Operational Management Midterm CH1, supply chain ch 3 notes, MAR6466 Ch3, Operations Management, Ch 8 MAR6466 on Final Exam, Ch 6 on MAR6466 Final, OSCM 3001-CH.2, OSCM Ch. 2, OSCM Ch. 8, OSCM Ch 16, op 16 Sustainable Operations Management—Preparing...

Which of the following is NOT one of the product/process design principles associated with lean/just-in-time production?

Encourage use of unique components.

Level 2 input

End item A is made by assembling 2 of part B and 3 of part C. Part C is made from 2 of component D and 2 of component E. Component D is considered to be a: Level 0 Level 1 input Level 2 input Level 3 input

Source inspection is inferior to inspection before costly operations.

F

The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.

F

The process view of business is vertical in nature while the functional view is horizontal in nature. True False

False pp. 108 - the process view is horizontal in nature; the functional view is vertical.

According to Little's Law, average throughput time equals average inventory * average flow rate. True False

False pp. 109, Little Law is: I = T X R or average inventory = average throughput rate X average flow rate

Performance Quality means producing a product or delivering a service that meets the required specifications. True False

False pp. 160 - Quality of conformance means producing a product to meet the specifications

The measures of quality used in manufacturing processes can be readily transferred to service operations. True False

False pp. 162 - The definition and measurement of service quality is quite different from that of manufacturing quality.

"When operational capabilities are consistent with and supportive of the value proposition and the outcomes desired by critical customers" best describes the concept of: Execution. Flexibility. Strategic planning. Fit.

Fit

When lean systems are implemented:

Fixed and variable costs both tend to decrease.

Successful Sourcing Strategies are different for:

Functional products versus innovative products

1. Build preparation process

Gain an understanding of both parties' interests; brainstorm value-maximizing solutions; identify objective criteria to evaluate fairness of agreement.

Most service plans are based primarily on labor requirements

How does aggregate planning for services differ from aggregate production planning for products: There is no difference Most service plans are based primarily on labor requirements Service plans make extensive use of inventory to meet demand

Which of the following environmental initiatives/programs deals most specifically with the firm's environmental management system? The Kyoto Protocol Responsible Care ISO 14000 LEED certification

ISO

Poka Yokes

Idea is that many mistakes can be prevented, examples: gas pump equipped with hose couplings

Supplier cert. programs are used to

Identify strategic supplier alliance candidates

At least 8 weeks

If the cumulative lead time is 8 weeks, to be feasible the MPS planning horizon must be: Exactly 8 weeks At least 8 weeks Less than 8 weeks At least 16 weeks

c. Precedence diagram A precedence diagram shows the relationships among tasks in a process.

In line-balancing, the relationships between tasks in a process is shown in a: a. Service blueprint b. Followers diagram c. Precedence diagram d. Product families diagram

Which of the following would you NOT expect to find in a company attempting to implement lean/just-in-time production?

Inspections after each piece is produced

Little's Law

Inventory (I) = Throughput Rate (TH) *Flow Time (F) F=I/TH

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings?

Ishikawa diagram

A well-designed value proposition possesses four characteristics. Which of the following is NOT one of those characteristics?

It offers the highest product quality in each quality dimension.

A short-term, highly focused effort for improving a process is know as

Kaizen Event

A short-term, highly focused effort for improving a process is known as:

Kaizen Event

Total Cost of Ownership (TCO)

Made up of all costs associated with the acquisition, use, and maintenance of a good or service

strategic

Make -vs- Buy is a _______ decision

Lean systems applications have found the most acceptance and adoption in:

Manufacturing firms.

Bottleneck

Minimum capacity among all activities

Control Charts

Monitor a metric over time to make sure it remains stable

An activity identified by a "?" is typically a(n)

None of these

If a company can eliminate all sources of variance in a process

None of these are true

What are the basic Activities of a process

Operation Transportation Inspection Delay Storage

d. The management of processes. "Processes" comprehends all of the aspects of operations management. The other answers are just possible components of operations management.

Operations management is: a. The management of production. b. The management of services. c. The management of physicians. d. The management of processes.

Reasons for global sources

Opportunity to improve quality, cost, and delivery performance

Modular Design (modularity)

Organizing a complex system as a set of distinct components that can be developed independently and then "plugged" together.

Modern TQM Ideas

Originated from post WWII & Japan

Which of the following statements about operations management processes is NOT true?

Outputs of operations management processes are always tangible goods.

The process improvement technique that sorts the "vital few" from the "trivial many" is

Pareto analysis

Xanadu makes HD televisions. It claims that its HD televisions have the clearest picture clarity in the industry. Xanadu is emphasizing which dimension of quality? Reliability Performance Features Conformance

Performance

PDCA

Plan, do, check, act

Shampoo

Planning for which of the following products would see the LEAST benefit from the use of an MRP system: Microwave ovens Mobile phones Shampoo Power lawnmowers

The types of costs included in a cost of quality analysis include:

Prevention, appraisal, and failure.

5S/6S

Process and method for creating and maintaining an organized, clean, high-performance workplace, you can think of it as cleaning up the current process, sets stage for future development

Centralized Purchasing

Purchasing department located at the firm's corporate office makes all the purchasing decisions

Linear Flow Process

Represents a more repetitive process, low variety, high volume

Which of the following is a measure common to both the strategic profit model and the SCOR model?

Return on assets

Little's Law suggests that the key to increased throughput is

Shorter flow times

Check Sheet

Simple tool to collect, organize, and display data. Categories are usually problem types

Ethical and Sustainable Framework

Step 1. Establish ethical and sustainable policies Step 2. Train staff and implement policies Step 3. Prioritize opportunities for improvement Step 4. Develop performance measurement systems Step 5. Monitor progress and make continuous improvements Step 6. Expand focus to other departments and partners

The 'triangle' symbol indicates what type of activity in a process?

Storage

Six Sigma

Strategy to improve the quality of outputs by identifying and removing defects and variation in processes, developed my Motorola in 1986

Xanadu Inc. claims that its manufacturing processes result in fewer greenhouse gases than those of its primary competitors. This suggests that Xanadu has a focus on: Risk management. Sustainability. Flexibility. Profitability.

Sustainability

Lean

Systematic approach that has been developed to help managers identify and reduce/eliminate waste and variance in the processes under their control

ISO 9000 has evolved from a set of quality assurance standards toward a quality management system.

T

Improved quality can increase profitability via flexible pricing.

T

Decisions being made about the aggregate production plans represent what type of planning? Tactical planning Detailed operational planning Long-term planning Strategic level planning

Tactical planning Aggregate production plans generally cover a period of three to nine months, which is considered to be tactical planning

As lean systems thinking is implemented, the amount of training that employees receive:

Tends to increase.

Suppose that a firm has historically been achieving "three-sigma" quality. If the firm later changes its quality management practices such that begins to achieve "six-sigma" quality, which of the following phenomena will result?

The average number of defects will be cut by 99.87%.

Commonality

The degree to which the same parts are used in different assemblies or products.

Target Cost

The desired final cost for a new product.

A bottleneck activity in a process is generally the activity with:

The least capacity

Cumulative Lead Time

The longest lead time path in the BOM is the: Time bucket Planning horizon Time window Cumulative lead time

c. To prevent an improved process from becoming highly variable again. In the control step, workers devise ways to monitor the process and prevent variation from rising to unacceptable levels.

The objective of the "control" step in the DMAIC process is: a. To create controlled experiments to analyze sources of variation b. To consider differing opinions regarding the root causes of problems c. To prevent an improved process from becoming highly variable again. d. To be rigourous in following the DMAIC steps

To an operations manager the "critical customer" is:

The person who has the greatest impact on design, sales and growth opportunities for the product.

New Product Development (NPD)

The process of generating new product and service concepts, creating designs, and bringing new products/services to the market. Basically, bringing concepts to reality.

Error Proofing

The process of identifying likely causes of a failure and preventing the failure or at least mitigating the impact of the failure; also known as mistake proofing, fool proofing, idiot proofing, and fail-safing, making fault tolerant and robust;

MPS

The quantities of end items to be completed in each time period into the future is shown in a(n): MRP MPS BOM ERP

Which of the following statements regarding "Six Sigma" is true?

The term has two distinct meanings—one is statistical; the other is a comprehensive quality system.

Time to Market

The time it takes to develop a new product from an initial idea (concept) to initial market sales; sometimes called speed to market.

What is a check sheet used for?

To track the number of different types of problems

Which of the following are NOT associated with quality at the source?

Total productive maintenance

Throughput time, process flow rate, capacity, and average amount of inventory in the system are some of the key metrics of a manufacturing process. True False

True (pp. 109, Little law is: I = T X R or average inventory = average throughput rate X average flow rate)

A major assumption behind Little's Law is that the process is in steady state wherein the average output rate equals the average input rate to the process. True False

True pp. 110 - this assumption is clearly stated on top of the page

Buy American Act (1933)

US government purchases and 3rd party purchases using federal funds must buy from US source if the US good is not more than a certain differential above the foreign good

Two main ethical approaches

Utilitarianism and Rights/Duties

Adam smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true?

Utilization was 133 percent of effective capacity

One implication of increased utilization in a process that:

Waiting time typically will go up

The "Plan-Do-Check-Act" Cycle was created by

Walter Shewhart

Elements of LEAN Manufacturing

Waste Reduction LEAN Supply Chain Relationships LEAN Layouts Inventory and Setup Time Reduction Small Batch Scheduling Continuous Improvement Workforce Empowerment

Which of the following is an important belief found in lean cultures? Inventory is to be reduced. Cost must be reduced. Management must be done through the use of appropriate tools and procedures. Waste is a symptom.

Waste is a symptom

Corporate strategic planning involves decisions related to:

What businesses should we be in?

Where is the most expensive point for quality defects to be detected?

When the final goods are at the customer

b. All of these have to think about "processes." All functions must think about processes.

Which of the following functions would NOT have to think about "processes"? a. Supply management b. All of these have to think about "processes." c. Production management d. Logistics management e. Accounting

A benefit of the process is that the firm should achieve high service levels with lower inventory

Which of the following is true concerning sales and operations planning: Once the plan is finalized, it should not be changed during the planning period There is a specific set of steps all firms should follow in the sales and operations planning process A benefit of the process is that the firm should achieve high service levels with lower inventory All of these are true

merchants

Wholesalers and retailers who purchase for resale.

Standard Work

Work instructions that describe all essential steps of an activity as clearly specified by: -Content -Sequence -Timing -Outcome Everyone needs to be doing things the same way

a. Sustainability. Maintaining operations that are profitable and nondamaging to the environment is sustainability.

Xanadu Inc. claims that its manufacturing processes result in fewer greenhouse gases than those of its primary competitors. This suggests that Xanadu has a focus on: a. Sustainability. b. Flexibility. c. Profitability. d. Risk management.

R Bar Chart

Y-Axis is the range of each sample

X Bar Chart

Y-axis is the mean of each sample

sealed bids

____ are used to satisfy the Invitation for Bid (IFB) and are opened in public display

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using

a Pareto chart

The results of___________ indicate whether a solution to a problem should be implemented throughout the area targeted for improvement.

a cause-and -effect analysis

with respect to operational performance, most logistics managers would prefer which of the following

a consistent 3 day performance cycle

For Juran, quality planning and control

are company-wide efforts to achieve specific, measurable objectives. focus on customer satisfaction.

operations

are the steps in a process

Numerous studies have been performed concerning retail stockouts. while results vary, generally the studies find that stockouts

average about 8%

The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as

benchmarking

which of the following lean principles best communicates the notion of demand synchronization?

build only as quickly as customers want them

Which of the following is a selection tool used to quickly reduce a list of items to two or three choices?

check sheet

corp. has found a way to prepare for changing colors in a few minutes, accomplished by

converting internal to external setups

role of management

create cultural change needed for LEAN to succeed -provide atmosphere of cooperation -empower workers to take action based on their ideas -develop incentive system for lean behaviors

has a significant impact on supply chain relationships

culture

true

cycle time units are always time: hours, minutes

The goal of inspection is to

detect a bad process immediately

Which of the following tools is a step-by-step pictorial representation of activities and decision points in a work process?

flow chart

quality and JIT

high quality is an important waste reduction tool; reducing defects reduces wasted material and capacity, and reduces the need for safety stocks

maximum capacity

highest output rate that an activity or a process can achieve under ideal conditions in the short term

Firms use:

internal certification programs, and many also require ISO 9000/ISO 140000 or other similar external certifications as part of their overall certification process

cycle time and throughput are

inverse of each other

which of the following approaches provides management with an appropriate tool for assessing the full impact from seed to sewer?

life cycle analysis

un brundtland commission

meet the needs of the present without compromising the ability of future generations to meet their needs

Import Broker: GS challenge

or sales agent performs service for a fee

part 2

part 2

yield rate

percentage of good units produced as a percentage of total units begun

Which of the following tools for displaying data show how all of something can be broken down into percentages of the whole?

pie chart

unnecessary automation is an example of which of the following forms of waste

process

lean philosophy could have negative impacts on...

radical product innovation

tools at the point of use is an example of which of the following elements of the 5s program

seitron/straighten/configure

What refers to training and empowering frontline workers to solve a problem immediately?

service recovery

small lot production

small amount of product produced at any one time: -reduces inventory and excess processing -increases flexibility -responds to customer demands more quickly -shortens manufacturing lead time -setup time must be low

which of the following is not associated with quality at the source

total productive maintenance

Based on his 14 Points, Deming is a strong proponent of

training and knowledge

providing greater spatial convenience to customers typically requires greater logistics expense

true

Project Type Process

unique output, ex: designing a video game, unique process, flexible equipment and employees

Cause & Effect Diagram

used to find problem sources/solutions

process thinking

way of viewing activities in an organization as a collection of processes as opposed to departments or functional areas

judment techniques are useful

when there is a lack of quantitative historical information, for example, when a new product is about to be launched.

Performance bonds

work will be on time and meet specifications

a. Built into the product. The other choices all imply "quality through inspection."

"Quality at the source" suggests quality should be: a. Built into the product. b. Inspected at multiple points. c. Ensured by the quality control lab. d. An inspector's function.

a. An approach that develops culture and tools with a focus on quality Quality management combines philosophy, culture, tools and techniques to ensure that high quality products and services are produced.

"Quality management" is: a. An approach that develops culture and tools with a focus on quality b. The achievement of all dimensions of quality c. A measure of how well managers achieve goals d. Six sigma

Benchmarking

- Measuring what other businesses do best and matching their performance, is an effective approach to improving your supply chain. - Benchmarking data regarding sourcing practices can be obtained in any number of ways, both formal and informal.

Risks associated with outsourcing, include

- Potential loss of control - Over production decisions, and intellectual property - Increased reliance on suppliers - Increased need for supplier management

Performance Metrics

- Related to quality, cost, delivery, and flexibility used to evaluate suppliers

Resources for learning about implementing sourcing practices:

- The Center for Advanced Purchasing Studies. - Council of Supply Chain Management Professionals (CSCMP) - Institute of Supply Management (ISM)

Request for Quotation (RFQ)/

-Buyer issues a Request for Quotation (RFQ) for routine / repeat purchased items

Drivers of Strategic Sourcing

-Reduce costs and reduce delivery cycle times -Improve quality and long-term financial performance -Optimize the number of global suppliers -Increase customer focus -Reduce high costs of materials -Deliver more innovative products, more frequently, and less expensively than competitors

Key Supplier Selection

-conducted by a cross functional team approach using evaluation forms or scorecards

The managers of a production line that fills cereal boxes would like to reach a Six Sigma level of quality in terms of product weight. The desired range of output extends from 10 to 16 ounces. In order to reach Six Sigma quality, what would the maximum standard deviation of output need to be?

0.5 ounces

4 Ways to Decrease Wait Time

1) How can you reduce variability in customer arrival times? 2) How can you reduce variability in the time to perform tasks? 3) Decrease utilization 4) Decrease process time

Cost Priorities

1) Low cost purchase, 2) low cost maintenance/repair

5S

1) Sort 2) Safe 3) Straighten 4) Scrub 5) Standardize 6) Sustain

Characteristics of World-Class Procurement Organizations

1. Being a Trusted Advisor to the Business 2. Driving Suppliers to Innovate 3.Providing Analytics backed Insights 4. Protecting the Business from Risk 5. Taking an Agile Approach to Staffing

Primary goals of industrial purchasing are

1. Ensuring uninterrupted flows of materials and services 2. Improve quality of the finished goods produced 3. Optimize customer satisfaction

Metrics should be

1. Understandable 2. Easy to measure 3. Focused on real value-added results (multi-criteria approach is best)

XYZ distribution center receives 1,000 deliveries each day. Arrivals are on time if they are within plus or minus 10 minutes of the targeted arrival. In order to have only 3.4 late or early arrivals per million deliveries, what would the standard deviation of arrival times need to be?

1.67 minutes

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Step 1: 500 chips/hour Step 2: 250 chips/hour Step 3: 200 chips/hour Step 4: 550 chips/hour Suppose the utilization is 70% of effective capacity. What is the actual output of the process?

140 Chips/Hour Done by doing (200*.7)

Quality Priorities

3) High-performance design, 4) Consistent quality/reliability, 5) service/support

If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage?

3.4

A process with Six Sigma quality is expected to produce how many defects?

3.4 defects per million opportunities

A process with 6 sigma quality is expected to produce how many defects?

3.4 defects/million

A bank has an average of 10 customers per hour arriving into the system and it takes an average of 30 minutes for the clerk to complete a transaction with a customer. Determine the average length of the queue in the bank. 300 3 20 5 0.333

5 pp. 109, T = I/R or 10/2(2 customers per hours processed) = 5

Time Priorities

6) Fast delivery, 7) On-time delivery, 8) Time-to-market

Under Juran's Law, whenever a problem occurs, what percentage of the time is the problem the result of a system/process error?

85%

Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the a. Taguchi Loss Function b. Pareto chart c. ISO 9000 Quality Cost Calculator d. process chart e. none of the above

A

The Plan-Do-Check-Act cycle is best defined as:

A method used to guide problem identification and solution.

In the preceding question, suppose the utilization is 70 percent of effective capacity. What is the actual output of the process? A. 140 chips/hour B. 350 chips/hour C. 175 chips/hour D. 200 chips/hour

A. 140 chips/hour

Utilization

Actual output/process capacity x100%

Process thinking causes managers to address critical process elements, including

All of the above( activities, inputs and outputs, flows, structure, resources, and metrics)

How do Alex and his team remove/reduce the bottleneck of the NCX10 in the film "the goal"?

All of the above, place quality before NCX10, stagger breaks and shift changes on NCX10

Strategic Alliance Development

An extension of supplier development which refers to increasing a key or strategic supplier's capabilities. - Results in better market penetration access to new technologies and knowledge, and higher return on investment - Eventually extends to a firm's second-tier suppliers as the firm's key suppliers begin to form their own alliances.

Business Ethics

Application of ethical principles to business.

Sanford Corp. bought new technological systems to inspect the quality or products as they come off the production line. The expense of operating these systems would be an example of which of the following types of quality-related costs?

Appraisal Costs

Sanford Corp. bought new technological systems to inspect the quality of products as they come off the production line. The expense of operating these systems would be an example of which of the following types of quality-related costs?

Appraisal cost

When should the metrics used in evaluating a process be developed?

As soon as we have identified the value proposition

"Quality at the source" suggests quality should be:

Built into the product.

