Management 4010 Exam 2
Lori Cook has developed the following forecasting model: y = 36.0 + 4.30x, where y = demand for Kool Air conditioners and x = the outside temperature (degrees Fahrenheit) a) When the temperature outside is 70° F, demand forecast = _______ air conditioners (enter your response as an integer). b) When the temperature outside is 80° F, demand forecast = _______ air conditioners (enter your response as an integer). c) When the temperature outside is 90° F, demand forecast = ________air
337, 380, 423
A company offers low-volume, custom-made furniture. Which process strategy is best suited for its operations? Part 2 A. process focus B. mass customization C. high quality D. product focus
A
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 sources or factors. This is most closely related to the ________ tool of TQM. A. cause-and-effect diagram B. histogram C. process control chart D. quality loss function E. scatter diagram
A
A forecasting technique consistently produces a negative tracking signal. This means that Part 2 A. the forecasting technique consistently over-predicts. B. the MAPE will also consistently be negative. C. the MSE will also consistently be negative. D. the forecasting technique consistently under-predicts.
A
A large quantity and large variety of products are produced in Part 2 A. mass customization. B. repetitive focus. C. product focus. D. process focus.
A
A manager wishes to build a 3-sigma range chart for a process. The sample size is five, the mean of sample means is 31.25, and the average range is 4.70. From Table S6.1, the appropriate value of D3 is 0, and D4 is 2.115. What are the UCL and LCL, respectively, for this range chart? (Do not round intermediate calculations. Round final answer to two decimal places.) A. 9.94 and 0.00 B. 35.95 and 26.55 C. 45.35 and 17.15 D. 6.82 and 2.59 E. 14.06 and 0.00
A
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? Part 2 A. communication, courtesy, and credibility B. competence, courtesy, and security C. communication, responsiveness, and reliability D. understanding/knowing customer, responsiveness, and reliability E. competence, responsiveness, and reliability
A
A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous September values were 220, 225, and 175. The average demand over all months during the three-year time period was 240. What is the approximate seasonal index for September? (Do not round intermediate calculations. Round final answer to three decimal places.) A.0.860 B. 0.729 C.1.160 D.0.390 E. cannot be calculated with the information given
A
For a 3-sigma x-bar chart where the process standard deviation is known, the lower control limit: A. is 3σ/n below the mean of sample means for a 3σ control chart. B. is 3σ above the mean of sample means for a 3σ control chart. C. is 3σ/n above the mean of sample means for a 3σ control chart. D. is 3σ below the mean of sample means for a 3σ control chart. E. cannot be calculated unless the average range is known.
A
In the mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except: A. customization. B. automation. C. standardization. D. tight quality control. E. removing some services.
A
In time series, which of the following cannot be predicted? A. random variations B. large increases in demand C. large decreases in demand D. cycles E. seasonal fluctuations
A
The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the design capacity of the system is 3,200 students per semester and that effective capacity equals 88% of design capacity. If the number of students who actually got their orientation session is 1,750, what is the utilization of the system? (Round answer to the nearest whole unit or whole percentage.) A. 55% B. 59% C. 62% D. 1,540 students E. 2,816 students
A
The forecasting time horizon that would typically be easiest to predict for would be the Part 2 A. short range. B. long range. C. medium range. D. intermediate range.
A
The fundamental difference between cycles and seasonality is the: A. duration of the repeating patterns. B. magnitude of the variation. C. ability to attribute the pattern to a cause. D. All of the above. E. None of the above.
A
What program is used to determine employee's bonuses? Part 2 A. weighted moving averages B. regression C. time series D. exponential smoothing
A
Which of the following DOES NOT increase profit by improving quality? Part 2 A. higher warranty costs B. increased productivity C. flexible pricing D. improved reputation
A
Which of the following statements comparing exponential smoothing to the weighted moving average technique is TRUE? Part 2 A. Exponential smoothing typically requires less record keeping of past data. B. Exponential smoothing is considerably more difficult to implement on a computer. C. More emphasis can be placed on recent values using the weighted moving average. D. Exponential smoothing is more easily used in combination with the Delphi method. E. Exponential smoothing allows one to develop forecasts for multiple periods, whereas the weighted moving average technique does not.
