

S&OP Outputs

- Sales plan - Production plan - Inventory plan - Backlog plan - Financial plan - Product & process development plan - Workforce plan

Which of these is a concept for reducing setup times? - RFID tags - Manufacturing production processes - Multi-product factories - Single minute exchange of die

- Single minute exchange of die

What are the differences of using the centered moving average method and the simple moving average method?

- The centered moving average works better when there is a trend in the data. - The centered moving average typically requires more calculations.

Which of the following are the assumptions underlying regression analysis?

- The deviations around the line should be normally distributed. - Variations around the line are random. - Predictions are not made outside the range of observed values.

Which of the following statements is a correct characterization of salesforce opinions?

- The salesforce has direct contact with customers and therefore have a good sense of what customers want.

Which of the following statements are true? (Choose all that apply) - The master production schedule assumes infinite capacity so it must be verified with the CRP - With input from the MRP, the CRP determines overload and underlay conditions - Capacity requirements planning determines how much capacity you need to meet the production plan - Costs are not considered when developing the CRP

- With input from the MRP, the CRP determines overload and underlay conditions - Capacity requirements planning determines how much capacity you need to meet the production plan

Which of the following is/are advantages of consumer surveys? (Check all that apply)

- You can get information that may be unavailable anywhere else. - Consumers are able to give direct feedback to companies.

Deviations around the average value (i.e., the line) should be normally distributed. Which of the following supports the assumption of normality.

- a small proportion of larger deviations - a concentration of values close to the line

Aggregate planning decisions define the framework within which ______ decisions will be made. They are the starting point for ______ and production control systems.

- operating - scheduling

Which of the following are true of good forecasts?

- should be cost-effective - should be accurate - should be meaningful (understandable units) - should be reliable - should be timely

What are the supporting goals of JIT:

- to eliminate disruptions - to eliminate waste - to make the system flexible

Ishikawa's Seven Quality Control Tools

1. Check Sheet 2. Histogram 3. Pareto analysis 4. Flow Chart 5. Cause-and Effect Diagram 6. Scatter Diagram 7. Graph, and Shewhart process control chart

Four Fundamentals for S&OP

1. Demand 2. Supply 3. Volume 4. Mix

Place the following steps for aggregated planning in the correct order.

1. Determine demand for each period 2. Determine capacities for each period 3. Identify relevant company/departmental policies 4. Determine all relevant costs 5. Develop alternative plans and compute the cost for each 6. Select the best plan

Two key tasks for demand management:

1. Managing Customer Orders 2. Forecasting Demand

The steps below are part of MRPII (Manufacturing Requirements Planning). Arrange these steps in the correct order on the bottom line. - MRP - Master Production Schedule - Market demand - Aggregate Plan - Final Capacity Requirements Plan

1. Market demand 2. Aggregate Plan 3. Master Production Schedule 4. MRP 5. Final Capacity Requirements Plan

Drag the items below and place them in the numbered boxes in the proper sequence in which decisions are typically made. - Master production schedule - Product and service selection - Material requirements plan - Aggregate plan - Facility layout - Facility size and capacity - Disaggregation

1. Product and service selection 2. Facility size and capacity 3. Facility layout 4. Aggregate plan 5. Disaggregation 6. Master production schedule 7. Material requirements plan

What is the one competitive priority that a job shop would least likely use to encourage a buyer to use his/her product or service instead of a competitor's? - Price or Cost - Flexibility - Quality - Service

?

The ultimate goal of JIT is:

A balanced, rapid flow

In the Cause and Effect diagram, the word Category refers to:

A group of similar causes

A system that is flexible, use minimal resources, and produces high-quality goods or services is called:

A lean system

5W2H

A method of asking questions about a process that includes what, why, where, when, who, how, and how much.

In the Cause and Effect diagram, the word cause refers to

A possible factor causing a particular quality problem

Yield Management

An approach to maximizing revenue by using a strategy of variable pricing; prices are set relative to capacity availability

Match the forecasting method to the appropriate classification.

Associative Models: - Linear Regression Time-Series Forecasts: - Seasonal Relative - Exponential Smoothing Judgemental Forecasts: - Consumer Surveys - Executive Opinions - Delphi Method

A national home builder creating a forecast of house sales based on an equation based on several predictor variables including unemployment, inflation, mortgage rates, and stock market performance is using which of the following?

Associative forecasting

Snow increases demand for snow shovels so a retail store manager watching the weather to forecast demand for snow shovels is applying which of the following?

Associative forecasting

With an ABC system, an item that has a high demand or high volume would probably be classified as a(n):

C item

Drag each tool below into the box corresponding to the step in the DMAIC cycle where it is most likely to be used.

