Operations Management - Exam 3

Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.

FALSE

High Quality and low prices are both considered to be dimensions of quality.

FALSE

ISO standards apply only to manufacturing organizations.

FALSE

If the majority of service customers are satisfied, it is likely that all service customers will be satisfied.

FALSE

In market research, a group of consumers who express their opinions about a product or service is called a steering committee.

FALSE

Juran describes quality management as a trilogy that consists of quality planning, control of quality costs, and quality improvement.

FALSE

Labor laws are an important site-related factor.

FALSE

Location decisions are basically one-time decisions usually made by new organizations.

FALSE

Modern quality management emphasizes finding and correcting mistakes before they reach the customer - catching the errors before they are shipped.

FALSE

A quality circle is a cross-functional team focused on quality.

FALSE

A strategy that emphasizes convenience for the customers would probably select a single very large facility.

FALSE

An organization achieves quality by consistently meeting their competitor's standards.

FALSE

Because 'courtesy' is subjective, it can't be considered a factor in service quality.

FALSE

Broadly defined, quality refers to the ability of a product or service to occasionally meet or exceed customer expectations.

FALSE

Continuous improvement attempts to achieve major breakthroughs in product or service quality.

FALSE

Cost of inspectors, testing, test equipment, and labs are examples of prevention costs.

FALSE

Deming stresses that workers are primarily responsible for poor quality because very often they fail to follow instructions.

FALSE

Factor rating is limited to quantitative information concerning location decisions.

FALSE

The primary purpose of statistical process control is to detect a defective product before it is shipped to a customer.

FALSE The primary purpose of SPC is to detect nonrandomness.

An x-bar control chart can only be valid if the underlying population it measures is a normal distribution.

FALSE The sample average typically is normally distributed regardless of the underlying distribution of the process.

Low-cost, high-volume items often require more intensive inspection.

FALSE These are not good candidates for inspection.

Demand can be altered in aggregate planning by promotion and producing additional product using overtime.

FALSE These are supply options.

Type I and Type II errors refer to the magnitude of variation from the standard.

FALSE These refer to decisions regarding whether the process is in or out of control.

A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule.

FALSE Time fences are used to ensure that full consideration is given when schedule changes are being considered.

Advanced communications has aided globalization.

TRUE

An example of a regional factor in location planning is the location of our markets (either existing or potential).

TRUE

As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives under consideration when the composite scores are below the minimum threshold value.

TRUE

Business organizations achieving good quality benefit in a variety of ways, including a positive reputation for quality, increased customer loyalty, and lower production costs.

TRUE

Convenience, Reliability and Assurance are dimensions of service quality.

TRUE

Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs.

TRUE

Crosby's concept of "quality is free" means that it is less expensive to do it right initially than to do it over.

TRUE

Customer expectations tend to change over time affecting their perception of service quality.

TRUE

Firms that wish to do business with the European Community can benefit from having a quality management system that meets ISO 9000 standards.

TRUE

For service and retail stores, a prime factor in location analysis is customer access.

TRUE

For service organizations, the dominant factors in location analysis usually are market-related.

TRUE

ISO standards aid in transferring technology to developing countries.

TRUE

Juran describes quality management as a trilogy that consists of quality planning, quality control, and quality improvement.

TRUE

Location decisions are closely tied to an organization's strategies.

TRUE

Medical malpractice claims are an example of how poor quality can affect an organization through liability.

TRUE

One criticism of total quality management is that it may produce blind pursuit of quality to the neglect of other priority considerations.

TRUE

One of the reasons for the importance of location decisions is its strategic importance to the supply chains.

TRUE

Process mapping is part of process improvement.

TRUE

Quality of conformance refers to the degree to which goods and services conform to the intent of the designers as documented in the specifications.

TRUE

Recent changes to ISO guidelines stress continuous improvement regardless of how good you currently are.

TRUE

Reducing the variations in our product or service is an important key to perceived quality.

TRUE

Serviceability, Conformance and Reliability are dimensions of product quality.

TRUE

Six sigma programs have both management and technical components.

TRUE

TQM expands the traditional view of quality beyond looking only at the quality of the final product or service to looking at the quality of every aspect of the process.

TRUE

TQM is not just a collection of techniques. It is rather a whole new attitude toward quality.

TRUE

The PDSA cycle forms the conceptual basis for continuous improvement.

TRUE

The center of gravity method is useful in location planning for the location of a distribution center.

TRUE

The customer is the focal point and customer satisfaction is the driving force in quality management.

TRUE

The degree to which a product or service satisfies its intended purpose is determined by service after delivery, ease of use, design, and conformance to design.

TRUE

The dimensions of product and service quality are too abstract to be applied operationally.

TRUE

The lower cost of foreign labor is often offset by lower levels of productivity.

TRUE

The primary difference between internal failures and external failures is time and place of discovery of the failure.

TRUE

The purpose of benchmarking is to establish a standard against which the organization's performance can be judged, and to identify a model for possible improvement.

TRUE

There is a positive link between quality and productivity.

TRUE

Three key philosophies in TQM are continuous improvement, involvement of everyone in the organization, and customer satisfaction.

TRUE

Total quality management attempts to involve everyone in an organization in the effort to achieve quality.

TRUE

User instructions and follow-up services after delivery are important elements of overall product or service quality.

TRUE

When considering service quality, convenience often is a major factor.

TRUE

Subcontracting 'in' would apply to periods in which our organization has excess capacity.

TRUE Subcontracting in would be selling some available capacity.

The amount of inspection needed is governed by the costs of inspection and the expected costs of passing defective items.

TRUE These interact to set the optimum amount of inspection.

Disaggregating an aggregate plan leads to a master schedule.

TRUE This is an output of the aggregate planning process.

The sampling distribution can be assumed to be approximately normal even when the underlying process distribution is not normally distributed.