1. In the Lean systems approach, as a system improves, it should have ____________ inventory on hand. A. more B. the same amount C. less D. twice the amount

C. LESS

Which of the following is NOT a principle of process improvement?

Change process design to facilitate product improvements

e-Procurement Systems

Concentrate large volumes of small purchases with a few suppliers, using e- catalogues available to the organization's users.

Process thinking causes managers to address critical process elements, including: A. Activities. B. Inputs and outputs. C. Flows, structure, resources, and metrics. D. All of these.

D. All of these

Which process activity is due to other factors (e.g. insufficient operating capacity, lack of material, equipment breaks)?

Delay

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following processes activities?

Delay

Postponement

Delaying differentiation (customization) for a product as long as possible to minimize complexity and inventory;

Variability as the source of most quality problems was a major contribution of which quality management thought leader?

Deming

Which of the following is NOT a component of the business model?

Desired outcome statement

Save-A-Lot

Displays different boxed goods, don't care if displays are orderly, stock in shipping boxes, do not give bags, 2800 grocery selection

Downcycling, as described in the chapter, is a critical consideration during which stage of the product life cycle? Extraction Packaging/transportation Usage Disposal

Disposal

Which of the following statements that might be made by a business executive best expresses the overall philosophy of Total Quality Management?

"There's always room for improvement."

Supplier Certification

"an organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections."

Maxmo Corporation identified the following costs for the most recent fiscal year: Vendor evaluation = $20,000 Design engineering = $100,000 Scrap = $15,000 Training = $30,000 Warranty = $40,000 What was Maxmo's total prevention cost for the year?

$150,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the inventory carrying cost of a chase plan accomplished through hiring and firing?

$2,000

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: What is the total cost if Dave hires one more full-time employee to meet additional demand? $36,000 $52,500 $40,750 $30,750

$40,750

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: What is the total cost if Dave relies on part-time employees to meet additional demand? $77,500 $43,500 $53,500 $70,500

$43,500

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Given this data, what is the total cost of a LEVEL plan?

$5,110,000

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. Given this data, what is the inventory carrying cost of a LEVEL plan? Regular production will vary each month. 5,000 units 4,000 units 6,000 units

$70,000 Inventory carrying cost = 7,000 × 10/unit = $70,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total inventory carrying cost for the level plan?

$8,000

Robust

(a) Hard to break; (b) Useful in a wide variety of situations; (c) Useful in the presence of high variation; sometimes called fault tolerant or error-proof; antonym: error-prone.

hybrid purchasing organization :Decentralized - Centralized

(large multiunit org) decentralized purchasing at the corporate level and centralized purchasing at business unit level.

hybrid purchasing organization: Centralized - Decentralized

(large org w/centralized control) Large national contracts centralized at the corporate level and smaller specific items decentralized at the business unit level.

e-Procurement Purchasing process

(newer process) 1. Requestor submits a material/purchase requisition -Relevant information such as quantity and date needed. 2. Material/purchase requisition goes to the Buyer -At purchasing department (hardcopy or electronically). 3. Buyer assigns qualified suppliers to bid -Product description, closing date, & bid conditions. 4. Buyer reviews closed bids & selects a supplier

Manual Purchasing process

(older process) 1. Purchase requisition 2. Request for Quotation (RFQ)/ Request for Proposal (RFP) 3. Purchase Order (PO)

Reasons for buying or outsourcing

*Cost Advantage -Especially for components that are non-vital to the organization's operations. Suppliers may have economies of scale *Insufficient Capacity -A firm may be at or near capacity and subcontracting from a supplier may make better sense. Extended Workbench *Lack of Expertise Firm may not have the necessary technology and expertise *Quality Suppliers may have better technology, process, skilled labor

ISO 140000

- A family of standards for environmental management. - The benefits include reduced energy consumption, environmental liability, waste and pollution, and improved community goodwill.

Third-Party Logistics (3PL)

- A growing industry that involves managing a firm's sourcing or materials and/or product distribution responsibilities - 3PL providers charge a fee for services. Typically generates an estimated savings of 10 to 20% of total logistics costs - Benefits include improved service, quality, and profits for their clients. - Vendor-managed inventory (VMI) services - One of the more popular roles of 3PL. - Lead logistics provider (LLP), aka 4PL - A primary 3PL provider; one that oversees other 3PL's

Supplier Evaluation and Certification

- A process to identify best and most reliable suppliers - Sourcing decisions are made on facts and not on perception - Frequent feedback can help avoid surprises and maintain good relationships - Suppliers should be allowed to provide constructive feedback to the customer

Information sharing and lines of communication

- Both formal and informal lines of communication should be set up to facilitate free flow of information. - Confidentiality of sensitive information must be maintained

Benefit of Supplier Certification

- Building long-term relationships - Reducing time spent on incoming inspections - Decreasing the supplier base - Recognizing excellence

Commitment and top management support

- Commitment must start at the highest management level. - Partnerships tend to be successful when top executives are actively supporting the partnership

Outsourcing allows a firm to

- Concentrate on core capabilities - Reduce staffing levels - Accelerate reengineering efforts - Reduce management problems - Improve manufacturing flexibility.

Benefits of e-Procurement include

- Cost savings - Frees-up time to concentrate on core business

SCM seeks to incorporate LEAN elements using

- Cross-training - Satisfying internal customer demand - Quickly moving products in the production system - Communicating demand forecasts and production schedules up the supply chain - Optimizing inventory levels across the supply chain - Channel integration - extending alliances to suppliers' suppliers and customers' customers

Ethical Policies should include

- Determining where all purchased goods originated and the manner in which they were made - Knowledge of the suppliers' workplace principles - Inclusion of ethics as a performance rating - Independent verification of vendor compliance - Report of supplier compliance to stakeholders - Provision of detailed ethical sourcing expectations to suppliers

ISO 9000

- Developed by International Organization for Standardization (ISO) - series of management and quality standards in design, development, production, installation, and service. - Companies wanting to sell in the global market seek ISO 9000 certification.

Inventory and Setup Time Reduction

- Excess inventory is a waste - Reducing inventory levels can create production problems - Once problems are detected, they can be solved. - The end result is a smoother running organization with less inventory investment.

Waste Reduction

- Firms reduce costs and add value by eliminating waste from the productive system. - Waste encompasses wait times, inventories, material and people movement, processing steps, variability, any other non-value-adding activity. - Before Waste is removed, processes are often scattered, which can negatively affect your customers - After Waste is removed, processes are more streamlined, resulting in more satisfied customers. You'll also save your organization time and money

Early Supplier Involvement (ESI)

- Highly effective supply chain integrative techniques - Key suppliers become more involved in the internal operations of the firm, particularly with respect to new product and process design, concurrent engineering and design for manufacturability techniques

Strong Supplier Partnerships

- Important to achieving win-win competitive performance for the buyer and supplier - These require a strategic perspective as opposed to a tactical position - Involves "a mutual commitment over an extended time to work together to the mutual benefit of both parties, sharing relevant information and the risks and rewards of the relationship"

Purchasing function is one of the most value-enhancing functions in any organization

- It is preferable to periodically monitor the purchasing function's performance against set standards, goals, and/or industry benchmarks. - Surveys or audits can be administered as self-assessments among purchasing staff as part of the annual evaluation process.

3 elements of LEAN working in unison

- LEAN manufacturing - Total Quality Management - Respect for People

Lean & Six Sigma complement each other

- Lean focuses on eliminating wastes and improving efficiency - Six Sigma focuses on reducing defects and variations

Continuous Improvement

- Making a series of small improvements over time results in the elimination of waste in a system - Buyers and suppliers must be willing to continuously improve their capabilities in meeting customer requirements

Criteria used in Certification Programs

- No incoming product lot rejections (e.g., less than 0.5 percent defective) for a specified time period. - No incoming non-product rejections (e.g., late delivery) for a specified time period - No significant supplier production-related negative incidents for a specified time period - ISO 9000/Q9000 certified or successfully passing a recent, on-site quality system evaluation - Mutually agreed-upon set of clearly specified quality performance measures - Fully documented process and quality system with cost controls and continuous improvement capabilities - Supplier's processes stable and in control

Mutual benefits and needs

- Partnership should result in a win-win situation, which can only be achieved if both companies have compatible needs. - An alliance is much like a marriage, and if only one party is happy, then the marriage is not likely to last

Value Added Process

- Process step that transforms or shapes a product or service which is eventually sold to a customer

Non-Value Added Process

- Process steps that take time, resources, or space, but do not add value to the product or service

SRM is often a part of the rollout of Strategic Sourcing and is typically applied with suppliers:

- Providing high volumes of a product/service - Providing lesser quantities of a crucial product/service - That serve many business units of a company or organization - Where intensive engineering, manufacturing and/or logistics interaction is essential

In the 90's, supply chain management combined

- Quick response (QR) - speed and flexibility - Efficient Consumer Response (ECR) - speed and flexibility - Just-in-Time (JIT) - Continuous reduction of waste - Keiretsu Relationships - Including suppliers in JIT/TQM efforts

Supplier Relationship Management

- SRM is the discipline of strategically planning for, and managing, all interactions with the third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. - Most supply professionals view SRM as an organized approach to defining what they need and want from a supplier and establishing and managing the company-to-company link to obtain those needs. - about IDENTIFYING AND MEASURING SUPPLIERS

Keys to Successful Partnerships

- Shared vision and objectives - Mutual benefits and needs - Commitment and top management support - change management - Information sharing and lines of communication - Capabilities - Continuous improvement - Performance metrics

SRM seeks to improve profits and reduce costs using tools such as:

- Sourcing Analytics - Sourcing Execution - Procurement Execution - Payment and Settlement - Supplier Score-carding - Performance Monitoring

Trends in Supplier Relationship Management

- Sourcing and procurement are increasing in importance in organizations. They are becoming more strategic - More companies expect more cost reductions to come from their procurement functions - Staff is being reallocated from low-level transaction activities to more strategic and higher value-added positions - Companies with effective transaction activities tend to reduce costs better and have strategic and automated systems

History of Lean

- Starting 1910's, Henry Ford's mass production line was a first breakthrough by using continuous assembly and flow systems that made parts find their way into finished products - In the 1940's, Taichii Ohno and Shigeo Shingo created the Toyota Production System (TPS), which incorporated Ford's production system and other techniques to form the basis of what is now known as LEAN. - The term LEAN was first coined by John Krafcik in 1988 and the definition was expanded in the 1990 book, The Machine that Changed the World.

ISO certified suppliers are frequently preferred by procurement departments

- They have to conform to an externally defined set of standards for quality and delivery of service - They are usually more open to sharing supply chain information - They welcome building relationships with their customers - They have formal processes in place for continual improvement of their products, services, and processes - They are easier for procurement to initially qualify and periodically audit - Certification is done by an external register agency - Firms have to be re-certified every three years

Lean is

- a culture - NOT a tool box of methods, ideas, or methodologies - provides value for customers through the use of most efficient resources possible - a standard in many industries - Results in: large cost reductions, improved quality, increase customer service

When evaluating suppliers to be used in a collaborative relationship

- purchase cost becomes relatively less important, particularly with key suppliers - the assumption is that excellent suppliers will be able to drive costs out

Value is...

- the inherent worth of a product as judged by the customer and reflected in its selling price and market demand - defined as anything for which the customer is willing to pay

Bid bonds/surety bonds

- to ensure that the successful bidder will accept the contract once awarded

Profit-Leverage Effect

-A decrease in purchasing expenditures directly increases profits before taxes (assuming no decrease in quality or purchasing total cost). -Bottom line impact is $ for $

Purchasing contributes to its objectives by:

-Actively seeking better materials and reliable suppliers -Work with the expertise of strategic suppliers to improve quality and materials -Involving suppliers and purchasing personnel in new product design and development efforts.

Electronic data interchange (EDI)

-Allows a supplier to profile demand and determine accurate forecasts -EDI also provides reorder point data to permit timely deliveries

VMI from the supplier's perspective

-Avoids ill-advised customer orders -Supplier decides inventory set up and shipments -Opportunity for supplier to educate customers about other products

Collaborative Negotiations

-Both sides work together to maximize the outcome or create a win-win result -Requires open discussions and a free-flow of information between parties

Advantages of Centralization

-Concentrated volume -Leveraging purchase volume - Avoiding duplication -Specialization - Lower transportation costs - No competition within units -Common supply base

Processing costs for small value purchases are minimized through

-Credit Card/Corporate Purchasing Card (P-card) -Blanket or Open-End Purchase Orders -Blank Check Purchase Orders -Petty Cash -Stockless Buying or System Contracting -Standardization & Simplification of Materials & Components -Accumulating Small Orders to Create a Large Order -Using a Fixed Order Interval

NOT a characteristic of goods

-Extensive customer contact

Inventory Turnover Effect

-Increased inventory turnovers indicate optimal utilization of space and inventory levels, increased sales, avoidance of inventory obsolesce. -Inventory is an asset but it is $ tied up

Advantages of Decentralization

-Knowledge of local requirements -Local sourcing -Less bureaucracy

Reasons for multiple suppliers

-Need more capacity -Spread risk of supply disruption -Create competition -More sources of information -Dealing with special kinds of business

Supply Base Rationalization (also called s.b. reduction/ s.b. optimization

-Often initial supply chain management effort - Reduce supply base to the lowest number of suppliers possible without increasing risk

Supplier selection is based on

-Product and process technologies -Willingness to share technologies & information -Quality -Service -Cost -Reliability -Order system & cycle time -Capacity -Communication capability -Location

Preferred Suppliers provide

-Product and process technology, and expertise. -Product development and value analysis. -Information on latest trends in materials, processes, or designs. -Capacity for meeting unexpected demand. -Cost efficiency due to economies of scale.

Reasons for making

-Protect proprietary technology -No competent supplier -Better quality control -Use existing idle capacity -Control of lead-time, transportation, and warehousing cost -Overall lower cost

Buyer-Supplier partnerships are easier with a rationalized supply base and result in

-Reduced purchase prices - Fewer supplier management problems - Closer and more frequent interaction between buyer and supplier - Greater levels of quality and delivery reliability

Small Batch Scheduling

-Small batch scheduling drives down costs by: -Reducing purchased, WIP, and finished goods inventories -Makes the firm more flexible to meet customer demand -Small production batches are accomplished with the use of kanbans -Kanbans generate demand for parts at all stages of production creating a "pull" system

VMI from the buyer-firm's perspective

-Supplier tracks inventories -Determines delivery schedules and order quantities -Buyer can take ownership at the stocking location -Buyer may also be able to avoid taking ownership until the material is actually being used.

LEAN Supply Chain Relationships

-Suppliers and customers work to remove waste, reduce cost, and improve quality and customer service -JIT purchasing includes delivering smaller quantities, at right time, delivered to the right location, in the right quantities -Firms develop lean supply chain relationships with key customers. Mutual dependency and benefits occur among these partners.

VMI Co-managed inventories

-Suppliers work from customers' storage areas or at the point of assembly or sale -Bar codes and scanners update computer counts

Advantages of e-procurement system

-Time savings -Cost savings -Accuracy -Real time -Mobility -Trackability -Management -Benefits to the suppliers

Reasons for a single supplier

-To establish a good relationship -Less quality variability -Lower cost -Transportation economies -Proprietary product or process -Volume too small to split -single source very risky, current trends favor fewer sources

visual signals

-communication between workstations -Kanban - signal or card in japanese -contains info passed between stations -authorizes production or the movement of materials to the next workstation

Public purchasing for government and non-profit sectors is characterized by

-competitive bidding -bidders are generally required to furnish bonds as incentive to ensure that the successful bidder will fulfill the contract awarded

Pull approach

-each stage in the supply chain requests quantities needed from the previous stage -no excess inventory generated -reduced inventory exposes problems

Value Engineering Activities

-help the firm to reduce cost, improve quality and reduce new product development time

respect for ppl

-must exist for an organization to be its best -flatter hierarchy than traditional organization -ordinary workers given great responsibility -supply chain members work together in cross functional teams (roles of workers, management, and suppliers)

role of workers

-workers performing diff tasks and actively pursuing company goals -worker duties - improve production process, monitor quality, correct quality problems -work in teams - quality circles

8 Wastes

1) Over-production 2) Inventory 3) Transportation 4) Motion 5) Waiting 6) Defects 7) Over-processing 8) Human Potential

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month What is the regular monthly actual production for a level plan?

1,250

5 Key Points of an SRM System

1. Automation handles routine transactions 2. Integration spans multiple departments, processes, and software applications 3. Visibility of information and process flows 4. Collaboration through information sharing 5. Optimization of processes and decision making

Steps to negotiating Win-Win Strategic Alliance Agreements

1. Build preparation process 2. Develop negotiation database 3. Design negotiation launch process 4. Institute feedback mechanism

3 Attributes of Supplier Recognition Problems

1. Companies should recognize and celebrate the achievements of their best suppliers. 2. Award winners exemplify true partnerships, continuous improvement, organizational commitment, and excellence. 3. Award-winning suppliers serve as role models for other suppliers.

8 Quality Management principles on which the ISO 9000 series quality management system standards are based:

1. Customer focus - understand current and future customer needs 2. Leadership - establish unity of purpose and direction of the organization 3. Involvement of people - people are the essence of an organization 4. Process approach - a desired result is achieved through a managed process 5. Systems approach to management - managing interrelated processes 6. Continual improvement - performance improvement is a permanent objective 7. Factual approach to decision making - decision are based on facts and data 8. Mutually beneficial supplier relationship - interdependent benefits create value for both an organization and its suppliers.

Sustainable Sourcing should seek to

1. Grow Revenues (new sustainable product intro) 2. Reduce Costs (increase resource efficiencies) 3. Manage Risk (link brand to social consciousness of consumer) 4. Build Intangible Assets (build social and environmental responsibility)

Skill set requirements of purchasing professionals have been changing/ Purchasing personnel must today exhibit world-class skills such as:

1. Interpersonal communication 2. Ability to make decisions 3. Ability to work in teams 4. Analytical skills 5. Negotiation skills 6. Customer focus 7. Ability to manage change 8. Influencing and persuasion skills 9. Strategic skills 10. Understanding business conditions

Assessing and Improving Firm's Purchasing Function. Criteria includes:

1. Participating in and leading multifunctional teams 2. Participating in value engineering efforts 3. Optimize supply base 4. Create ESI initiatives 5. Utilize e-procurement 6. Further supplier integration 7. Contribute to new product development 8. Improve time to market 9. Initiate supplier cost reduction programs 10. Creation of strategic alliances

Supplier Evaluation

1. Preferred: work with these suppliers in maintaining a competitive position and on new product development 2. Acceptable: require a plan from these suppliers outlining how they will achieve preferred status 3. Developmental: require corrective actions from these suppliers on how they will achieve acceptable level. Look for alternative suppliers if these do not achieve acceptability within a fixed period of time, e.g., 3 months.

Weighted-Criteria Evaluation System

1. Select the key dimensions of performance mutually acceptable to both customer and supplier. 2. Monitor and collect performance data. 3. Assign weights to each of the dimensions. 4. Evaluate performance measures between 0 and 100. 5. Multiply dimension rating by weight and sum of overall score. 6. Classify vendors based on their overall score, e.g., Certified, Preferred, Acceptable, Conditional, Developmental, Unacceptable, etc. 7. Audit and perform ongoing certification review.

