Test 2

The statistical definition of Six Sigma allows for 3.4 defects per million. This is achieved by a Cpk index of

2

44. A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is approximately

a. $20,920

39. A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. The weighted contribution of this product is approximately

a. 0.133

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

a. 3.4

82. Four hundred and eighty minutes of production time are available per day. Scheduled production is 120 units per day. What is the cycle time?

a. 4 minutes

56. A county wants to build one centrally-located processing facility to serve the county's four recycling drop-off locations. The four drop-offs have characteristics as given in the table below. What is the approximate center of gravity of these four locations?

a. 4.75, 6.04

47. Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. The crossover point between process A and process B is

a. 50 units

49. In the Office Relationship Chart, which rating reflects the highest importance for two departments' closeness to each other?

a. A

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

a. Ishikawa diagram

48. Which of the following is true of a focused factory?

a. It may be focused in ways other than by product or layout.

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

a. Taguchi Loss Function

80. Which of the following statements about acceptance sampling is True?

a. The steeper an OC curve, the better it discriminates between good and bad lots.

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

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

70. Which of the following is false regarding control charts?

a. Values above the upper control limits always imply that the product's quality is exceeding expectations

55. East Texas Seasonings is preparing to build one processing center to serve its four sources of seasonings. The four source locations are at coordinates shown below. Also, the volume from each source is provided. What is the center of gravity?

a. X = 28.125; Y = 31.25

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

a. a Pareto chart

A Type one error occurs when

a. a good lot is rejected

23. If demand exceeds capacity at a new facility, an organization can use which of the following to move demand to an existing facility?

a. aggressive marketing

50. To set x -chart upper and lower control limits, one must know the process central line, which is the

a. average of the sample means

A fishbone diagram is also known as a

a. cause-and-effect diagram

76. A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality?

a. communication, courtesy, and credibility

64. Computer-integrated manufacturing (CIM) includes manufacturing systems that have

a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated

71. The goal of inspection is to

a. detect a bad process immediately

43. Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to

a. determine whether any of the organization's stakeholders are violated by poor quality products

40. A firm is seeking a new factory location, and is considering several countries worldwide. In some of these countries, child labor is prevalent; in others, working conditions and worker safety are inferior to conditions in the U.S. An operations manager paying attention to __________will factor these issues into the location decision.

a. ethical and social responsibility issues

46. Evaluating location alternatives by comparing their composite (weighted-average) scores involves

a. factor rating analysis

A drawing of the movement of material, product, or people is a

a. flow diagram

47. The usual purpose of an R-chart is to signal whether there has been a

a. gain or loss in dispersion

50. Which of the statements below best describes office layout?

a. groups workers, their equipment, and spaces/offices to provide for movement of information

25. An organization whose capacity is on that portion of the average unit cost curve that falls as output rises

a. has a facility that is below optimum operating level and should build a larger facility

68. Which of the following is not one of the essential ingredients for mass customization?

a. high machine utilizations

18. Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched?

a. inexpensive rates for weekend phone calls

31. A manufacturing firm finds a location that has a significant cost advantage over alternatives, but rejects that location because the educational infrastructure was insufficient to train the firm's workers in its special production technologies. The firm's action illustrates the link between __________ and location.

a. innovation

big advantage of a process-oriented layout is

a. its flexibility in equipment and labor assignments

43. Which of the following phrases best describes process focus?

a. low volume, high variety

60. The "four Ms" of cause-and-effect diagrams are

a. material, machinery/equipment, manpower, and methods

81. Daily capacity of a product layout is determined by

a. operating time divided by cycle time

61. The use of information technology to monitor and control a physical process is known as

a. process control

37. The type of layout which features departments or other functional groupings in which similar activities are performed is