TRUE This is especially true as the sample size grows.

Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity.

TRUE This is the ATP calculation for the first week.

Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time.

TRUE This is the domain of aggregate planning.

The goal of aggregate planning is to achieve a production plan that attempts to balance the organization's resources and meet expected demand.

TRUE This is the goal of aggregate planning.

One of the major obstacles to implementing TQM is the emphasis on long-term financial results.

FALSE

Poor quality has a positive effect on productivity because it usually takes longer to produce a good part.

FALSE

Product design choices are usually the result of inputs from accounting and human resources.

FALSE

Quality at the source means returning all defects to the source - our vendors.

FALSE

The degree to which a product or service satisfies its intended purpose is determined by design, conformance to design, cost, and reputation of the producer.

FALSE

An "up and down" run test uses the median as a reference point and measures the percentage above and below the median.

FALSE An up-and-down runs test looks only at runs of increasing or decreasing values.

The purpose of statistical process control is to ensure that historical output is random.

FALSE It is to ensure that non-random variation is detected and corrected.

Larger samples will require wider x-bar control limits because there is more data.

FALSE Large samples will lead to narrower control limits.

A level capacity strategy is also known as a chase demand strategy.

FALSE Level and chase strategies are opposite approaches.

Master schedulers are employed primarily by service organizations.

FALSE Master schedulers are primarily employed in manufacturing.

A control chart is a visual representation of the various states in a process.

FALSE

The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal.

FALSE

A tool used to organize data into logical categories is called a(n) ___. A. Affinity diagram B. Check list C. Control Chart D. Flow Chart E. Relationship diagram

A. Affinity diagram

_______ variation is a variation whose cause can be identified. A. Assignable B. Controllable C. Random D. Statistical E. Theoretical

A. Assignable Assignable variation has a special cause.

Uncommitted inventory is called ______. A. Available-to-promise inventory B. Free inventory C. Safety stock D. Lead time inventory E. Obsolete inventory

A. Available to promise inventory Uncommitted inventory is available-to-promise.

A chart showing the number of occurrences by category would be used in: A. Pareto analysis B. interviewing C. cause-and-effect diagrams D. benchmarking E. none of the above

A. Pareto analysis

The Baldrige award is based on seven categories. Which is not one of those? A. Relative profitability B. Strategic planning C. Human resource focus D. Information and Analysis E. Leadership

A. Relative profitability

Which of the following is least important as a consideration for a firm at the beginning of a supply chain? A. access to end consumers B. access to resources C. proximity to customers D. access to transportation infrastructure E. access to productive labor

A. access to end consumers Firms at the beginning of the supply chain are far-removed from final consumers.

One option for altering the pattern of demand is: A. backorders B. overtime C. part-time workers D. inventories E. subcontracting

A. backorders Backordering shifts demand to later time periods.

Retail businesses often engage in ____________, the tendency to locate in close proximity to one another. A. clustering B. strategizing C. localcasting D. centering

A. clustering

The method for evaluating location alternatives which uses their total cost curves is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis

A. cost-volume analysis

Lost production time, scrap, and rework are examples of ___. A. internal failure costs B. external failure costs C. appraisal costs D. prevention costs E. replacement costs

A. internal failure costs

In doing "aggregate planning" for a firm producing paint, the aggregate planners would most likely deal with: A. just gallons of paint, without concern for the different colors and sizes B. gallons of paint, but be concerned with the different colors to be produced C. gallons, quarts, pints, and all the different sizes to be produced D. all the different sizes and all the different colors by size E. none of the above

A. just gallons of paint, without concern for the different colors and sizes The principle of aggregation is reflected in this answer.

A one-hour photo processing machine in a Wal-Mart store is an example of a ___. A. micro-factory B. downsize strategy C. diversified strategy D. lean production system E. falling price strategy

A. micro-factory

A control chart used to monitor the fraction of defectives generated by a process is the: A. p-chart B. R-chart C. x-bar chart D. c-chart E. Gantt chart

A. p-chart The p-chart monitors the fraction defective.

In location planning, the location of raw materials, the location of markets, and labor factors are: A. regional factors B. community factors C. site-related factors D. national factors E. minor considerations

A. regional factors

Asking questions about the current process in the hope that it will lead to important insights about why the current process isn't working as well as it could is called: A. the "5W2H approach" B. using quality circles C. benchmarking D. PDCA cycle E. none of the above

A. the "5W2H approach"

One option for altering the availability of capacity is: A. use of overtime or slack time B. pricing C. promotion D. backorders E. none of the above

A. use of overtime or slack time Overtime or slack time alters the availability of capacity.

Linear programming to produce an aggregate plan: A. will produce the best plan if accurate inputs are used B. is the most widely used technique C. (a) and (b) D. will produce a plan that may not be the best plan E. requires an excel spread sheet

A. will produce the best plan if accurate inputs are used If inputs are valid and accurate, linear programming will give an optimal solution.

Studies on a machine that molds plastic water pipe indicate that when it is injecting 1-inch diameter pipe, the process standard deviation is 0.05 inches. The one-inch pipe has a specification of 1-inch plus or minus 0.10 inch. What is the process capability index (Cpk) if the long-run process mean is 1 inch? A. 0.50 B. 0.67 C. 1.00 D. 2.00 E. none of the above

B. 0.67 Use the Cpk formula to assess this process' capability.

The specifications for a product are 6 mm ± 0.1 mm. The process is known to operate at a mean of 6.05 with a standard deviation of 0.01 mm. What is the Cpk for this process? A. 3.33 B. 1.67 C. 5.00 D. 2.50 E. none of the above

B. 1.67 Cpk is used here since the process mean isn't centered in the specification interval.

Some communities offer financial and other incentives to ______ new businesses. A. Tax B. Attract C. Marginalize D. Incorporate E. Zone

