OM FINAL EXAM

Managers at Arnold Palmer Hospital take quality so seriously that the hospital typically is a national leader in several quality areas—so that continuous improvement is no longer necessary.

False

Time-function mapping is a flow diagram with time added to the horizontal axis.

True

To become ISO 9000 certified, organizations must a. document quality procedures b. have an onsite assessment c. have an ongoing series of audits of their products or service d. all of the above e. none of the above

d

What refers to training and empowering frontline workers to solve a problem immediately? a. just-in-time b. poka-yoke c. benchmarking d. kaizen e. service recovery

e

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

A) process control.

Which of the following elements of the factor weighting technique in supplier selection analysis does NOT contain a certain degree of subjectivity?

A) the formula used to calculate the total weighted score for each supplier

Distribution management focuses on which of the following?

A) the outbound flow of products

What does TPS stand for?

B) Toyota Production System

Sequencing (or dispatching):

C) specifies the order in which jobs should be done at each center.

________ is a continuing reconciliation of inventory with inventory records.

Cycle counting

Service blueprinting:

D) focuses on the provider's interaction with the customer.

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes which of the following?

D) the transportation method

Which of the following is NOT an input to S&OP?

E) master production schedule

Define EDI.

Electronic data interchange is a standardized data-transmittal format for computerized communications between organizations.

An enlarged job has more responsibility than the same job enriched.

False

The number of kanbans decreases as safety stock is increased.

False

The two extremes of employment stability policy are "follow demand exactly" and "keep demand constant."

False

Working around asbestos raised ethical concerns before its inherent dangers became known.

False

________ involves the ability to respond with little penalty in time, cost, or customer value.

Flexibility

________ represent an organization's attempt to gain increased efficiency through specialization, which can include, for example, concentrating on certain classes of customers.

Focused processes

________ is the Japanese word for card that has come to mean "signal."

Kanban

________ is the time between placement and receipt of an order.

Lead time

What is MRO an acronym for? What is the function of MRO inventories?

MRO inventories are devoted to maintenance/repair/operating supplies. They exist because the need and timing for maintenance and repair of some equipment are unknown.

________ is a system that allows, with MRP in place, inventory data to be augmented by other resource variables.

Material requirements planning II or material resource planning or MRP II

Bridget is considering how to get to work over the summer. She has two options. Option A is to buy a seasonal bus pass for $100. Option B is to pay $.25 for each ride. Identify the fixed and variable costs for each option. If she has to ride both to and from work, how many days of work would it take for the seasonal pass to cost the same amount as Option B?

Option A: VC = 0 FC = 100 Option B: VC = .25 FC= 0 100 = .25V, V = 400 rides, since she has to take 2 rides each time she works, she would need to work 200 days for the two options to cost the same amount.

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

Pareto analysis

________ is a process strategy based on a product-oriented production process that uses modules.

Repetitive focus

________ involves capacity decisions that determine the allocation of resources to maximize revenue or yield.

Revenue management (or Yield management)

________ is the process of sending returned products back up the supply chain for value recovery or disposal.

Reverse logistics

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is _____ days. a. 6 b. 9 c. 13 d. 17 e. cannot be determined

c

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _____ weeks. a. 6 b. 7 c. 8 d. 10 e. cannot be determined

c

For which of the following operations would a fixed-position layout be most appropriate? a. assembling automobiles b. producing TV sets c. constructing a highway tunnel or bridge d. refining of crude oil e. running an insurance agency

c

In level scheduling, what is kept uniform from month to month? a. product mix b. inventory levels c. production/workforce levels d. demand levels e. sub-contracting levels

c

The ________ is a set of processes, metrics, and best practices developed by the Supply Chain Council.

Supply Chain Operations Reference model or SCOR model

________ describes the coordination of all supply chain activities, starting with raw materials and ending with a satisfied customer.

Supply chain management

When selecting new equipment and technology, decision makers look for flexibility—the ability to respond with little penalty in time, cost, or customer value.

TRUE

Mary is considering purchasing a machine from one of two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?

The answer is that there is no demand for which Supplier B's machine will be better. Both Supplier B's fixed and variable costs are higher than Supplier A's.

A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable costs are $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacturing. The new process would have fixed costs of $90,000, and variable costs of $5. What is the crossover point for these processes? For what range of outputs is each process appropriate?

The crossover is at 1800 units annually. For volumes under 1800, the process focus is cheaper; for volumes over 1800 units, the repetitive focus is cheaper.

Mixed strategies in aggregate planning utilize inventory, work force, and production rate changes over the planning horizon.

True

Product storage is an example of waste, in the sense that no value is added.

True

Servicescape refers to the physical surrounding in which the service is delivered.

True

TPS stands for Toyota Production System.