Define: - Flow charts Measure: - Check sheets Analyze: - Pareto charts - Cause-and-Effect diagrams Improve: - Brainstorming - Quality circles Control: - Control charts for new process

Which of these is not a cost of quality?

Design cost

Special attributes that give an organization a competitive advantage are called:

Distinctive competencies

The items listed below each contribute to one or more of the supporting goals of lean systems. Drag each item into the box corresponding to the goal to which it contributes the most.

Eliminate Disruptions: - Level loading - Preventive maintenance - Highly capable production system - Close vendor relationships Make the System Flexible: - Manufacturing cells - Cross-trained workers - Single-minute exchange of die (SMED) Eliminate Waste: - Minimal inventory - Value stream mapping - Automation

(T/F) A Push system requires a high degree of coordination between production stations.

False

(T/F) Design-for-Six-Sigma programs offer a set of quality standards accepted by all industries.

False

(T/F) Process "capability" means the ability to produce at high throughput.

False

(T/F) Scheduling major change-overs sequentially helps to shorten overall setup times for the factory.

False

(T/F) The Bill of Materials is usually a very simple, straight-forward recipe for making the final product.

False

(T/F) The greek letter α ("alpha") in the exponential smoothing formula can be any value between -10 and 10.

False

Companies implementing lean systems typically build close vendor relationships with vendors who are expected to provide

Frequent small deliveries of high-quality goods

Aggregate production strategies are part of your _______ planning. - Long range - Short range - Intermediate range - Sales

Intermediate range

Forecasts are the basis for many decisions and an essential input for what?

Matching supply and demand

Determining the baseline performance occurs in the Six Sigma DMAIC step know as:

Measure

Match each of the following potential causes of dissatisfied customers at a fast-food restaurant with the category under which it would appear on a cause-and-effect diagram.

Methods: - Orders are taken by one worker, payment processed by another, and food delivered by third worker. - Orders are written down on paper slips or paper cups. - Line cooks are also expected to pitch in at the order station when available. People: - Workers are late or absent. - Workers are inattentive during food preparation or serving. Equipment: - The fryer temperature is too hot. - The food warmer thermostat is not working. - The grill temperature is lower than optimal, leading to longer cooking time. Materials: - Sometimes stale bread is used because fresh bread did not arrive. - Some ingredients such as tomatoes and pickles are missing on some days.

A tax accountant who calculates the total demand for her serivces from the past four years and divides by four to forecast demand for the next year is using which of the following?

Moving average

Building a lean production system requires that a firm identify and eliminate

Muda

The quality tool which helps focus on the most important problem areas based on the 80-20 rule is:

Pareto analysis

The tool that is sued to separate the most important problems regarding a process from problems of less importance is the

Pareto chart

Sales & Operations Planning

Planning process used by companies to help keep supply and demand in balance. The output of the process is a plan that specifies how demand will be met over the business cycle.

One of the building blocks of JIT is:

Product design

The level strategy and the chase strategy are examples of a(an) ______ aggregate production strategy. - Long-term - Constant - Pure - Combined

Pure

Which of the following statements is true of Push and Pull systems?

Push and Pull systems are opposite but can still be used together

Forecasting demand for a new restaurant concept would most likely rely on which of the following?

Qualitative techniques

The items listed on the left below are each related to one of the classifications of forecasting techniques shown on the right. Drag each item into the correct forecasting classification.

Qualitative: - Subjective - Delphi Method - Panel of experts Time-Series: - Weighted moving average - Seasonal relatives - Exponential smoothing Associative: - Multiple-regression - Explanatory variables All forecasting techniques: - Imperfect

Group technology may be used in lean systems to facilitate

Reductions in setup cost and time

The Cause and Effect diagram can be used to

Search for the cause of a problem

Demand Management

The activities involved with integrating information from and about the firm's customers, internal and external to the firm, into the manufacturing planning and control systems.

Sales and Operations Planning combines: - Supply and demand - Long-range planning and short-range implementation - The aggregate plan and the sales plan - Production costs and backordering costs

The aggregate plan and the sales plan

In the Cause and Effect diagram, "Effect" refers to:

The problem being analyzed

The Cp measure of capability assumes which thing?

The production distribution is centered

______ typically is stated in terms of aggregate units for an intermediate-range time horizon. - The employee work schedule - The job sequence - The material requirements plan - The master production schedule - The sales and operations plan

The sales and operations plan

The Cause and Effect diagram is also referred to as the "fishbone diagram" because:

The shape of the actual diagram resembles a fishbone

A movie theater using demand from the past 28 days to forecast demand for the next seven days is applying which of the following?

Time-series forecasting

Which of the following is a task of aggregate planners?