B. Attract

Management behaviors supporting an organizational culture that encourages continuous improvement include which of the following? (I) develop a vision statement for the organization (II) develop a reward system that promotes the philosophy (III) institute continuous training programs (IV) make decisions that adhere to the philosophy A. I, II, and IV B. I, II, III, and IV C. I and III D. II, III, and IV E. II and IV

B. I, II, III, and IV

The Deming Prize was established by the ___. A. American Statistical Association B. Japanese C. North American Free Trade Association D. American Quality Society E. World Trade Organization

B. Japanese

Location options don't usually include: A. expansion B. a contract C. adding new facilities D. moving E. doing nothing

B. a contract

A process results in a few defects occurring in each unit of output. Long-run, these defects should be monitored with ___________. A. p-charts B. c-charts C. x-bar charts D. r-charts E. o-charts

B. c-charts C-charts are used to monitor the number of defects per unit.

Focusing a supply chain on _________ is a modern way of ensuring high quality inputs and a ready supply of process-improvement ideas. A. lowest cost-per unit sourced B. close, collaborative ties with suppliers C. suppliers that emphasized continuous-flow production D. ISO 14000 customers E. partners pursuing similar strategies

B. close, collaborative ties with suppliers

Moving from the aggregate plan to a master production schedule requires: A. rough cut capacity planning B. disaggregation C. sub-optimization D. strategy formulation E. chase strategies

B. disaggregation The aggregate plan is disaggregated into the master schedule.

Warranty service, processing of complaints, and costs of litigation are examples of ___. A. internal failure costs B. external failure costs C. appraisal costs D. prevention costs E. replacement costs

B. external failure costs

An approach to location analysis that can include both qualitative and quantitative considerations is: A. location cost-volume B. factor rating C. transportation model D. expected value (net present value) E. financial analysis

B. factor rating

Cause-and-effect diagrams are sometimes called: A. Pareto diagrams B. fishbone (Ishikawa) diagrams C. run charts D. control charts E. none of the above

B. fishbone (Ishikawa) diagrams

In practice, the more commonly used techniques for aggregate planning are: A. mathematical techniques B. informal trial-and-error techniques C. (a) and (b) about equally D. simulation models E. linear programming optimization

B. informal trial-and-error techniques Trial-and-error techniques are more commonly used.

The more effective and all-encompassing a firm's quality control and continuous improvement efforts, the less that company will need to rely on: A. insourcing. B. inspection. C. outsourcing. D. acceptance sampling. E. capability assessment.

B. inspection.

Which term is most closely associated with the term disaggregation? A. subcontracting B. master schedule C. diversity D. varying inventory levels E. firing and laying off

B. master schedule The aggregate plan is disaggregated into the master schedule.

Aggregate planning is capacity planning for: A. the long range B. the intermediate range C. the short range D. typically one to three months E. typically one or more years

B. the intermediate range The intermediate range typically runs from two to 12 months.

The four dimensions of quality that are sometimes used to determine fitness for use of a product are ___. A. performance, special features, durability, and service after sale B. performance, special features, conformance, and reliability C. special features, conformance, reliability, and durability D. performance, conformance, reliability, and durability E. special features, conformance, durability, and service after sale

B. performance, special features, conformance, and reliability

Essentially, the output of aggregate planning is the: A. marketing plan B. production plan C. rough-cut capacity plan D. assignment plan E. material requirements plan

B. production plan The production plan largely results from the aggregate planning effort.

The basis for a statistical process control chart is a(the) __________. A. process capability B. sampling distribution C. control limit D. sample range E. sample mean

B. sampling distribution Control charts reflect the sampling distribution of an in control process.

In a service setting, the aggregate plan results in a time-phased projection of __________ requirements. A. customer B. staff C. inventory D. subcontracting E. outsourcing

B. staff Staff requirements are the focus of aggregate planning in services.

The main disadvantage(s) of informal techniques used for aggregate planning is (are): A. they are expensive to do B. they may not result in the best plan C. they take a long time to do D. they require use of a computer E. lack of formal education of the planners

B. they may not result in the best plan Informal solutions may not be costly or difficult, but they may be less likely to offer up the best plan.

The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis

B. transportation model analysis

In using the "chase strategy" variations in demand could be met by: A. varying output during regular time without changing employment levels B. varying output during regular time by changing employment levels C. (a) and (b) D. varying inventory levels E. price increases

B. varying output during regular time by changing employment levels Changing employment levels to vary output is representative of a chase strategy.

A shift in the process mean for a measured characteristic would most likely be detected by a: A. p-chart B. x-bar chart C. c-chart D. R-chart E. s-chart

B. x-bar chart X-bar charts monitor the process mean.

Aggregate planners seek to match supply and demand: A. at minimum overall cost B. by staying within company policy C. (a) and (b) D. keeping inventories at a minimum E. all of the above

C. (a) and (b) Aggregate plans minimize costs but conform to company policies.

The specification limit for a product is 8 cm and 10 cm. A process that produces the product has a mean of 9.5 cm and a standard deviation of 0.2 cm. What is the process capability, Cpk? A. 3.33 B. 1.67 C. 0.83 D. 2.50 E. none of the above

C. 0.83 Cpk is used here since the process mean isn't centered in the specification interval.

A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3 and 4. What is the available to promise for week 6? A. 50 B. 6 C. 300 D. 100 E. Cannot be determined without projected on-hand information

C. 300 No orders are booked after week 4, so all 300 units arriving in week 6 are available-to-promise in week 6.

A time-ordered plot of sample statistics is called a(n) ______ chart. A. Statistical B. Inspection C. Control D. SIMO E. Limit

C. Control A control chart is a time-ordered plot of sample statistics.

A time-ordered plot of representative sample statistics is called a: A. Gantt chart B. SIMO-chart C. Control Chart D. Up-Down Matrix E. Standard deviation table