True

________ is any deviation from the optimum process that delivers perfect product on time, every time.

Variability

________ is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor.

Vertical integration

A drawing of the movement of material, product, or people is a a. flow diagram b. process chart c. service blueprint d. process map e. none of the above

a

A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level? a. 41 b. 55 c. 133 d. 140 e. 165

a

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? a. close relationships with trust b. close relationships with skepticism c. distant relationships with trust d. distant relationships with skepticism e. none of the above

a

Industrial location analysis typically attempts to a. reduce costs b. maximize sales c. focus more on human resources d. be environmentally friendly e. none of the above

a

Which layout type assumes an adequate volume for high equipment utilization? a. product-oriented layout b. process-oriented layout c. fixed-position layout d. retail layout e. warehouse layout

a

Which of the following is a location analysis technique typically employed by a service organization? a. purchasing power analysis b. linear programming c. queuing theory d. crossover charts e. cost-volume analysis

a

Aggregate planning is capacity planning for a. the long range b. the intermediate range c. the short range d. typically one to three months e. typically three or more years

b

The process improvement technique that sorts the "vital few" from the "trivial many" is a. Taguchi analysis b. Pareto analysis c. benchmarking d. Deming analysis e. Yamaguchi analysis

b

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

b

A location decision for a traditional department store (Macy's) would tend to have a(n) b. labor focus c. revenue focus d. environmental focus e. education focus

c

A master production schedule specifies a. the raw materials required to complete the product b. what component is to be made, and when c. what product is to be made, and when d. the labor hours required for production e. the financial resources required for production

c

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 a. 8 percent b. 21 percent c. 82 percent d. 100 percent e. none of the above

c

Linking a part requirement with the parent component that caused the requirement is referred to as a. net requirements planning b. a time fence c. pegging d. kanban e. leveling

c

One of the elements of ergonomics is a. allocating work time based on economic studies b. the cost justification of technology c. designing tools and machines that facilitate human work d. the use of automation in a manufacturing organization e. the establishment of time standards

c

Tangible costs include which of the following? a. climatic conditions b. availability of public transportation c. taxes d. quality and attitude of prospective employees e. zoning regulations

c

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic? a. Gross Requirements b. Scheduled Receipts c. Projected On Hand d. Net Requirements e. Planned Order Receipts

c

Which of the following is not an advantage of level scheduling? a. stable employment b. lower absenteeism c. matching production exactly with sales d. lower turnover e. more employee commitment

c

Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to minimize holding costs e. All of the above are functions of inventory.

d

A job shop is an example of a(n) a. repetitive process b. continuous process c. line process d. intermittent process e. specialized process

d

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 a. internal benchmarking b. Six Sigma c. ISO 9000 d. Taguchi concepts e. process control charts

d

Advances in technology a. have impacted the manufacturing sector only b. have had only limited impact on services c. have failed to change the level of customer interaction with an organization d. have had dramatic impact on customer interaction with services and with products e. have dramatically changed health care, but have not changed retailing

d

Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all a. indicators of imbalance on an assembly line b. indicators that cross-docking has been successful c. elements of customization in a warehouse layout d. elements of servicescapes e. elements of successful office layouts

d

Based on his 14 Points, Deming is a strong proponent of a. inspection at the end of the production process b. an increase in numerical quotas to boost productivity c. looking for the cheapest supplier d. training and knowledge e. all of the above

d

Management and labor share the labor cost reductions in which of these compensation schemes? a. bonus system b. quota system c. Scantron plan d. Scanlon plan e. measured day work plan

d

Shadow boards and foot printing are elements of a. the Hawthorne studies b. workplace noise reduction c. project management in service firms d. the visual workplace e. specialization of labor

d

The term "China price" has become interchangeable with a. negotiated price b. fixed exchange rates c. price of the lowest quality item d. lowest price possible e. price multiplier based on the Hong Kong stock exchange level

d

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. removal of engineering changes e. All of the above are goals of JIT partnerships.

d

Which of the following is true regarding vision systems? a. They are consistently accurate. b. They are modest in cost. c. They do not become bored. d. All of the above are true. e. None of the above is true.

d

Which of the following is usually not one of the top considerations in choosing a country for a facility location? a. availability of labor and labor productivity b. exchange rates c. attitude of governmental units d. zoning regulations e. location of markets

d

Which of the following statements about the basic EOQ model is false? a. If the setup cost were to decrease, the EOQ would fall. b. If annual demand were to increase, the EOQ would increase. c. If the ordering cost were to increase, the EOQ would rise. d. If annual demand were to double, the EOQ would also double. e. All of the above statements are true.

d

Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane? a. process-oriented layout b. fixed-position layout c. focused factory d. product-oriented layout e. work cell layout

d

Which one of the following is not a requirement of JIT systems? a. quality deliveries on time b. low setup time c. training support d. strong job specialization e. employee empowerment

d

Which of these statements about the production order quantity model is false? a. The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous. b. Because receipt is noninstantaneous, some units are used immediately, not stored in inventory. c. Average inventory is less than one-half of the production order quantity. d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity. e. None of the above is false.

d

Which one of the following technologies is used only for material handling, not actual production or assembly? a. robots b. CNC c. CAD d. AGVs e. FMS

d

In the production order quantity model, the fraction of inventory that is used immediately and not stored is represented by the ratio of ________.

demand rate to production rate

An item's holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 weeks. EPP is a. .005 b. 60 c. 72 d. 100 e. 200

e

Process redesign a. is the fundamental rethinking of business processes b. can focus on any process c. tries to bring about dramatic improvements in performance d. focuses on activities that cross functional lines e. all of the above

e

The minimum record accuracy required for successful MRP is approximately a. lower than 90% b. 90% c. 95% d. 97% e. 99%

e

Which of the following statements best compares modular bills and phantom bills? a. Both pertain to assemblies that are not inventoried. b. There is no difference between the two. c. Both pertain to assemblies that are inventoried. d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills. e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

e

The ________ is the time between the arrival of raw materials and the shipping of finished products.

manufacturing cycle time

The process strategy that is organized around processes to facilitate low-volume, high-variety processes is called a(n) ________.

process focus

How does the pursuit of a response strategy impact the supply chain decisions of: (1) primary supplier selection criteria, (2) supply chain inventory, (3) distribution network, and (4) product design characteristics?

