BADM 7120 Operations Management

Reduction of setup time is accomplished by separating internal and external setups and: A. Reducing inventory B. Implementing a Kanban system C. Converting internal setup time to external setup time D. Reducing lot sizes

Converting internal setup time to external setup time

Supply Chain Strategy focuses, in part, on: A. Purchasing and logistics B. Customers C. Information Flow D. All of the above

D. All of the Above

A cause and effect diagram: A. Identifies common causes of quality defects B. Is often used in conjunction with a Pareto chart C. Is also called a fishbone diagram D. All of the above

D. All of the above

Project management requires: A. Scheduling, planning, and controlling B. Quantitative skills C. Behavioral skills D. All of the above

D. All of the above

Reducing setup time is important because it: A. Increases available capacity B. Increases flexibility to meet schedule changes C. Reduces inventory D. All of the above

D. All of the above

Supply chain management includes the integration of: A. Suppliers B. Manufacturers C. Customers D. All of the Above

D. All of the above

Which of the following is/are assumption(s) of process control? A. Random variability cannot be eliminated unless the process is redesigned. B. Common causes represent random variability C. Production processes are not usually found in a state of control. D. All of the above

D. All of the above

Which of the following is NOT one of the four principles of process redesign> A. Eliminate unnecessary steps in the process B. Have the people who do the work process their own information C. Organize around outcomes, not tasks D. Automate the remaining steps in the process

D. Automate the remaining steps in the process

The operation objectives of quality, cost, delivery and flexibility are: A. Unique B. Mutually exclusive C. Independent of each other D. Connected

D. Connected

The contemporary operations themes signify that: A. To be competitive, strategies for operations should exclude broader supply chain issues. B. More emphasis should be placed on manufacturing than on service industries. C. Operations decisions should precede decision in other functions in an organization. D. Every operation should be externally directed to meet the customers' requirements.

D. Every operation should be externally directed to meet the customers' requirements.

Which of the following is NOT true about Collaborative Planning, Forecasting and Replenishment (CPFR) A. The basic idea is to share forecasting information with the suppliers and customers in the supply chain B. It is best applied to a few customers representing the bulk of demand. C. It creates visibility in the supply chain minimizing the occurrence of the bullwhip in supply chains. D. It requires advanced forecasting tools such as Box-Jenkins to improve the forecasting accuracy.

D. It requires advanced forecasting tools such as Box-Jenkins to improve the forecasting accuracy.

Quality Function Deployment: A. Depends only on engineering characteristics B. Eliminates customer attributes C. Assumes that interactions between engineering characteristics are unimportant D. Links customer requirements to technical specifications

D. Links customer requirements to technical specifications.

The four elements that form the heart of operations strategy include: A. Mission, distinctive competence, internal analysis, and external analysis B. Mission, objectives, internal analysis, and external analysis C. Mission, distinctive competence, objectives internal analysis D. Mission, distinctive competence, objectives, and strategic decisions

D. Mission, distinctive competence, objectives, and strategic decisions

The carrying cost for inventory consists of which cost components? A. Capital cost, obsolescence cost, and ordering cost B. Storage cost, handling cost, and obsolescence cost C. Obsolescence cost, capital cost, and stock out cost D. Obsolescence cost, storage cost, and capital cost

D. Obsolescence cost, storage cost, and capital cost

If an organization were having difficulty trying to get customers' opinions into the definition of quality, which of the following approaches would be most suitable? A. TQM B. Six-sigma C. ISO 9000 certification D. Quality Function Deployment

D. Quality Function Deployment

One of the main objectives of a lean system is: A. Define value from the manufacturer's perspective B. Striving for "good enough" C. Reduction of takt time D. Reduction of waste

D. Reduction of waste

In a Q system, average inventory: A. Is depleted at a constant rate B. Is set to cover average demand over the lead time plus the review interval C. Is relatively flat in the neighborhood of the minimum D. Tends to be less than under a system of periodic review (P system)

D. Tends to be less than under a system of periodic review (P system)

Which of the following statements regarding capacity is NOT true? A. Capacity is the maximum output that could be produced over a period of time B. Capacity can be measured in several units such as hours of output, number of units produced, number of customers served, etc. C. Effective capacity is generally les than the theoretical capacity D. The "maximum output" of a process is not meaningful measure

D. The 'maximum output' of a process is not a meaningful measure

Which of he following is NOT a correct statement? A. A service is produced and consumed simultaneously B. Services are provided in a bundle of services and goods C. Low-contact services can usually be made more efficient than high-contact services D. The service delivery system should be designed primarily around the employees in the system.