C. Control Chart Control charts are time-ordered plots of sample statistics.

When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive. A. Layoffs B. Backorders C. Excess capacity D. Disaggregation E. Both B and C

C. Excess capacity The excess capacity costs diminish in relation to the potential lost revenue.

Which isn't a cost of quality? A. Prevention cost B. External failure C. Extended Service Contracts D. Internal failure E. Appraisal costs

C. Extended Service Contracts

When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is ___. A. Linear programming B. Consumer surveys C. Factor rating D. Transportation models E. Center of gravity methods

C. Factor rating

If a process is performing as it should, it is still possible to obtain observations which are outside of which limits? (I) tolerances (II) control limits (III) process variability A. I B. II C. I and II D. II and III E. I, II, and III

C. I and II Even capable, in control processes can have observations outside of control limits or tolerances.

A plot below the lower control limit on the range chart: (I) should be ignored since lower variation is desirable (II) may be an indication that process variation has decreased (III) should be investigated for assignable cause A. I and II B. I and III C. II and III D. II only E. I, II, and III

C. II and III Plots outside of control limits should be investigated.

The quality control improvement tool which distinguishes between the "important few" and the "trivial many" is ___. A. brainstorming. B. check sheets. C. Pareto analysis. D. cause-and-effect diagrams. E. fail-safe methods.

C. Pareto analysis.

Loss of business, liability, productivity and costs are consequences of ___. A. Labor Unions B. Globalization C. Poor Quality D. Robotics E. Micro-factories

C. Poor Quality

Which of the following relationships must always be incorrect? A. Tolerances > process variability > control limits B. Process variability > tolerances > control limits C. Tolerances > control limits > process variability D. Process variability > control limits > tolerances E. Process variability <Tolerances<control limits

C. Tolerances > control limits > process variability Process variability will always be greater than control limits.

The tool that is useful in the collection and organization of data is: A. a control chart B. a Pareto chart C. a check sheet D. a flow chart E. none of the above

C. a check sheet

Costs of inspectors, testing, test equipment, and labs are examples of ___. A. internal failure costs B. external failure costs C. appraisal costs D. prevention costs E. replacement costs

C. appraisal costs

That portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders is: A. beginning inventory B. safety stock inventory C. available-to-promise inventory D. high margin inventory E. none of the above

C. available-to-promise inventory Available-to-promise values are calculated to help marketing make realistic commitments.

A quality improvement technique that involves the sharing of thoughts and ideas in a way that encourages unrestrained collective thinking is: A. Pareto analysis B. benchmarking C. brainstorming D. a control chart E. a check sheet

C. brainstorming

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: A. continuous improvement B. employee empowerment C. competitive benchmarking D. copycatting E. industrial espionage

C. competitive benchmarking

Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem ___. A. just before shipping our product to the customer B. immediately after we complete the last operation C. during the design phase D. just before we begin the first production operation E. regardless of when you fix the problem, costs are about the same

C. during the design phase

Which of the following is not a step in the quality control process? A. define what is to be controlled B. compare measurements to a standard C. eliminate each of the defects as they are identified D. take corrective action if necessary E. evaluate corrective action

C. eliminate each of the defects as they are identified Eliminating defects is not part of quality control.

The method for evaluating location alternatives which uses their composite (weighted-average) scores is: A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis

C. factor rating analysis

Facilities, personnel and operations that are located around the world are called: A. non-domestic B. diversified operations C. globalization D. worldwide presence E. virtual organization

C. globalization

Which of the following circumstances would be least likely to lead to a need for a new location? A. shifting of markets B. depletion of basic inputs C. growth in demand that is leading to greater utilization of existing capacity D. the need to expand into new markets E. the opportunity to take advantage of globalization trends

C. growth in demand that is leading to greater utilization of existing capacity

One area to which aggregate planning decisions relate is: A. job sequencing B. customer order quantities C. inventory levels D. location E. layout

C. inventory levels Different aggregate planning strategies affect inventory levels differently.

Among the disadvantages of having global operations is/are: A. proximity to global markets B. favorable liability laws C. low labor productivity D. lower wage costs E. less restrictive environmental regulation

C. low labor productivity

Nearness to raw materials would be most important to a ... A. grocery store B. tax preparation service C. manufacturing company D. post office E. hospital

C. manufacturing company

In addition to correcting substandard work, employees have an ethical obligation to __________ whatever led to the quality problem as well. A. prevent B. offset C. report D. standardize E. redesign

C. report

A point which is outside of the lower control limit on an R-chart: A. is an indication that no cause of variation is present B. should be ignored because it signifies better than average quality C. should be investigated because an assignable cause of variation might be present D. should be ignored unless another point is outside that limit E. is impossible since the lower limit is always zero

C. should be investigated because an assignable cause of variation might be present Points outside of the control limits should be investigated as signals of non-random variation being present.

A p-chart would be used to monitor _______. A. average shrinkage B. dispersion in sample data C. the fraction defective D. the number of defects per unit E. the range of values

C. the fraction defective The p-chart monitors the fraction defective.

Which of the following differs between aggregate planning in services and aggregate planning in manufacturing? A. uncertainty in demand B. costs of storing inventory C. the perishability of capacity D. cost of overtime E. cost of hiring

C. the perishability of capacity Capacity is inherently perishable in services.

A control chart used to monitor the process mean is the: A. p-chart B. R-chart C. x-bar chart D. c-chart E. Gantt chart

C. x-bar chart The x-bar chart monitors the process mean.

When a process is in control, it results in there being, on average, 16 defects per unit of output. C-chart limits of 4 and 28 would lead to a _______ chance of a Type I error. A. 67% B. 92% C. 33% D. 0.3% E. 5%