a. process-oriented

67. Which layout type assumes an adequate volume for high equipment utilization?

a. product-oriented layout

68. Which of the following is a location analysis technique typically employed by a service organization?

a. purchasing power analysis

25. Industrial location analysis typically attempts to

a. reduce costs

55. Strategies for improving productivity in services are

a. separation, self-service, automation, and scheduling

42. Stakeholders who are affected by the production and marketing of poor quality products include

a. stockholders, employees, and customers

29. Which of the following is not one of McDonald's "seven major innovations"?

a. the Happy Meal

63. Solving a load-distance problem for a process-oriented layout requires that

a. the difficulty of movement be the same for all possible paths

61. Takt time is

a. the total work time available divided by units required by the consumer

70. Which of the following is a location analysis technique typically employed by a manufacturing organization?

a. transportation method

63. LaQuinta Motor Inns has a competitive edge over its rivals because it

a. uses regression analysis to determine which variables most influence profitability

41. A manager wants to build 3 control limits for a process. The target value for the mean of the process is 10 units, and the standard deviation of the process is 6. If samples of size 9 are to be taken, the UCL and LCL will be

b. 16 and 4

47. A clothing chain is considering two different locations for a new retail outlet. They have identified the four factors listed in the following table as the basis for evaluation, and have assigned weights as shown on the left. The manager has rated each location on each factor, on a 100-point basis, as shown on the right.

b. 24.50

21. The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put in use, the program has become more complex, so that 1050 now represents the most employees that can be trained per year. In the past year, 950 employees were trained. The efficiency of this system is approximately _____ and its utilization is approximately _____.

b. 90.5 percent; 79.2 percent

78. An acceptance sampling plan is to be designed to meet the organization's targets for product quality and risk levels. Which of the following is true?

b. AQL, LTPD, and collectively determine n and c.

28. Which of the following statements regarding Dell Computer is false?

b. Dell builds its computers overseas in order to gain a low-cost advantage.

42. Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor?

b. Few people will travel out-of state for a haircut.

44. Which of the following characteristics best describes repetitive focus?

b. Its output is a standardized product produced from modules.

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

b. Pareto analysis

51. A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs 0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If demand is expected to be 10 million units, which plant offers the lowest total cost?

b. Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units

60. Which of the following is True regarding the process capability index Cpk?

b. The larger the Cpk, the more units meet specifications.

37. A sample of parts is measured. The mean of this sample is in the middle of the control limits, but some individual parts measure too low for design specifications and other parts measure too high. Which of the following is true?

b. The process is in control, but not capable of producing within the established control limits.

40. Which of the following is false regarding repetitive processes?

b. They allow easy switching from one product to the other.

30. Which of the following statements regarding fixed costs is true?

b. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.

A Type Two error occurs when

b. a bad lot is accepted

48. Total quality management emphasizes

b. a commitment to quality that goes beyond internal company issues to suppliers and customers

30. "Quality is defined by the customer" is

b. a user-based definition of quality

65. Which of the following is not one of the requirements of cellular production?

b. adequate volume for high equipment utilization

60. Balancing a work cell is done

b. as part of the process of building an efficient work cell

42. The type of inspection that classifies items as being either good or defective is

b. attribute inspection

17. Effective capacity is the

b. capacity a firm expects to achieve given the current operating constraints

64. A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of categories. This is most closely related to the ____________ tool of TQM.

b. cause and effect diagram

55. The c-chart signals whether there has been a

b. change in the number of defects per unit

59. Which of the following is not an advantage of work cells?

b. decreased use of equipment and machinery

39. The main issue in designing process layouts concerns the relative positioning of

b. departments

36. Statistical process control charts

b. display upper and lower limits for process variables or attributes, and signal when a process is no longer in control

48. An approach to location analysis that includes both qualitative and quantitative considerations is

b. factor rating

44. Which of the following is true for process layouts, but false for product-oriented layouts?

b. flexibility in equipment and labor assignments

74. "Poka-yoke" is the Japanese term for

b. foolproof

37. Standard Register

b. groups people and machines into departments that perform specific activities

29. Globalization of the location decision is the result of all of the following except

b. higher quality of labor overseas

77. In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and all defective items are replaced. When using this technique the AOQ

b. improves (AOQ becomes a smaller fraction)