To achieve rough equality of demand and capacity one the entire planning horizon

Roll over the items to read their descriptions. Then drop them into the correct position. - Process design - Product design - Personnel/organizational elements - Manufacturing planning and control - Eliminate disruptions - Eliminate waste - Make the system flexible - A balanced, rapid flow

Top: - A balanced, rapid flow Middle: - Eliminate disruptions - Eliminate waste - Make the system flexible Bottom: - Process design - Product design - Personnel/organizational elements - Manufacturing planning and control

(T/F) A Pull system is likely to struggle to meet demand during demand spikes.

True

(T/F) A common approach toady is to use outsourcing to satisfy short-term increases in demand.

True

(T/F) Because of the need to interact with key supply chain partners, sales & operations planning is viewed as a cross-functional process.

True

(T/F) Inventory records help determine how many items of material, components, and subassemblies need to be ordered to make the final product.

True

(T/F) Many demand planners will make several forecasts under different scenarios and then apply their business judgement to make a recommendation that is somewhere in between.

True

(T/F) The Master Production Schedule breaks down the aggregated production plan, specifying what individual products the factory will make each week.

True

(T/F) The aggregate plan is derived from the company's overall business plan.

True

(T/F) The first step in planning capacity is to do a rough-cut plan to validate the MPS.

True

(T/F) The purpose of enterprise resource planning is to support planning and execution systems and the decisions they drive throughout your company.

True

The Deming Prize was established by the:

Union of Japanese Scientists

In the equations for the coefficients of a line, what is the y term?

Value of the time series

Enterprise Resource Planning

a computer system that integrates application programs in accounting, sales, manufacturing, and other functions in the firm

A quality circle is:

a group of employees who meet to discuss ways of improving products or processes

Setting α(alpha) equal to 1 results in which outcome?

a highly reactive forecast

Averaging a number of the most recent periods generates

a moving average forecast.

Backorder

a past due customer order or commitment (must be replanned)

Backlog

all customer orders received but not yet shipped (has a future delivery date) * includes backorders

Strategic Capacity Plannin

an approach for determining the overall capacity level of capital intensive resources, including facilities, equipment, and overall labor force size

Which of the following is the set of all cost components that make up the fixed-order-quantity total annual cost (TC) function:

annual holding cost, annual ordering cost, annual purchasing cost

Six Sigma's goal is to

approach the standard of Zero Defects through design and process improvements

The best forecast tools:

are easy to use

A ______ ______ strategy matches planned output to expected demand for each period.

chase demand

A production planning strategy that matches supply and demand by hiring and laying off employees as the demand varies is the - level workforce strategy - chase strategy - level capacity strategy - sales incentive strategy - subcontracting strategy

chase strategy

A tool that is commonly used to help facilitate data collection is the:

check sheet

Sales and operations planning requires - weekly workforce scheduling - master scheduling - a marketing budget - detailed short-range forecasts - coordination across functional areas

coordination across functional areas

Fixing a problems will often cost money; to minimize these costs it is best to find and fix the problem:

during the design phase

Associative forecasting techniques develop an

equation that summarizes the effects of predictor variables on the variable being forecast.

Warranty service, processing complaints, and costs of litigation are examples of:

external failure costs

Factors that might be causing a problem are grouped into categories such as Methods, People and Equipment in a

fishbone diagram

A visual representation of the steps in a process is known as a

flow chart

"Ft" stands for which thing?

forecast for period t

Aggregation for manufactured goods is typically based on ______. - warehouse operators - marketing considerations - groups of similar products - customer requests - supplier networks

groups of similar products

Production systems with customized outputs typically:

have relatively high skilled workers

The goal of the basic EOQ model is to minimize:

holding cost

The "Control" phase of DMAIC is intended to ensure that:

improvements are sustained

The aggregate plan typically attempts to - ensure the supply remains less than demand in order to keep prices up - determine the firms long-term capacity requirements - produce a supply that exceeds in order to keep the sales force busy - minimize labor utilization - minimize the cost of matching supply and demand

minimize the cost of matching supply and demand

The aggregate plan is a plan for labor and production for the intermediate term with the objective to

minimize the cost of meeting demand.

For JIT production it is important to

minimize waiting time

The smooth flows that are the goal of lean production systems depends on

minimized setup times

Qualitative techniques are useful for

new products or services.

Control charts show plotted values of a statistic

on a time-ordered chart

Loss of business, increased liability, decreased productivity, and higher costs are all likely consequences of:

poor quality

Linear regression is useful when one variable (such as advance ticket sales) is a

predictor variable for the item of interest (such as demand for stadium concessions).

Check sheets are basic forms that help users

record and organize data.

The aggregate plan provides input into ______ and production control systems. - forecasting - product development - scheduling - process design - corporate strategy

scheduling