D. 0.3% These would be three-sigma limits.

Studies on a bottle-filling machine indicates it fills bottles to a mean of 16 ounces with a standard deviation of 0.10 ounces. What is the process specification, assuming the Cpk index of 1? A. 0.10 ounces B. 0.20 ounces C. 0.30 ounces D. 16.0 ounces plus or minus 0.30 ounces E. none of the above

D. 16.0 ounces plus or minus 0.30 ounces Use the Cpk formula to solve for the specification interval.

The probability of concluding that assignable variation exists when only random variation is present is: (I) the probability of a Type I error (II) known as the alpha risk (III) highly unlikely (IV) the sum of probabilities in the two tails of the normal distribution A. I and II B. I and IV C. II and III D. I, II, and IV E. I, III, and IV

D. I, II, and IV Incorrect signals can be on either side of the distribution.

The center of gravity method is used to _______ travel time, distance and costs. A. Normalize B. Eliminate C. Average D. Minimize E. Document

D. Minimize

Focusing attention on the most important problem areas is referred to as: A. quality circles B. quality assurance C. brainstorming D. Pareto analysis E. cause-and-effect analysis

D. Pareto analysis

A tool that is not used for quality is ___. A. Flowchart B. Histogram C. Parato Analysis D. Redesign E. Check sheets

D. Redesign

Deciding how much to invest in the prevention of defects can be analyzed using ___. A. EVPI B. Net Present Value C. Weighted Factor Analysis D. Return on Quality E. Breakeven Analysis

D. Return on Quality

TQM stands for: A. Taguchie Quality Methods B. Tactical Quality Measurements C. The Quality Matrix D. Total Quality Management E. Total Quantity Measurement

D. Total Quality Management

The tool that is useful in documenting the current process is: A. a control chart B. a Pareto chart C. a check sheet D. a flow chart E. a simo chart

D. a flow chart

A quality circle is ___. A. responsible for quality B. total quality control C. an inspection stamp found on meat D. a voluntary group of employees E. none of the above

D. a voluntary group of employees

The purpose of the Malcolm Baldrige National Quality Award is to ___. A. stimulate efforts to improve quality B. recognize quality achievements of U.S. companies C. publicize successful quality programs D. all of the above E. distribute the grant money available for improved quality

D. all of the above

Which of the following is an input to aggregate planning? A. beginning inventory B. forecasts for each period of the schedule C. customer orders D. all of the above E. quantity discounts

D. all of the above All except quantity discounts are aggregate planning inputs.

Which of the following best describes aggregate planning? A. the link between intermediate term planning and short term operating decisions B. a collection of objective planning tools C. make or buy decisions D. an attempt to respond to predicted demand within the constraints set by product, process and location decisions E. manpower planning

D. an attempt to respond to predicted demand within the constraints set by product, process and location decisions A workable balance between demand and these constraints is sought.

A control chart used to monitor the number of defects per unit is the: A. p-chart B. R-chart C. x-bar chart D. c-chart E. Gantt chart

D. c-chart C-charts monitor the number of defects per unit.

The quality control improvement tool that resembles a "fishbone" is ___. A. brainstorming B. check sheets C. Pareto analysis D. cause-and-effect diagrams E. fail-safe methods

D. cause-and-effect diagrams

The purpose of control charts is to: A. estimate the proportion of output that is acceptable B. weed out defective items C. determine if the output is within tolerances/specifications D. distinguish between random variation and assignable variation in the process E. provide meaningful work for quality inspectors

D. distinguish between random variation and assignable variation in the process Control charts are used to signal assignable variation.

Giving workers responsibility for quality improvements and authority to make changes is known as: A. continuous improvement B. passing the buck C. benchmarking D. employee empowerment E. employee involvement

D. employee empowerment

Which of the following is the last step in the procedure for making location decisions? A. determine the evaluation criteria B. identify important factors C. develop location alternatives D. evaluate alternatives and make a selection E. request input regarding alternatives

D. evaluate alternatives and make a selection

Which of the following is not a goal of process improvement? A. increasing customer satisfaction B. reducing waste C. achieving higher quality D. identifying the cause of a problem E. All are the goals.

D. identifying the cause of a problem

One option for altering the availability of manufacturing capacity is: A. pricing B. promotion C. backorders D. inventories E. none of the above apply to manufacturing capacity

D. inventories Inventory involves using capacity from earlier periods to satisfy demand in later periods.

Which of the following is not a basic option for altering the availability of capacity in a service environment? A. overtime B. hiring/layoff C. part time D. inventory E. All of these are basic capacity options.

D. inventory Inventory is typically not an option in services.

ISO certification differs substantially from the Baldrige Award in that it: A. is national rather than international B. emphasizes self-appraisal C. is customer-driven D. is an ongoing process E. focuses primarily on quality teams

D. is an ongoing process ISO certification is ongoing and the Baldrige Award is a self appraisal.

One thing that makes aggregate planning in services easier than aggregate planning in manufacturing is: A. inventory is cheaper to hold B. labor availability is more predictable C. inventory is less perishable D. labor is more flexible E. demand is less variable.

D. labor is more flexible

Which of the following is not an input to the aggregate planning process? A. resources available B. demand forecast C. policies on work force changes D. master production schedules E. cost information

D. master production schedules The master production schedule is an output of the aggregate planning process.

The direct result of disaggregating the aggregate plan is the: A. marketing plan B. production plan C. rough-cut capacity plan D. master schedule E. material requirements plan

D. master schedule The aggregate plan is disaggregated into the master schedule.

Quality planning and administration, quality training, and quality control procedures are examples of ___. A. internal failure costs B. external failure costs C. appraisal costs D. prevention costs E. replacement costs

D. prevention costs

Which one of the following would not be considered a decision option for purposes of aggregate planning? A. inventory levels B. manpower levels C. pricing D. production costs E. promotion

D. production costs Production costs would be a critical variable, but they would not be a decision variable.

A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should: A. be indifferent between these locations B. choose Akron C. choose Boston D. reject both locations E. build a plant in both cities

D. reject both locations

Which one of the following is not a basic option for altering demand? A. promotion B. backordering C. pricing D. subcontracting E. All are demand options.