32. Assignable variation

b. is to be identified and eliminated

77. In assembly line balancing, cycle time (the ratio of available production time to scheduled production) is the

b. maximum time that a product is allowed at each workstation

47. The typical goal used when developing a process-oriented layout strategy is to

b. minimize the material handling costs

58. The transportation method, when applied to location analysis

b. minimizes total production and transportation costs

61. If the Cpk index exceeds 1

b. must be less than one-third of the difference between the specification and the process mean

78. A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities totaling 16 minutes of work. The factory operates 750 minutes per day. The cycle time for this assembly line is

b. one and one-half minutes

67. If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is

b. out of control and the process should be investigated for assignable variation

57. A manufacturer uses statistical process control to control the quality of the firm's products. Samples of 50 of Product A are taken, and a defective/acceptable decision is made on each unit sampled. For Product B, the number of flaws per unit is counted. What type(s) of control charts should be used?

b. p-chart for A, c-chart for B

34. Which one of the following products is most likely made in a job shop environment?

b. paper forms

26. Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. The term associated with this phenomenon is

b. political risk

38. The basic break-even model can be modified to handle more than one product. This extension of the basic model requires

b. price and variable cost for each product, and the percent of sales that each product represents

61. Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a

b. process chart

66. The assumption of stability of demand is important for justifying which of the following layout types?

b. product-oriented layout

72. Producer's risk is the probability of

b. rejecting a good lot

64. Which of the following layouts generally has the best machine utilization?

b. repetitive and product-oriented layout

59. Which of the following is not among the eight components of revenue and volume for a service firm?

b. shipment cost of finished goods

A product-oriented layout would be most appropriate for which one of the following businesses?

b. steel-making

77. Marketing issues such as advertising, image, and promotion are important to quality because

b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer

57. Production and/or shipping costs are always considered in which of the following location decision methods?

b. transportation method

32. Three broad categories of definitions of quality are

b. user-based, manufacturing-based, and product-based

72. Which of the following is most likely to affect the location strategy of a manufacturing firm?

b. utility costs

32. Basic break-even analysis typically assumes that

b. variable costs and revenues increase in direct proportion to the volume of production

54. The statistical process chart used to control the number of defects per unit of output is the

c-chart

56. The local newspaper receives several complaints per day about typographic errors. Over a seven- day period, the publisher has received calls from readers reporting the following number of errors: 4, 3, 2, 6, 7, 3, and 9. Based on these data alone, what type of control chart(s) should the publisher use?

c-chart

58. A nationwide parcel delivery service keeps track of the number of late deliveries (more than 30 minutes past the time promised to clients) per day. They plan on using a control chart to plot their results. Which type of control chart(s) would you recommend?

c-charts

48. A manager wishes to build a 3 range chart for a process. The sample size is five, the mean of sample means is 16.01, and the average range is 5.3. From Table S6.1, the appropriate value of D3 is 0, and D4 is 2.115. The UCL and LCL for this range chart are

c. 11.2 and 0

A Cpk index of 1.00 equates to a defect rate of

c. 2.7 per 1,000 items

If x = 23 ounces, = 0.4 ounces, and n = 16, the 3 control limits will be

c. 22.70 to 23.30 ounces

35. Fred's Fabrication, Inc. wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $70,000. The variable cost for A is $9.00 per unit and for B, $14.00. The revenue generated by the units processed on these machines is $20 per unit. The crossover between machine A and machine B is

c. 4,000 units, with B more profitable at low volumes

20. Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 85%. What is the expected weekly output of cranks for this company?

c. 4845

79. A production line is to be designed for a job with four tasks. The task times are 2.4 minutes, 1.4 minutes, 0.9 minutes, and 1.7 minutes. The maximum cycle time is ______ and the minimum cycle time is ______ minutes.

c. 6.4; 2.4

89. An assembly line consists of 158 tasks grouped into 32 workstations. The sum of all task times is 105 minutes. Cycle time for the line is 4 minutes. The efficiency of this line is approximately

c. 82 percent

88. An assembly line consists of 21 tasks grouped into 5 workstations. The sum of the 21 task times is 85 minutes. Cycle time for the line is 20 minutes. The efficiency of this line is

c. 85 percent

73. Which of the following is true regarding the relationship between AOQ and the true population percent defective?

c. AOQ is less than the true percent defective.