(1) Suppliers should be selected primarily based on capacity, speed, and flexibility. (2) The firm should use buffer stocks to ensure speedy supply. (3) The firm should use fast transportation, and it should provide premium customer service. (4) Products should have low setup times, and they should be poised for rapid production ramp-up.

Identify the ten opportunities in managing the integrated supply chain.

(1) accurate "pull" data; (2) lot size reduction; (3) single-stage control of replenishment; (4) vendor-managed inventory; (5) collaborative planning, forecasting, and replenishment (CPFR); (6) blanket orders; (7) standardization; (8) postponement; (9) electronic ordering and funds transfer; (10) drop shipping and special packaging

Supply chain managers outsource logistics to meet what three goals?

(1) drive down inventory investment; (2) lower delivery costs; (3) improve delivery reliability and speed

Identify three common occurrences that contribute to distortions of information about what is really occurring in the supply chain.

(1) local optimization; (2) incentives (sales incentives, quantity discounts, quotas, and promotions); (3) large lots

Identify nine areas of technology that enhance production and productivity.

(1) machine technology, (2) automatic identification systems (AIS), (3) process control, (4) vision systems, (5) robots, (6) automated storage and retrieval systems (ASRSs), (7) automated guided vehicles (AGVs), (8) flexible manufacturing systems (FMSs), and (9) computer-integrated manufacturing (CIM)

Identify three common features of contracts between buyers and suppliers.

(1) quantity discounts; (2) buybacks; (3) revenue sharing

Identify the four types of inventory.

(1) raw material inventory; (2) work-in-process inventory; (3) maintenance/repair/operating supply (MRO) inventory; and (4) finished-goods inventory

Identify the four stages of supplier selection.

(1) supplier evaluation; (2) supplier development; (3) negotiations; (4) contracting

By convention, what is the top level in a product structure?

A) level 0

Warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions?

A) purchasing

By which distribution system is more than 90 percent of U.S. coal shipped?

A) railroads

Which of the following are all strategies for improving productivity in services?

A) separation, self-service, automation, and scheduling

Which of the following actions is consistent with the use of level scheduling?

A) use inventory to meet demand requirements

________ is a computer-controlled warehouse that provides for the automatic placement of parts into and from designated places within the warehouse.

Automated storage and retrieval system or ASRS

Which of the following statements regarding the production order quantity model is TRUE?

B) It relaxes the assumption that all the order quantity is received at one time.

Which of the following characteristics best describes repetitive focus?

B) Its output is a standardized product produced from modules.

What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 20, and a variance of orders equal to 450?

C) 1.125

What is the typical time horizon for aggregate planning?

C) 3 to 18 months

JIT makes quality cheaper because:

C) JIT prevents long runs of defects.

Most inventory models attempt to minimize:

C) total inventory-based costs.

Who is credited with coining the phrase, "Inventory is evil"?

D) Shigeo Shingo

The purpose of safety stock is to:

D) control the likelihood of a stockout due to variable demand and/or lead time.

A job shop is an example of a(n):

D) intermittent process.

Arnold Palmer Hospital uses which focus?

D) mass customization

Forward scheduling:

D) starts the schedule as soon as the job requirements are known.

One of the similarities between process focus and mass-customization is:

D) the variety of outputs.

Capacity planning in closed-loop MRP:

E) All of the above are true.

Which of the following statements about the basic EOQ model is TRUE?

E) All of the above statements are true.

Maintaining a stable workforce generally results in the firm paying higher wages than a firm that follows demand.

False

With level schedules, a few large batches, rather than frequent small batches, are processed.

False

________ determine the sequence of jobs in process-oriented facilities.

Priority rules

________ is the use of information technology to control a physical process.

Process control

________ is extra stock that is carried to serve as a buffer.

Safety stock

Optical checkout scanners and ATMs are examples of technology's impact on services.

TRUE

The term focused processes refers to the quest for increased efficiency, whether in goods or services, that results from specialization.

TRUE

A fishbone chart is also known as a

cause-and-effect diagram

"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 a. Vilfredo Pareto b. Armand Feigenbaum c. Joseph M. Juran d. W. Edwards Deming e. Philip B. Crosby

d

Provide an example of the focus strategy for improving service productivity.

The focus strategy refers to restricting the offerings. Examples will vary, but a restaurant with a limited menu would be one example.

________ are a way of allowing a segment of the master schedule to be designated as "not to be rescheduled."

Time Fences

All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle d. it states that all items require the same degree of control e. it states that there are the critical few and the trivial many inventory items

d

If setup costs are reduced by substantial reductions in setup time, the production order quantity is also reduced.