The following environmentally responsible process/material matrix was developed for Zanda Corp. Zanda has determined that a score of 40 is its goal at this time, but efforts to lower its score will continue regardless. What is Zanda's current score, and what is your conclusion? 53, Zanda is doing better than its goal. 53, Zanda is doing worse than its goal. 47, Zanda, is doing better than its goal. 47, Zanda is doing worse than its goal.

47, Zanda is doing worse than its goal.

The following environmentally responsible process/material matrix was developed for Zanda Corp. Zanda has determined that a score of 40 is its goal at this time, but efforts to lower its score will continue regardless. What is Zanda's current score, and what is your conclusion? 53, Zanda is doing better than its goal. 47, Zanda, is doing better than its goal. 47, Zanda is doing worse than its goal. 53, Zanda is doing worse than its goal.

47, Zanda is doing worse than its goal. The sum of the scores is 47. Since this is a higher number than the goal, Zanda is doing worse (the ultimate objective would be a score of zero).

The following environmentally responsible process/material matrix was developed for Zanda Corp. Zanda has determined that a score of 50 is its goal at this time, but efforts to lower its score will continue regardless. What is Zanda's current score, and what is your conclusion? 47, but Zanda must do something about solid residue during extraction now. 47, and Zanda has met its goals—no further actions are necessary. 15, (from manufacture) and Zanda has met its goals—no further actions are necessary. 53, and Zanda has not met its goals.

47, but Zanda must do something about solid residue during extraction now. While the sum of 47 is less than the goal of 50, the problem facing Zanda is that of solid residue during extraction. This has a score of 4, which indicates an event that is extremely dangerous and highly hazardous from an environmental perspective.

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters. The company's expected quarterly demand is given in the following chart. The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter. Following is other critical data: Production cost per unit = $250 Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000 Firing cost per worker = $2,000 Beginning number of workers = 10 Each worker can produce 100 units per quarter. Any worker on the staff at the end of the year will not be fired at that time. If Jones prefers a level plan, what will be the regular production rate per quarter?

5,000 units 20,000/4 = 5,000

A fishbone diagram is also known as a a. cause-and-effect diagram b. poka-yoke diagram c. Kaizen diagram d. Kanban diagram e. Taguchi diagram

A

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using a. a Pareto chart b. a scatter diagram c. a Taguchi loss function d. a cause and effect diagram e. a flow chart

A

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings? a. Ishikawa diagram b. Pareto chart c. process chart d. control charts e. activity chart

A

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality? a. communication, courtesy, and credibility b. competence, courtesy, and security c. competence, responsiveness, and reliability d. communication, responsiveness, and reliability e. understanding/knowing customer, responsiveness, and reliability

A

If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage? a. 3.4 b. 6.0 c. 34 d. 2700 e. 6 times the monthly standard deviation of passengers

A

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to a. determine whether any of the organization's stakeholders are violated by poor quality products b. gain ISO 14000 certification for the organization c. obtain a product safety certificate from the Consumer Product Safety Commission d. have the organization's legal staff write disclaimers in the product instruction booklets e. compare the cost of product liability to the external failure cost

A

Stakeholders who are affected by the production and marketing of poor quality products include a. stockholders, employees, and customers b. suppliers and creditors, but not distributors c. only stockholders, creditors, and owners d. suppliers and distributors, but not customers e. only stockholders and organizational executives and managers

A

Which of the following is false regarding control charts? a. Values above the upper control limits always imply that the product's quality is exceeding expectations. b. Control charts are built so that new data can be quickly compared to past performance data. c. Control charts graphically present data. d. Control charts plot data over time. e. None of the above is false.

A

Which of the following statements regarding "Six Sigma" is true? a. The term has two distinct meanings—one is statistical; the other is a comprehensive quality system. b. Six Sigma means that about 94 percent of a firm's output is free of defects. c. The Six Sigma program was developed by Toyota in the 1970's. d. The Six Sigma program is for manufacturing firms, and is not applicable to services. e. Six Sigma certification is granted by the International Standards Organization (ISO).

A

In our accounting department one of the actions taken by a clerk has been to identify the most frequently used forms and to put them in an area where they can be easily accessed. The other less frequently used forms have been tagged and put in their own separate area. This action likely occurred from the use of which lean tool?

A 5-S program

Which of the following is true concerning sales and operations planning? All of these are true. Once the plan is finalized, it should not be changed during the planning period. There is a specific set of steps all firms should follow in the sales and operations planning process. A benefit of the process is that the firm should achieve high service levels with lower inventory.

A benefit of the process is that the firm should achieve high service levels with lower inventory. A benefit of the process is that the firm should achieve high service levels with lower inventory.

Mass customization

A business model that uses a routine approach to efficiently create a high variety of products or services in response to customer-defined requirements.

Supplier Development

A buyer's activities to improve a supplier's capabilities based on the following approach 1. Identify critical products and services 2. Identify critical suppliers 3. Form a cross-functional team 4. Meet with top management of supplier 5. Identify key projects 6. Define details of Agreement 7. Monitor status and modify strategies

d. 80% The takt time is the [time available]/customer demand which is [60 minutes/hour]/30 units per hour = 2 minutes. The efficiency is [Sum of all task times/(Actual work stations × takt time)] × 100 which is ((8 minutes)/(5 workstations x 2 minutes)) x 100 = 80%

A company must make 30 units per hour. What is the efficiency if the total time to complete all tasks is 8 minutes and the company is using 5 workstations? a. 63% b. 75% c. 20% d. 80% The takt time is the [time available]/[customer demand]. The efficiency is [Sum of all task times/(Actual work stations × takt time)] × 100.

c. 71% The takt time is the [time available]/customer demand which is [1 shifts per day x 12 hours per shift x 60 minutes per hour]/400 units = 1.8 minutes. The efficiency is [Sum of all task times/(Actual work stations × takt time)] × 100 which is ((23 minutes)/(18 workstations x 1.8 minutes)) x 100 = 71%

A company must make 400 units per day. The company works one 12-hour shift. What is the efficiency if the total time to complete all tasks is 23 minutes and the company is using 18 workstations? a. 88% b. 22% c. 71% b. 50%

Pugh Matrix

A decision tool that facilitates a disciplined, team-based process for concept generation, evaluation, and selection. A scoring matrix that defines the important criteria for a decision, defines the weights for each criterion, defines the alternatives, and then scores each alternative.

Return on assets effect (ROA)

A high ROA indicates managerial prowess in generating profits with lower spending

Quality Function Deployment

A method for translating customer desires into design specifications for a product or service; also known as the house of quality

Platform Strategy

A new product development strategy that plans new products around a small number of basic product designs (platforms) and allows for many final products with differing features, functions, and prices.

After you have drawn the current state process map, you decide that you need a tool for showing the actual moves of material (and their locations) that take place in the manufacture of widget A. Which of the following tool would be most appropriate?

A physical layout diagram

Which of the following conditions does a "critical" process satisfy?

A process that is visible to the key customers

Which of the following conditions does a critical process satisfy?

A process that is visible to the key customers

b. 3.4 defects per million opportunities Six Sigma quality means 3.4 defects per million opportunities.

A process with Six Sigma quality is expected to produce how many defects? a. 66,807 defects per million opportunities b. 3.4 defects per million opportunities c. 6 defects per million opportunities d. Zero defects

Which of the following is the most appropriate definition of an "order winner"? A product characteristic that causes customers to choose the product over that of a competitor. A product characteristic that permits the product to compete in a market. A product that has the highest profit margin. A product that generates the highest dollar sales volume. Order winners are traits that cause customers to actually choose a specific product.

A product characteristic that causes customers to choose the product over that of a competitor.

Stage-Gate Process

A project management approach commonly used in both Lean Sigma and New Product Development (NPD) projects that uses formal reviews at the end of each step to decide if the project will be allowed to proceed.

Kano Analysis

A quality measurement tool used to categorize and prioritize customer requirements based on their impact on customer satisfaction;

Design for Manufacturing (DFM)

A set of methodologies and principles that can be used to guide the design process so that product fabrication and assembly will have low cost,

Design for Disassembly (DFD)

A set of principles used to guide designers in designing products that are easy to disassemble for remanufacturing or repair operations.

Lean Design

A set of tools for reducing the new product development cost and time with a focus on reducing variation, addressing bottlenecks, eliminating rework, and managing capacity;

e. Kaizen Event. Short-term efforts to improve process performance are called Kaizen Events.

A short-term, highly focused effort for improving a process is known as a: a. Poka-yoke Event. b. Enchilada Event. c. Jidoka Event. d. Chaebol Event. e. Kaizen Event.

Value Proposition

A statement of the benefits offered by a product or service to a market.

Phase Review

A step in the new product development process where approval is required to proceed to the next step; also called stage-gate review and tollgate review

b. Designing, transforming, consuming, and disposing of goods and services. The organizations and activities in a supply chain are involved in designing, transforming, consuming, and disposing of goods and services.

A supply chain is a global network of organizations and activities involved in: a. Designing, financing, selling, and disposing of goods and services. b. Designing, transforming, consuming, and disposing of goods and services. c. Producing, buying, servicing, and disposing of goods and services. d. Financing, producing, and marketing of goods and services.

Concurrent Engineering

A systematic approach to the integrated, simultaneous design of products and their related processes, including manufacturing and support;

Technology Road Map

A technique used by many businesses and research organizations to plan the future of a particular process or product technology.

11. In our accounting department one of the actions taken by a clerk has been to identify the most frequently used forms and to put them in an area where they can be easily accessed. The other less frequently used forms have been tagged and put in their own separate area. This action likely occurred from the use of which lean tool? A. A 5-S program B. Kanban scheduling C. Jidoka D. Poka-yoke

A. 5-S program

4. With respect to lead-time performance, most customers would prefer which of the following from a supplier? A. A consistent three-day lead time B. A lead time that averages three days with a range of one to four days C. A lead time that averages two days with a range of one to four days D. All of these are equally preferable.

A. A consistent three-day lead time

Which process activity is due to other factors (e.g., insufficient operating capacity, lack of material, equipment breakdowns)? A. Delay B. Operation C. Storage D. Transportation E. Inspection

A. Delay

Which of the following forms of capacity can only be determined AFTER the completion of activities? A. Demonstrated capacity B. Maximum capacity C. Design capacity D. Effective capacity

A. Demonstrated capacity

Most processes involve two basic types of flows: A. Information flows and physical flows. B. Product flows and decision flows. C. Information flows and operator flows. D. Physical flows and documentation flows.

A. Information flows and physical flows

6. We observe a man working on a setup. During the process of setting up, the man positions the die at a first position. He then runs through a few pieces to check whether or not they are acceptable. He then repositions the die and repeats the process. What we have observed is which of the following forms of waste? A. Processing waste. B. Waste from Product defects. C. Inventory Waste. D. Waste of Motion.

A. Processing waste

15. Johnson Corp. has so strongly embraced the lean philosophy that it wants to apply the approach to all processes in the organization. Doing this may actually have the most severe negative impact on: A. Radical product innovation B. Incremental product innovation C. TAKT time D. All of the options are correct

A. Radical product innovation

7. Most of the tools and techniques used in lean systems seek to: A. Reduce variability from the system B. Reduce operator's discretion C. Improve product quality D. None of the options are correct

A. Reduce variability from the systems

Little's Law suggests that the key to increased throughput is: A. Shorter flow times. B. Fewer defects. C. Eliminating waste. D. Increased inspection.

A. Shorter flow times

A firm has established a standard of 96 percent for on-time delivery. Over the past month the firm determined it actually delivered 94 percent on-time. The difference is the: A. Standards gap. B. Performance gap. C. Satisfaction gap. D. Knowledge gap.

A. Standards gap.

Process thinking causes managers to address critical process elements, including:

ALL OF THESE

Sustainability

Ability to meet current needs of the supply chain without hindering the ability to meet future needs in terms of economic, environmental, and social challenges

Process thinking causes managers to address critical process elements, including:

Activities Inputs and Outputs Flows, structure, resources, and metrics

Pull Systems

Activities should be initiated by actual customer demands, not demand forecast

Process Flow Diagram-Rectangle

Activities, add value required to complete, flow unit, have a capacity

As technology and cultures evolve, the best approach for operations managers is to: Work harder. Adapt their business models. Retire. Make their processes more efficient.

Adapt their business models

As technology and cultures evolve, the best approach for operations managers is to: Work harder. Retire. Adapt their business models. Make their processes more efficient.

Adapt their business models. While some students may argue for the other choices, the theme of the chapter is that technology and culture are important elements of operations that may dictate the need to alter business models.

An example of a short-term capacity decision is:

Adding low-skilled labor

A and C

Advance planning and scheduling systems Use logic similar to the logic found in MRP Consolidate all business planning systems and data throughout an organization Integrate materials and capacity planning into one system A and C

Green Purchasing

Aimed at ensuring products or materials meet environmental obj. e.g. waste reduction, reuse and recycling

Which of the following is NOT true about "order qualifiers"? These are product traits that must meet a certain level in order for the product to even be considered by customers. The firm must perform acceptably on these traits, usually at least as well as competitors' offerings. Customers may not be aware of any level of performance in excess of those minimum levels that they have established. All of the above are true about order qualifiers.

All

Which of the following functions would not have to think about "processes"?

All listed functions must think about "processes"

Maintaining inventory involves a which expense related to the cost of capital invested in inventory: A) Insurance B) Storage and obsolescence C) Taxes D) All of the above

All of the above

Soft benefits of S&OP include: Enhanced teamwork B) Better and faster decisions C) Greater accountability for results D) Both B & C E) Both A & C F) All of the above

All of the above

Which one of the following is not considered a quality pioneers? Edwards Deming Joseph Juran Kaoru Ishikawa Philip Crosby All of the above are quality pioneers

All of the above are quality pioneers pp. 167 - There are many quality pioneers including Deming, Juran, Crosby, Feigenbaum, Shewart, and Ishikawa

Which of the following is NOT true about "order qualifiers"?

All of the above are true about order qualifiers.

a. Scrapping defective raw material. Scrapping raw material is an internal failure cost. The others are external failure costs.

All of the following represent external failure cost EXCEPT the cost of: a. Scrapping defective raw material. b. Repairing items covered by warranty. c. Replacing defective items found by customers. d. Loss of goodwill and reputation.

Growth of the supply-chain management perspective in operations management results from the advent of:

All of the listed options

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true/. l Jones will have higher hiring and firing costs. All of the options are true. Jones will have higher investment in plant and equipment. Jones will have lower inventory carrying costs.

All of the options are true Chase plans typically require more equipment investment, resulting in lower inventory carrying costs, and higher hiring/firing costs.

A bottleneck is: a resource that has the smallest capacity a resource that can affect the flow rate of a production process a resource that can determine the capacity of the entire process a concept addressed in the theory of constraints All the above

All the above pp. 111 - 112 - explain what a bottleneck is and how it affects the flow rate and capacity of the process

Which of the following statements concerning ISO 9000 is false? ISO 9000 standards are meant to describe how a company should go about ensuring quality. ISO 9000 standards specify that a company must have a quality system in place, which documents procedures, policies, and training. A quality manual and careful record keeping are integral elements of ISO 9000 documentation. An ISO 9000 registered company signifies the company produces items of the highest quality. ISO 9000 certification must be periodically renewed via return audits by a registrar.

An ISO 9000 registered company signifies the company produces items of the highest quality pp. 169-170 - ISO 9000 does not provide a complete quality system because it does not address competitive strategy, information systems, and business results

Value Engineering (analysis)

An approach for designing and redesigning products and services to achieve the same functionality at less cost or achieve better functionality at the same cost;

Design for Six Sigma (DFSS)

An extension of six sigma tools and concepts used for developing new products. The rationale for DFSS is that it is much easier to design quality into a product than it is to fix problems after the design is complete. Instead of using the lean sigma DMAIC framework, DFSS uses IDOV (Identify, Design, Optimize, and Validate) or DMADV (Define, Measure, Analyze, Design, and Verify). DMADV is defined as: • Define the project goals and customer (internal and external) deliverables. • Measure and determine customer needs and specifications. • Analyze the process options to meet the customer needs. • Design the process to meet the customer needs. • Verify the design performance and ability to meet customer needs.

Which of the following statements would Deming most likely agree with?

As quality improvements increase, levels of productivity rise throughout an organization. If employees are to play an effective role in a continuous improvement process, no employee should lose a job because of productivity gains.

d. Define, Measure, Analyze, Improve, Control. The acronym DMAIC stands for: Define, Measure, Analyze, Improve, and Control.

At the heart of the Six Sigma program is a five-step process called D-M-A-I-C. These letters denote a major activity that must be completed to achieve the objectives of Six Sigma. These activities are: a. Define, Measure Analyze, Improve, and Compare. b. Define, Measure, Analyze, Inquire, and Compare. c. Define, Measure, Analyze, Involve, and Cost. d. Define, Measure, Analyze, Improve, Control.

Which of the following identifies the most appropriate time to set the metrics when doing a process flow analysis?

At the start of the process

A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of categories. This is most closely related to the ____________ tool of TQM. a. Taguchi loss function b. cause and effect diagram c. scatter diagram d. histogram e. process control chart

B

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a a. Pareto chart b. process chart c. check sheet d. Taguchi map e. poka-yoke

B

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is a. in control, but not capable of producing within the established control limits b. out of control and the process should be investigated for assignable variation c. within the established control limits with only natural causes of variation d. monitored closely to see if the next sample mean will also fall outside the control limits e. none of the above

B

Marketing issues such as advertising, image, and promotion are important to quality because a. they define for consumers the tangible elements of a service b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer c. they educate consumers on how to use the product d. they make the product seem more valuable than it really is e. they raise expenses and therefore decrease profitability

B

The process improvement technique that sorts the "vital few" from the "trivial many" is a. Taguchi analysis b. Pareto analysis c. benchmarking d. Deming analysis e. Yamaguchi analysis

B

Total quality management emphasizes a. the responsibility of the quality control staff to identify and solve all quality-related problems b. a commitment to quality that goes beyond internal company issues to suppliers and customers c. a system where strong managers are the only decision makers d. a process where mostly statisticians get involved e. ISO 14000 certification

B

2. Johnson Company has the following data about customer orders for the month of June: Orders Received: 5,000 orders Total Units Ordered: 40,000 units Total Units Delivered: 37,800 Total Orders Delivered Complete: 4,600 What was Johnson's unit fill rate? A. 92 percent B. 94.5 percent C. 12.5 percent D. None of these

B. 94.5 percent

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following process activities? A. Operation B. Delay C. Storage D. You are not in a process activity.

B. Delay

Customer relationship management attempts to: A. Ensure the development of customer success for customers. B. Ensure the development of strategically appropriate relationships with customers. C. Meet the expectations of customers. D. Use technology to replace human interaction with customers.

B. Ensure the development of strategically appropriate relationships with customers.

5. John Jones is a plant manager. He believes his plant is "guilty of waste of overproduction". Which of the following symptoms might he have observed that led to this belief? A. Idle equipment B. Excess inventory C. High customer returns of products D. All options are correct

B. Excess inventory

Government regulations belong to which of the following elements of a process? A. Activities B. Inputs/outputs/feedback C. Process structure D. Management policies

B. Inputs/outputs/feedback

During the "mass production" era, operations management focused primarily on:

B. Internal production

A short-term, highly focused effort for improving a process is known as a: A. Jidoka Event. B. Kaizen Event. C. Chaebol Event. D. Poka-yoke Event. E. Enchilada Event.