D. The service delivery system should be designed primarily around the employees in the system.

T/F A finite population in waiting line management refers to a population that is large enough in relation to the service system so that the change in population size caused by subtraction or additions to the population does not significantly affect the system probabilities.

False

T/F Best practices in operations are best for all organization.

False

T/F ISO 9000 standards guarantee that a product or service has no defects

False

T/F If there are multiple resources in series that process each transaction, then the process capacity is the sum of all the individual capacitates of the resources.

False

T/F In a batch operation, each product must have the same flow path and must pass through all of the same work centers.

False

T/F It is often good to have many conditions in a service guarantee as these conditions minimize the changes of a service failure.

False

T/F Kaizen events typically take between 1 to 2 months.

False

T/F Ideally in waiting line or queuing analysis, we want to balance the cost of service capacity with the cost of waiting.

True

T/F A process will generally have at least one bottleneck.

True

T/F A small improvement in customer loyalty can substantially improve the profitability of a service firm.

True

T/F According to the lean philosophy, a stable master production schedule is desirable to reduce the work-in-process inventories.

True

T/F In a waiting line situation, multiple lines occur only when there are multiple servers.

True

T/F The business strategy can be derived from a firm's distinctive competence that is difficult for competitor to copy or imitate.

True

T/F The total cost of quality in an organization is the sum of control costs and failure costs.

True

T/F Value stream maps are similar to flowcharts and are used for identifying the waste and non-value-added steps in the current process.

True

T/F With lean thinking, a company's operations layout should evolve to a cellular manufacturing layout.

True

T/F A department of 25 machines is kept running by three operators who respond to randomly occurring equipment problems. An analyst wanting to know whether to add a fourth operator or downsize to two operators would be helped by using queuing theory analysis.

True

T/F High-contact and low-contact services can also be classified as front office and back office operations.

True

T/F One of the major benefits of concurrent engineering is the reduction in time to complete the new-product development process.

True

T/F The process view provides a basis for viewing an entire business as a system of interconnected processes.

Ture

In aggregate planning: A. 'Aggregate' implies that planning is done for a single overall measure of output or at most a few products B. The concern I over a long-range planning horizon C. Output levels are set in the face of certain demand. D. Firms should never consider overtime, hiring, firing, or subcontracting

A. "Aggregate" implies that planning is done for a single overall measure of output or at most a few products

A large capacity cushion is appropriate when: A. A firm is attempting to capture market share in a growing industry B. The market for its products or services is shrinking C. A firm wants its capacity to match average demand D. A make-to-stock process is used

A. A firm is attempting to capture market share in a growing industry

A computerized inventory system checks inventory levels at the end of the week and produces suggested orders for the coming week. What kind of system is this? A. A periodic review system B. An ABC inventory system C. A service level system D. A continuous review system

A. A period review system

The market-pull view of new product innovation is to: A. Develop products that the company can sell, based on customer needs B. "Pull" the products into the market as fast as possible. C. Make new products appealing through innovative packaging D. Market whatever the company makes best

A. Develop products that the company can sell, based on customer needs

The difference between actual demand and the forecast is: A. Forecast error B. Mean absolute percentage error C. Mean absolute deviation of forecast error D. Absolute deviation of forecast error

A. Forecast error

A service blueprint is used to analyze and manage the service process because it involves: A. The identification of flows, bottlenecks, and customer interaction points B. The design of the services advertising campaign C. The identification of the consumer benefit concept D. All of the above

A. Identification of flow, bottlenecks, and customer interaction points

Using exponential smoothing, if we want forecasts to be very responsible to recent demand, the value of alpha should be: A. Large B. The value of alpha does not matter C. Small D. Moderate

A. Large

"Slack" refers to the difference between: A. Late and early times B. Finish and start time C. Observed and predicted times D. Optimistic and pessimistic times E. None of the above

A. Late and early times

With regards to suppliers, lean systems typically require: A. Long-term relationships and commitments B. Buyer inspection of goods and materials C. Delivery of large lots at frequent intervals D. Multiple sources from which to purchase

A. Long-term relationships and commitments

If one time-series model is used for forecasting a low demand item and another time-series model is used for forecasting a high demand item, which measure of forecast accuracy provides a valid comparison of the errors from these two time-series? A. MAPE B. MAD C. MSE D. CFE

A. MAPE

In the basic EOQ model, if annual demand and carrying costs double, the EOQ: A. Remains the same B. Increases, but less than double C. Doubles D. Decreases