True

In ABC analysis, "A" Items are the most tightly controlled.

True

Job rotation is an example of job enlargement.

True

Nearly any business activity can be outsourced.

True

The transportation method of linear programming is an optimizing approach to aggregate planning.

True

________ rely on a variety of supplier relationships to provide services on demand.

Virtual companies

The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are a. 115 b. 175 c. 240 d. 690 e. 700

a

Which of the following is a location analysis technique typically employed by a manufacturing organization? a. transportation method b. queuing theory c. correlation analysis and traffic counts d. simulation e. demographic analysis

a

Which of the following lot-sizing techniques results in the lowest holding costs? a. lot-for-lot b. EOQ c. part-period balancing d. Wagner-Whitin algorithm e. the quantity discount model

a

Which one of the following is an example of JIT being used for competitive advantage? a. Jones Company has decreased the number of job classifications to just a few. b. Lafourche Metals increases the number of its suppliers to be less dependent on just a few. c. Houma Fabricators is proud to announce that incoming goods are inspected. d. Acme Company tells its maintenance department to intervene only if a machine breaks down. e. Caro Specialty Metals, Inc. has built a new, huge warehouse to store inventory.

a

"Poka-yoke" is the Japanese term for a. card b. foolproof c. continuous improvement d. fishbone diagram e. just-in-time production

b

Dependence on an external source of supply is found in which of the following aggregate planning strategies? a. varying production rates through overtime or idle time b. subcontracting c. using part-time workers d. back ordering during high demand periods e. hiring and laying off

b

In aggregate planning, which one of the following is not a basic option for altering demand? a. promotion b. subcontracting c. back ordering d. pricing e. All are demand options.

b

Production and/or shipping costs are always considered in which of the following location decision methods? a. factor rating method b. transportation method c. locational break-even analysis d. center-of-gravity method e. crossover analysis

b

Which of the following aggregate planning strategies might direct your client to a competitor? a. using part-time workers b. subcontracting c. changing inventory level d. varying production rates through overtime or idle time e. varying work force size by hiring or layoffs

b

What is the practice of procuring from external sources services or products that are normally part of an organization? a. nearshoring b. farshoring c. offshoring d. outsourcing e. backsourcing

d

Which of the following is an ergonomics issue with ethical implications? a. job enrichment b. equal opportunity c. equal pay for equal work d. a noisy workplace e. foot printing

d

Inventory that separates various parts of the production process performs a(n) ________ function.

decoupling

ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality b. unit price c. the number of units on hand d. annual demand e. annual dollar volume

e

Balancing low-cost storage with low-cost material handling is important in a(n) a. fixed-position layout b. process-oriented layout c. office layout d. repetitive and product-oriented layout e. warehouse layout

e

Managers should seek to control such work environment factors as a. illumination b. noise and vibration c. temperature d. air quality e. all of the above

e

When a worker has a say in the work methods that he/she wishes to utilize, his/her job is characterized by a. skill variety b. job identity c. job significance d. feedback e. autonomy

e

Which of the following is not a limitation of job expansion? a. higher capital cost b. higher wage rates c. smaller labor pool d. higher training costs e. All of the above are limitations of job expansion.

e

Which of the following is not a work environment issue with ethical implications? a. hazardous materials in the workplace b. equal opportunity c. equal pay for equal work d. danger on the job e. All of the above have ethical implications.

e

Which of the following products is likely to be assembled on a repetitive process line? a. automobiles b. personal computers c. dishwashers d. television sets e. all of the above

e

Poka-yoke is the Japanese term for

foolproof

The 4 M's of cause-and-effect diagrams are

material, machinery, manpower, and methods

Pareto charts are used to

organize errors, problems, or defects

The strategy for improving service productivity that customizes at delivery, rather than at production, is ________.

postponement

A(n) ________ model gives satisfactory answers even with substantial variations in its parameters.

robust

Based on his 14 points, Deming is a strong proponent of

training and knowledge

A flowchart with the addition of a time axis becomes a process chart.

FALSE

Activity times should not be included in a service blueprint.

FALSE

An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

FALSE

Flowcharts use distance, but not time, to show the movement of material, product, or people through a process.

FALSE

Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.

FALSE

Production technology has had a major impact on services, but as yet there has been little reduction in service labor requirements.

FALSE

Professional services typically require low levels of labor intensity.

FALSE

Successful process redesign focuses on departmental areas where small, continuous improvements can be made.

FALSE

The typical full-service restaurant uses a product-focused process.

FALSE

"Phantom bills" are bills of material for subassemblies that do not exist in reality.

False

"Visual workplace" is a term coined by Hawthorne, and refers to the need for proper lighting at employee workstations.

False

A client firm should not include its home country when conducting a country risk assessment.

False

A decision tree for analyzing capacity would have future demands or market favorability as the decision alternatives.

False

A decision tree indicates at what quantity profit changes from negative to positive.

False

A dependent demand item is so called because its demand is dependent on customer preferences.

False

A fabrication line and an assembly line are both types of repetitive and product-focused layout, but only the fabrication line utilizes workstations.