B. Kaizen Event

1. From an operations perspective, companies should strive to: A. Provide customer success to all customers. B. Realize different customer management approaches may be appropriate for different customers. C. Realize that all customers desire close customer success types of relationships. D. Never refuse to do business with a customer.

B. Realize different customer management approaches may be appropriate for different customers.

2. As Lean Systems thinking is implemented, the amount of training that employees receive: A. Tends to be about the same as with other manufacturing philosophies. B. Tends to increase. C. Tends to be reduced dramatically, replaced instead by continuous improvement. D. Is focused exclusively in statistical process control.

B. TENDS TO INCREASE: because you want well trained employees

A bottleneck activity in a process is generally the activity with: A. The smallest number of resources devoted to it. B. The least capacity. C. No delays in front of it. D. The highest cost.

B. The least capacity

You are an upper-level manager in a firm. You believe that corporate objectives are not effectively disseminated throughout the organization and that line-level managers do not take them into account in their decision making. Which of the following would best help you to try to correct this problem?

Balanced scorecard model

You are an upper-level manager in a firm. You believe that corporate objectives are not effectively disseminated throughout the organization and that line-level managers do not take them into account in their decision making. Which of the following would best help you to try to correct this problem? Strategic profit model. Balanced scorecard model. Maslow's needs model. SCOR model.

Balanced scorecard model

The purpose of the kanban card is to:

Be a signal from the user authorizing the maker to start producing the required parts.

The purpose of the kanban card is to: Be a signal from the user authorizing the maker to start producing the required parts. Keep track of defective products. Inform the maker of the exact specification of the required parts. Keep track of the total labor hours spent on a finished product.

Be a signal from the user authorizing the maker to start producing the required parts.

Easy Implementation

Benefits of ERP systems include all of the following EXCEPT: Easy implementation Fewer data entry errors More informed business decisions Improved customer service

In the case of lost sales, there is the: A) Direct loss of profit B) Ill-will cost of not being able to meet demand C) Both A and B

Both A and B

Why is product quality sometimes poorly defined in a firm?

Both B and C are correct.

Shared vision and objectives

Both partners must share the same vision and have objectives that are not only clear but mutually agreeable. The focus must move beyond tactical issues and toward a more strategic path to corporate success.

Which of the following lean principles best communicates the notion of demand synchronization?

Build only as quickly as customers want them.

Which of the following lean principles best communicates the notion of demand synchronization? Produce only the products that the customer wants. Build with perfect quality. Build only as quickly as customers want them. Build only with features that the customers want and no others.

Build only as quickly as customers want them.

Which of the following statements best describes the role of the business model in today's environment?

Business models must be regarded as dynamic.

ISO 9000 defines a set of internationally accepted standards for:

Business quality management.

Request for Proposal (RFP)

Buyer issues a Request for Proposal (RFP) for products which have not been previously purchased or purchased from the specific supplier.

outsourcing

Buying materials and components from suppliers instead of making them in-house.

Pareto charts are used to a. identify inspection points in a process b. outline production schedules c. organize errors, problems, or defects d. show material flow e. all of the above

C

Which of the following statements is not true? a. Self-promotion is not a substitute for quality products. b. Inferior products harm a firm's profitability and a nation's balance of payments. c. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product. d. Quality—be it good or bad—will show up in perceptions about a firm's new products, employment practices, and supplier relations. e. Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.

C

Under Juran's Law, whenever a problem occurs, what percentage of the time is the problem the result of a system/process error? A. 15 percent B. 50 percent C. 85 percent D. 100 percent

C. 85 percent

Alpha Company has a performance standard of 97 percent fill rate. Last month it achieved a 94 percent fill rate. This is an example of: A. A knowledge gap. B. A standards gap. C. A performance gap. D. A perception gap.

C. A performance gap.

10. Zanadu Corp. produces several different colors of a product on a single production line. It used to take several hours to switch colors but now it has found a way to prepare for changing colors in a few minutes. This was most likely accomplished by: A. TAKT time flow balancing B. Implementing Andon lights C. Converting internal to external setups D. Converting external to internal setups

C. Converting internal to external setups

The difference between a "customer success" focus and a "customer satisfaction" focus is that: A. Customer satisfaction is more difficult to achieve. B. Customer success deals with expectations of customers, satisfaction deals with their requirements. C. Customer satisfaction deals with expectations, customer success deals with requirements. D. There really isn't any difference.

C. Customer satisfaction deals with expectations, customer success deals with requirements.

4. In a lean system, 'waste' is any action that: A. Costs money B. Could be done by an outside supplier C. Does not generate value D. Must be performed manually

C. Does not generate value

3. When lean systems are implemented: A. Variable costs tend to increase while fixed costs tend to decrease. B. Fixed costs tend to increase while variable costs tend to decrease. C. Fixed and variable costs both tend to decrease. D. Contribution margin tends to decrease.

C. Fixed and Variable costs both tend to decrease.

14. Applying lean systems to supply chain relationships has which of the following risks? A. It encourages companies to buy at the lowest unit price. B. It encourages firms in the supply chain to hold extra inventory to protect themselves from failure. C. It makes the supply chain more vulnerable to performance breakdowns. D. All of the options are risks.

C. It makes the supply chain more vulnerable to performance breakdowns because there are no backups

Which functional activities are the most related to operations management attempts to manage the flow of materials and information in a firm?

C. Logistics, supply, and customer management

Which of the following actions will NOT increase output? A. Increasing capacity through physical additions. B. Outsourcing. C. Managing the flow of work into the system. D. Changing the processes to eliminate unnecessary steps.

C. Managing the flow of work into the system

12. A standard electrical plug fits into an outlet in only one way because one of the two prongs is larger than the other. This ensures that people will insert the plug properly to create a grounded circuit. This is an example of: A. Cause-and-effect analysis B. Kanban C. Poka-Yoke D. A benefit of pareto analysis

C. Poka-Yoke

Kaizen Events are most appropriate for which type of operations problem? A. Customer-based B. Metrics-based C. Process-based D. Product-based

C. Process-based

Which of the following is NOT a basic activity type in processes? A. Delay B. Operation C. Reporting D. Storage E. Decision

C. Reporting

14. Customers who are both low revenue generators and low profit generators for a firm should be: A. Terminated as customers. B. Provided with a minimum level of customer service. C. Reviewed for possible termination or continuation. D. Treated with customer success relationships to improve revenue and profit.

C. Reviewed for possible termination or continuation.

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck? Step 1: 500 chips/hour Step 2: 250 chips/hour Step 3: 200 chips/hour Step 4: 550 chips/hour A. Step 1 B. Step 2 C. Step 3 D. Step 4

C. Step 3

Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true? A. Utilization is 60 percent of maximum capacity. B. Yield is 133 percent of effective capacity. C. Utilization was 133 percent of effective capacity. D. All of these are true.

C. Utilization was 133 percent of effective capacity

Importance of Quality

Can help differentiate from other companies, improved reputation and market share

Structural operations management decisions include

Capacity, facilities, and technology

Which of the following is NOT one of the costs considered in aggregate production planning Inventory cost. Subcontracting cost. Capital equipment cost. Firing (layoff) cost. All of these are considered in aggregate production planning

Capital equipment cost Capital equipment is considered to be a constraint in aggregate production planning, but its cost is not included.

A specific analysis of the total greenhouse gases caused directly or indirectly by a product is called: Carbon footprinting. Life cycle analysis. Life cycle waste assessment matrix. Cap and trade.

Carbon footprinting.

A specific analysis of the total greenhouse gases caused directly or indirectly by a product is called: Carbon footprinting. Life cycle analysis. Life cycle waste assessment matrix. Cap and trade.

Carbon footprinting. Carbon footprinting is an analysis of the total greenhouse gases caused directly or indirectly by a product. Life cycle analysis and LCWAM are more extensive than carbon footprinting.

Innovative products

Characterized by short product life cycles, volatile demand, high profit margins, and relatively less competition (ie: tech products like the iphone)

In a ____ production plan, the objective is to match production in each period to the ______ in that period, thus avoiding the need to hold inventory.

Chase, demand

Change Management

Companies must be prepared to manage change that comes with the formation of new partnerships

We have a situation where we have many different processes; high quantities are required to deliver the product's value both on the factory floor and in the customer's use. Which of the following categories of waste in product design have we encountered in this situation?

Complexity

We have a situation where we have many different processes; high quantities are required to deliver the product's value both on the factory floor and in the customer's use. Which of the following categories of waste in product design have we encountered in this situation? Complexity Precision Danger Sensitivity

Complexity

Computer Aided Design (CAD)

Computer systems used by engineers, architects, and other designers to create, edit, analyze, and improve designs;

Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality?

Conformance

In its promotional material for bed linens, Scarsdale Corporation states that all sheets and pillowcases sold to customers should have and actually do have a thread count of exactly 600 threads per inch. Scarsdale is apparently emphasizing:

Conformance quality.

System Nervousness

Constant changing of the master schedule and the resulting changes in the requirements for components is referred to as: Master schedule dynamics System nervousness Bad planning MRP failure

Continuous Improvement

Continuous approach to reduce process, delivery, and quality problems, such as machine breakdown problems, setup problems, and internal quality problems

The meaning of quality has evolved greatly over the past century. Which of the following statements best exemplifies the current meaning of quality? Continuous improvement, competitive advantage and meeting or exceeding customer requirements now and in the future Inspection of every item produced to ensure exact customer specifications are met Production of parts within control limits and the maintenance of process output in a state of statistical control as measured by statistical process control tools to ensure consistent meeting of customer specifications The collaboration of all functional disciplines for the purpose of designing and offering quality products or services

Continuous improvement, competitive advantage and meeting or exceeding customer requirements now and in the future pp. 159 - Now, quality has taken a broader meaning, including continuous improvement, competitive advantage, and a customer focus.

Zanadu Corp. produces several different colors of a product on a single production line. It used to take several hours to switch colors, but now Zanadu has found a way to prepare for changing colors in a few minutes. This was most likely accomplished by:

Converting internal to external setups.

Which of the following statements is true regarding corporate culture?

Corporate culture is learned.

c. What businesses should we be in? Corporate strategic planning is very broad and relates to what businesses the company should be involved in.

Corporate strategic planning involves decisions related to: a. All of these. b. What measures should we use to control strategic initiatives? c. What businesses should we be in? d. What specific product- and market-based initiatives and goals should we establish?

3. Design negotiation launch process

Create an environment to work together to create a shared vocabulary, build working relationships, and map out a shared decision-making process.

4. Institute feedback mechanism

Create process to provide feedback to negotiating teams and capture lessons learned.

The initial focus of the DMAIC process is on:

Critical-to-quality characteristics.

"Zero defects" is a concept of quality management of which thought leader?

Crosby

Which of the following factors was most responsible for the breakdown of the Daimler-Benz/Chrysler merger? Technology incompatibility Lack of sustainability Cultural incompatibility Different languages

Cultural incompatibility

Which of the following factors was most responsible for the breakdown of the Daimler-Benz/Chrysler merger? Technology incompatibility Lack of sustainability Cultural incompatibility Different languages

Cultural incompatibility The Chrysler/Daimler-Benz failure is an oft-cited example of a clash of cultures.

Underlying the success of companies such as Apple and Zappos is which of the following elements?

Culture

Which of the following sustainability issues has a significant impact on supply chain relationships? Culture Common usage of lean systems Location Governmental regulations and tariffs

Culture

Which of the following sustainability issues has a significant impact on supply chain relationships? Governmental regulations and tariffs Location Culture Common usage of lean systems

Culture discussed in this section, culture, or more correctly similarity of culture, has a significant impact on the ease with which companies can establish and maintain supply chain relationships.

Voice of the Customer

Customer opinions, perceptions, needs, desires (both stated and unstated), preferences, expectations, and requirements.

A company with a number of physically separate plants has a centralized tool room. This tool room in the past has been responsible for emergency repairs. Option A Option B Option C Option D

D

A manager tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of a. internal benchmarking b. Six Sigma c. ISO 9000 d. Taguchi concepts e. process control charts

D

A quality loss function includes all of the following costs except a. the cost of scrap and repair b. the cost of customer dissatisfaction c. inspection, warranty, and service costs d. sales costs e. costs to society

D

A successful TQM program incorporates all of the following except a. continuous improvement b. employee involvement c. benchmarking d. centralized decision-making authority e. none of the above; a successful TQM program incorporates all of the above

D

According to the manufacturing-based definition of quality, a. quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost b. quality depends on how well the product fits patterns of consumer preferences c. even though quality cannot be defined, you know what it is d. quality is the degree to which a specific product conforms to standards e. quality lies in the eyes of the beholder

D

When a sample measurement falls inside the control limits, it means that a. each unit manufactured is good enough to sell b. the process limits cannot be determined statistically c. the process output exceeds the requirements d. if there is no other pattern in the samples, the process is in control e. the process output does not fulfill the requirements

D

Which of the following statements best describes the relationship between quality management and product strategy? a. Product strategy is set by top management; quality management is an independent activity. b. Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies. c. High quality is important to all three strategies, but it is not a critical success factor. d. Managing quality helps build successful product strategies. e. Companies with the highest measures of quality were no more productive than other firms.

D

A firm has found that it provides a 90 percent order fill rate (orders shipped complete), 90 percent on-time delivery, 90 percent of its orders arrive at customers' destination in perfect condition, and 90 percent of the time all documentation is correct. These are all of the elements of a perfect order for this company's customers. What is the best estimate of its perfect order performance? A. 90 percent B. 60 percent C. 0 percent D. 66 percent

D. 66 percent

Zanda Company has told a supplier that it is difficult to contact people in the supplier's company to learn the status of its orders and when they might arrive. Zanda is explaining which type of expectation it has of this supplier? A. Reliability B. Courtesy C. Credibility D. Access

D. Access

An example of a short-term capacity decision is: A. Adding specialized labor. B. Installing new equipment. C. Adding new facilities. D. Adding low-skilled labor.

D. Adding low-skilled labor

Which of the following statements most clearly expresses a company's commitment to customer success? A. "We attempt to meet or exceed the expectations of all of our customers." B. "We attempt to meet our standards of providing perfect order performance to all of our customers." C. "We attempt to meet the requirements of our customers." D. All of these are clear expressions of commitment to customer success.

D. All of these are clear expressions of commitment to customer success.

9. A production Kanban: A. Authorizes a worker to add an empty bin B. Authorizes a worker to withdraw a standard lot of a specific item C. Authorizes a worker to withdraw any item he feels is needed D. Authorizes a worker to replenish an empty bin.

D. Authorizes a worker to replenish an empty bin

Jones Company promised a customer that the customer would receive at least 98 percent of all items ordered. In fact, the customer received 95 percent of the items. This is an example of which "gap" in the customer satisfaction model? A. Performance gap B. Knowledge gap C. Standards gap D. Communications gap

D. Communications gap

13. Lean systems applications have found the most acceptance and adoption in: A. Service firms B. Across entire supply chains C. In design activities D. In manufacturing firms

D. In manufacturing firms; this is where it started

Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's: A. Effective capacity. B. Yield rate. C. Utilization. D. Maximum capacity.

D. Maximum capacity

If a company can eliminate all sources of variance in a process: A. It will be able to operate at maximum capacity at all times. B. There will be no constraints in the process. C. Continuous improvement will not be necessary. D. None of these are true.

D. None of these are true

A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process: A. Inputs, outputs, and flows. B. Activities. C. Management metrics. D. Structure.

D. Structure

8. Achieving the goal of producing at the output rate which matches the rate of customer demand is the goal of: A. Jidoka B. Poka-Yoke C. Total Productive Maintenance D. Takt time flow balancing

D. Takt time flowing balancing

You are given the following information. Which of these statements can you support with this information? Maximum Capacity: 480 hours per week Effective Capacity Ratio: 85 percent Demonstrated Capacity: 380 hours per week over the last two weeks On-Time Delivery %: 75 percent of the jobs are being completed on time A. More capacity needs to be added in the short term to improve performance in the system. B. We have to look at the rate at which jobs are being input into the shop. C. Our workforce is not working hard enough. D. We need to further investigate whether the problem is in input or capacity.

D. We need to further invesigate whether the problem is in input or capacity

8 Wastes of DOWNTIME

DEFECTS Anything that does not meet the acceptance criteria OVERPRODUCTION Production before it is needed, or in excess of customer requirements. Providing a service that is not needed. WAITING Elapsed time between processes when no work is being done NON-UTILIZED TALENT Underutilizing people's talents, skills or knowledge. De-motivating the workforce by not asking for input or recognizing success TRANSPORTATION Unnecessary movement of materials or products INVENTORY Excess products or materials not being processed MOTION Unnecessary movement of people. Multiple hand-offs EXTRA- PROCESSING Unnecessary steps in a process. Redundancies between processes. More work or higher quality than required by the customer

What do DMAIC and DFSS have in common?

DMAIC and DFSS have the following in common: • Lean sigma methodologies are used to drive out defects. • Data intensive solution approaches require cold, hard facts. • Trained project leaders (black belts and green belts) lead projects with support from master black belts. • Projects are driven by the need to support the business and produce financial results. • Champions and process owners oversee and support projects.

Tactical Planning

Decisions being made about the aggregate production plans represent what type of planning: Strategic level planning Tactical planning Detailed operational planning Long-term planning

Suppose you learn that a process has a very long waiting time. Which of the following would decrease the waiting time?

Decrease utilization

At the heart of the Six Sigma program is a five-step process called D-M-A-I-C. These letters denote a major activity that must be completed to achieve the objectives of Six Sigma. These activities are:

Define, Measure, Analyze, Improve, Control.

Which process activity is due to other factors (e.g., insufficient operating capacity, lack of material, equipment breakdowns)?

Delay

Which process activity is due to other factors?(ex: insufficient operating capacity, lack of material, equipment breakdowns.)

Delay

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following process activities?

Delay

Which of the following matches between quality gurus and the guru's philosophy is incorrect? Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. Juran emphasized the quality trilogy of planning, control, and quality improvement. Crosby advocated the make it right the first time philosophy.

Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. pp. 168 - Deming argued that management should cease its dependence on mass inspection to achieve quality and stress prevention of defects instead

Which of the following matches between quality gurus and the guru's philosophy is incorrect? Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. Juran emphasized the quality trilogy of planning, control, and quality improvement. Crosby advocated the make it right the first time philosophy.

Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. pp. 168 - Deming argued that management should cease its dependence on mass inspection to achieve quality and stress prevention of defects instead.

Type of capacity that can only be shown AFTER the completion of activities

Demonstrated Capacity

Which of the following forms of capacity can only be determined AFTER the completion of activities?

Demonstrated capacity

An application of the DMAIC process to product design is known as:

Design for Six Sigma.

Design for Assembly (DFA)

Design for manufacturing concepts applied to assembly.

What decisions do supply managers make that potentially impact quality?

Design of contracts and associated incentives and penalties

If a product includes features that customers care most about, we would say that it has high:

Design quality.

Which of the following is not a characteristic of a continuous process?

Designing a new video game-actaully a project process

A supply chain is a global network of organizations and activities involved in

Designing, transforming, consuming, and disposing of goods and services

Which of the following is NOT a component of the business model? Critical customer Value proposition Desired outcome statement System capabilities

Desired outcome

Recycling is a major consideration during which phase of the product life cycle?