24. Which of the following statements regarding FedEx is 709&?

c. FedEx believes the hub system helps reduce mishandling and delays due to better controls.

71. Which of these assumptions is .)7 associated with strategies for goods-producing location decisions?

c. High customer contact issues are critical.

74. Which of the following statements regarding ethical and environmentally friendly processes is true?

c. Operations managers can be environmentally sensitive and still follow a low cost strategy.

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

c. Philip B. Crosby

24. In queuing problems, which of the following probability distributions is typically used to describe the number of arrivals per unit of time?

c. Poisson

48. Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs

c. Process Y is cheaper than process X at all volumes; there is no crossover point.

37. Which of the following statements is not true?

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

62. Which of the following statements regarding Starbucks Coffee is 1#$%&?

c. The firm's cafes are exclusively in traditional settings: malls, tourist areas, and airports.

31. "Making it right the first time" is

c. a manufacturing-based definition of quality

61. Traffic counts and purchasing power analysis of drawing area are techniques associated with

c. a retail or professional service location decision

58. Which one of the following is not common to repetitive and product-oriented layouts?

c. ability to adjust to changes in demand

56. The major problem addressed by the warehouse layout strategy is

c. addressing trade-offs between space and material handling

38. The Central Limit Theorem

c. allows managers to use the normal distribution as the basis for building some control charts

50. Product Focused processes

c. are processes that are specialized for relatively few products or customer groups

34. Control charts for variables are based on data that come from

c. averages of small samples

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

c. benchmarking

72. Making environmentally sound products through efficient processes

c. can still be profitable

54. A regional bookstore chain is about to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis?

c. center-of-gravity model

35. The purpose of an X chart is to determine whether there has been a

c. change in the central tendency of the process output

43. The x-bar chart tells us whether there has been a

c. change in the central tendency of the process output

22. Which of the following represents a common way to manage capacity in the service sector?

c. changes in staffing levels

73. Geographic Information Systems can assist the location decision by

c. combining geography with demographic analysis

34. For which of the following operations would a fixed-position layout be most appropriate?

c. constructing a highway tunnel or bridge

35. When making a location decision at the region/community level, which of these would be considered?

c. cost and availability of utilities

78. Which of the determinants of service quality involves having the customer's best interests at heart?

c. credibility

53. The center-of-gravity method is used primarily to determine what type of locations?

c. distribution center locations

54. Building high-morale organizations and building communication networks that include employees are both elements of

c. employee empowerment

45. Which of the following methods best considers intangible costs related to a location decision?

c. factor rating analysis

38. One of the major advantages of process-oriented layouts is

c. flexibility in equipment and labor assignment

66. A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n)

c. flexible manufacturing system

67. "Operators simply load new programs, as necessary, to produce different products" describes

c. flexible manufacturing systems

A product-focused process is commonly used to produce

c. high-volume, low-variety products

71. An operating characteristics curve shows

c. how the probability of accepting a lot varies with the population percent defective

74. Average outgoing quality (AOQ) usually

c. improves with inspection

64. Acceptance sampling

c. is used to determine whether to accept or reject a lot of material based on the evaluation of a sample

43. A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is

c. less than $30,000

52. Which of the following does not support the retail layout objective of maximizing customer exposure to products?

c. maximize exposure to expensive items

85. Which of the following is not a heuristic rule for assigning tasks to workstations in a product layout?

c. median tasks first

40. Up to three standard deviations above or below the centerline is the amount of variation that statistical process control allows for

c. natural variation

83. A production line is to be designed for a product whose completion requires 21 minutes of work. The factory works 400 minutes per day. Can an assembly line with five workstations make 100 units per day?