A
Computer-integrated manufacturing (CIM) includes manufacturing systems that have: Part 2 A. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated. B. all of their computers integrated with the marketing department. C. automated guided vehicles, robots, and process control integrated. D. robots, automated guided vehicles, and transfer equipment integrated. E. transaction processing, management information systems, and decision support systems integrated.
A
A forecast that projects a company's sales is Part 2 A. an environmental forecast. B. a demand forecast. C. a technological forecast. D. an economic forecast.
B
Advances in technology: A. have impacted the manufacturing sector only. B. have had a dramatic impact on customer interaction with services and with products. C. have had only a limited impact on services. D. have dramatically changed health care, but have not changed retailing. E. have failed to change the level of customer interaction with an organization.
B
Anthony Perez has identified three independent variables for the Magic's dynamic pricing model. Those three variables are Part 2 A. time of year, location in the arena, and opponent rating. B. time of the year, day of the week, and opponent rating. C. opponent rating, StubHub price, and location in the arena. D. day of the week, time of the year, and location in the arena. E. StubHub price, time of the day, and opponent rating
B
As compared to long-range forecasts, short-range forecasts: A. are less accurate. B. deal with less comprehensive issues supporting management decisions. C. employ similar methodologies. D. All of the above. E. None of the above.
B
Before creating a workforce schedule, an operations manager should create what future time-horizon forecast? Part 2 A. Long-range B. Short-range C. Medium-range D. Not applicable, workforce scheduling does not require forecasts
B
GE's recall of 3.1 million dishwashers cost the company more in repairs than the value of the actual dishwashers. This is an example of which quality principle? A. internal failure costs B. cost of poor quality is underestimated C. prevention costs D. PDCA E. appraisal costs
B
Kaizen is a Japanese term for which of the following concepts? Part 2 A. six sigma B. continuous improvement C. employee empowerment D. total quality management
B
Of the following list of tools used at Arnold Palmer Hospital, which one graphically describes a process or system? Part 2 A. flip charts B. flow charts C. OM charts D. check sheets
B
Operations managers most commonly deal with which type of forecast? Part 2 A. Economic B. Demand C. Technological D. Environmental
B
The dependent variable in the Magic's dynamic pricing model is Part 2 A. Ticket Master price. B. revenue. C. opponent rating. D. StubHub price. E. None of the above
B
The following equation predicts demand (y) for electric power (in megawatts) at N.Y. Edison using the straight-line trend method over time in years (x). Which statement best describes the slope (b)? y=56.76 + 10.54x Part 2 A. At time zero, demand for electric power at N.Y. Edison is 56.76 megawatts. B. Each year demand for electric power at N.Y. Edison increases by 10.54 megawatts. C. Each year demand for electric power at N.Y. Edison increases by 56.76 megawatts. D. At time zero, demand for electric power at N.Y. Edison is 10.54
B
The process improvement technique that sorts the vital few from the trivial many is: A. benchmarking. B. Pareto analysis. C. Taguchi analysis. D. Deming analysis. E. Yamaguchi analysis.
B
What is considered the primary factor to forecast? Part 2 A. monthly food sales B. people who walk through the door C. memorabilia sales activity D. food and beverage costs
B
What is the primary difference between time-series and associative forecasting models? Part 2 A. Time-series models are only used for long-range forecasts B. Associative models incorporate variables that might influence the quantity being forecasted C. Associative models do not predict demand D. Time-series models are only used for economic forecasts
B
What is the purpose of Statistical Process Control (SPC)? Part 2 A. assessing customer expectations B. ensuring processes meet standards C. taking measurements D. revealing common (natural) causes of variation
B
What is the reasoning behind setting the upper and lower control limits ±3σx from the mean? Part 2 A. We know that 99.73% of assignable variation is contained within ±3σx, and thus any data point outside of the limits is likely due to natural variation B. We know that 99.73% of natural variation is contained within ±3σx, and thus any data point outside of the limits is likely due to assignable variation C. 95.45% of the time, the sample averages will fall within ±3σx if the process has only natural variation D. The limits of the Z table are set at ±3
B
Which of the following characteristics best describes repetitive focus? A. Operators are broadly skilled. B. Its output is a standardized product produced from modules. C. It is widely used for the manufacture of steel. D. It uses sophisticated scheduling to accommodate custom orders. E. low volume, high variety
B
Which of the following could reduce costs and increase profit? Part 2 A. improved response B. increased productivity C. flexible pricing D. improved reputation
B
Which of the following is NOT one of the techniques for building employee empowerment? Part 2 A. Build communication networks that include employees. B. Eliminate formal organization structures such as teams and quality circles. C. Develop open, supportive supervisors. D. Build high-morale organizations.