Disposal

Downcycling, as described in the chapter, is a critical consideration during which stage of the product life cycle? Usage Disposal Packaging/transportation Extraction

Disposal Of the four areas, while the issues of downcycling are encountered in all four, this issue is most directly relevant during the last stage, disposal.

purchase requisition

Document that defines the need for goods and/or services. An internal document. Does not constitute a contractual relationship with any external party. -Stating the product, quantity, and delivery date needed -May originate from the MRP system

In a lean system, waste is any action that

Does not generate value.

In a lean system, waste is any action that Costs money. Could be done by an outside supplier. Does not generate value. Must be performed manually.

Doesn't generate value

12. Johnson Company makes widgets which it then sends to Smith Company. Smith Company puts the widgets in packages. Smith Company is considered by Johnson to be a:

Downstream product supplier

Tariffs: GS challenge

Duties, taxes, or customs imposed by the host country for imported or exported goods.

A good description of "source inspection" is inspecting a. materials upon delivery by the supplier b. the goods at the production facility before they reach the customer c. the goods as soon as a problem occurs d. goods at the supplier's plant e. one's own work, as well as the work done at the previous work station

E

All of the following costs are likely to decrease as a result of better quality except a. customer dissatisfaction costs b. inspection costs c. scrap costs d. warranty and service costs e. maintenance costs

E

The philosophy of zero defects is a. the result of Deming's research b. unrealistic c. prohibitively costly d. an ultimate goal; in practice, 1 to 2% defects is acceptable e. consistent with the commitment to continuous improvement

E

What refers to training and empowering frontline workers to solve a problem immediately? a. just-in-time b. poka-yoke c. benchmarking d. kaizen e. service recovery

E

A firm has found that it provides a 90 percent order fill rate (orders shipped complete), 90 percent on-time delivery, 90 percent of its orders arrive at customers' destination in perfect condition, and 90 percent of the time all documentation is correct. These are all of the elements of a perfect order for this company's customers. If the firm improves its performance in on-time delivery to 98 percent, what is its new perfect order performance? A. 88 percent B. 98 percent C. 0 percent D. 80 percent E. 71.4 percent

E. 71.4 percent

Rolling Planning Horizons

Each month the sales and operations team at Johnson company meets to develop plans for each of the next six months. This process is known as: Collaborative planning and forecasting Rolling planning horizons Unconstrained planning Continuous planning

SRM Software Suppliers

EcVision i2 Technologies, Inc. Oracle SAP SAS Institute SupplyWorks

May not exist at all levels of production One reason they occur is b/c employees become more efficient as volume increases One reason they occur is b/c fixed costs can be spread over more units of production as output increases

Economies of Scale

Which of the following statements about economies of scale is NOT true?

Economies of scale refers to the fact that as volume increases, total cost of production decreases

Which of the following statements about economies of scales is NOT true?

Economies of scale refers to the fact that as volume increases, total cost of production descreases

Which of the following is NOT one of the product/process design principles associated with lean/just-in-time production? Encourage use of unique components. Design products with as few parts as possible. Design products that are easy to assemble. Use flexible processes and cross-trained workers as much as possible.

Encourage use of unique components.

b. Fixed-position layout In a fixed-position layout, all of the necessary resources must come to the work site.

Ensuring that all the right people, equipment, and materials arrive on time is especially challenging when using which layout? a. Functional layout b. Fixed-position layout c. Product layout d. Service factory layout

ISO 14000 deals with which of the following?

Environment

Which of the following statements best describes the implementation of environmental sustainability?

Environmental sustainability always has some form of environmental impact.

When people and profit intersect, from a sustainability perspective, which of the following areas is most impacted? Equitability Sustainability Bearability Viability

Equitability

When people and profit intersect, from a sustainability perspective, which of the following areas is most impacted? Sustainability Bearability Viability Equitability

Equitability

Utilitarianism

Ethical act creates the greatest good for the greatest number of people and should be the guiding principle of conduct

Appraisal Costs

Evaluating Products to asses quality levels -Testing -Labs and lab equipment -Inspectors

Variability

Every process has variability that consumes capacity, learning to manage and/or reduce variability is key to getting good use out of your capacity

Total Quality Management (TQM)

Everyone in the company has an impact on quality, so quality improvement depends on everyone

John Jones is a plant manager. He believes his plant is guilty of "waste of overproduction." Which of the following symptoms might he have observed that led to this belief? Idle equipment. Excess inventory. High customer returns of products. All of these.

Excess inventory

John Jones is a plant manager. He believes his plant is guilty of "waste of overproduction." Which of the following symptoms might he have observed that led to this belief?

Excess inventory.

Toyota & J&J Examples

External defective Failures

An improvement in quality must necessarily increase costs.

F

Conforming to standards is the focus of the product-based definition of quality.

F

For most, if not all organizations, quality is a tactical rather than a strategic issue.

F

The focus of an aggregate production plan, in general, is on all of the following EXCEPT: Facilities and capital equipment rather than labor and inventory. Product lines rather than specific items. The intermediate-term future rather than the very short-term future. All of these are the focus of an aggregate production plan. Inventory levels rather than new plants.

Facilities and capital equipment rather than labor and inventory. Aggregate production plans are intermediate-term plans for product lines (families), where facilities and equipment are considered constraints.

If a company spends more on prevention, what would be the expected impact on other costs of quality?

Failure costs will go down.

Which of the following programs/initiatives strives to improve the lives of suppliers and their families? ISO 14000 Responsible Care LEED FairTrade

FairTrade

Which of the following programs/initiatives strives to improve the lives of suppliers and their families? Responsible Care ISO 14000 LEED FairTrade

FairTrade Of the various initiatives, only Fair Trade deals with suppliers and their conditions

The carbon footprint is established by estimating the difference between direct and indirect greenhouse gas emissions?

False

since walmart and target are both mass merchandisers it is likely that they both have the same logistical service requirements from suppliers

False

Customer and Market Focus contribute most of the points of the Baldrige criteria. True False

False pp. 171 - Leadership and results contribute most of the points of the Baldrige criteria.

Training is an example of appraisal costs. True False

False pp. 175 - Training is a component of prevention costs

Rules that often govern Government and nonprofit procurement

Federal Acquisition Streamlining Act (1994), Buy American Act (1933), Green Purchases

Which of the following is not one of the processes included in operational management

Finance

From an operations standpoint, sustainability means that: Profit is not an important goal. A company should focus its efforts on reducing pollution. Firms should pursue profit without damaging the environment or the well-being of future generations. The firm must improve how it manages its people resources since these are important to the long-term survival of the firm.

Firms should pursue profit without damaging the environment or the well-being of future generations.

From an operations standpoint, sustainability means that: Firms should pursue profit without damaging the environment or the well-being of future generations. Profit is not an important goal. The firm must improve how it manages its people resources since these are important to the long-term survival of the firm. A company should focus its efforts on reducing pollution.

Firms should pursue profit without damaging the environment or the well-being of future generations. Sustainability is much more than reducing pollution, and it includes meeting profitability goals. Firms should pursue profit without damaging the environment or the well-being of future generations.

"When operational capabilities are consistent with and supportive of the value proposition and the outcomes desired by critical customers" best describes the concept of:

Fit

When lean systems are implemented: Variable costs tend to increase, while fixed costs tend to decrease. Fixed costs tend to increase, while variable costs tend to decrease. Fixed and variable costs both tend to decrease. Contribution margin tends to decrease.

Fixed and variable costs both tend to decrease.

Which of the following is considered a "process-related" competitive priority?

Flexibility

Which of the following is considered a "process-related" competitive priority? Flexibility Quality Cost All of these

Flexibility

Kaizen

Focus on continuous improvement

Control Charts

Focused on documenting the normal amount of variability so you can know when something abnormal is happening

Which of the following situations reflects the kind of fear that Deming believes must be driven out of the workplace?

Fred, the lead employee on the dish line, knows the dish matching isn't working properly but doesn't tell his supervisor because he doesn't want to blamed for the problem. Angie a convention services manager, throws away several complaint letters form attendees of a convention recently held at the hotel because she thinks the general manager might block her promotion if he reads them. At a business plan and budget meeting with the hotel owner, the general manager minimizes the capital expenses needed for renovations of the property because he suspects that if he doesn't the owner will deny him his bonus.

Concepts of TQM

Frontline workers have the most impact on quality, prevention-oriented problem solving approach, use of data, tools to analyze, recognition of variability as major source of problems, focus on continuous improvement

Company Reputation

Good/bad, employee relations, confidence in new products, supplier agreements

Which of the following is NOT a stakeholder, as considered from the P-People perspective of sustainability? Government Customers Investors Workers

Government

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the hybrid plan: Has higher hiring/layoff cost than the chase plan and higher inventory carrying cost than the level plan. Has lower inventory carrying cost than the chase plan and higher hiring/layoff cost than the level plan. None of these. Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan.

Has lower inventory carrying cost than the level plan and lower hiring/layoff cost than the chase plan. Since hybrid plans combine aspects of level and chase, they typically have less inventory than level, but more than chase. They also typically have more hiring/layoff than level, but less than chase.

Which of the following most accurately describes the role of quality in a lean/just-in-time manufacturing environment?

High quality is an important waste reduction tool. Reducing defects reduces wasted material and capacity, and reduces the need for safety stocks.

Job Shop Process

High variety, low volume, auto repair, skilled employees, general purpose equipment

Continuous Process

High volume, low variety, detergent, gasoline, paper, specialized equipment, fully automated, defined sequence

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing: Inventory carrying costs. Hiring and layoff costs. Cost of subcontracting. Both A and C. Both B and C.

Hiring and layoff costs

Currently, our system is characterized by a lack of fit between what the customer wants and what the SCM system is best able to provide. As a result, which of the following would apply? I. The firm must change the market segment it is going after. II. Unless something is done, our firm will not be the most effective and efficient long-term supplier. III. Any firm can successfully counter such inconsistencies through the use of patents and aggressive advertising. I only. II only. III only. I and II only. I, II, and III.

II only

Currently, our system is characterized by a lack of fit between what the customer wants and what the SCM system is best able to provide. As a result, which of the following would apply?

II only. II. Unless something is done, our firm will not be the most effective and efficient long-term supplier.

Which of the following two areas does lean/just-in-time production focus its attention on? I. Cost II. Quality III. Variance IV. Waste

III and IV

Which of the following two areas does lean/just-in-time production focus its attention on? I. Cost II. Quality III. Variance IV. Waste I and III II and IV I and II III and IV

III and IV

walmart could have included a requirement that suppliers meet the standards of

ISO 14000

Which of the following environmental initiatives/programs deals most specifically with the firm's environmental management system? ISO 14000 LEED certification The Kyoto Protocol Responsible Care

ISO 14000 Of all the standards and programs summarized in Table 16-1, ISO 14000 is the only one specifically targeted toward the firm's environmental management system.

Walmart has announced that suppliers must attempt to improve their efforts in environmental management. In this announcement, Walmart could have included a requirement that suppliers meet the standards of: SO 9000. ISO 14000. ISO 9002. ISO 2011.

ISO 14000 is the international standard for environmental management.

a. Business quality management. ISO 9000 is a broad set of standards applied to business quality management, not just product quality, quality control, or operations management.

ISO 9000 defines a set of internationally accepted standards for: a. Business quality management. b. Quality control. c. Operations management quality. d. Product quality.

You, as a supply chain analyst, have been approached by the vice president of supply chain operations to come up with a recommendation for improving the throughput time for the manufacture of Widget A. You quickly realize that you need a process map before you proceed. What is the first step you should undertake to map the process?

Identify the desired outcomes of the process

a. Failure costs will go down. Appraisal costs are a choice, independent of prevention costs, whereas failure costs are likely to go down with well-framed prevention efforts. Some costs need to be impacted, otherwise the investment in prevention cost is not of any value.

If a company spends more on prevention, what would be the expected impact on other costs of quality? a. Failure costs will go down. b. Other costs will be unaffected. c. Appraisal costs will go up. d. Failure costs will go up.

Hiring and Layoff Costs

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing: Inventory carrying costs Hiring and layoff costs Cost of subcontracting Both A and C

Inventory will fluctuate significantly during the year

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true: Inventory will fluctuate significantly during the year The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year It will be difficult to keep the workforce size stable The firm must make sure that its maximum capacity is at least as high as the heaviest demand period

c. Design quality. Design quality occurs when product features meet customers' desires and needs.

If a product includes features that customers care most about, we would say that it has high: a. Conformance quality. b. Aesthetics. c. Design quality. d. Reliability.

b. Reliability. Reliability is the length of time (or number of instances) a product performs as planned before a failure occurs.

If a tangible good or service performs the promised function dependably, we say that it has high: a. Conformance. b. Reliability. c. Durability. d. Perceived quality.

c. Costs associated with defects Failure costs are both internal and external expenses incurred when a product or service has defects.

In a Cost of Quality analysis, "failure costs" refers to: a. Costs of not considering customer needs b. Costs of not achieving goals c. Costs associated with defects d. Costs associated with mistakes

d. Conformance quality. Conformance quality is meeting design specifications.

In its promotional material for bed linens, Scarsdale Corporation states that all sheets and pillowcases sold to customers should have and actually do have a thread count of exactly 600 threads per inch. Scarsdale is apparently emphasizing: a. Design quality. b. Total quality management. c. Reliability. d. Conformance quality. e. Product quality.

d. the time at each workstation is driven by actual customer demand When designing a process, the time at each workstation is what is needed to meet customer demand.

In line balancing, _______ rev: a. efficiency is not affected by the takt time b. the number of actual workstations should always equal the theoretical number of workstations c. once determined, the balanced line should not be changed d. the time at each workstation is driven by actual customer demand

Chapter 4: Which of the following statements best distinguishes incremental improvements from breakthrough improvements?

Incremental improvements result in unprecedented gains in quality, speed, and or savings; breakthrough improvements enhance or streamline current work processes within a company.

Process Flow Diagram-Arrows

Indicate flow, can represent movement within a factory or by different modes of transportation

Decentralized Purchasing

Individual, local purchasing departments, such as at the plant level, making their own purchasing decisions

Most processes involve two basic types of flow:

Information and Physical Flows

Most processes involve two basic types of flows:

Information flows and physical flows

Normal Variation

Inherent to the process, can document the variation, reduction requires redesigning the process, "in control"

Government regulations belong to which of the following elements of a process?

Inputs/Outputs/Feedback

Government regulations belong to which of the following elements of a process?

Inputs/outputs/feedback

Services

Intangible (airline ex.), cannot be inventoried, extensive customer contact, short lead time, often labor intensive, quality harder to asses, information or customer is transformed, Healthcare

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true? The firm must make sure that its maximum capacity is at least as high as the heaviest demand period. The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year. It will be difficult to keep the workforce size stable. Inventory will fluctuate significantly during the year.

Inventory will fluctuate significantly during the year. When using a level plan, inventory will increase during periods of low demand and decrease during periods of high demand

Process Flow Diagram-Triangles

Inventory/buffers, where inventory waits between activities, can be in storage or literally waiting for an operation to occur

Which of the following is NOT considered a key characteristic of a core capability: It is based on factors that are rare or unique to the firm. It is hard to imitate. It does not need to be extendable to many market opportunities.

It does not need to be extendable to many market opportunities.

What happens to waiting time as you increase the variability in your process?

It increases

What does a triangle represent in a process flow diagram?

It indicates where inventory waits between activities

Costs of Detecting Defects

It is cheaper to prevent the problem through quality mgmt rather than let the customer find it

Which of the following statements most accurately represents the challenge of being environmentally sustainable? The choices facing the firm are clear, and the obvious candidates for improvement can be easily identified. It is not easy to be environmentally responsible since the choices facing management involve trade-offs. This is a decision that firms must move on since the demand for environmental responsibility is driven by forces that cannot be ignored—governmental regulations, decreasing resource levels, and changing customer demands. Being environmentally responsible is simply a matter of complying with governmental regulations.

It is not easy to be environmentally responsible since the choices facing management involve trade-offs.

Which of the following statements most accurately represents the challenge of being environmentally sustainable? Being environmentally responsible is simply a matter of complying with governmental regulations. The choices facing the firm are clear, and the obvious candidates for improvement can be easily identified. It is not easy to be environmentally responsible since the choices facing management involve trade-offs. This is a decision that firms must move on since the demand for environmental responsibility is driven by forces that cannot be ignored—governmental regulations, decreasing resource levels, and changing customer demands.

It is not easy to be environmentally responsible since the choices facing management involve trade-offs. As illustrated in the discussion presented in the section, it is not easy to be environmentally responsible since there are significant and conflicting trade-offs that must be addressed—trade-offs where there is no obvious "right" answer.

Personal Relationships

It is people who communicate and make things happen

Applying lean systems to supply chain relationships has which of the following risks?

It makes the supply chain more vulnerable to performance breakdowns.

Applying lean systems to supply chain relationships has which of the following risks? It encourages companies to buy at the lowest unit price. It encourages firms in the supply chain to hold extra inventory to protect themselves from failure. It makes the supply chain more vulnerable to performance breakdowns. All of these.

It makes the supply chain more vulnerable to performance breakdowns.

A well-designed value proposition possesses four characteristics. Which of the following is NOT one of those characteristics? It offers the highest product quality in each quality dimension. It differentiates the firm from its competition in a way that is difficult to imitate. It satisfies the financial and strategic objectives of the firm. It can be reliably delivered given the operational capabilities of the firm and its supporting supply chain.

It offers the highest product quality in each quality dimension.

Lean systems thinking in operations management can extend to sustainability in what way? Its focus on improving product quality. Its focus on delivering products to customers faster. Its focus on reducing waste of all types. Its focus on product innovation.

Its focus on reducing waste of all types.

Lean systems thinking in operations management can extend to sustainability in what way? its focus on delivering products to customers faster . Its focus on reducing waste of all types. Its focus on improving product quality. Its focus on product innovation.

Its focus on reducing waste of all types. Lean systems could improve quality and result in faster delivery, but the focus is on waste reduction, which is important to sustainability.

c. Functional layout. Unique routes and high processing times are characteristics of functional layouts.

John Jones, CEO of Joes Corp., is unhappy because each product his company makes takes a unique route through the facility, so processing times tend to be high. His company most likely has a: a. Fixed-position layout. b. Sequential action layout. c. Functional layout. d. Product layout.

a. Continuous process structure. Continuous process structures are used for make-to-stock orientations. The others are primarily make-to-order.

Jones Company has a make-to-order orientation. It most likely does NOT use: a. Continuous process structure. b. Cellular manufacturing process structure. c. Job shop process structure. d. Batch process structure.

a. Tier 2 A supplier's supplier is known as a Tier 2 supplier.

Jones Manufacturing sells a part to Lear Corporation. Lear puts this part into a radio, which Lear then sells to Ford. From Ford's point of view, Jones Manufacturing is a(n) __________ supplier. a. Tier 2 b. Echelon 1 c. Tier 1 d. Echelon 2

A short-term, highly focused effort for improving a process is known as a:

Kaizen Event

Critical to Quality (CTQ)

Key measurable characteristics of a product or process that require performance standards or specification limits to satisfy the customer (internal or external) requirements; also called Key Process Output Variable (KPOV).

Capabilities

Key suppliers must have the right technology and capabilities to meet cost, quality, and delivery requirements in a timely manner

Which of the following developments deals with emission trading and clean development mechanisms?