D. subcontracting Subcontracting is an option for altering capacity.

The typical difference between "quality circles" and "continuous improvement teams" is ______. A. Quality circles work on product design only. B. Continuous improvement teams work on product and process design. C. Continuous improvement teams use only engineers while quality circles use just the workers doing the work. D. the amount of employee empowerment E. There is no difference-they are just the same.

D. the amount of employee empowerment

The optimum level of inspection is where the: A. cost of inspection is minimum B. cost of passing defectives is minimum C. total cost of inspection and defectives is maximum D. total cost of inspection and defectives is minimum E. difference between inspection and defectives costs is minimum

D. total cost of inspection and defectives is minimum At the optimum level these costs are, in total, minimized.

ISO 9000 standards do not have a requirement for ___. A. resource B. remedial C. systems D. training E. management

D. training

Organizations should work to improve process capability so that quality control efforts can become more ________. A. effective B. efficient C. necessary D. unnecessary E. widespread

D. unnecessary Increasing process capability reduces the necessity for quality control.

In order to use the "level capacity strategy," variations in demand are met by: A. varying output during regular time without changing employment levels B. varying output during regular time by changing employment levels C. (a) and (b) D. using combination of inventories, overtime, part time, and back orders E. price adjustments

D. using combination of inventories, overtime, part time, and back orders A combination of inventories, overtime, part time, and back orders is the level strategy.

The range chart (R-chart) is most likely to detect a change in: A. proportion B. mean C. number defective D. variability E. sample size

D. variability The range chart monitors variability.

Simulation to produce an aggregate plan: A. will produce the best plan B. is the most widely used technique C. both (a) and (b) D. will produce a plan that may not be the best plan E. requires a minimum of 4 iterations to be accurate

D. will produce a plan that may not be the best plan Simulation is not guaranteed to produce an optimal plan.

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 250 units? A. $105,500 B. $105,200 C. $100,520 D. $100,250 E. $102,500

E. $102,500

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 550 units? A. $100,520 B. $102,500 C. $105,200 D. $100,250 E. $105,500

E. $105,500

When a process is in control, it results in there being, on average, 16 defects per unit of output. C-chart limits of 8 and 24 would lead to a _______ chance of a Type I error. A. 67% B. 92% C. 33% D. .03% E. 5%

E. 5% These would be two-sigma limits

At XYZ Corp., the aggregate planning unit reflects the fact that 50% of its output is product version A, 30% is version B, and 20% is version C. Suppose that over the coming year forecasted total demand (in planning units) is for 10,400 units. Once the production plan is disaggregated, what will the weekly forecast for version A be (assume 52 weeks per year)? A. 1000 B. 200 C. 400 D. 100 E. 50

E. 50 Divide 5,200 (annual demand) by 52 weeks.

The quality certification that deals primarily with conformance to customer requirements is ISO __________; ISO __________ is concerned primarily with the organization's effect on the environment. A. 14000; 24700 B. 9000; 24700 C. 24700; 9000 D. 14000; 9000 E. 9000; 14000

E. 9000; 14000

Which of the following is not a location option that management can consider in location planning? A. expand an existing facility B. add a new location C. relocate from one location to another D. do nothing E. All are possible options.

E. All are possible options.

The more __________ demand is, the more the aggregate plan will tend to reflect the ____________ strategy. A. Stable; Level B. Aggregated; Outsourcing C. Variable; Chase D. Complex; Uncommitted E. Both A and C

E. Both A and C These pure strategies reflect particular underlying demand patterns.

ISO 9000 currently requires _____ of a certified organization. A. Quarterly reporting B. Product diversity C. Annual audits D. A minimum of four supervisory levels E. Continuous improvement

E. Continuous improvement

Proactive and Reactive aggregate planning strategies are best associated with: A. Input and Output B. Make and Buy C. Quantitative and Qualitative D. Exact and Approximate E. Demand and Capacity options

E. Demand and Capacity options Demand and capacity are the targets of proactive and reactive aggregate planning strategies.

Accommodating peak demands and effectively using labor resources during periods of low demand would be the goal of aggregate planners in _________. A. Manufacturing B. Military C. Archeology D. Libraries E. Financial Services

E. Financial Services These are the considerations in aggregate planning for service firms.

Cultural differences, Customer preferences, Labor and Resources are factors relating to: A. Regional choices B. Site selection C. Zoning D. Product design E. Foreign locations

E. Foreign locations

Software systems known as GIS help in location analysis. The initials GIS stand for __. A. Graphic Interface Systems B. Global Integrated Software C. Graded Information Systems D. Geo Intensive Software E. Geographical Information System

E. Geographical Information System

Managers have obligations to a wide variety of stakeholders such as shareholders, employees and customers. When considering outsourcing production to offshore suppliers, managers have to weigh _____. I) Cost benefits that might make shareholders wealthier II) Quality issues that might make firms less productive and/or products riskier III) The investments already tied up in relationships with existing suppliers A. I B. II C. III D. I and II only E. I, II and III

E. I, II and III

A c-chart is used for: A. means B. ranges C. percent defective D. fraction defective per unit E. number of defects per unit

E. number of defects per unit C-charts monitor the number of defects per unit.

The process capability index (Cpk) may mislead if: (I) the process is not stable. (II) the process output is not normally distributed. (III) the process is not centered. A. I and II B. I and III C. II and III D. II only E. I, II and III

E. I, II and III When using Cpk these concerns should be addressed.

When service firms such as retailers or banks make growth-spurred location decisions, typically these involve: A. expanding existing locations rather than adding new ones. B. finding new sources of resources to replace exhausted ones. C. closing down existing locations and opening new ones elsewhere. D. downsizing existing locations and opening new ones elsewhere. E. adding new locations rather than expanding existing ones.