B
Which of the following is a qualitative forecasting method? Part 2 A. naive approach B. Delphi method C. linear regression D. trend projection
B
Which of the following is a qualitative forecasting method? Part 2 A. weighted moving average B. jury of executive opinion C. trend projection D. exponential smoothing
B
Which of the following is considered to be the single standard of quality with international recognition. Part 2 A. Deming Prize B. ISO 9000 Certification C. Malcolm Baldrige Quality Award D. JD Power and Associates Certification
B
Which of the following is TRUE? A. The main purpose of flowcharts is to identify and eliminate waste. B. Value-stream mapping is a variation of time-function mapping. C. A process chart is a flowchart with time added on the horizontal axis. D. Time-function mapping extends the value analysis back to suppliers. E. Service blueprinting focuses on the provider's interaction with its supplier.
B
Which one of the following products is most likely made in a job shop environment? A. rolls of newsprint B. custom furniture C. television sets D. canned vegetables E. cigarettes
B
A process that is assumed to be in control with limits of 89 ± 2 had sample averages for the x-bar chart of the following: 87.1, 87, 87.2, 89, 90, 88.5, 89.5, and 88. Is the process in control? A. Yes. B. Not enough information to tell. C. No, two or more consecutive points are very near the lower (or upper) limit. D. No, there is a distinguishable trend. E. No, one or more averages exceeded the limits.
C
An assembly line has 10 stations with times of 1, 2, 3, 4, ..., 10, respectively. What is the bottleneck time? A. 550% of the throughput time B. 1.82% of the throughput time C. 18.18% of the throughput time D. 50% of the throughput time E. 100% of the throughput time
C
Anthony Perez's primary statistical tool for revenue management at the Orlando Magic is Part 2 A. linear programming. B. exponential smoothing. C. multiple regression. D. trend and seasonal indices. E. linear regression.
C
A six-month moving average forecast is generally better than a three-month moving average forecast if demand: A. has been changing due to recent promotional efforts. B. exceeds one million units per year. C. is rather stable. D. follows an upward trend. E. follows a downward trend.
C
Events in the data caused by chance and unusual situations, such as natural disasters, are considered Part 2 A. seasonality. B. trend. C. random variation. D. cycle.
C
Kaizen is a Japanese term meaning: A. a fishbone diagram. B. just-in-time (JIT). C. continuous improvement. D. a foolproof mechanism. E. setting standards.
C
Linear regression Part 2 A. uses the weighted moving average method of forecasting. B. is also referred to as the naive method of forecasting. C. uses the equation y = a + bx. D. uses the simple moving average method of forecasting.
C
Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE? A. Process X is more profitable than process Y and should be selected. B. It is impossible for one process to have both of its costs lower than those of another process. C. Process Y is cheaper than process X at all volumes. D. Process X should be selected for very large production volumes. E. The crossover point is approximately 6667 units.
C
Question content area Part 1 The American Society for Quality (ASQ) defines quality as Part 2 A. the degree of excellence at an acceptable price and the control of variability at an acceptable cost. B. better performance, nicer features, and other (sometimes costly) improvements that appeal to customers. C. the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs. D. conforming to standards and "making it right the first time."