Kyoto Protocol

role of supplier

LEAN builds long term supplier relationships -partner with suppliers -improve process quality -info sharing -goal to have single source suppliers

LEAN manufacturing and the environment

LEAN green practices -reduce the cost of environmental management -lead to improved environmental performance -increase the possibility that firms will adopt more advanced environmental management

Which of the following environmental initiatives/programs deals most specifically with building design and construction? The Kyoto Protocol Responsible Care ISO 14000 LEED certification

LEED

which of the following environmental initiatives/programs deals most specifically with building design and construction?

LEED certification

Which of the following environmental initiatives/programs deals most specifically with building design and construction? The Kyoto Protocol Responsible Care LEED certification ISO 14000

LEED certification The answer to this question can be found in Table 16-1.

Process View

Labor & capital, transforming inputs to outputs

Which of the following operations management systems/approaches is most appropriate when dealing with environmental sustainability?

Lean Systems

C-TPAT or Customs-Trade Partnership Against Terrorism is a program designed to manage the flow of orders across borders. It is an example of which of the following risks for lean supply chains? Operational/technological Social Economy/competition Legal/political

Legal political

C-TPAT or Customs-Trade Partnership Against Terrorism is a program designed to manage the flow of orders across borders. It is an example of which of the following risks for lean supply chains?

Legal/political

In the lean systems approach, as a system improves, it should have ____________ inventory on hand.

Less

In the lean systems approach, as a system improves, it should have ____________ inventory on hand. More The same amount of Less Twice the amount of

Less

Which type of aggregate production plan is likely to have the LEAST negative impact on the local community and the workforce? Chase plan with overtime Chase plan with hiring and firing The plans do not differ in their impact on the local community and the workforce. Level plan impact on the local community and the workforce. correct Level plan

Level plan Chase with hiring/firing or with overtime both have potential negative impacts on the community and/or the workforce. Level plans tend to minimize these.

Which of the following approaches provides management with an appropriate tool for assessing the full impact from "seed to sewer" (from creation to disposal)? Life cycle analysis Total cost of ownership Trade-off analysis Cost of quality analysis

Life cycle

Which of the following approaches provides management with an appropriate tool for assessing the full impact from "seed to sewer" (from creation to disposal)? Life cycle analysis Trade-off analysis Total cost of ownership Cost of quality analysis

Life cycle analysis Of these four options, only life cycle analysis deals with all of the stages of a product's life.

d. Shorter flow times. According to Little's Law, decreasing flow times results in increased throughput.

Little's Law suggests that the key to increased throughput is: a. Eliminating waste. b. Fewer defects. c. Increased inspection. d. Shorter flow times.

Which of the following is not an example of a competitive priority?

Logistics/supply chain design

Physical goods can be differentiated from services in the operations management process by:

Longer lead times and they can be inventoried.

What is the main competitive priority at save-a-lot grocery?

Low cost purchase

Which of the following is an advantage of a chase production strategy (as compared to a level plan)? All of these. High inventory carrying cost. Lower inventory investment. Low investment in equipment.

Lower inventory investment. In chase plans, production rates are equal to demand, so inventory does not accumulate during periods of low demand.

Functional products:

MRO items and other commonly low profit margin items with relatively stable demands and high levels of competition (ie: office supplies, food staples)

Planning requirements for bicycle seats in a bicycle production plant

MRP is a process that would be most applicable in which situation: Planning requirements for repair parts for production equipment in a manufacturing plant Planning requirements for safety stocks of finished goods in a distribution center Planning requirements for bicycle seats in a bicycle production plant A and C

Which of the following is not an element of the quality cycle? Determination of customer needs Specification of quality attributes Interpretation of customer needs Production of product as specified Maintenance of current quality standards into the future

Maintenance of current quality standards into the future Fig, 8.2, pp. 163 depicts the elements of the quality life cycle

Which of the following is not part of the criteria recommended by Juaran for organizations selecting their first quality improvement project?

Make sure that the issue or problem is significant.

Which of the following identifies the ultimate goal of process mapping?

Make the desired outcome inevitable

The TQM view of organizational structure states that

Management must support employees.

Operations Management

Management of processes used to design, supply, produce, and deliver valuable goods and services to customers, managing what a firm does

Workforce Commitment

Managers must support LEAN Manufacturing by providing subordinates with the skills, tools, time, and other necessary resources to identify problems and implement solutions

Product Life Cycle Management

Managing a product through its entire life, from concept to design, development, commercialization, manufacturing, and finally, phase out.

Which of the following statements best describes the relationship between quality management and product strategy?

Managing quality helps build successful product strategies.

Which of the following actions will NOT decrease output?

Managing the flow of work into the system

Which of the following actions will NOT increase output?

Managing the flow of work into the system

Plan Materials

Materials requirement planning (MRP) systems are used primarily to: Plan materials Plan lead time Plan production Plan distribution

Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's:

Maximum Capacity

Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's:

Maximum capacity

Process Capacity

Maximum rate of output for a process in a given unit of time

Conformance

Measure of whether or not a delivered product or service meets its design specifications

Make/buy/subcontract is typically considered at what time horizon when doing capacity planning?

Medium-term

The principles of process improvement suggest that an effective, efficient process:

Minimizes the number of entry points of a workpiece into the process

S&OP results in:

More stable supply rates

How does aggregate planning for services differ from aggregate production planning for products? Service plans make extensive use of inventory to meet demand. correct Most service plans are based primarily on labor requirements. Demand for products typically is stated as the number of hours of labor required, whereas demand for services is generally stated as the number of units of service desired. There is no difference. Since services can't be put in inventory

Most service plans are based primarily on labor requirements. Since services can't be put in inventory, they generally are based on human resource requirements.

LEAN Layouts

Move people and materials when and where needed, and as soon as possible Are very visual (lines of visibility are unobstructed) with operators at one processing center able to monitor work at another Manufacturing cells Process similar parts or components saving duplication of equipment and labor Are often U-shaped to facilitate easier operator and material movements

Walmart's Cross Docking

Moving goods from inbound vehicle to outbound vehicle without storage in between, creates less inventory, less warehouses

If a company can eliminate all sources of variance in a process:

NONE OF THE ARE TRUE

Which is the most important category (as evaluated in terms of weightings used by the outside assessors) of the Malcolm Baldrige National Quality Award Program?

None of these is the most important for the award.

John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period. At his company, demand varies by month with substantial month-to-month differences. The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan. He is most likely to find that the pure level plan: Has lower inventory carrying cost than the hybrid plan. Has higher hiring/layoff cost than the hybrid plan. None of these. Has higher hiring/layoff cost than the chase plan.

None of these.

Production planning and scheduling is most likely to be associated with which of the following activies

Operation

Value in a process flow analysis is most often associated with which of the following activities?

Operation

While there is overlap between operations management and supply chain management, the two are different in that:

Operations management focuses on processes, supply chain management focuses on relationships and flows.

A company with a number of physically separate plants has a centralized tool room. This tool room in the past has been responsible for emergency repairs. Whenever equipment (e.g., a spindle, boring machine, transfer line) in one of these separate plants breaks down, the affected items are brought to the tool room, where they are repaired. In some cases, the breakdowns affect production schedules. In other cases, the breakdowns are more annoying but do not adversely affect schedules. Complicating the operations in the tool room is the fact that many of the plans for the equipment are incomplete or out-of-date, thus resulting in "make from sample" requests (the broken part is provided and the tool room is asked to make the replacement piece just like the broken part). It is difficult to predict what equipment will break down and when. Furthermore, the company owns a wide variety of equipment. What are the order winners and order qualifiers in this scenario?

Option D: Speed, Flexibility, Quality, Cost

Which of the following best describes organizational culture? Organizational culture is easy to change. Organizational culture is readily identified. Organizational culture is becoming less important in today's environment (due to factors such as downsizing and outsourcing). Organizational culture is critical to long-term success.

Organizational culture is critical to long-term success.

Which of the following best describes organizational culture? Organizational culture is becoming less important in today's environment (due to factors such as downsizing and outsourcing). Organizational culture is easy to change. Organizational culture is critical to long-term success . Organizational culture is readily identified.

Organizational culture is critical to long-term success. As discussed in the section dealing with organizational culture, all of the factors except organizational culture being critical to long-term success are not true.

Make Vs. Buy Decision

Outsourcing Backward Vertical Integration Forward Vertical Integration

Over which stage of the product's life cycle does operations management have the greatest amount of direct control? Extraction Usage Packaging/transportation Disposal

Packaging/transportation Of these four areas, operations can directly influence packaging/transportation; the others are under the control of other areas (e.g., extraction is under the control of the suppliers and usage and disposal are under the control of the user).

Rewarding Supplier performance provides an incentive to surpass performance goals. Pain and Gain Share Agreements

Pain: Punishment is a negative reward: -Could reduce future business for poor performance - Could implement a bill-back amount equal to the incremental costs resulting from a late delivery or poor quality. Gain: Strategic supplier agreements can reward suppliers by allowing - A share of the cost reductions - More business and/or longer contracts - Access to in-house training seminars and other resources - Company and public recognition

Pareto Chart

Pareto analysis sets priorities for action based on 80/20 rule (80% of problems from 20% causes). Need to collect data about the problems and sort in descending order

Processes use resources to transform inputs into outputs. For a medial clinic, what are the inputs from a process perspective?

Patients

Which three elements make up the triple bottom line? Planet, Pollution, Profit. Pollution, Equality, People. Profit, Equality, Pollution. People, Profit, Planet.

People planet profit

Which three elements make up the triple bottom line?

People, Profit, Planet.

The "triple bottom line" suggests that efforts should be devoted to assessing the impact of activities on: People, planet, profit. Profit, planet, processes. People, profit, processes. Profit, profit, profit.

People, planet, profit.

Fairtrade deals with the following elements of the Triple Bottom Line?

People.

Xanadu makes HD televisions. It claims that its HD televisions have the clearest picture clarity in the industry. Xanadu is emphasizing which dimension of quality?

Performance

"Quality Is Free," meaning that the costs of poor quality have been understated, is the work of

Philip B. Crosby

c. Longer lead times and they can be inventoried. Physical goods typically have longer lead times than services and can be inventoried (services typically cannot). See Table 1-1.

Physical goods can be differentiated from services in the operations management process by: a. More labor intensive and longer lead times. b. More expensive and easier to control. c. Longer lead times and they can be inventoried. d. More capital intensive and short lead times.

The concept of mistake-proofing was first developed in the 1960s by Shigeo Shingo. It was called: Kaizen Jidoka Poka-yoke Kanban Keiretsu

Poka-yoke pp. 166 - The concept of mistake-proofing was first developed in the 1960s by Shigeo Shingo. It was called poka-yoke

A standard electrical plug fits into an outlet in only one way because one of the two prongs is larger than the other. This ensures that people will insert the plug properly to create a grounded circuit. This is an example of:

Poka-yoke.

Corporate Social Responsibility

Practice of business ethics

Reverse Auctions

Pre-qualified suppliers enter website and at pre-designated time and date, try to underbid competitors. Bid prices are monitored until the session is officially over.

The process of "stapling yourself to an order" refers to

Pretending you are the workpiece moving through a process

Xanadu Inc. decided to increase the training received by new employees. The expense of this training is an example of which of the following costs of quality:

Prevention costs

Unnecessary automation is an example of which of the following forms of waste?

Process

A tool used to quickly communicate proposed process changes effectively is called a:

Process summary table

b. If you don't like the outcome, change the process. This is strict definition and it comes from the textbook.

Process thinking causes managers to address critical process elements, including: a. If you don't like the outcome, focus on the people. b. If you don't like the outcome, change the process. c. Processes are guidelines to thinking about to best staff activities. d. Processes drive measurement.

Kaizen Events are most appropriate for which type of operations problem?

Process-based

Kaizen events are most appropriate for which type of operations problem?

Process-based

We observe a man working on a setup. During the process of setting up, the man positions the die at a first position. He then runs through a few pieces to check whether or not they are acceptable. He then repositions the die and repeats the process. What we have observed is which of the following forms of waste?

Processing waste

The principles of process improvement suggest that an ineffective, inefficient process:

Produces products in large batch sizes

Internal Failure Costs

Producing defective parts or service but found prior to shipment to customers -Scrap -Rework -Downtime

Which of the following statements is not true?

Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.

Which of the following is the most appropriate definition of a core capability? A set of products unique to a firm. Technical capabilities of a firm. Reputation. Production/design processes unique to the firm.

Production/design

Which of the following is the most appropriate definition of a core capability?

Production/design processes unique to the firm.

Visual Controls

Provide information to guide everyday actions, provides a clear indication of normal vs. abnormal, go vs. no go, etc.

McGreen Burger Shop sells about two burgers per minute. Although the cook can cook up to 10 burgers per minute, he starts to cook another burger only after the salesperson removes a burger from the ramp. The ramp is large enough to hold only five burgers and keep them warm until a sale is made. This is an example of a:

Pull system.

industrial buyers

Purchase raw materials for conversion, services, capital equipment, & MRO supplies

Attributes

Qualitative characteristics or a process output

Which of the following is NOT a core value of TQM?

Quality assurance managers should have the most power in the organization.

Which of the following statements is false?

Quality dimensions are easy to measure for tangible goods, while they are difficult to measure for services.

Stu Johnson, CEO of Johnson, Inc., attended a seminar on Total Quality Management. Which of the following is NOT something he is likely to have learned at that seminar?

Quality is primarily the responsibility of operations management.

The four different dimensions of quality include all of the following except: Quality of design Quality of correlation coefficients Quality of conformance Availability Field service

Quality of correlation coefficients pp. 140 - the other four are the dimensions of quality

Variables

Quantitative data such as speed, weight, length, or time

Non-tariff barriers: GS challenge

Quotas, licensing agreements, embargoes, laws, and regulations imposed on imports and exports.

Johnson Corp. has so strongly embraced the lean philosophy that it wants to apply the approach to all processes in the organization. Doing this may actually have the most severe negative impact on:

Radical product innovation.

Most of the tools and techniques used in lean systems seek to:

Reduce variability from the system.

Most of the tools and techniques used in lean systems seek to: Reduce variability from the system. Reduce the operator's discretion. Improve product quality. None of these.

Reduce variability from the system.

Reduced wastes consequently results in

Reduced cycle times Greater throughput Better productivity Improved quality Reduced costs

Prevention Costs

Reducing the potential for defects -Training -Investments in better equipment -Quality improvement projects

Distributive Negotiations

Refers to a process that leads to self-interested, one-sided outcome

Forward Vertical Integration

Refers to acquiring customer's operations.

Backward Vertical Integration

Refers to acquiring sources of supply

Competitive Priorities

Reflect the quality, timeliness, and cost of the product or service

If a tangible good or service performs the promised function dependably, we say that it has high:

Reliability.

Federal Acquisition Streamlining Act (1994)

Removed restrictions on bids less than $100,000. Micro purchases (less than $2,500) can be made without bidding

A production kanban authorizes a worker to: Add an empty bin. Withdraw a standard lot of a specific item. Withdraw any item he feels is needed. Replenish an empty bin.

Replenish

A production kanban authorizes a worker to:

Replenish an empty bin.

Which of the following is NOT a basic activity type in processes?

Reporting

Which of the following practices seems to agree most with Deming's notion of "adopting a new philosophy" of doing business?

Representatives form the sales department, the front desk, and the reservations area meet to develop service strategies for building repeat business over the next twelve months.

Flexible Flow Process

Represents more job shop, high variety, low volume,

Potential challenges of global sources

Requires additional skills and knowledge to deal with international suppliers, logistics, communication, political environment, and other issues *Import Broker *Import Merchant *Trading Company *Tariffs *Non-tariff Barriers *Countertrade

Which of the following environmental initiatives/programs is an example of an industry-specific program aimed at improving environmental performance? The Kyoto Protocol Responsible Care ISO 14000 LEED certification

Responsible

Which of the following environmental initiatives/programs is an example of an industry-specific program aimed at improving environmental performance? ISO 14000 Responsible Care The Kyoto Protocol LEED certification

Responsible Care The answer to this question can be found in Table 16-1.

Abnormal Variation

Results from assignable or special causes, disturbs statistical equilibrium or the process, eliminate cause of variation, would like to prevent from reoccuring, "out-of-control"

You observe three different people doing the same task using three different approaches ( with differing levels of quality, output, and lead time) Which of the following disposition options is most appropriate for tis situation?

Rethink

Which of the following is a measure common to both the strategic profit model and the SCOR model? Responsiveness Return on assets Delivery performance Lead time

Return on assets

In-sourcing (back sourcing)

Reverting to in-house production when quality, delivery, and services do not meet expectations

2. Develop negotiation database

Review previous negotiations to catalogue standards, practices, precedents, metrics, creative solutions used, and lessons learned.

Each month the sales and operations team at Johnson Company meets to develop plans for each of the next six months. This process is known as Rolling planning horizons. Unconstrained planning. Continuous planning. Collaborative planning and forecasting.

Rolling planning horizons. Replanning each month for a given number of periods into the future is known as rolling planning horizons

Recalculates the MRP Plan

Rough-cut capacity planning does all of the following EXCEPT: Determines if a work center has the capacity to implement the MRP plan Uses planned order releases and scheduled receipts to estimate work center loads Develops a load profile Recalculates the MRP plan

The performance measurement approach that would be most useful in measuring and describing supply chain processes would be: Strategic profit model. Balanced scorecard. SCOR model. All of these.

SCOR

The performance measurement approach that would be most useful in measuring and describing supply chain processes would be:

SCOR model

Generally speaking, the sales function and operations function differ in objectives. Which of the following is NOT one of those differences? Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts. All of these. Sales emphasizes revenue, operations emphasizes cost minimization. Sales prefers many product variations, operations prefers few variations.

Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts. Generally, the sales function only wants aggregate forecasts, while operations needs detailed forecasts for planning purposes

d. Appraisal cost Inspection is an appraisal cost.

Sanford Corp. bought new technological systems to inspect the quality of products as they come off the production line. The expense of operating these systems would be an example of which of the following types of quality-related costs? a. Internal failure cost b. Prevention cost c. External failure cost d. Appraisal cost

a. Conformance Defects are an indication of lack of conformance.

Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality? a. Conformance b. Durability c. Reliability d. Performance

All of the following represent external failure cost EXCEPT the cost of:

Scrapping defective raw material.

Tools at the point of use is an example of which of the following elements of the 5-S program?

Seiton/Straighten/Configure

Tools at the point of use is an example of which of the following elements of the 5-S program? Seiri/Sort/Clear out Seiton/Straighten/Configure Seiso/Scrub/Clean and check Seiketsu/Systematize/Confirm

Seiton/Straighten/Configure

Joe's Quick Oil Change ship is interested in improving its ability to satisfy customers. The most appropriate mapping tool for a company such as this is called:

Service blueprinting

Implementation of a Six Sigma program typically involves:

Setting up training at various levels including green belt and black belt training.

Which of the following is an example of an activity that is "necessary but not value-adding"?

Setups

Kaizen

Short term (between 1-5 days), events focused on achieving specific goals for a process or part of a process, focused on doing particular, targeted improvements

Little's Law suggests the key to increased throughput is

Shorter Flow Times

Little's Law suggests that the key to increased throughput is:

Shorter flow times

Cause inconsistencies in the MRP

Significant changes in an MPS quantity several weeks into the planning horizon can: Make the MRP more accurate Cause inconsistencies in the MRP Reduce stock outs Increase safety stock

Phil Bord is a CEO for a large auto manufacturer and is interested in improving the product quality. Phil had overheard his friend mention Six Sigma. Considering that Phil has no idea what Six Sigma is, what are some key points to help Phil out?