c. no, it will fall short even with a perfectly balanced line

43. Which type of layout is specifically designed to encourage employees to interact?

c. open office

59. Pareto charts are used to

c. organize errors, problems, or defects

67. Which of the following is most likely to affect the location decision of a service firm rather than a manufacturing firm?

c. parking and access

69. A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a location decision.

c. parking and access

31. Three types of processes are

c. process focus, repetitive focus, and product focus

53. The normal application of a p-chart is in

c. process sampling by attributes

38. Which of the following transformations generally has the highest equipment utilization?

c. product-focused process

In location planning, environmental regulations, cost and availability of utilities, and taxes are

c. regional/community factors

36. An assembly line is an example of a

c. repetitive process

A location decision for a traditional department store (Macy's) would tend to have a(n)

c. revenue focus

64. Traffic counts and demographic analysis of drawing areas are associated with

c. service location decisions

40. When decision trees are used to analyze capacity decisions,

c. states of nature are often demand-based, as in "market favorability"

37. Tangible costs include which of the following?

c. taxes

24. Adding a complementary product to what is currently being produced is a demand management strategy used when

c. the existing product has seasonal or cyclical demand

52. One fundamental difference between a process chart and a process map is that

c. the process chart is more like a table, while the process map is more like a schematic diagram

52. The center-of-gravity method does .)7 take into consideration the

c. value of the goods shipped

69. The assumptions necessary for a successful product layout include all of the following except

c. volatile product demand

36. Which of these factors would be considered when making a location decision at the site level?

c. zoning regulations

51. According to the text, the most common choice of limits for control charts is usually

c. ± 3 standard deviations

27. A location decision for an appliance manufacturer would tend to have a(n)

cost focus

33. Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is

d. 15,000 units

62. A process layout problem consists of 4 departments, each of which can be assigned to one of four rooms. The number of different solutions to this problem is _____, although not all of them may have different material handling costs.

d. 24

50. A full-service restaurant is considering opening a new facility in a specific city. The table below shows its ratings of four factors at each of two potential sites.

d. 34; 28

84. Four hundred and eighty minutes of production time are available per day. The schedule calls for the production of 80 units per day. Each unit of the product requires 30 minutes of work. What is the theoretical minimum number of workstations?

d. 5

19. The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the capacity of the system is 1900 students per semester and the utilization is 90%. If the number of students who actually got their orientation session is 1500, what is the efficiency of the system?

d. 87.7%

65. Which one of the following technologies is used only for material handling, not actual production or assembly?

d. AGVs

81. Which of the following is True regarding the average outgoing quality level?

d. AOQ is very low (very good) for extremely poor quality lots.

63. "Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes

d. ASRS

A disadvantage of product-oriented layout is that

d. All of the above are disadvantages of product-oriented layouts.

60. Which of the following is true regarding vision systems?

d. All of the above are true.

68. Which of the following statements on acceptance sampling is True

d. All of the above are true.

75. Which of the following is true regarding the concept of flexibility?

d. All of the above are true.

71. Which of the following is true regarding fabrication lines?

d. Balancing their assembly line is more technological than worker oriented.

28. Which of the following is false regarding capacity expansion?

d. Capacity may only be added in large chunks.

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

d. Managing quality helps build successful product strategies.

62. Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds?

d. RFID

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

d. Taguchi concepts

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

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

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

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

52. Which of the following is true of a p-chart?

d. The lower control limit may be at zero.

38. "Employees cannot produce goods that on average exceed the quality of what the process is capable of producing" expresses a basic element in the writings of