False

A firm that outsources its internal business activities is called the outsource provider.

False

A firm that provides outsourcing activity is called the client firm.

False

A focused work center is well suited to the production of a large family of products requiring similar processing, even if their demands are not very stable.

False

A product requires 24 separate tasks, and the sum of those task times is 14 minutes; if the cycle time is 2 minutes, then at least 12 workstations will be needed.

False

A push system means providing the next station with exactly what is needed when it is needed.

False

ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.

False

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

False

According to the global company profile, Amazon.com's advantage in inventory management comes from its almost fanatical use of economic order quantity and safety stock calculations.

False

Advertising and promotion are methods of manipulating product or service supply in aggregate planning.

False

At the economic order quantity, holding costs are equal to purchasing costs.

False

Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.

False

Because service firms do not inventory their output, pure chase strategy is not appropriate.

False

Because various employment laws now require it, "equal pay for equal work" is no longer an ethical concern in the work environment.

False

Break-even analysis identifies the volume at which fixed costs and revenue are equal.

False

Break-even analysis is a powerful analytical tool, but is useful only when the organization produces a single product.

False

Building an additional warehouse is an incremental expansion, not a one-step expansion

False

By convention, the top level in a bill of material is designated level 1.

False

CRAFT is software for balancing assembly lines.

False

Capacity decisions are based on technological concerns, not demand forecasts.

False

Core competencies are good candidates for outsourcing.

False

Customer demand will always remain an unknown, so it is not considered a source of variation.

False

Cycle counting is an inventory control technique exclusively used for cyclical items.

False

Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making.

False

Ergonomics is a branch of economics that deals with costs of scheduling workers.

False

FedEx chose Memphis, Tennessee, for its central location, or "hub," primarily because of the incentives offered by the city of Memphis and the state of Tennessee.

False

For a location decision, labor productivity may be important in isolation, but low wage rates are a more important criterion.

False

Fredrick W. Taylor is credited with introducing psychology into the workplace.

False

Generally, the objective of the location decision is to maximize the firm's profit.

False

Heuristics are problem-solving procedures that mathematically optimize the solution.

False

In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.

False

In a JIT system, product inspection adds value by identifying defective items.

False

In location decisions, intangible costs are easier to measure than tangible costs.

False

In the quantity discount model, the cost of acquiring goods (product cost) is not a factor in determining lot size.

False

In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.

False

In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

False

Increasing inventory exposes variability in production processes.

False

Industrial location decisions often assume that costs are relatively constant for a given area.

False

Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

False

JIT brings about competitive advantage by faster response to the customer regardless of cost.

False

JIT systems carry inventory just in case something goes wrong.

False

Job expansion can lead to increased labor cost because of the extra workers hired in the expansion.

False

Labor specialization includes the development of specialized tools to reduce labor costs.

False

Level scheduling means producing at a constant rate, regardless of customer demands.

False

Location decisions are based on many things, including costs, revenues, incentives, attitudes, and intangibles, but not on ethical considerations.

False

MRP can be effective only if very accurate lot sizes are calculated in advance.

False

MRP is an excellent tool for scheduling products with variable lead times.

False

Mutual trust means that both management and employee strive to meet common objectives.

False

Of the several determinants of service quality, access is the one that relates to keeping customers informed in language they can understand.

False

Offshoring is the practice of procuring from foreign external sources services or products that are normally part of an organization.

False

One of the demand options of aggregate planning is to vary the workforce by hiring or firing.

False

Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.

False

Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.

False

PDCA, developed by Shewhart, stands for Plan-Develop-Continue-Act

False

Plans for new product development generally fall within the scope of aggregate planning.

False

Process maps use distance, but not time, to show the movement of material, product, or people through a process.

False

Process-oriented layouts typically have low levels of work-in-process inventory.

False

Product-oriented layouts tend to have high levels of work-in-process inventories.

False

Production technology has had a major impact on services, but as yet there has been little reduction in service labor requirements.

False

Professional services typically require low levels of labor intensity.

False

Profit-sharing is a motivation and incentive system where executives receive stock options.

False

Psychological factors have little relevance in the design of assembly line jobs since they involve physical products and production technology.

False

Safety stock in inventory systems depends only on the average demand during the lead time.

False

Self-directed teams tend to be successful in work environments where there is little employee empowerment.

False

Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning.

False

Some business activities, such as human resources and legal processes, cannot be outsourced.

False

Starbucks Coffee's approach to choosing new café locations is largely based on executive intuition, not sophisticated models and site selection technology.

False

Successful process redesign focuses on departmental areas where small, continuous improvements can be made.

False

TPS stands for Total Production Streamlining.

False

The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how much of which products is to be made at what times.

False

The EOQ model is best suited for items whose demand is dependent on other products.

False

The Hawthorne studies, which showed that there is a dynamic social system in the workplace, took place in the 1960s.

False

The Japanese use the term poka-yoke to refer to continuous improvement

False

The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.

False

The aggregate planning process usually includes expediting and dispatching of individual products.

False

The balancing of work cells uses the same procedures as the balancing of an assembly line.

False

The biggest advantage of a product layout is its flexibility to handle a varied product mix.

False

The center-of-gravity method finds the location of a centralized facility, such as a distribution center, that will maximize the organization's revenue.

