OPM 101 EXAM 1 REVIEW Full Set to study

Costs incurred by defects that occur prior to delivery to the customer are called: external failure costs. internal failure costs. appraisal costs. prevention costs.

internal failure costs.

The capacity of a resource determines the ________ number of flow units that can flow through that resource per unit of time.

maximum

inventory

number of units-within a process. is also referred to as Work In Process (WIP). • takes up space and cost money•Inventory indicates the congestion level of a process.

A graphical representation of a process is called a:

process flow diagram.

The ________ of a resource is how long that particular resource takes to complete one flow unit.

processing time

Bottleneck

resource (stage) with lowest-capacity(or highest processing time) in a process

Flow Unit

the basic unit that moves through a process. •Flow unit is generally associated with the output of the process.

An example of a flow unit at a fast-food restaurant is:

the customers.

A process scope is: the set of outputs produced by the process. the set of activities involved in the process. the set of resources used in the process. the set of inputs required by the process.

the set of activities involved in the process

Flow time

the time a flow unit spends in a process, from start to finish.In service businesses, is associated with the waiting time of a customer.

Flow time tells us:

the time a flow unit spends in a process.

A customer's desire for a product or service is measured by its:

utility.

Leftover bread that is not sold at a bakery is an example of:

waste.

Strategic trade-off

when selecting inputs and resources, the firm must choose between a set that excels in one direction of customer utility or another, but no single set of inputs and resources can excel in all dimensions.

Off-loading the bottleneck

Line balancing: reassign activities to other resources with more capacity. •Technology: automate some of the activities consuming time at the bottleneck. •Outsourcing: outsource some of the activates consuming time at the bottleneck.

Which of the following statements is TRUE? Utilization of a resource is at its minimum when the flow rate is equal to its capacity. Utilization of a resource is at its maximum when the flow rate exceeds its capacity. Utilization of a resource is at its maximum when the flow rate is equal to its capacity. Utilization of a resource is at its minimum when the flow rate exceeds its capacity.

Utilization of a resource is at its maximum when the flow rate is equal to its capacity.

Consumption Utility

a measure of how much you like a product or service, ignoring the effects of price and of the inconvenience of obtaining the product or service

Customers are driving away after failing to find a place to park at a supermarket. The process currently is:

capacity constrained.

Process capacity

capacity of the bottleneck

Which of the following is NOT a core idea of total quality management? cost reduction leadership improvement employee empowerment continuous improvement

cost reduction

Utility is composed of the following components EXCEPT:

customer loyalty.

The set of products or services customers want is called:

demand.

Which of the following terms is interchangeable with "lean"? Toyota Production System Value adding Green No waiting

Lean and Toyota production systems are interchangeable

The goal of lean is to ________ from the system. eliminate waste generate value increase output extract profit

Lean's goal is to eliminate waste from the system.

C&A's potato chip filling process has a lower specification limit of 9.5 oz. and an upper specification limit of 10.5 oz. The standard deviation is 0.3 oz. and the mean is 10 oz. What is the process capability index for the chip filling process? 0.33 3.33 0.56 1.11

(USL - LSL)/(6 × Standard deviation) = (10.5 - 9.5)/(6 × 0.3) = 0.555556

Which of the following statements is FALSE? Nonbottleneck resources have a less than 100% utilization. A bottleneck resource must have a utilization of 100%. Nonbottleneck resources have slack capacity. A bottleneck resource does not always have the longest processing time.

A bottleneck resource can have a less than 100% utilization if demand constrained the process.

Which of the following statements about a firm's capabilities is FALSE? A firm has capabilities to do well on some dimensions of its customers' utility function. How well a firm can satisfy its customers' utility function is dependent on its capabilities. A firm has capabilities to do well on all dimensions of its customers' utility function. A firm's capabilities can be defined as the dimensions of the customer's utility function it is able to satisfy.

A firm has capabilities to do well on all dimensions of its customers' utility function.

Process flow diagram

A graphical way to describe the process. •The process flow diagram provides a visual chart that represents the steps of a process.

Which of the following statements is TRUE about capability analyses? A higher process capability index means the process has a lower defect probability A process capability index of 1.33 means that a process has a six sigma capability. A higher process capability index means the process has a higher defect probability. A process must have its mean centered in the middle of its tolerance interval in order to perform capability analyses.

A higher process capability index means the process variation is lower (or higher probability of meeting the tolerance interval) and therefore the defect probability is also lower.

A kanban system ________ work through the process based on ________. pulls, demand pushes, capacity pulls, capacity pushes, demand

A kanban system pulls work through the process based on demand.

The capacity of a nonbottleneck resource is ________ the capacity of the process. equal to The answer depends on the specific process under consideration. smaller than larger than

A nonbottleneck resource has a higher capacity than the bottleneck of the process.

Which of the following is a definition of the term "process"? A set of activities that transforms a collection of inputs into outputs. A set of activities that combines a collection of supplies. A set of activities that transforms a collection of outputs into inputs. A set of activities that combines a collection of units.

A set of activities that transforms a collection of inputs into outputs.

Market Segments

A set of customers who have similar utility functions

Lean was started as: An offshoot of the quality movement after WWII As Toyota wanted to emulate Ford's efficiencies without huge inventory build-up it saw at Ford. Ford Motor Company turned to mass production in the 1950s Both a and b

As Toyota wanted to emulate Ford's efficiencies without huge inventory build-up it saw at Ford.

