Operations Final
What is the Six Sigma Methodology
(DMAIC) Define- identify customer priorities. your goals and benefits Measure- determine defect metrics and collect data Analyze- identify sources of variation, determine root causes Improve- determine potential solution, re-evaluate Control- Develop standards and procedures, Statistical Process Control, verify benefits
What are the main parts/steps of determining an inspection procedure?
1) An inspection frequency is determined that considers trade-off 2) Each inspection measures the outputs from a sample size of N 3) The sample measurements are analyzed to see if the process is in control
What are benefits of concurrent development?
1) Lower manufacturing cost (designed for manufacturability since everyone can help each other out to make design optimal) 2) Shorter product development cost (since people can plan ahead)
A problem just asking for process capability has what type of sigma
3 sigma
Sig Sigma Process Capability wants a defect to be no higher than what ? What does it assume?
3.4 in a million. That the process mean will not shift from the center by more than 1.5standard deviations.
a problem asking for Six Sigma Process Capability has what type of sigma
6 sigma
What is the central idea of Six Sigma?
A highly disciplined process focused on delivering near perfect products. It puts extreme emphasis on variability reduction.
What is a Cause-Effect Diagram aka Fishbone Diagram
A pictorial representation depicting the cause and effect relationships in an effort to identify all the potential root causes.
A disadvantage of the chase aggregate plan is? A) workforce instability B) excess hiring C) space requirements d) minimized finished good holding costs E) excessive purchase of additional tools and equipment
A) Workforce instability
What is the formula for inventory turns? A) annual COGS/ average inventory in dollars B) annual sales/ average inventory in dollars C) average inventory in dollars/ annual COGS D) average inventory in dollars/ annual sales E) annual COGS/ annual holding cost
A) annual COGS/ average inventory in dollars
Which of the following is not part of the framework of Porter's five forces? A) Order Winner B) Rivalry among existing firms C) Suppliers D) Buyers E) Substitute products
A) order winner
Which of the following statements on inventory policies is FALSE?- A) In a continuous inventory review system, inventory level is checked periodically. B) A fixed order quantity inventory policy prescribes a specific quantity that is used each time inventory is placed. C) In an inventory system that uses a order up to level order quantity may vary each time inventory order is placed D)The economic order quantity policy is a fixed order quantity policy. E) none of the aboce
A. In a continuous inventory review system, inventory level is checked periodically.
The ___ file lists all the materials needed to build a product A) master production schedule B) bill of materials C) inventory record D) materials requirement planning E) aggregate planning
B) Bill of materials
The ____ lists the materials needed to build a project A) master production schedule B) bill of materials C) inventory records D) materials needs E) build structure
B) Bill of materials
which of the following ranks the four processes in a n increasing order of product variety that they are suitable to handle? A) job shop, batch, assembly, continuous B) continuous, assembly, batch, job shop C) Continuous, batch, assembly, job shop D) Assembly, job shop, continuous, batch F) none of the above
B) Continuous, assembly, batch, job shop
An assembly line process is characterized by ____ volume and ____ variety? A) high, high B) High, low C) Medium, Medium D) Medium, high E) Low, High
B) High, Low
The central objective of just in time production is to? A) improve quality B) eliminate wastes C) improve working conditions D)Install consistent policies E) induce better supplier performance
B) eliminate wastes
Which of the following does not explain the differences between modular and integral product architecture? A) in a modular architecture there is a one to one mapping from functional elements to at the physical components of the overall product. B) it is easier to optimize the overall performance of a product with a modular architecture C) It requires sophisticated information technology to handle customer order information, billing and order tracking D) Product design change is easier under a modular architecture E) none of the above
B) it is easier to optimize the overall performance of a product with a modular architecture
Which of the following is the least useful sales forecasting model to use when sales are increasing? A. Double exponential smoothing B. Simple Average C. Single exponential smoothing D. Weighted moving average E. Linear Regression
B. Simple Average
According to just in time production philosophy ___ is carried to cover up a wide variety of problems, such as poor quality, demand uncertainty, and slow delivery? A) excess capacity B) group of back up workers C) inventory D) spare equipment E) insurance
C) Inventory
a moving forecast of order n becomes ___ responsive to a true perm ante shift in mean demand level as n increases. A simple exponential smoothing forecast becomes ____ responsive to a true permanent shift in means demand level as the smoothing factor a increases. A) more, more B) more, less C) less, more D) less, less