E. adding new locations rather than expanding existing ones.

Which of the following is an element of TQM? A. continual improvement B. competitive benchmarking C. operations Manager empowerment D. team approach E. all of the above

E. all of the above

Aggregate planning requires which of the following information? A. a forecast of expected demand B. current levels of inventory C. (a) and (b) D. policies regarding employment levels E. all of the above

E. all of the above All of these are inputs into the aggregate planning process.

Inspection is a(n): A. prevention. B. control. C. monitoring. D. corrective. E. appraisal.

E. appraisal.

The "5W2H approach" involves: A. measuring width and height B. using 7 people C. using 2 people D. using 9 people E. asking questions

E. asking questions

Aggregate planners attempt to balance: A. demand and inventories B. demand and costs C. capacity and inventories D. capacity and costs E. capacity and demand

E. capacity and demand Capacity and demand are roughly balanced in aggregate planning.

Quality control, in contrast to quality assurance, is implemented: A. after production. B. before inspection. C. by self-directed teams. D. by top management. E. during production.

E. during production.

Which statement best characterizes a typical search for location alternatives? A. identify the best location choice B. minimize cost consequences C. maximize associated profits D. locate near markets E. identify acceptable locations

E. identify acceptable locations

In order for TQM to be successful, it is essential that most of the organization be _________. A. members of quality circles B. under contract C. ISO certified D. trained in error detection techniques E. in agreement with the philosophy and its goals

E. in agreement with the philosophy and its goals TQM won't work without substantial buy-in.

Before a dimension of quality can be made operationally useful, it must be restated in some ___________ form. A. certifiable B. manipulative C. marketable D. qualitative E. measurable

E. measurable

Which of the following quality control sample statistics indicates a quality characteristic that is an attribute? A. mean B. variance C. standard deviation D. range E. proportion

E. proportion Proportions would be control with attribute control charts.

Which of the following steps is necessary to ensure that a master schedule is valid? A. worker scheduling B. order promising C. inventory counting D. order booking E. rough-cut capacity planning

E. rough-cut capacity planning Rough-cut capacity planning insures that the master schedule is reasonably feasible.

Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand? A. subcontract B. vary the size of the workforce C. vary the intensity of workforce utilization D. allow inventory levels to vary E. use backorders

E. use backorders Backorders do not involve adjusting capacity.

Quality certification refers to a process of 100 percent inspection to catch all defective products before they leave the company; this allows every item to certified defect free.

FALSE

Quality of design refers to the degree to which goods and services achieve the intent of the designers.

FALSE

Regardless of superior quality, consumers won't pay premium prices.

FALSE

Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

FALSE

So long as quality input resources are used to make a product, we can expect quality output from the process.

FALSE

Suppliers are not included in quality assurance and quality improvement efforts in TQM; they should worry about their own problems.

FALSE

Technology has made communication with global operations as easy as local communication.

FALSE

The Baldrige award can only be won by manufacturing organizations.

FALSE

The PDSA cycles is also referred to as the Baldrige Wheel.

FALSE

The benchmark organization must be chosen from the same industry in order for its methods to be applicable.

FALSE

The causes of variation in any process can be identified through the general categories of people, procedures, education and age.

FALSE

The center of gravity method is a location planning technique that determines a composite score from weighted factor evaluation.

FALSE

The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are not overly important; one location typically is as good as another.

FALSE

The first step in developing location alternatives is identifying important factors.

FALSE

The seven dimensions of quality are important for products but are not applicable in service organizations.

FALSE

The term "quality at the source" refers primarily to the practice of requiring each of our vendors to provide quality parts and materials.

FALSE

Total quality management is a collection of techniques, such as quality control charts, ISO 9000, and quality function deployment.

FALSE

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

FALSE

When problems arise in a total quality managed organization, it is important to assign blame and punish the worker responsible for causing the problem.

FALSE

You can't make a mistake by locating where labor costs are low.

FALSE

Zero defects requires 100% inspection of the final product.

FALSE

A c-chart is used to monitor the total number of defectives in the output of a process.

FALSE A c-chart is used to monitor the number of defects per unit, not defective units.

Approving the effort that occurs during the production process is known as acceptance sampling.

FALSE Acceptance sampling occurs before or after the production process.

Aggregate planners are concerned with the quality and quantity of expected demand.

FALSE Aggregate planners are concerned with the quantity and timing of expected demand.

Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques.

FALSE Aggregate planning can accommodate seasonal changes in demand.

Aggregate planning is intermediate-range capacity planning that typically covers a time horizon of one to three months.

FALSE Aggregate planning covers the mid-term, typically two to 12 months.

A process that exhibits random variability would be judged to be out of control.

FALSE All processes exhibit random variability.

Approximately 99.7% of sample means will fall within ± two standard deviations of the process mean if the process is under control.

FALSE Approximately 99.7% of sample means will fall within ± three standard deviations of the process mean.

The assignment of work to specific machines and people are examples of aggregate planning.

FALSE Assigning work to specific machines or people is an example of detailed scheduling.

Attributes need to be measured, variable data can be counted.

FALSE Attributes need to be counted, variable data is measured.

Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning.

FALSE Both qualitative and quantitative approaches are used in aggregate planning.

Control limits are based on multiples of the process standard deviation.

FALSE Control limits are based on multiples of the standard deviation of the sample statistic.

Control limits used on process control charts are specifications established by design or customers.

FALSE Control limits are independent of specifications.

The process capability index (indicated by Cpk) can be used only when the process is centered.

FALSE Cpk can be used whether or not the process is centered.

The greater the capability ratio, the higher the rejects.

FALSE Greater capability reduces rejects.

The larger the process variation, the tighter the specifications should be.