False

The dominant problem associated with the fixed-position layout is that workers are fixed in position, and cannot be reassigned.

False

The economic part period is a fraction of a time bucket.

False

The layout approach that addresses trade-offs between space and material handling is called the fixed position layout.

False

The level scheduling strategy allows lower inventories than the pure chase strategy.

False

The location decisions of goods-producing firms will generally pay more attention to parking, access, and traffic counts than will service location decisions.

False

The master production schedule is a forecast of demand for families of products.

False

The minimum number of workstations depends upon the set of task times and the precedence chart, but not the number of units scheduled.

False

The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.

False

The number-one reason driving outsourcing for many firms is to focus on core competencies.

False

The only objective of aggregate planning is to minimize the cost of matching capacity to demand over the planning period.

False

The physical environment in which employees work may affect the quality of work life, but it does not affect their performance and safety.

False

The purpose of labor standards is to accurately define the skills required to complete a job.

False

The quality management tool called poka-yoke is not relevant to JIT systems.

False

The term "India price" has become the global benchmark—interchangeable with "lowest price possible."

False

The term "Mexico price" has become the global benchmark—interchangeable with "lowest price possible."

False

The term renewal has been created to describe the return of business activity to the client firm.

False

The theory of competitive advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

False

The transportation model calculates an optimal shipping system between a central facility and several outlying customers.

False

The work cell layout, a special arrangement of machinery and equipment to focus on the production of a single product or group of related products, is for manufacturing applications and has no relevance to services.

False

U.S. government data suggest that foreigners outsource far fewer services to the U.S. than American companies send abroad.

False

Utilization is the number of units a facility can hold, receive, store, or produce in a period of time.

False

Utilization of the total "cube" is the dominant consideration in office layout.

False

Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management.

False

Work-in-process inventory is devoted to maintenance, repair, and operations.

False

________ uses computerized short-term scheduling to overcome the disadvantages of rule-based systems by providing the user with interactive computing and graphical output.

Finite capacity scheduling

Why do modern operations managers look for flexibility in their equipment?

Flexibility in equipment provides managers with the ability to respond to changes in demand with little penalty in time, cost, or customer value. And in this age of rapid technological change and short product life cycles, adding flexibility to the production process can be a major competitive advantage.

What is the link between focused processes and specialization? What kinds of focus are possible?

Focused processes are a means of obtaining increased productivity through forms of specialization. Focus can take several forms, including concentrating on specific classes of customers, working only with products in selected product families, specializing in a specific service, or working with a narrow range of technology.

In an affluent society, how do we produce a wide number of options for products at low cost?

For mass customization, products should be built-to-order. Product design must be imaginative. Process design must be flexible and able to accommodate changes in both design and technology. Inventory management requires tight control. Tight schedules are needed that track orders and material from design through delivery. Responsive partners in the supply chain can yield effective collaboration.

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

From formula (S11-1), we notice that when S increases, (1 - S) decreases; therefore, the disruption risk probability due to all suppliers individually failing at the same time receives less weight. In other words, there's a higher chance that all will be disrupted by a super-event anyway, so there is less incentive to increase the supplier base to handle the case where every supplier has a unique-event at the same time. Mathematically, the impact of a higher n in the second term is smaller because it's being multiplied by (1 - S), which is smaller. Having said that, a larger S does increase the overall probability of total disruption, so it's never a desired occurrence--it just means that simply adding more suppliers may not be quite as effective of a mitigation strategy. On the other hand, when U increases, the impact of the second term of formula (S11-1) increases, so adding another supplier (raising n by 1) has even more impact. This makes sense--the greater the chance that each supplier will individually fail, the more likely it is that we will want more suppliers.

________ are planning charts used to schedule resources and allocate time.

Gantt charts

______ for developing aggregate plans work with a few variables at a time and are easy to understand and use.

Graphical Techniques

Describe the difference between a fixed-quantity and a fixed-period inventory system?

In a fixed-quantity inventory system, when the quantity on hand reaches the reorder point, an order is placed for the specified quantity. In a fixed-period inventory system, an order is placed at the end of the review period. The quantity ordered is that needed to bring inventory up to a specified level.

Describe vendor-managed inventory (VMI). How is it related to outsourcing? Cite an example from your experiences as a shopper.

In vendor-managed inventory, the supplier maintains material for the buyer, often delivering directly to the buyer's using department. It is a form of outsourcing, because the buying firm has transferred the shipping, stocking, and receiving tasks to an external vendor. There are many instances of VMI in today's retail model, e.g., shelves of snack foods and soft drinks are routinely managed by the distributor, not the retailer.

The ________ is an organization that has developed principles and standards for ethical supply management conduct.

Institute for Supply Management

What is a fixed-period system?

It is a system in which inventory orders are made at regular time intervals.

An approach to sequencing that can handle the situation where jobs must pass through two or more work centers in a fixed sequence is ________.