Six sigma quality is the result of a well-defined and structured process.

Six Sigma 2 of 2

Six standard deviations on each side of the mean should be within the product's design specification (not defective)

ERP

Software that consolidates all of the business planning systems and data throughout an organization is: MPS MRP DRP ERP

Rights and Duties

Some actions are just right in and of themselves, regardless of the consequences

5 S's of LEAN Manufacturing

Sort- organization Set- tidiness Shine- purity Standardize- cleanliness Sustain- discipline

Which of the following is not an example of a method to reduce variability in arrivals?

Standard operating procedures

Repetitive Process

Standard products with options, appliances/automobiles, same sequence, lower skilled workers do limited activities

Framework for sourcing strategy development

Step 1 - Classify the firm's suppliers as belonging to either the innovative or functional category. Step 2 - Develop strategic sourcing goals and strategies Step 3 - Evaluate supply chain capabilities and compare to required performance Step 4 - Set goals for improving capabilities including those identified from audits or from past experience. Step 5 - Implement the work plan. Use formal project management process. Step 6 - Monitor progress and adjust the work plans.

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck?

Step 1: 500 chips/hour Step 2: 250 chips/hour Step 3: 200 chips/hour <-- Is the bottleneck Step 4: 550 chips/hour

The following sequence shoes four operation for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck? 1; 500 chips/hour 2:250 chips/hour 3: 200 chips/hour 4: 550 chips/hour

Step 3

A vice president of operations wants to evaluate the impact of reducing manufacturing expenses on the firm's return of assets. A measurement approach that he might consider for this is the:

Strategic profit model

A vice president of operations wants to evaluate the impact of reducing manufacturing expenses on the firm's return on assets. A measurement approach that he might consider for this is the: Strategic profit model. Balanced scorecard model. SCOR model. None.

Strategic profit model.

Operations managers answer questions of what, how, when, where and who by defining both the ___________ and _____________ aspects of the operations management system.

Structural and infrastructural

Joe Jones was asked to undertake a project to determine the resources and capacity his firm would need in the next three to ten years. These types of decisions are considered to be:

Structural aspects of operations management

A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process:

Structure

Capacity at a Resource Pool

Sum of the capacities of the resource units in that pool

Supplier co-location or JIT II

Supplier's employee is embedded in buyer's purchasing department to forecast demand, monitor inventory and place orders. Involves granting supplier access to proprietary or sensitive data

Vendor Managed Inventory (VMI)

Suppliers directly manage buyer inventories to reduce the buyer's inventory carrying costs and avoid stockouts for buyer

a. Technology has facilitated globalization. Communications and transportation technologies have made global outsourcing easier, thus raising the need to focus on supply chains.

Supply chain management has grown as a prevalent perspective on operations management because: a. Technology has facilitated globalization. b. Firms have become more vertically integrated. c. Governments have become less open to trade. d. Purchasing managers now have stronger roles in companies.

Which of the following describes the intersection between people, profit, and the planet?

Sustainability

Xanadu Inc. claims that its manufacturing processes result in fewer greenhouse gases than those of its primary competitors. This suggests that Xanadu has a focus on:

Sustainability

Which of the following terms best describes the impact of sustainability initiatives on the business model? Sustainability affects primarily the capabilities offered by the supply chain. Sustainability helps the firm to change its value proposition. Sustainability impacts primarily the customers that we serve. Sustainability affects the entire business model.

Sustainability affects the entire business model

Which of the following terms best describes the impact of sustainability initiatives on the business model? Sustainability affects primarily the capabilities offered by the supply chain. Sustainability helps the firm to change its value proposition. Sustainability affects the entire business model. Sustainability impacts primarily the customers that we serve.

Sustainability affects the entire business model.

Which of the following statements best describes the role of sustainability measurement and reporting in many of today's firms? Sustainability reporting is becoming more important, with its structure being determined by governmental regulations and requirements. Sustainability reporting focuses on those issues where the reporting firm has the greatest degree of control. Sustainability reporting is becoming more important with more metrics being provided by different organizations. Sustainability reporting, while important, is plagued by problems involving its development and deployment and with concerns over appropriate standards.

Sustainability reporting is becoming more important with more metrics being provided by different organizations

Which of the following statements best describes the role of sustainability measurement and reporting in many of today's firms? Sustainability reporting focuses on those issues where the reporting firm has the greatest degree of control. Sustainability reporting is becoming more important, with its structure being determined by governmental regulations and requirements. Sustainability reporting, while important, is plagued by problems involving its development and deployment and with concerns over appropriate standards. correct Sustainability reporting is becoming more important with more metrics being provided by different organizations.

Sustainability reporting is becoming more important with more metrics being provided by different organizations. Of these various statements, all are essentially false except for the right answer.

Which of the following mapping techniques identifies and integrates functional responsibilities into the process mapping process?

Swim lanes

One of the ways that Just-In-Time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

T

The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process capability; the other is a comprehensive system for achieving and sustaining business success.

T

Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the

Taguchi Loss Function

A manager tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of

Taguchi concepts

Lean Developer

Taiichi Ohno of Toyota, visited US Ford plant to see setup reduction, etc. Thought he could translate it to the production floor

Achieving the goal of producing at the output rate which matches the rate of customer demand is the goal of: Jidoka. Poka-yoke. Total productive maintenance. Takt time flow balancing.

Takt time

Achieving the goal of producing at the output rate which matches the rate of customer demand is the goal of:

Takt time flow balancing.

Goods

Tangible (physical), can be inventoried, little customer contact, long lead time, often capital-intensive, quality easily assured, material is transformed

a. Prevention is better than rework PDCA is a tool, not a core value (underlying belief).

Ted wants to hire more inspection personnel to insure that all products shipped are free of defects. What TQM core value would this action violate? a. Prevention is better than rework b. Workers are more valuable than managers c. Better quality leads to long term success d. A PDCA cycle should always be followed

As lean systems thinking is implemented, the amount of training that employees receive: Tends to be about the same as with other manufacturing philosophies. Tends to increase. Tends to be reduced dramatically, replaced instead by continuous improvement. Is focused exclusively on statistical process control.

Tends to increase

Ethical Sourcing

That which attempts to take into account the public consequences of organizational buying or bring about positive social change through organizational buying behavior

Taichi Ohno, the founder of lean/just-in-time, when he came to America in the 1950s was most impressed with which of the following American developments?

The American supermarket

Which of the following statements concerning the Malcolm Baldrige award is true? The Baldrige system represents a comprehensive framework, comprising of seven categories, for quality management and performance measurement. The award was established by the U.S. Congress in 1987 to promote better quality management practices and improved quality results by worldwide competitors. The Baldrige criteria are based upon 1,000 points, allocated among four categories: strategic planning, information systems, business results, and conformance to documented procedures, policies, and training. A disadvantage of the Baldrige award process is its lack of flexibility, requiring each participating firm to utilize the same standardized approach. A disadvantage of the Baldrige award process is its lack of a framework for internal assessment of quality and performance improvement systems.

The Baldrige system represents a comprehensive framework, comprising of seven categories, for quality management and performance measurement. pp. 170-172, the Baldrige system represents a comprehensive framework, comprising of seven categories (see Table 8.3), for quality management and performance measurement

purchase order (PO)

The Buyer's offer to the supplier to acquire goods or services. Becomes a legally binding contract only when accepted by the supplier

A bottleneck activity in a process is generally the activity with:

The Least Capacity

Product Data Management (PDM)

The business function and associated software that creates, publishes, and manages detailed product information.

Early Supplier Involvement (ESI)

The collaborative product development practice of getting suppliers involved early in the product design process. Good suppliers have core competences around their product technologies. Therefore, firms that involve their suppliers in product development at an early stage can take advantage of these core competencies and potentially reap financial and competitive rewards.

a. IoT The Internet of Things (IoT) allows products and machines to connect to the Internet and share data with other devices.

The connection of products and machines for sharing data with other devices is: a. IoT b. ERP c. RFID d. UAV

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true? The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year. It will be easy to keep the workforce size stable. Inventory will fluctuate significantly during the year. The firm likely will have higher capital investment than if it followed a level plan.

The firm likely will have higher capital investment than if it followed a level plan. Chase plans require sufficient investment in plant and equipment to produce enough output to meet demand in the highest period.

Which of the following statements regarding Arnold Palmer Hospital is false?

The hospital's high quality is measured by low readmission rates, not patient satisfaction.

Zanda Corp. has always operated within one country. It is contemplating opening production facilities in another country. Zanda should realize: Production processes used domestically should work well in a different country. The means of motivating the workforce domestically may not work well in a different country. The technology used domestically is often the best to use in a different country. The same business model that is used domestically should apply to the foreign country.

The means of motivating the workforce domestically may not work well in a different country.

Zanda Corp. has always operated within one country. It is contemplating opening production facilities in another country. Zanda should realize: The means of motivating the workforce domestically may not work well in a different country. Production processes used domestically should work well in a different country. The technology used domestically is often the best to use in a different country. The same business model that is used domestically should apply to the foreign country.

The means of motivating the workforce domestically may not work well in a different country. Because of cultural differences, including skills, ways of interacting, what constitutes "success," may be different in another culture.

Joe Jonas, plant manager at Waco Industries, told a friend that if it was necessary, his plant could product 1,000 items a day if all conditions were just right. Joe is describing his plant's:

The output possible under ideal conditions is maximum capacity.

Integrated product Design (IDS)

The practice of systematically forming teams of functional disciplines to integrate and concurrently apply all necessary processes to produce an effective and efficient product that satisfies the customer's needs.

The fuzzy front end

The process for determining customer needs or market opportunities, generating ideas for new products, conducting necessary research on the needs, developing product concepts, and evaluating product concepts up to the point that a decision is made to proceed with development. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is more structured, predictable, and formal.

Reverse Engineering

The process of dismantling and studying a competitor's product to understand the strengths and weaknesses of the design to support the design effort for a similar product.

Co-sourcing (selective sourcing)

The sharing of a process function between internal staff and an external provider

Why are processes that are visible to the customer considered to be critical?

They affect the customer perceptions of value

Jones Manufacturing sells a part to Lear Corporation. Lear puts this part into a radio which Lear then sells to Ford. From Ford's point of view, Jones Manufacturing is a __________ supplier.

Tier 2

Which of the following phrases BEST defines the concept of sustainability, as set out by the United Nations Brundtland Commission: To reduce, minimize, and ideally eliminate pollution, thus preserving the planet and its resources for the benefit of not only today's generation but also the future. To meet the needs of the present without compromising the ability of future generations to meet their needs. To ensure that business and the community work together to preserve limited resources while also ensuring that business is appropriately rewarded for its efforts. To foster an environment that satisfies the requirements of the triple bottom line—namely people, profit, and the planet—the keys to our future survival.

To meet the needs of the present without compromising the ability of future generations to meet their needs

Which of the following phrases BEST defines the concept of sustainability, as set out by the United Nations Brundtland Commission: To meet the needs of the present without compromising the ability of future generations to meet their needs. To ensure that business and the community work together to preserve limited resources while also ensuring that business is appropriately rewarded for its efforts. To foster an environment that satisfies the requirements of the triple bottom line—namely people, profit, and the planet—the keys to our future survival. To reduce, minimize, and ideally eliminate pollution, thus preserving the planet and its resources for the benefit of not only today's generation but also the future. The answer is found in the first paragraph under the heading, and it focuses on the notion that sustainability must deal with needs (not pollution alone) and that these needs must

To meet the needs of the present without compromising the ability of future generations to meet their needs. The answer is found in the first paragraph under the heading, and it focuses on the notion that sustainability must deal with needs (not pollution alone) and that these needs must be satisfied both today and in the future.

Which of the following are NOT associated with quality at the source? Total productive maintenance Jidoka Stop-and-fix systems Andons (trouble lights)

Total productive maintenance

The 'arrow' symbol indicates what type of activity in a process?

Transportation

Sustainability metrics are being added to operations management both as customer requirements and as operational performance criteria.

True

The process of constructing a flowchart for service operations is also referred to as service blueprinting. True False

True pp. 113 - in a service operations, process flowcharting is also called service blueprinting

The improvement goals of the transformation process typically are to increase efficiency, reduce throughput time, increase quality, or even improver worker morale. True False

True pp. 118 - these are typically the four goals

Supplier certification means the supplier has control over the processes and can pass an ISO 9000 type of audit at the very least. True False

True pp. 173 - this is true, see bottom of page

In which operational setting has lean/just-in-time experienced the lowest levels of acceptance/implementation?

Turbulent business settings

In which operational setting has lean/just-in-time experienced the lowest levels of acceptance/implementation? Manufacturing Services Across the supply chain Turbulent business settings

Turbulent business settings

c. Internal production Over the last 50 years, globalization and outsourcing have caused a shift in operations management from an internal focus to a combined internal and external focus.

Up until the latter parts of the 20th century, operations management mainly focused on: a. Design b. Globalization c. Internal production d. External Outsourcing

BMW has introduced a program of covered scheduled maintenance for its cars. That is, when you bring in your vehicle for maintenance at a BMW dealership, BMW will cover the costs of everything (except for worn-out tires). This practice specifically targets which stage of the product life cycle? Extraction Packaging/transportation Usage Disposal

Usage

BMW has introduced a program of covered scheduled maintenance for its cars. That is, when you bring in your vehicle for maintenance at a BMW dealership, BMW will cover the costs of everything (except for worn-out tires). This practice specifically targets which stage of the product life cycle? Usage Disposal Packaging/transportation Extraction

Usage What BMW is doing here is influencing how the customer uses (and treats) the product, thus improving the trade-in values and reducing the total costs of ownership. Consequently, the correct answer is Usage.

Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true?

Utilization was 133% of effective capacity

Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true?

Utilization was 133% of effective capacity

Which of the following is false regarding control charts?

Values above the upper control limits always imply that the product's quality is exceeding expectations.

Green Purchases

Variety of federal, state, and local initiatives to include environmental and human health considerations when making purchases

"Employees cannot produce goods that on average exceed the quality of what the process is capable of producing" expresses a basic element in the writings of

W. Edwards Deming

One implication of increased utilization in a process is that:

Waiting time will go up

c. Cellular manufacturing. Cellular manufacturing attempts to maintain flexibility of job shops but at lower costs.

Wanda Corp. currently uses a job shop process. It wants to maintain the advantages of this but increase efficiency. Wanda should investigate: a. Job shop processes. b. Mass customization. c. Cellular manufacturing. d. Project process.

Which of the following is an important belief found in lean cultures?

Waste is a symptom.

You are given the following information. Which of these statements can you support with this information? Max Capacity: 480 hours/week Effective capacity ratio:85% demonstrated capacity: 380 hours/week over the past two weeks OTD %: 75% of the jobs are being completed on-time

We need to further investigate whether the problem is in input or capacity

You are given the following information: Maximum Capacity: 480 hours per week Effective Capacity Ratio: 85% Demonstrated Capacity: 380 hours per week over the last two weeks On-Time Delivery %: 75% of the jobs are being completed on time Which of these statements can you support with this information?

We need to further investigate whether the problem is in input or capacity

You are given the following information. Which of these statements can you support with this information? Max Capacity: 480 hours per week Effective Capacity Ratio: 85% Demonstrated Capacity: 380 hours per week over the last 2 weeks On-time Delivery %: 75% of jobs being completed on time

We need to further investigate whether the problem is in our input or capacity

Corporate strategic planning involves decisions related to: What businesses should we be in? What specific product- and market-based initiatives and goals should we establish? What measures should we use to control strategic initiatives? All of these.

What businesses should we be in?

b. 1.9 minutes The takt time is the [time available]/customer demand. In this case [2 shifts per day x 8 hours per shift x 60 minutes per hour]/500 units = 1.9 minutes.

What is the takt time in minutes, if 500 units are needed per day? The company works 2, 8-hour shifts per day. a. 0.5 minutes b. 1.9 minutes c. 31.3 minutes d. 62.5 minutes

c. How many manufacturing plants should the company operate? Strategic planning deals with long term issues (years) at a business level, including making changes to a physical network of facilities.

What kinds of question does an operations manager who is responsible for strategic planning address? a. Which employees should work the day shift tomorrow? b. Should we make this part or buy it? c. How many manufacturing plants should the company operate? d. How should this process be organized?

Functional strategic planning involves decisions related to:

What metrics should be used to ensure progress in operations management?

Functional strategic planning involves decisions related to: What businesses should we be in? Specific product- and market-based initiatives and goals. What metrics should be used to ensure progress in operations management? All of these.

What metrics should be used to ensure progress in operations management?

a. Customers are more directly involved in service processes, so their perceptions need to be consideredIt is a way to categorize elements of work activities Customers are often intimately a part of the operations process. The process is the product, and customers directly and immediately observe the process.

Which of the following challenges are more likely to be faced by service operations managers, rather than manufacturing operations manager? a. Customers are more directly involved in service processes, so their perceptions need to be consideredIt is a way to categorize elements of work activities b. The "total product experience" is more important in services c. Pure service operations need to be separated from pure goods producing operations d. Operations is typically less financially important in service businesses

d. All of the above are likely to be stakeholders A bank must consider the needs of its customers and employees, while also complying with government and other regulators.

Which of the following groups are NOT likely to be stakeholders for operations in a local bank? a. Customers b. Regulators c. Employees d. All of the above are likely to be stakeholders

a. Desired outcome statement This is based on the discussion of the business model.

Which of the following is NOT a component of the business model? a. Desired outcome statement b. System capabilities c. Value proposition d. Critical customer

Planned Order Release

Which of the following is NOT an input in the MRP: Bill of materials Inventory records file Master production schedule Planned order release

Net Requirements

Which of the following is NOT included in the information about the inventory records file for an item: Safety stock Preferred order quantity Net requirements Lead time

Capital Equipment Cost

Which of the following is NOT one of the costs considered in aggregate production planning: Subcontracting cost Capital equipment cost Inventory cost Firing (layoff) cost

d. All of the items are true. The characteristics described are all characteristics of order qualifiers, not order winners or losers.

Which of the following is NOT true about "order qualifiers"? a. These are product traits that must meet a certain level in order for the product to even be considered by customers. b. Customers may not be aware of any level of performance in excess of those minimum levels that they have established. c. The firm must perform acceptably on these traits, usually at least as well as competitors' offerings. d. All of the items are true.

c. A computer repair shop A computer repair shop tends to have a high degree of customization and customer interaction and relatively low labor intensive since much of the diagnosis is automated making it the best example of a service shop.

Which of the following is the best example of a service shop? a. A dentist b. A fast food restaurant such as McDonald's c. A computer repair shop d. An electrical utility company

b. Production/design processes unique to the firm. Core capabilities are skills, processes, and systems that are unique to the firm and desired by the customer.

Which of the following is the most appropriate definition of a core capability? a. A set of products unique to a firm. b. Production/design processes unique to the firm. c. Technical capabilities of a firm. d. Reputation.

b. A product characteristic that causes customers to choose the product over that of a competitor. Order winners are traits that cause customers to actually choose a specific product.

Which of the following is the most appropriate definition of an "order winner"? a. A product characteristic that permits the product to compete in a market. b. A product characteristic that causes customers to choose the product over that of a competitor. c. A product that generates the highest dollar sales volume. d. A product that has the highest profit margin.

d. An upholstered sofa For an upholstered sofa using an assemble-to-order orientation, the premade frames are held in inventory but the fabric is not added until a customer order is placed. Sofas can also be make to stock.