FALSE Greater variation would lead to wider specifications.

Non-random variation is likely whenever all observations are between the LCL and UCL.

FALSE If all observations are between the LCL and UCL, then the process would be considered in control.

Even if the process is not centered, the process capability index (indicated by Cpk) is very useful.

FALSE If the process is not centered, Cpk is not useful.

An R value of zero (on a range chart) means that the process must be in control since all sample values are equal.

FALSE If the sample size is sufficiently large, an R of zero could indicate an out of control process.

Processes that are in control eliminate variations.

FALSE In control, processes are free of non-random variation.

Range charts and p-charts are both used for variable data.

FALSE P-charts are used with attribute data.

In the master production schedule, production is planned for the next period whenever the available-to-promise quantity becomes negative.

FALSE Production is planned to be complete in the period in which the projected on-hand becomes negative.

Capacity can be modified in aggregate planning by promotion and producing additional product using overtime.

FALSE Promotions do not modify capacity.

Range charts are used mainly with attribute data.

FALSE Range charts are used with variable data.

Range control charts are used to monitor process central tendency.

FALSE Ranger charts monitor variability.

Run tests give managers an alternative to control charts; they are quicker and cost less.

FALSE Runs tests are not alternatives to control charts.

Statistical Process Control is the measurement of rejects in the final product.

FALSE SPC is the evaluation of the process.

Seasonality in demand has the advantage of leveling out requirements for our product or service.

FALSE Seasonality increases variation in requirements.

Statistical process control focuses on the acceptability of process output.

FALSE Statistical process control focuses on the variability of processes.

The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan.

FALSE Such solutions may be good solutions, but they're usually not optimal.

The Taguchi Cost Function suggests that the capability ratio can be improved by extending the spread between LCL and UCL.

FALSE The Taguchi cost function suggests that reducing variation is key.

The best way to assure quality is to use extensive inspection and control charts.

FALSE The best way to assure quality is to make sure processes are highly capable.

The number of defective parts in a sample is an example of variable data because it will "vary" from one sample to another.

FALSE The number of defective parts in a sample is an example of attribute data.

The optimum level of inspection occurs when we catch at least 98.6 percent of the defects.

FALSE The optimum level of inspection is when the sum of inspection costs and the cost of passing defectives are equal.

The output from aggregate planning is a detailed business plan covering the next 2 to 12 months.

FALSE The output is an aggregate production plan.

Tolerances represent the control limits we use on the charts.

FALSE Tolerances are specification limits, not control limits.

According to Deming, it is the systems that management puts into place that are primarily responsible for poor quality, not employees.

TRUE

A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.

TRUE

Concluding a process is out of control when it is not is known as a Type I error.

TRUE A Type I error involves erroneously concluding that a process is out of control.

A c-chart is used to monitor the number of defects per unit for process output.

TRUE A c-chart monitors the number of defects per unit for process output.

If a point on a control chart falls outside one of the control limits, this suggests that the process output is non-random and should be investigated.

TRUE A point outside the control limits suggests non-random variation.

The output of a process may not conform to specifications even though the process may be statistically "in control."

TRUE A process can be free of non-random variation and still not meet specifications.

After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity.

TRUE After the first week, ATP values will only occur in periods in which there are MPS quantities.

"Assignable variation" is variation due to a specific cause, such as tool wear.

TRUE Assignable variation is specific cause variation.

Quality control is assuring that processes are performing in an acceptable manner.

TRUE Control is used to monitor the performance of processes.

When a process is not centered, its capability is measured in a slightly different way. The symbol for this case is Cpk.

TRUE Cpk is used when the process is not centered.

Patterns of data on a control chart suggest that the process may have non-random variation.

TRUE Ideally, the data on a control chart will have no pattern.

Linear programming models yield the optimal solution.

TRUE Linear programming models can find an optimal solution if one exists.

A p-chart is used to monitor the fraction of defectives in the output of a process.

TRUE P-charts involve the fraction of defectives.

"Process capability" compares "process variability" to the "tolerances."

TRUE Process variability influences how much output falls outside of tolerances.

Control limits tend to be wider for more variable processes.

TRUE Process with inherently more variability will naturally have wider control limits.

The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start.

TRUE Required start dates depend on products' lead times.

Run tests are useful in helping to identify nonrandom variations in a process.

TRUE Runs tests are useful to identify non-randomness in patterns.

A run test checks a sequence of observations for randomness.

TRUE Runs tests can be used to detect nonrandomness in sequences of observations.

"Quality of conformance" is concerned with whether a product or service conforms to its specifications.

TRUE Specification conformance is quality of conformance.

Departmental budgeting is an example of aggregate planning.

TRUE The challenge is to get requirements into balance with resources.

An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low.

TRUE The chase strategy keeps inventories low.

A lower control limit must by definition be a value less than an upper control limit.

TRUE The lower limit must be smaller than the upper limit.

The variation of a sampling distribution is tighter than the variation of the underlying process distribution.

TRUE The sampling distribution exhibits less variation than the underlying process.

Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost.

TRUE The task of aggregate planning is to strike a balance between demand and capacity at minimum cost.

High-cost, low-volume items often require careful inspection since we make them so infrequently.

TRUE These are good candidates for inspection.

The amount of inspection we choose can range from no inspection at all to inspecting each item numerous times.

TRUE These are the extremes of inspection.

Attribute data are counted, variable data are measured.

TRUE These distinguish attribute from variable data.

The optimum level of inspection minimizes the sum of inspection costs and the cost of passing defectives.

TRUE This represents the optimum balance between inspection and failure costs.

Variation in a sample statistic collected from a process may be either random variation or assignable variation - or both.

TRUE Total variation can consist of both random and assignable variation.

Aggregate planners commonly use trial-and-error methods in developing aggregate plans.

TRUE Trial-and-error approaches can lead to good solutions.