Johnson's rule

________ is the minimum inventory necessary to keep a perfect system running.

Just-in-time inventory

________ is a Japanese term that describes suppliers who become part of a company coalition.

Keiretsu

________ allows manufacturing work cells and offices to be easily rearranged.

Layout flexibility

________ involve scheduling products so that each day's production meets the demand for that day.

Level schedules

________ maintains a constant output rate, or work force level, over the planning horizon.

Level scheduling

________ is the assignment of jobs to work or processing centers.

Loading

________ is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.

Logistics management

________ is a lot-sizing technique that generates exactly what is required to meet the plan.

Lot-for-lot

Kirstin is thinking about opening a Chinese restaurant and needs to buy a rice cooker. Machine A has fixed costs of $100 and variable costs of $1/pound. Machine B has fixed costs of $500 and variable costs of $.1/pound. If Kirstin plans to sell 100 pounds of rice, which machine should she choose? What is the cross-over point?

Machine A costs 100 + 1(100) = $200 Machine B costs $500 + .1(100) = $510 Thus she should buy machine A. Crossover occurs when 100+V = 500 + .1V, or V = 444.4 pounds of rice

________ is a rapid, low-cost production process that caters to constantly changing unique customer desires.

Mass customization

What is mass customization?

Mass customization is rapid, low-cost production of goods and services that fulfill increasingly unique customer desires. It brings us the variety of products traditionally provided by the process focus, with low costs associated with standardized high volume production (the product focus).

________ is a dependent demand technique that uses a bill of material, inventory, expected receipts, and a master production schedule to determine material requirements.

Material requirements planning or MRP

How are modules useful in manufacturing processes?

Modules are parts or components of a product previously prepared. By using modules, the final product can be quickly assembled. Using a different combination of modules allows for quasi-customization.

A manufacturing plant averaged $740 of raw materials, $230 of work-in-process inventory, and $1030 of finished goods inventory during the month. If the cost of goods sold this month amounted to $10,000, what is the inventory turnover for the month?

Monthly cost of goods sold / Inventory Investment = $10,000 / ($740 + $230 + $1030) = 5

________ are the result of adjusting gross requirements for inventory on hand and scheduled receipts.

Net material requirements (or Net requirements plans)

A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable cost = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

Old: TR = $40,000, TC = $16,000, therefore Profit = $24,000. New: TR = $80 × 400 = $32,000, TC = $24,000 + $10 × 400 = $28,000, for a profit of $4,000. The manager should not change. The larger repetitive process is less profitable than the smaller process-focused shop.

Karla's candle factory is considering two different manufacturing options. Option A is highly automated with fixed costs of $25,000 and variable costs of $.1/candle. Option B uses hand labor with fixed costs of $10,000 and variable costs of $.5/candle. If demand for Karla's candles is 25,000, which option should she pick?

Option A: $25,000 + .1(25,000) = $27,500 Option B: $10,000 + .5(25,000) = $22,500 Karla should pick Option B

How are outsourcing and vertical integration related? Can a single firm successfully do both?

Outsourcing transfers what were traditional internal activities to outside vendors. It is a way of increasing specialization which allows the firm to focus on its core strengths, and not try to do all possible tasks. Vertical integration is much the opposite, decreasing a firm's specialization so that it can perform additional functions along its supply chain. Vertical integration has become increasingly difficult in the face of increasing specialization. It seems unlikely that firms that make significant use of outsourcing would do much vertical integration, but it is possible that a firm's set of competitive advantages would support outsourcing in some functions and vertical integration in others.

Identify three specific measures that indicate how well assets are utilized. What are the formulas for each measure?

Percent invested in inventory = (Total inventory investment/Total assets) × 100 Inventory turnover = Cost of goods sold/Inventory investment Weeks of supply = Inventory investment/(Annual cost of goods sold/52 weeks)

A(n) ________ is a bill of material for components, usually subassemblies, that exist only temporarily; they are never inventoried.

Phantom bill of material

_______ involves delaying any modifications or customization to the product as long as possible in the production process.

Postponement

Identify the four basic process strategies, and describe them in a complete sentence or two each.

Process focus is a job shop—high variety and low volume; repetitive focus is an assembly line—relatively standardized products with options from modules; product focus is for high volume, low-variety, products, such as oil refining and flour milling; and mass customization is for high volume, high variety.

________ is the fundamental rethinking of business processes to bring about dramatic improvements in performance.

Process redesign

What is e-procurement?

Purchasing facilitated through the Internet.

________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Raw material

Identify the typical elements in a process control system.

Sensors collect data, which are read on a periodic basis. Measurements are digitized and transmitted to a computer. Computer programs read the file and analyze the data. Output is produced in the form of signals, diagrams, charts, messages, etc.

________ determines the order in which jobs should be done at each work center.

Sequencing

________ is a process analysis technique that focuses on the customer and the producer's interaction with the customer.

Service blueprinting

________ is the complement of the probability of a stockout.

Service level

Define shrinkage. Identify three or more examples of shrinkage.

Shrinkage is retail inventory that is unaccounted for between receipt and sale. Examples will vary, but may include damage and theft as well as sloppy paperwork.

________ involves reducing the number of variations in materials and components as an aid to cost management.

Standardization

A grocery chain is interested in exploring the impact effective supply chain management would have. Suppose that for every $1 of sales, 4% is profit, 50% is spent in the supply chain, and the remaining 46% is evenly divided between fixed and production costs. If the chain can save $1 in the supply chain it would take how many dollars of increased sales to have the same increase in profit? Assume that fixed costs are fixed so that the portion of increased sales allocated to fixed costs is instead profit (27% profit margin combined now).