C) Less,more
Which of the following statements on aggregate planning is false? A) one of the inputs of the aggregate planning is financial costs B) aggregate planning is also called staffing plan in service companies C) aggregate planning is a long term strategic plan D) in the chase strategy, workforce levels are adjusted to match demand requirements over the planning horizon E) none of the above
C) aggregate planning is a long term strategic plan
For the level aggregate plan, fluctuations in demand are absorbed by? A) inventory and subcontracting B) backorders and price changes C) inventory and backorders D) price changes and subcontracting E) subcontracting and backorders
C) inventory and backorders
For a moving average forecast of order n, it becomes ___ responsive to a true change in mean level demand as n increases. For a simple exponential smoothing forecast, it becomes ____ responsive to a true change in mean level demand as smoothing factor A increases? A) more, more B) more, less C) less, more D) less, less
C) less, more
A job shop process is characterized by ___ volume and ___ variety A) high, high B) High, low C) low, high D) low, low
C) low, High
Which of the following statements on organizational learning is false? A) organizations can transfer best practices from one worker to the rest of the workers B) organizations can redesign tasks, equipment and or product to enhance productivity C) organizations learn but never forget D) increased volume may enable organizations to further pursue division of labor and increase specialization of workers E) none of the above
C) organizations learn but never forget
Rolling horizon planning is useful managerial tactic to achieve balance between ___ and ___? A) demand, supply B) capacity planning, production planning C) revising the production plan based on updated demand forecast, keeping a stable production plan D) inventory replenishment, sales planning E) operations planning, financial planning
C) revising the production plan based on updated demand forecast, keeping a stable production plan
Which of the following is False? A)The simple moving average method of order n treats each of the n most recent demand observations equally in generating the demand forecast for the next period B) the weighted moving average method of order n weights each of the n most recent demands possibly of differently in generating the demand forecast for the next period C) the double exponential smoothing method uses the actual demand in period t to forecast the demand in period t. D) the simple average smoothing method uses the entire history of demand observations to generate the forecast for demand in the next period. E) none of the above
C) the double exponential smoothing method uses the actual demand in period t to forecast the demand in period t.
Which of the following is not an assumption of the EOQ model? A) demand is constant and known B) lead time is constant and known C) unit procurement cost depends on the order quantity D) Total inventory holding cost depends on the order quantity. E) all demand must be met
C) unit procurement cost depends on the order quantity
What are the three main quality analysis tools?
Cause and Effect Diagram, Process Flow Charts, Pareto Charts
What are internal failure costs
Costs associated with discovering poor product quality before it reaches the customer (rework, equipment downtime)
What are external failure costs?
Costs associated with product quality problems that occur after the product reaches the customer (litigation, brand loyalty, repair costs, recall, etc)
As a general rule of thumb, we should have sufficient WIP inventory ___ the bottleneck resource so it is not ___ A) after, blocked B) Before, blocked C) After, starved' D) Before Starved
D) Before Starved
As a general rule of thumb in managing bottlenecks we should have sufficient WIP inventory ____ the bottleneck resource so it is not ___ A) after, blocked B) before, blocked C) After, starved D) Before, starved.
D) Before, Starved
In JIT system Kanban is used to signal that A) a set up is needed in the production line B) A production line needs to be stopped C) the preceding machine is ready for preventive maintenance D) Inventory needs to be replenished E) a Worker needs assistance
D) Inventory needs to be replenished. aka WIP
Which of the following is False? A) JIT production views inventory as waste since it covers up wide variety of problems in a company B) A Pull system does not work well when the demand is seasonal C) JIT production spreads out the production of each product evenly across time resulting in the same precut mix every day D) JIT is a push system that uses kanban cards E) none of the above
D) JIT is a push system that uses kanban cards
Why would an apparel retailer/manufacturer like Zara postpone the timing of dyeing shirts into different colors to be closer to the selling season? A) to simplify the manufacturing process B) to lower the cost of the dyeing process C) To improve the quality of dyeing D) To reduce the safety stock of shirts E) none of the aboce
D) To reduce the safety stock of shirts.