A. Remains the same

Which phrase most closely describes the Delphi technique? A. Round of anonymous data collection B. Consumer survey C. Test markets D. Individual opinions

A. Rounds of anonymous data collection

Which of the following statements is NOT true about six sigma quality? A. six sigma corresponds to 3 standard deviations on either side of the mean B. Six sigma results in 3.4 ppm defects C. Motorola invented the term "six sigma quality" in the mid-80s D. Six sigma can be applied to administrative and service processes as well

A. Six sigma corresponds to 3 standard deviations on either side of the mean

Which of the following are the three major components of the queuing system? A. The arrival population characteristics/behavior, the queuing system, and resource characteristics/behavior B. The service speed, the queue discipline and the waiting line C. The sources population, how customers exit the system, and the queuing discipline D. The number of servers, the service speed and the waiting line. E. The source population and the way customers arrive at the system, the serving systems, and how customers exit the system.

A. The arrival population characteristics/behavior, the queuing system, and resource characteristics/behavior.

The capacity of a process is determined by: A. The bottleneck B. The maximum of the required capacity resources C. Throughput time D. None of the above

A. The bottleneck

Independent demand inventory consists of: A. Inventory whose demand is determined by market conditions outside the firm B. Inventory that is independent of any known rules of demand and supply C. Demand tat is related to the demand of another item D. Inventory whose demand comes from independent suppliers.

A. inventory whose demand is determined by market conditions outside the firm

Quality Function Deployment includes which of the following: (1) relative importance of customer attributes. (2) tolerance stack-up (3) a comparison to the competitor's product (4) engineering characteristics (5) customer perceptions (6) customer attributes (7) variation around a target (8) value analysis A. 2,5,6,7,8 B. 1,3,4,5,6 C 3,5,6,7,8 D, 1,2,4,6,7

B 1,3,4,5,6

Process efficiency is usually highest in which type of process? A. Job shop B. Assembly line C. Project D. Batch

B. Assembly Line

Why is it dangerous to justify capacity expansion using economies of scale? A. It requires consideration of quality, dependability, and flexibility B. Because the common notion that unit costs decline for larger facilities due to size is not always accurate C. It is far too specific to use as a basis for the capacity decisions D. Because volume, capacity, and process considerations are looked at individually.

B. Because the common notion that unit costs decline for larger facilities due to size is not always accurate

Which of the following is NOT a measure of forecast accuracy? A. Cumulative sum of forecast error B. Cumulative absolute deviation of forecast error C. Mean absolute deviation of forecast error D. Mean square error

B. Cumulative absolute deviation of forecast error

Multiple critical paths can exist under CPM because: A. There is more than one way to complete the project B. Different network paths exist, each with the same total time C. Great flexibility of activity sequences is available D. None of the above

B. Different network paths exist, each with the same total time

An important lesson from the product-process matrix is: A. Most firms should operate off the diagonal to achieve competitive status B. Give importance to aligning product choice decisions and process choice decisions C. Give importance to product choice decision over process choice decisions D. Give importance to process choice decisions over product choice decisions.

B. Give importance to aligning product choice decision and process choice decisions

Which of the following is NOT true about the cost of quality? A. Training cost is an example of prevention cost B. Increasing prevention cost increases appraisal, internal and external failure costs C. Warranty is an example of external failure cost D. Cost of quality is actually the cost of poor quality

B. Increasing prevention cost increases appraisal, internal and external failure costs

In which phase of the new-product design process should considerations about tradeoffs among product coast, quality, and schedule, be made? A. Concept development B. Product design. Preliminary process design D. Pilot production/testing

B. Product design

Managing quality in a lean system: A. Means that product and service defects are never defined as waste B. Requires continuously exposing and correctly quality problems C. is done by suppliers D. Is easy

B. Requires continuously exposing and correctly quality problems

A process control chart: A. Has upper and lower control limits set at +/- 2 standard deviations from the center line B. Separates the assignable cause of variation from the common cause of variation C. Assumes that 99.74% of special cause variation will fall between upper and lower limits. D. Assigns causes of variation to operator, machine, or material

B. Separates the assignable cause of variation from the common cause of vaiation

In a college registration process, several department heads have to approve an individual student's semester course load. What is the queuing system line structure? A. Single channel, single phase B. Single channel, multiphase C. Multichannel, single phase D. Multichannel, multiphase E. None of the above

B. Single channel, multiphase

Which of the following is an example of a finite population in a queuing system? A. People waiting to place their order at a fast food restaurant B. The departmental faculty in line at a copier C. People waiting in line at an ATM D. Patients seeking help in a hospital emergency room E. Taxpayers calling for assistance from the IRS

B. The departmental faculty in line at a copier

Which of the following accurately describes a chase strategy? A. None of the above B. The firm produces exactly what is needed each month C. The firm produces the same amount each day over the planning period and deals with the variations in demand with inventory or overtime D. The firm produces at the same level for half of the year, and then adjusts production to another level and produces at that level for the remainder of the year.