C
Question content area Part 1 Which forecasting method considers several variables that are related to the variable being predicted? Part 2 A. weighted moving average B. simple regression C. multiple regression D. exponential smoothing
C
The Arnold Palmer Hospital uses _______________ to give hospital personnel a quick, visual overview of what's happening in house, versus internal goals and external national norms. Part 2 A. scatter diagrams B. histograms C. Pareto charts D. check sheets
C
The R-chart Part 2 A. generally uses control limits set at plus or minus 2 standard deviations of the distribution, rather than plus or minus 3, which is commonly used on the x-bar chart. B. is used to measure changes in the central tendency. C. is used to indicate gains or losses in dispersion. D. control limits are computed using sample standard deviations.
C
The normal application of a p-chart is in: A. process sampling by variables. B. acceptance sampling by attributes. C. process sampling by attributes. D. acceptance sampling by variables. E. process capability ratio computations.
C
Total quality management emphasizes: A. a system where strong managers are the only decision makers. B. a process where mostly statisticians get involved. C. a commitment to quality that goes beyond internal company issues to suppliers and customers. D. the responsibility of the quality control staff to identify and solve all quality-related problems. E. ISO 14000 certification.
C
Which forecasting model is based upon salespersons' estimates of expected sales? Part 2 A. jury of executive opinion B. market survey C. sales force composite D. Delphi method
C
Which of the following is NOT a step in the forecasting process? A. Determine the use of the forecast. B. Validate and implement the results. C. Eliminate any assumptions. D. Determine the time horizon of the forecast. E. Select the forecasting model.
C
Which of the following is NOT an external failure cost? Part 2 A. returned goods B. lost goodwill C. scrap D. costs to society
C
Which of the four major categories of quality costs is particularly hard to quantify? A. prevention costs B. appraisal costs C. external failure costs D. internal failure costs E. None is hard to quantify.
C
PDCA, developed by Shewhart, stands for which of the following? Part 2 A. Problem−Develop-Solution−Check−Act B. Plan−Develop−Check−Accept C. Plan−Do−Check−Act D. Prepare−Develop−Create−Assess E. Problem−Do−Continue−Act
C
"Today's forecast equals yesterday's actual demand" is referred as Part 2 A. a moving average. B. exponential smoothing. C. the naive approach. Your answer is correct. D. the Delphi method.
D
A forecast based on the previous forecast plus a percentage of the forecast error is a(n): A. naive forecast. B. moving average forecast. C. qualitative forecast. D. exponential smoothing forecast. E. weighted moving average forecast.
D
A forecast that addresses the business cycle by predicting planning indicators is A. a demand forecast. B. an environmental forecast. C. a technological forecast. D. an economic forecast.
D
A time-series trend equation is 450 + 15x. What is your forecast for period 6? A.465 B.525 C.486 D.540 E.471
D
Effective capacity×Efficiency equals: A. design capacity. B. utilization. C. efficient capacity. D. expected output. E. actual capacity.
D
Goods made to order are typical of ________ and ________ approaches while goods made to forecast are typical of ________ and ________ approaches. A. repetitive, product; mass customization, process B. product, process; repetitive, mass customization C. product, mass customization; repetitive, process D. process, mass customization; repetitive, product E. repetitive, process; mass customization, product
D
Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to: A. obtain a product safety certificate from the Consumer Product Safety Commission. B. compare the cost of product liability to the external failure cost. C. gain ISO 9000 certification for the organization. D. determine whether any of the organization's stakeholders are being wronged by poor quality products. E. have the organization's legal staff write disclaimers in the product instruction booklets.
D
The goal of inspection is to: A. correct deficiencies in products. B. add value to a product or service. C. correct system deficiencies. D. detect a bad process immediately. E. All of the above.
D
Three broad categories of definitions of quality are: A. low-cost, response, and differentiation. B. internal, external, and prevention. C. Pareto, Shewhart, and Deming. D. user based, manufacturing based, and product based. E. product quality, service quality, and organizational quality.
D
To develop a standard or benchmark, firms need to start with Part 2 A. forming a benchmark team. B. collecting benchmarking information. C. identifying benchmarking partners. D. determining what to benchmark.