Which of the following is not a characteristic of mass customization? A) requires flexible process to provide customization of products and services B) it often requires modular product design to enable product variety in an economic way C) It requires sophisticated information technology to handle customer order information billing and order tracking D) it provides an unlimited number of product configurations to satisfy any customer preference E) none of the above
D) it provides an unlimited number of product configurations to satisfy any customer preference
Which of the following is not a possible downside of using a common component across multiple products? A) The common component may cost more money B) The common component may have a negative impact on brand value C) the common component may not achieve the same functionality D) none of the above
D) none of the above
Which of the following is not a remedy for the bullwhip effect? A) collaborative planning and forecasting B) everyday low prices C) sharing demand information amend supply chain members D) Eliminate order batching or reduce batch size E) Fill orders based on a fixed percentage of customers order quantities
E) Fill orders based on a fixed percentage of customers order quantities
In an ABC inventory classification system no ___ than ___ of the items classified as A items and they are subject to ___ review A) more, 10% continuous/frequent B) More, 20% less regular C) Less, 10% continuous/frequent D) Less, 20% less regular E) More, 20% continuous/frequent F) none of the abov
E) More, 20%, continuous/frequent
Which of the following is not typically considered to be a core competency? A) a well trained workforce B) skills in attracting and raising capital C) deep understanding of markets D) superior supply chain management E) a highly popular product.
E) a highly popular product.
Which of the following is not a characteristic of organizational learning A) organizations can transfer practices from one worker to the rest of the workers B) organizations can redesign tasks, equipment and or product to enhance productivity c) organizations can lose skills and capabilities due to employee turnover D) organizations can prevent forgetting skills and capabilities through proper documentation of best practices and processes E) none of the above
E) none of the above
which of the following is not a cause of the bullwhip effect? A. retailers use order batching for inventory replenishment B) retailers order more than customer demand in anticipation of future price increase C) retailers inflate orders when they are put on allocation due to product shortage. D) Demand forecast updates are not shared E) none of the above
E) none of the above
Compared to conventional barcode labeling, which of the following is not an advantage or RFID? A) no direct contact or line of sight required B) bulk reading capability C) Repeated read/write capability D) unique identification for each individual merchandise item E) none of the above
E) none of the above. Bulk reading capability means that you can read more information at one time such as expiration date, price, etc
In a process the bottleneck step has the maximum system slack
False
In an ABC inventory classification no less than 20% of items can be classified as A items
False
T/F Companies that compete based on cost generally also allow a lot of product customization
False
T/F Frequent stock outs of a product could lead to overestimation of demand when forecasting is based on past sales
False
T/F In MRP scheduled receipts are replenishment order that a planner needs to schedule ruing the current planning horizon
False
T/F Throughput time for a process is the time interval that passes between the completion times of two successive units of output
False
T/F Zara sources majority of its garment production from low wage countries in asia to reduce production costs
False
T/F consolidating regional distribution centers into fewer number of DCs increases overall safety stock level held at DCs
False
T/F In serving the EOQ model we assume that the per unit purchase price decreases in the order quantities pruchased.
False. In the EOQ model we assume that demand rate is known and constant, lead time known and constant, not allowed to run out of items, there is a fixed cost of ordering, constant unit price.
What is one way of defining quality?
If the product does what the customer wants it to do
Where are product defects the greatest, in the product/process design or customer site?
In the customer site. The increase in this order Product/Process design, production, customer site.
Which product has functions that are shared across multiple physical components?
Integral
For what type of produce is product design relatively complex?
Integral (since its only one piece trying to make that do something else is harder)
What type of charts are used to capture shift variability?
R-charts (range charts)
In general, quality management is considered more challenging in a service operations environment than in a manufacturing environment since defects are immediately experienced by customers?