B. The firm produces exactly what is needed each month

The advantage(s) of the network method over the Gantt chart is (are) that: A. The network method is easy to use and quite widely understood. B. The network method shows precedence relationships explicity when compared to Gantt charts. C. Network methods are less costly to use. D. None of the above

B. The network method shows precedence relationships explicitly when compared to Gantt charts.

Facilities decisions: A. are medium-range capacity decisions B. Should consider one of the five crucial questions of how much, how large, when, where, and what type C. Constrain all other capacity decisions D. Require planning for one year only.

C. Constrain all other capacity decisions

The type of processing system that is used for highly standardized products such as oil and gasoline is: A. Mass production B. Batch C. Continuous process D. Project

C. Continuous process

The ability of the process to meet, or exceed, its specification can be determined by: A. Histograms B. Pareto charts C. Cp index D. Cause-and-effect diagrams

C. Cp index

Which of the following statements is NOT true about managing inventory in supply chains? A. Coordination among supply chain partners is essential while managing inventory across supply chains B. The total cost minimization approach can be applied while managing inventory across the supply chain. C. In a supply chain, a single firm typically controls all of the inventories that are required while manufacturing a product. D. Vendor managed inventory is an initiative shifting responsibility for managing inventory to suppliers.

C. In a supply chain, a single firm typically controls all of the inventories that are required while manufacturing a product.

Quality of design: A. Is the prime responsibility of production B. Is one of the four decision areas of engineering C. Is determined before production by a cross-functional product design team D. Means a product has high reliability, maintainability, and availability

C. Is determined before production by a cross-functional product design team

Safety stock inventory is: A. Equivalent to the Economic Order Quantity B. Providing for inventory that is in transit from one location to another C. Maintained to absorb uncertainty in, for example, delivery lead time from suppliers D. All of the above

C. Maintained to absorb uncertainty in, for example, delivery lead time from suppliers

Which of the following is NOT an element of Lean? A. Kanban pull system B. Small-lot sizes C. Modularized master schedule D. Perfect or nearly perfect quality E. Multifunction workers

C. Modularized master schedule

Buying a ticket for a college football game where there are multiple windows to buy the ticket at features which type of queuing system line structure? A. Single channel, single phase B. Single channel, multiphase C. Multichannel, single phase D. Multichannel, multiphase E. None of the above

C. Multichannel, single phase

Which of the following statements is incorrect about the PERT method of project scheduling: A. PERT requires three time estimates for scheduling a given activity B. PERT assumes that the actual activity times are distributed according to the beta probability distribution. C. PERT assumes that the statistical variation in total project completion times can be computed by multiplying variances along the critical path. D. The standard deviation of the project is square root of the variance of the critical path.

C. PERT assumes that the statistical variation in total project completion times can be computed by multiplying variances along the critical path.

The four major decision responsibilities of operations management are: A. Process, quality, capacity, and human resources B. Quality, inventory, human resources, and capacity C. Process, capacity, quality, and inventory D. Process, quality, human resources, and inventory

C. Process, capacity, quality, and inventory

A decision is made that suppliers will be chosen based on quality rather than cost. This is an example of which of the following? A. Mission B. Distinctive Competence C. Strategic decision D. Objective

C. Strategic decision

Which of the following statements about CPM is true? A. CPM is an example of a variable time project scheduling method B. The CPM method is well suited when activity times are expected to vary a lot C. The CPM method is well suited when activity times are fairly constant and can be reduced by spending more money. D. The CPM method is well suited for R&D projects and for scheduling computer systems.

C. The CPM method is well suited when activity times are fairly constant and can be reduced by spending more money.

Which of the following is NOT a general characteristic of a service? A. No resale is possible B. The service cannot be stored C. The service can be transported D. Production and consumption are simultaneous

C. The service can be transported

Which of the following statements is true about a critical path? A. Critical path consists of activities for which early start time equals late start time. B. The activities along the critical path take the longest time. C. A critical path consists of activities for which early finish time equals late finish time. D. There is no slack in the activities along the critical path. E. All of the above

E. All of the above

T/F In a make-to-stock operation, the order penetration point is after fabrication and before final assembly.

Flase