Which of the following products is most likely to use an assemble-to-order market orientation? a. Shampoo b. A mobile phone c. A race car d. An upholstered sofa

d. Economies of scale refers to the fact that as volume increases, total cost of production decreases. Economies of scale refer to cost per unit of production, not total cost of production (which increases as volume goes up).

Which of the following statements about economies of scale is NOT true? a. One reason economies of scale occur is because employees become more efficient as volume increases. b. Economies of scale may not exist at all levels of production. c. One reason economies of scale occur is because fixed costs can be spread over more units of production as output increases. d. Economies of scale refers to the fact that as volume increases, total cost of production decreases.

a. It is a way to view business as a system of inter-related activities. Process thinking looks at all operations as systems of activities that are related by material, information, and people flows, and by shared resources.

Which of the following statements best describes "process thinking"? a. It is a way to view business as a system of inter-related activities. b. It is a way to manage thought processes to make better decisions. c. It is a way to approach work systematically d. It is a way to categorize elements of work activities

d. None of these statements is true. ISO 9000 certification can be applied to almost all industries. It guides managers in what to do but not how to do it.

Which of the following statements is most true regarding ISO 9000? a. ISO 9000 was designed specifically for the electronics industry b. ISO 9000 is a quality award given by the U.S. government c. ISO 9000 tells management specifically how to ensure quality d. None of these statements is true.

c. People, Profit, Planet. Simple definition.

Which three elements make up the triple bottom line? a. Pollution, Equality, People. b. Planet, Pollution, Profit. c. People, Profit, Planet. d. Profit, Equality, Pollution.

Level Plan

Which type of aggregate production plan is likely to have the LEAST negative impact on the local community and the workforce; Chase plan with hiring and firing Chase plan with overtime Level plan The plans do not differ in their impact on the local community and the workforce

d. All these answers are correct. Quality has both objective and subjective elements. Operations managers tend to emphasize conformance, marketing managers tend to emphasize features, engineering managers tend to emphasize performance, reliability, and durability.

Why is product quality sometimes poorly defined in a firm? a. Managers are not clear on what characteristics customer care most about. b. Holistic measures of quality are difficult to develop. c. Managers in different functional areas tend to emphasize different dimensions of quality. d. All these answers are correct.

c. Performance Picture clarity is a basic performance dimension of HD televisions.

Xanadu makes HD televisions. It claims that its HD televisions have the clearest picture clarity in the industry. Xanadu is emphasizing which dimension of quality? a. Features b. Conformance c. Performance d. Reliability

You are sitting next to a person in business class on a flight from Los Angeles to Sydney, Australia. You mention to that person that you got your ticket two months ago for only $12,500. The person responds that she bought her ticket two days ago for $7,800. This sometimes happens because airlines often use an approach called: Capacity management. Load management. Yield management. Workforce leveling.

Yield management. Yield management is an approach that adjusts prices for a service as demand occurs - or fails to occur

DRP

Zanda Company is looking for a requirements planning system to help replenishment of its finished goods throughout its network of distribution centers. The type of system Zanda should consider is known as: CRP DRP MRP ERP

Jones will have lower inventory carrying costs

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true: Jones will have higher investment in plant and equipment Jones will have higher hiring and firing costs Jones will have lower inventory carrying costs All of the options are true

Zanda will have higher inventory carrying costs

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true: Zanda will have higher investment in plant and equipment Zanda will have higher hiring and firing costs Zanda will have higher inventory carrying costs Zanda will have lower total production costs

Zanda Corp. and Jones Corp. are identical in every way (products produced, costs, demand, etc.) except for one. Zanda uses a level production plan while Jones prefers a chase production plan. Which of the following is most likely to be true Zanda will have higher investment in plant and equipment. Zanda will have lower total production costs. Zanda will have higher inventory carrying costs. Zanda will have higher hiring and firing costs.

Zanda will have higher inventory carrying costs.

Total quality management emphasizes

a commitment to quality that goes beyond internal company issues to suppliers and customers

Lean manufacturing

a coordinated system producing the exact products desired, delivered in the right quantities, where needed, and Just in time -pull system -visual signals -small lot production -uniform plant loading

Supply Base

a list of suppliers -Firms emphasize long-term strategic supplier alliances consolidating volume into one or fewer suppliers, resulting in a smaller supply base.

"Making it right the first time" is

a manufacturing-based definition of quality

supply management

a newer term that encompasses all acquisition activities beyond the simple purchase transaction.

Alpha company has a performance standard of 97% fill rate. Last month it achieved a 94% fill rate. This is an example of

a performance gap

Which of the following statements about "process" would Juran most likely agree with?

a process is a set of activities that taken together, produce a result that is of value to a customer. A process that creates a product may include several departments and areas within an organization.

Disruptive Techonology

a technological innovation, product, or service that eventually overturns the existing dominant technology in the market despite the fact that the disruptive technology is radically different than the leading technology and often has poorer performance (at least initially) than the leading technology.

Symbols used within a typical flow-process chart include all of the following except: a trapezoid, representing a work queue a circle, representing an operation an arrow, representing transportation a triangle, representing storage a square, representing inspection

a trapezoid, representing a work queue Fig. 6.5, pp. 117 - trapezoid is not a symbol key. The fifth symbol key is D for delay

"Quality is defined by the customer" is

a user-based definition of quality

Which of the following is true about ISO 14000 certification?

a. It is not a prerequisite for ISO 9000 certification. b. It deals with environmental management. c. It offers a good systematic approach to pollution prevention. d. One of its core elements is life-cycle assessment. **e. All of the above are true.

Arnold Palmer Hospital uses which of the following quality management techniques?

a. Pareto charts b. flow charts c. benchmarking d. Just-in-Time *******e. The hospital uses all of the above techniques.

Techniques for building employee empowerment include

a. building communication networks that include employees b. developing open, supportive supervisors c. moving responsibility from both managers and staff to production employees d. building high-morale organizations ***e. All of the above are techniques for employee empowerment.

To become ISO 9000 certified, organizations must

a. document quality procedures b. have an onsite assessment c. have an ongoing series of audits of their products or service ***d. all of the above

The role of quality in limiting a firm's product liability is illustrated by

a. ensuring that contaminated products such as impure foods do not reach customers b. ensuring that products meet standards such as those of the Consumer Product Safety Act c. designing safe products to limit possible harm to consumers d. using processes that make products as safe or as durable as their design specifications call for ****e. All of the above are valid.

Quality circles members are

a. paid according to their contribution to quality b. external consultants designed to provide training in the use of quality tools c. always machine operators d. all trained to be facilitators ***e. none of the above; all of the statements are false

Which of the following is not one of the major categories of costs associated with quality?

a. prevention costs b. appraisal costs c. internal failures d. external failures ***e. none of the above; they are all major categories of costs associated with quality

An example of a short term capacity decision is:

adding low-skilled labor

Which of the following is not a typical inspection point?

after a costly process

Sourcing

all of the firm's activities used to manage external resources.

capacity planning

amount of output or work that a process can produce in a given amount of time represents our ability to meet demand

utilization

as the percentage of process capacity that is actually used

Little's Law in a manufacturing process relates to: average throughput time, average inventory, and efficiency of a process average inventory, average queue length, and average flow rate of a process average inventory, average throughput time, and average flow rate of a process efficiency, average inventory, and average flow rate of a process average flow rate, average inventory and utilization of a process

average inventory, average throughput time, and average flow rate of a process pp. 109, Little Law is: I = T X R or average inventory = average throughput rate X average flow rate

Import Merchant: GS challenge

buys and takes title to the goods

a specific analysis of the total greenhouse gases caused directly or indirectly by a product is called

carbon footprinting

A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of categories. This is most closely related to the ____________ tool of TQM.

cause and effect diagram

A fishbone diagram is also known as a

cause-and-effect diagram

A successful TQM program incorporates all of the following except

centralized decision-making authority

Which of the following are factors used to assess and rank a list of choices?

check sheets

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality?

communication, courtesy, and credibility

Jones company promised a customer that they would receive at least 98% of all items ordered. In fact, the customer received 95% of the items. This is an example of which gap in the customer satisfaction model

communications gap

high quantities, different processes

complexity

Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality? Durability Reliability Performance Conformance

conformance

Which of the following is not a perpetual measure of service? tangibles reliability responsiveness empathy conformance

conformance pp. 162 - the five perpetual measures of quality are tangibles, reliability, responsiveness, assurance, and empathy.)

The philosophy of zero defects is

consistent with the commitment to continuous improvement

"Kaizen" is a Japanese term meaning

continuous improvement

Which of the following is not a reason for quality improvement failure? focus on short-term financial results managers always blame employees when there is a quality problem continuous trade-off quality to reduce cost or meet schedules suppliers are certified for a functioning quality systems managers continue to interfere with team wor

continuous trade-off quality to reduce cost or meet schedules pp. 177 - many quality improvement efforts fail because suppliers are not certified for a functioning quality system

Competitive bidding

contract is usually awarded to lowest priced responsive & responsible bidder

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total cost of a chase plan which uses only hiring/firing?

correct $257,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total cost of the level plan?

correct $260,700

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. What is the total cost of a CHASE plan (using hiring/firing)?

correct $380,300

Zanda Corporation is preparing an aggregate production plan for its product for the next four months. The company's expected monthly demand is given in the following chart. The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month. Following is other critical data: Production cost per unit = $125 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50 Firing cost per worker = $100 Beginning number of workers = 25 Each worker can produce 25 units per month. The total inventory carrying cost of a chase plan is:

correct $4,000

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month. Following is other critical data: Production cost per unit = $50 Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300 Firing cost per worker = $200 Beginning number of workers = 16 Each worker can produce = 50 units per month. What is the total cost of hiring and firing the workers in a chase plan which uses only hiring and firing?

correct $5,000

Which of the determinants of service quality involves having the customer's best interests at heart?

credibility

In most organizations, the most costly defects in products and services

cross the boundaries of several departments, persist despite the efforts of individual department mangers, and are not adequately addressed because a mechanism does not exist to help mangers deal with interdepartmental issues and problems.

which of the following factors was most responsible for the breakdown of the daimier-benz/chrysler merger?

cultural incompatibility

Service quality is based on the gap between ________ and __________. customer expectation and actual service delivered customer expectation and performance quality actual service delivered and the potential service that can be delivered customer expectation and conformance quality None of the above

customer expectation and actual service delivered pp. 162 - Service quality is based on the gap between what the customer expects on each dimension and what is provided

Jones company makes every effort to consistently meet the expectations of all of its customers. IT is clear that jones company is focused on

customer satisfaction

the difference between a 'customer success' and a 'customer satisfaction' focus is that

customer satisfaction deals with expectations, customer success deals with requirements

providing perfect orders to a customer would be a key aspect of which customer accommodation focus

customer service

providing value added services is a critical aspect of

customer success

Institute of Supply Management (ISM)

defines supply management as the "Identification, acquisition, access, positioning, and management of resources an organization needs or potentially needs in the attainment of its strategic objectives."

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to

determine whether any of the organization's stakeholders are violated by poor quality products

According to Deming, quality improvement slogans, banners, and posters

disillusion and frustrate employees when they promote goals without specifying how the goals are to be achieved.

when you buy a machine it exactly

doubles capacity of operation

Building high-morale organizations and building communication networks that include employees are both elements of

employee empowerment

when people and profit intersect, from a sustainability perspective, which is most impacted?

equitability

Which of the following tools is useful for recording how frequently something occurs?

fact-finding planning sheet

A company has identified that there are 5 critical components of a "perfect order" It establishes a 97% standard on each of these components. Assuming it achieves this standard, it can expect that its overall perfect order performance is 97%.

false

A customer success program in a company should focus on every customer the company serves

false

A firm which provides logistics service that is superior to its competitors can be sure that customers are satisfied

false

In developing strategy for customer accommodation, low-profitability customers should never be candidates for a customer success relationship

false

companies should strive to offer the same fill rate performance on all items they stock

false

good logistics practice involves developing operations in which malfunctions never occur

false

Poka-yoke" is the Japanese term for

foolproof

One of the reasons a continuous-improvement team establishes baseline measurements when analyzing a problem is to:

gauge the effectiveness of the solutions the team implements later on in the continuous-improvement process.

founder of lean/JIT impressed by US

grocery stores

The best starting point for identifying existing service problems or current work processes that fail to meet or exceed guest expectations is:

guest feedback

capacity 2

how much volume you can handle throughput

Decisions Made by Operations Managers

how to produce goods/services, measuring quality, how much to make/when, delivering products to our customers

When a sample measurement falls inside the control limits, it means that

if there is no other pattern in the samples, the process is in control

Trading company :GS challenge

imports & carries wide variety of goods (like catalogues)

To save money and increase the efficiency of the housekeeping department, a continuous-improvement team at the ABC Hotel decided to offer guests the water-saving and energy-saving option of reusing their bed sheets and towels during their second night's stay. Because a large number of guests choose this "environment- friendly" option, the hotel is able to significantly increase the productivity of room attendants, dramatically decrease the volume of linens and towels processed by the on-premises laundry, and substantially decrease energy and water cots. This example illustrates the concept of:

incremental improvement

Six Sigma

is an enterprise and supply chain-wide philosophy that emphasizes a commitment toward excellence and encompasses suppliers, employees, and customers

Lean

is an operating philosophy of waste reduction and value enhancement and was originally created as the Toyota Production System (TPS) by key Toyota executives.

Purchasing organization

is dependent on many factors, such as market conditions and types of materials required

which of the following most accurately represents the challenge of being environmentally sustainable?

it is not easy to be environmentally responsible since the choices facing management involve trade offs

applying lean systems to supply chain relationships has which of the following risks?

it makes the supply chain more vulnerable to performance breakdowns

purchasing (the function)

key business function for acquiring materials, services, & equipment

Reliability refers to: restoration of the product or service once it has failed a warranty and repair or replacement of the product or service once it has been sold length of time that a product can be used before it fails the ratio between uptime and uptime + downtime

length of time that a product can be used before it fails pp. 160, reliability refers to the length of time a product can be used before it fails

bottleneck

limits the capacity of the whole process

All of the following costs are likely to decrease as a result of better quality except

maintenance costs

Strategic Sourcing

managing the firm's external resources specifically to support firm's long term goals.

The "four Ms" of cause-and-effect diagrams are

material, machinery/equipment, manpower, and methods

Batch Process

moderate volume and variety, bakery, flow patterns, set up times

purchasing (the action)

obtaining merchandise, capital equipment; raw materials, services or maintenance, repair, and operating (MRO) supplies in exchange for money or its equivalent

A good description of "source inspection" is inspecting

one's own work, as well as the work done at the previous work station

on-time delivery is an aspect of a company's performance in

operational performance

the most exacting measure of logistics performance regarding availability is

orders shipped complete

Pareto charts are used to

organize errors, problems, or defects

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is

out of control and the process should be investigated for assignable variation

over which stage of the product's life cycle does ops mgmt have the greatest amount of direct control?

packaging/transpo

electrical plug only has one way to plug in because of a reason

poka-yoke

which of the following is not one of the 'service outputs' of supply chain

price

uniform plant loading

problem: -demand exceeds capacity at points in the planning horizon -matching the production plan to follow demand exactly can contribute to inefficiency and waste solution* - planning up to capacity in earlier time periods to meet demand in later time periods -also called "front loading" the plan or "leveling" the plan -production schedule is frozen in the up-front time period (month) -helps suppliers better plan production

ISO 9000 seeks standardization in terms of

procedures to manage quality

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a

process chart

true

process thinking causes managers to address critical process elements, including activities, inputs, outputs, flows, structure, resources, and metrics process thinking can be applied to any operations that involve transformations of materials, information, currencies, or even people

die at many positions, keeps resetting

processing waste

payment bonds

protection against 3rd party liens not fulfilled by bidder

According to the manufacturing-based definition of quality,

quality is the degree to which a specific product conforms to standards

Counter trade: GS challenge

raw materials are traded for goods and services

from a strategic perspective, companies should strive to

realize different customer accommodation approaches may be appropriate for different customers.

Capacity

refers to the limit on the amount of output that a process can produce given an amount of inputs and resources made available to the process capacity is also used to denote size or storage limits the capacity of a process is determined by the limits of its resources

Which of the determinants of service quality involves performing the service right the first time?

reliability

a production kanban authorizes a worker to

replenish an empty bin

which of the following environmental initiatives/programs is an example of an industry specific program aimed at improving environmental performance?

responsible care

in general, offering consumers higher levels of service output in terms of greater spatial convenience or product variety

results in higher logistics and distribution cost

A quality loss function includes all of the following costs except

sales costs

ISO 9000 certification:

signifies that a company is following detailed quality methods and procedures drawn up by the International Standards Socity

Elements of a system may include all of the following except: inputs outputs suppliers customers specifications

specifications pp. 107, a system is described by his boundaries, inputs, outputs, suppliers, customers, and system flows

Stakeholders who are affected by the production and marketing of poor quality products include

stockholders, employees, and customers

which customer accommodation approach requires a comprehensive supply chain perspective on the part of logistics executives

success and satisfaction?

The four "costs of quality" include all of the following except: internal failure costs external failure costs supply chain failure costs prevention costs appraisal costs

supply chain failure costs See Table 8.4, pp. 175 - the other four comprise costs of quality

Pull system: traditional approach

supply chains work as "push" systems -inventory carried to cover up problems

process

system of structured activities that use resources to transform inputs such as energy, materials, and information into valuable outputs

as lean systems thinking is implemented, the amount of training that employees receive

tends to increas

contracting

term often used for the acquisition of services

process

testing activity the whole business, many operations

effective capacity

that the process can sustain

Marketing issues such as advertising, image, and promotion are important to quality because

the intangible attributes of a product (including any accompanying service) may not be defined by the consumer

A bottleneck activity in a process is generally the activity with

the least capacity

Capacity is defined as: the average rate of output of a process the maximum rate of output of a process the minimum rate of output of a process the difference between the maximum and the minimum rate of output of a process the ratio between the output and the input

the maximum rate of output of a process pp. 110 - is the maximum rate of output from a transformation process or a maximum flow rate that can be sustained over a period of time

Customers may be dissatisfied with a company even if that company consistently provides perfect order performance

true

achieving customer satisfaction with logistical performance does not mean that customers will be loyal

true

Three broad categories of definitions of quality are

user-based, manufacturing-based, and product-based

which of the following 2 areas does lean/just in time production focus its attention on?

variance and waste

In a process thinking philosophy, it is important to: view the functional disciplines in isolation of one another so that problems can be easily diagnosed and solved. view the functional disciplines in isolation of one another so that any one team member's performance can be easily and objectively evaluated by strict objective measures of performance. view the functional disciplines as a collection of business processes emphasizing the cross-functional nature of decision making. understand that the value of the individual parts is greater in sum than the value of the system itself. understand that optimization in decision-making can only occur by disaggregating large-scale process problems into smaller, more tractable problems that can be easily quantified and solved.

view the functional disciplines as a collection of business processes emphasizing the cross-functional nature of decision making. pp. 107-108, the banking illustration clearly shows that a cross-function team should be formed

in providing service outputs to consumers, a disadvantage of internet retailers compared to store-based retailers arises in

waiting time