d. W. Edwards Deming

33. The fixed-position layout would be most appropriate in which of the following settings?

d. a cruise ship assembly facility

40. Which of the following is not an information requirement for solving a load-distance problem?

d. a list of product cycle times

38. Intangible costs include which of the following?

d. all of the above

47. To become ISO 9000 certified, organizations must

d. all of the above

76. In assembly line balancing, the minimum number of workstations is

d. all of the above

66. An acceptance sampling plan's ability to discriminate between low quality lots and high quality lots is described by

d. an operating characteristics curve

31. Which of the following costs would be incurred even if no units were produced?

d. building rental costs

A successful TQM program incorporates all of the following except

d. centralized decision-making authority

80. Cycle time is computed as

d. daily operating time divided by the scheduled output

65. Acceptance sampling's primary purpose is to

d. decide if a lot meets predetermined standards

53. Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all

d. elements of servicescapes

45. Utilization in process-oriented facilities is frequently low because

d. excess capacity for peak demands is desirable

16. What is sometimes referred to as rated capacity?

d. expected output

53. Service blueprinting

d. focuses on the provider's interaction with the customer

42. Net present value will be greater

d. for a 4% discount rate than for a 6% discount rate

69. Advances in technology

d. have had dramatic impact on customer interaction with services and with products

42. Which of the following phrases best describes product focus?

d. high fixed costs, low variable costs

70. An operating characteristic (OC) curve describes

d. how well an acceptance sampling plan discriminates between good and bad lots

In mass service and professional service, the operations manager should focus on

d. human resources

69. When a sample measurement falls inside the control limits, it means that

d. if there is no other pattern in the samples, the process is in control

69. Acceptance sampling is usually used to control

d. incoming lots of purchased products

A job shop is an example of a(n)

d. intermittent process

39. For an x-bar chart where the standard deviation is known, the Upper Control Limit

d. is 3 n above the mean of sample means for a 3 control chart

57. The concept of customizing in a warehouse layout

d. is a new trend in value-added activities in warehouses

31. Natural variations

d. lead to occasional false findings that processes are out of control

In a product-oriented layout, the process of deciding how to assign tasks to workstations is referred to as

d. line balancing

42. The most common tactic followed in process-layout planning is to arrange departments or work centers so they

d. minimize the costs of material handling

41. The major problem addressed by the process-oriented layout strategy is

d. minimizing difficulties caused by material flow varying with each product

29. The causes of variation in statistical process control are

d. natural causes and assignable causes

25. In queuing problems, which of the following probability distributions is typically used to describe the time to perform the service?

d. negative exponential

34. A fabrication company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased?

d. no purchase because neither machine yields a profit at that volume

36. A shop wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $22 per unit. If the estimated output is 9,000 units, which machine should be purchased?

d. no purchase because neither machine yields a profit at that volume

51. Which of the following constitutes a major trend influencing office layouts?

d. off-site employees

35. Because the fixed-position layout problem is so difficult to solve on-site, operations managers

d. often complete as much of the project as possible off-site

23. Which of the following is (*) a common queuing situation?

d. parcel delivery truck following its computer-generated route

56. ISO 9000 seeks standardization in terms of

d. procedures to manage quality

70. Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane?

d. product-oriented layout

33. According to the manufacturing-based definition of quality,

d. quality is the degree to which a specific product conforms to standards

87. Which of the following is a common heuristic for assembly line balancing?

d. ranked positional weight

79. Which of the determinants of service quality involves performing the service right the first time?

d. reliability

A quality loss function includes all of the following costs except

d. sales costs

37. Break-even analysis can be used by a firm that produces more than one product, but

d. the break-even point depends upon the proportion of sales generated by each of the products

36. One factor impacting the fixed-position layout strategy is

d. the movement of material to the limited storage areas around the site

59. A run test is used

d. to examine points in a control chart to check for nonrandom variability

49. The crossover point is that production quantity where

d. total costs for one process equal total costs for another process

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

d. training and knowledge

39. Harley Davidson

d. uses work cells to feed its assembly line

31. "A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes what layout type?

d. work cell

32. Which of the following is usually .)7 one of the top considerations in choosing a country for a facility location?

d. zoning regulations

46. A quasi-custom product

e. All but d are true.

A lot that is accepted by acceptance sampling

e. All of the above are false.

53. Techniques for building employee empowerment include

e. All of the above are techniques for employee empowerment.

23. FedEx chose Memphis, Tennessee, as its U.S. hub because

e. All of the above are true.

29. An organization's process strategy

e. All of the above are true.

30. Natural variations

e. All of the above are true.

45. Which of the following is true about ISO 14000 certification?

e. All of the above are true.