True
T/F In general quality management is considered more challenging in a service operations environment than in a manufacturing environment because defects are experienced by customers immediately
True
T/F When a company increases its probability of stockout it should decrease the amount of safety stock it carries
True
T/F according to the WSJ article we discussed in class starbucks has successfully applied lean operations concepts to its retail stores by reducing unnecessary motion of store employees
True
in the EOQ model, the maximum inventory level equals the economic order quantity
True
T/F suppose that you are using three period simple moving average method to forecast sales and sales have been increasing by ten percent every period over the previous prod. then your forecasts will be increasing by ten percent every period.
True (its tedious to check just remember)
T/F In the EOQ with known and constant demand rate, the maximum inventory level equals the economic order quantity
True (most amount of inventory you have is equal to you Q (quantity) you can't have more than what you order and when you receive that order)
What type of charts are used to capture shift in means?
X-bar Charts (mean charts)
How can we use attributes in the process control?
by using a P-chart (aka attribute control chart). This helps measures output when it can't be quantified such as defective vs non defective, for these, they are assigned "0 or 1"
What are assignable causes?
causes of variation based on reasons that we can identify (Atypical variation.)
What are common causes?
causes of variation that are based on random reasons that we cannot identify (Typical variation)
What is the tradeoff of inspection
cost of measurement vs cost incurred because a process is out of control. So you either spend money measuring but save money fixing. Or save money measuring but spend money fixing.
What are Prevention costs?
costs incurred in the process of preventing poor quality (planning, training, upfront design, etc)
What are Appraisal costs?
costs incurred in the process of uncovering defects (inspections, tests, audits, etc)
What is the central idea of Total Quality Management?
customer satisfaction results from continuous improvement of key processes
According to the bullwhip effect a retailer faces a higher degree of demand volatility than its manufacturer in a supply chain
false
T/F Just in time production is suitable for seasonal demands
false
T/F according to the single minute exchange of die method, external setup tasks should be converted to internal ones as much as possible
false
T/F in the aggregate planning process individual SKUs are planned sperately
false
T/F just in time production is a push production system
false
everything else equal, a higher inventory turn indicates a worse inventory management performance?
false
aggregate planning determines the capacity adjustments on the stock keeping unit
false. No its like the one thing it doesn't. Stock keeping units are specific SKU's and aggregate only cares about groups of SKU's called product families.
T/F Sales and operations planning is a short term operational planning
false. Short range planning is only to support the incoming or existing orders, focuses on daily/weekly scheduling and allocation decisions.
T/F An MPS replenishment amount is always set equal to the absolute value of the amount in the projected on hand row if that amount is negative
false. The projected on hand doesn't directly relate to replenishment. You first have to figure out if your on hand row is less than or bigger to than the future forecast.
What is in-control?
if measurements for a process fall within the typical range
You have learned that one of the important principles of managing bottlenecks and non bottleneck is to balance flow not capacity. briefly explain this principle?
if you balance capacity your utilization is 100% which can lead to long wait times and dissatisfied customers but balancing flow can lead to better utilization of each step and shorter wait times.
What type of product has better overall performance?
integral
For what type of product is large product variety easier?
modular
Which product is decomposable into independent modules?
modular
Does in-control mean high quality?
no it just meanest that the process is behaving as you would expect it to behave.
What project characteristics?
one time activity, divided into subtask, complex enough that sub tasks require careful coordination and control, always has some elements that are unique to that project
What are the pros/cons of narrow limits
pros: you quickly catch assignable causes (atypical variation) Cons: you spend money throwing out batches that might have been good
What are the pros/cons of wide limits?
pros: you spend less money cons: you make more errors that are from assignable causes (atypical variation)
What is a visual way of representing process data over time and using statistical analysis to help in monitoring the process?
run charts /control charts
An X-bar Chart would notice the ____ _____ if they fall outside the control limits
sample means
T/F According to the learning curve theory higher learning rate implies slower learning process
true
T/F In a concurrent development process trade offs among marketing design production and logistics can be identified early in the product development cycle
true
T/F when using rolling horizon planning companies with more flexibility can have shorter frozen zones
true
To maximize throughput we need to have sufficient storage after the bottleneck and sufficient WIP before the bottleneck
true
When using rolling horizon planning companies with more flexibility can have shorter frozen zones
true
An R-chart would notice shifts in _____
variability