D
What is a drawing of the movement of material, product, or people? A. vision system B. process map C. process chart D. flowchart E. service blueprint
D
What mathematical technique is used when planning menu changes? Part 2 A. standard error of the estimate B. correlation analysis C. exponential smoothing D. multiple-regression analysis
D
When sample measurements falls inside the control limits, it means that: A. each unit manufactured is good enough to sell. B. the process output does not fulfill the requirements. C. the process limits cannot be determined statistically. D. if there is no other pattern in the samples, the process is in control. E. the process output exceeds the requirements.
D
Which forecast error measure provides an error percentage? Part 2 A. MAD B. MSE C. MD D. MAPE
D
Which of the following industries is most likely to have low equipment utilization? A. auto manufacturing B. television manufacturing C. commercial baking D. restaurants E. steel manufacturing
D
Which of the following is the LAST step in a forecasting system? Part 2 A. Select the items to be forecasted. B. Determine the time horizon of the forecast. C. Select the forecast model(s). D. Validate and implement the results
D
Which of the following would NOT be a concerning pattern on a control chart? Part 2 A. Five consecutive points above the central line. B. Two points very near the lower control limit C. One point above the upper control limit D. All of the above are concerning patterns on a control chart
D
Which time-series forecasting method works best if the company assumes that product demand will stay fairly steady over time? Part 2 A. Mean absolute deviation B. Exponential smoothing C. Seasonality D. Moving average
D
John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 2,500 pancakes in May, 2,200 pancakes in June, and 1,200 pancakes in July, what should be the forecast for August? (Round answer to the nearest whole number.) Part 2 A. 2,233 B. 1,200 C. 15,100 D. 1,678 E.
D
A forecasting method has produced the following over the past five months. What is the mean absolute deviation? (Round answer one decimal place.) Actual Forecast Error 10 11 −1 8 10 −2 7 6 1 6 6 0 9 5 4 A. 4.4 B. 0.4 C. 8.0 D. 4.0 E. 1.6
E
Control charts for variables are based on data that come from: A. averages of large samples. B. acceptance sampling. C. the entire lot. D. individual items. E. averages of small samples.
E
Forecasts are usually classified by time horizon into which three categories? A. departmental, organizational, and industrial B. strategic, tactical, and operational C. exponential smoothing, regression, and time series D. finance/accounting, marketing, and operations E. short-range, medium-range, and long-range
E
Given an actual demand this period of 100, a forecast value for this period of 130, and an alpha of 0.56, what is the exponential smoothing forecast for next period? (Round answer to the nearest whole number.) A.117 B. 100 C.130 D.83 E.113
E
Members of quality circles are: A. all trained to be facilitators. B. paid according to their contribution to quality. C. external consultants designed to provide training in the use of quality tools. D. always machine operators. E. None of the above; all of the statements are false.
E
Natural variations: A. are tolerated, within limits, when a process is under control. B. are the many sources of variation that occur when a process is under control. C. affect almost every production process. D. when grouped, form a pattern, or distribution. E. All of the above are true.
E
One use of short-range forecasts is to determine: A. research and development plans. B. planning for new products. C. facility location. D. cash budgeting. E. production levels.
E
Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would you recommend? A. One value outside the control limits is insufficient to warrant any action. B. The process is out of control; reject the last units produced. C. Since there is no obvious pattern in the measurements, variability is in control. D. Lower than expected dispersion is a desirable condition; there is no reason to investigate. E. Variation is not in control; investigate what created this condition.
E
The Central Limit Theorem: A. states that the average of assignable variations is zero. B. controls the steepness of an operating characteristic curve. C. states that the average range can be used as a proxy for the standard deviation. D. is the theoretical foundation of the c-chart. E. allows managers to use the normal distribution as the basis for building some control charts.
E
The two general approaches to forecasting are: A. judgmental and qualitative. B. historical and associative. C. judgmental and associative. D. mathematical and statistical. E. qualitative and quantitative.
E
Time-series data may exhibit which of the following behaviors? A. trend B. random variations C. seasonality D. cycles E. They may exhibit all of the above.
E