51. V alue Stream Mapping

e. All of the above are true.

67. Acceptance sampling

e. All of the above are true.

34. The role of quality in limiting a firm's product liability is illustrated by

e. All of the above are valid.

26. Of the four approaches to capacity expansion, the approach that "straddles" demand

e. Choices a and c are both correct.

41. Which of the following statements regarding "proximity" in the location decision is false?

e. Clustering among fast food chains occurs because they need to be near their labor supply.

65. What describes a system that stores and displays information that can be linked to a geographic location?

e. GIS

58. Which of the following is true regarding opportunities to improve service processes?

e. None of the above is true.

28. Arnold Palmer Hospital uses which of the following quality management techniques?

e. The hospital uses all of the above techniques.

49. Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would you recommend?

e. Variation is not in control; investigate what created this condition.

I a layout problem is solved by use of "heuristics," this means that

e. a "satisfactory" solution is acceptable

72. Which of the following is not a typical inspection point?

e. after a costly process

22. Study of waiting-line models helps operations managers better understand

e. all of the above

35. Which of the following products is likely to be assembled on a repetitive process line?

e. all of the above

39. Operations managers will need to consider ethical and social responsibility issues when location decisions involve

e. all of the above

41. When done correctly, mass customization

e. all of the above

59. Which of the following are typical of process control systems?

e. all of the above

60. Which of the following is among the eight components of revenue and volume for a service firm?

e. all of the above

66. Location analysis techniques typically employed by service organizations include

e. all of the above

70. Process redesign

e. all of the above

71. Ethical and environmentally friendly processes include which of the following?

e. all of the above

73. Flexibility can be achieved with

e. all of the above

A good layout requires determining

e. all of the above

33. Assignable causes

e. are causes of variation that can be identified and removed

43. Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries?

e. are young

40. The philosophy of zero defects is

e. consistent with the commitment to continuous improvement

50. "Kaizen" is a Japanese term meaning

e. continuous improvement

55. Which of the following requires an information system that provides inbound product identification, its destination, and routing of the product to the designated outbound vehicle?

e. cross-docking

57. In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except

e. customization

44. Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in which of the following location decision methods?

e. factor rating method

41. Net present value

e. is the discounted value of a series of future cash receipts

27. Which of the following is not one of the four approaches to capacity expansion?

e. lag demand with one-step expansion

33. When making a location decision at the country level, which of these would be considered?

e. location of markets

74. The main advantage of a product-oriented layout is typically

e. low variable cost per unit

36. All of the following costs are likely to decrease as a result of better quality except

e. maintenance costs

72. The central problem in product-oriented layout planning is

e. minimizing the imbalance in the work loads among workstations

30. The layout strategy that deals with low-volume, high-variety production is

e. none of the above

44. The mean and standard deviation for a process for which we have a substantial history are x = 120 and = 2. For the variable control chart, a sample size of 16 will be used. What is the mean of the sampling distribution?

e. none of the above

52. Quality circles members are

e. none of the above; all of the statements are false

35. Which of the following is not one of the major categories of costs associated with quality?

e. none of the above; they are all major categories of costs associated with quality

A good description of "source inspection" is inspecting

e. one's own work, as well as the work done at the previous work station

34. Which of these factors would be considered when making a location decision at the region/community level?

e. proximity to raw materials and customers

32. Which of the following industries is likely to have low equipment utilization?

e. restaurants

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

e. service recovery

46. One disadvantage of process-oriented layouts arises from

e. the use of the general purpose machines and equipment

49. On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which

e. total costs are equal for two alternative locations

29. Break-even is the number of units at which

e. total revenue equals total cost

54. Balancing low-cost storage with low-cost material handling is important in a(n)

e. warehouse layout

If a sample of items is taken and the mean of the sample is outside the control limits the process is

out of control and the cause should be established

45. Jars of pickles are sampled and weighed. Sample measures are plotted on control charts. The ideal weight should be precisely 11 oz. Which type of chart(s) would you recommend?

x - and R-charts