A control chart is used to identify ________ of a process. assigned causes of variation input variables output variables normal causes of variation

Assignable causes of variation of a process can be identified as drifts or outliers falling outside the control limits of a control chart.

Guests are arriving at a party at a rate of 12 per minute. Each guest will be checked in, served a drink, and accompanied to his/her table by one receptionist, one bartender, and one usher respectively. Both the receptionist and usher can serve 10 guests per minute, whereas the bartender takes 5 minutes to serve one guest. Which resource is the bottleneck and what is the process capacity in guests per minute? Receptionist, 10 Bartender, 5 Usher, 5 Bartender, 0.2

Capacity = 1/Process time. Capacity for both the receptionist and usher = 10 guests per minute. Capacity of the bartender is 1/5 = 0.2 guest per minute. The bottleneck is the bartender because it is the resource with the lowest capacity. The lowest capacity also defines the process capacity, which is 0.2 guest per minute.

Patients are arriving at a clinic at a rate of two per minute. Each patient's visit consists of four steps: check in, record vital signs, receive treatment, and check out. A receptionist takes 1 minute to check a patient in. A nurse takes 2 minutes to record the patient's vital signs. A doctor spends 10 minutes with a patient. A staff member takes 3 minutes to check a patient out. What is the process capacity in patients per hour? 30 6 20 60

Capacity = 1/Processing time. Capacity at check in, record vital signs, receive treatment, and check out is 1, 0.5, 0.1, and 0.3 patient per minute respectively. The lowest capacity is the bottleneck and is Process capacity = 0.1 patient per minute = 0.1 × 60 (minutes/hour) = 6 patients per hour.

Which of the following is NOT a component of worker time on the job? Commuting Non-value-added work Waste Value-added work

Commuting is not a component of a worker's time as it happens outside work.

Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. What is the utilization of the bottleneck resource? 80% 2% 20% 100%

Cycle time = 50 minutes. Flow rate = 1/50 = 0.02 customer per minute. Bottleneck capacity = Min(1, 1/40, 1/10) = 0.025 customer per minute. Utilization of the bottleneck resource = Flow rate/Capacity = 0.02/0.025 = 80%.

Which of the following is another name for the fishbone diagram? Pareto diagram Flow diagram Frequency diagram Cause-effect diagram

Fishbone diagrams are also called cause-effect diagrams.

A patient leaves an outpatient clinic every 5 minutes. There are 5 patients in the clinic waiting to be seen by the physician. How long will a patient be in the clinic?

Flow time = Inventory × Cycle time = 5 patients × 5 minutes per patient = 25 minutes.

Which of the following is an example of waste of worker intellect? Discounting process improvement ideas from workers Walking from one part of the building to the other Working overtime Taking lunch breaks

Frontline workers are familiar with the work themselves and should be allowed to come up with ideas to improve their work.

Little's Law relates inventory, flow rate, and flow time as:

Inventory = Flow rate × Flow time.

Which dimension of the customer utility function is emphasized with a restaurant's slogan, "Eat Fresh"?

Performance

Variability

Predictable or Unpredictable changes in the demand or the supply process

Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. Which of the following conclusions can be drawn? The interview resource is the bottleneck. The process capacity is equal to the bottleneck capacity. The process is demand constrained. The process is capacity constrained.

Process capacity = Min(1, 1/40, 1/10) = 0.025 candidate per minute. Flow rate = 1/Cycle time = 1/50 = 0.02 candidate per minute. The process is demand constrained because the flow rate is less than the process capacity.

Which of the following is a means to counter overproduction? Keep moving things around. Keep resources busy. Produce expected demand. Produce at the volume of actual demand.

Producing exactly the quantity needed to meet demand is a means to counter overproduction.

Which of the following is an appropriate flow unit for a roller coaster at an amusement park? Seats on the roller coaster. Riders. . Employees. Miles per hour (as in the speed of the roller coaster). Operating time (as in the number of hours operated per day).

Riders

Which of the following is NOT an element of the Toyota Production System? Kaizen Scientific management Lean Kanban

Scientific management is not an element of the Toyota Production System as it is about following scientific principles of designing work instead of relying on workers' insights.

Which of the following is an example of value-added work? Waiting for customers to order Delivering pizza to customers Taking orders from customers Repairing a defective product

Taking orders from customers is value-added work

Capabilities

The dimensions of the customer's utility function a firm is able to satisfy. Capabilities allow a company to do well on some but not all components for customer utility.

inflexability

The inability to adjust to either changes in the supply process or changes in customer demand

Which of the following is the Pareto principle? The majority of problems can be explained by a few root causes. The majority of problems can be explained by many symptoms. The majority of problems can be explained by one root cause. The majority of problems can be explained by many root causes.

The majority of problems can be explained by a few root causes is the Pareto principle.

Trade-offs

The need to sacrifice one capability in order to increase another one

Demand rate

The number of flow units that customers want per unit of time.

What is the processing time

The processing time of a process is the sum of the activity times of all its activities.

flow rate

The rate at which flow units travel through a process. is a speed. indicates how fast work is processed within a process

inconvenience

The reduction in utility that results from the effort of obtaining the product or service. It comes from various attributes such as Location & Timing.

Price

The total cost of owning a product or receiving the service. Included expenses such as shipping and financing etc.

A restaurant promising a meal in two minutes or less attempts to cater to which part of the customer utility function?

Timing

Which of the following is not a dimension of quality? Performance Conformance Reliability Traceability

Traceability

A worker moving inventory from one machine to another is considered non-value-added work. True False

True

Activities are shown in a process flow diagram as:

boxes.