Suppose initially the firm sells $100 of merchandise. $50 is spent in the supply chain, $23 in fixed costs, $23 in variable costs, and $4 is profit. An increase in sales of $X would increase revenue by X but increase costs by X ∗ (.5 + .23). Therefore profit would be increased by revenue - costs = X - (.73X). Therefore .27X(profit % ∗ sales) = 1(profit req) and solving gives X = $3.70 of increased sales yields an additional $1 of profit.

A firm's process strategy is its approach to transforming resources into goods and services.

TRUE

A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

TRUE

Automated storage and retrieval systems are commonly used in distribution facilities of retailers.

TRUE

Flexible manufacturing systems, because of easily changed control programs, are able to perform such tasks as manufacturing one-of-a-kind parts economically.

TRUE

In process-focused facilities, utilization of facilities is low.

TRUE

Intermittent processes are organized around processes.

TRUE

One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.

TRUE

Process control is the use of information technology to monitor and control a physical process.

TRUE

Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

TRUE

The assembly line is a classic example of a repetitive process.

TRUE

The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.

TRUE

Time-function mapping is a flowchart with time added to the horizontal axis.

TRUE

A working MRP system allows a firm to react to even minor changes in production requirements. Discuss both the advantage and disadvantage of having such ability.

The advantage is that it allows the firm to react quickly and, conceivably, to minimize costs. The disadvantage is that the reaction to a large number of minor changes may introduce instability (nervousness) into the purchasing and production departments, which can create havoc.

What are several advantages of shipping by truck?

The advantages of shipping by truck include flexibility, on-time behavior, no damage, paperwork in order, and low cost.

A company is deciding where to assign its summer intern. The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue) by $25,000. If sales (revenue) is divided into the three categories shown in the table, where should the manager assign the intern to maximize profits?

The intern would save $10,000 in the supply chain, or show a profit of $10k. Profit from the increase in sales would be equal to revenue - costs. If revenue is X, then costs would be (.35+.25)X. Thus profit would be X - .6X or simply .4X. $25,000(.4) = $10,000 so the manager is neutral on where to assign the intern.

Provide an example of the postponement strategy for improving service productivity.

The postponement strategy refers to customizing the product at delivery, not at production. Examples will vary, but a home builder might leave some tasks unfinished until the house is sold, so that the buyer can make those final decisions. Carpeting, paint colors, cabinet doors, and some appliance choices might be good examples. Another example would be cars or vans.

As the corporate and operations management strategies vary from low cost to response to differentiation, how does this impact the criteria used for selecting suppliers?

The supply chain must support the operations management strategy. For a firm using the low-cost strategy, supplier selection should be based primarily on cost. When using the response strategy, the selection criteria are capacity, speed, and flexibility. For the differentiation strategy, the supplier is selected based on product development skills, the degree to which it is willing to share information, and the degree to which it can jointly and rapidly develop new products.

Of all areas of the organization, why is the supply chain especially vulnerable to ethical lapses?

The supply chain offers more opportunities for ethical issues than some other functions in the organization. Some of these opportunities arise from the large sums of money involved. Perhaps these opportunities arise because of the close and long-term personal contact between buyer and seller. Globalization adds even more complexity to the decisions made in the supply chain.

What are the three classic negotiation strategies? Briefly describe each of them.

The three classic strategies for negotiating with suppliers are the cost-based model, the market-based price model, and competitive bidding. In the cost-based model, contract price is a function of supplier costs, such as those for time and materials. In the market-based price model, price is set by some form of published, auction, or index price. Competitive bidding may be used when vendors are not open to the cost-based model, or where information is not perfect enough for market-based pricing. Bidding policies usually require that the purchasing agent has several potential suppliers and quotations from each.

Identify some technological advances that can serve to improve logistics management and also improve shipping security.

They include devices that can detect a broken seal on a shipping container; devices that can detect whether a container is in motion; devices that sense and transmit temperature and radioactivity; and devices that can transmit truck or container location, content, and condition.

If the explosion of the bill of material tells MRP how much of each part is needed, how does MRP learn when each of these parts is needed?

Timing is established with the time-phased product structure, which turns a bill of material on its side and adds lead times for each component. Each component is then offset to accommodate lead times.

Explain why once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may well increase compared to the optimal number of facilities based on total logistics costs only. Include details about the behavior of relevant cost and revenue elements.

Total logistics costs are comprised of inventory, transportation, and facility costs. While inventory and facility costs always increase in the number of facilities, transportation costs first decline steeply, then rise. This causes the total logistics cost curve to first decline, then rise, suggesting a certain optimal number of facilities. However, on the revenue side, increasing the number of facilities always decreases response time, which should increase revenue (better customer service). Therefore, when these revenue implications are considered, the total profit (revenue - cost) may suggest more facilities than a cost analysis alone would imply.

TPS stands for ________.

Toyota Production System

What is the trucking industry doing to improve efficiency?

Trucking firms are using computers to monitor weather, find the most effective route, reduce fuel cost, and analyze the most efficient way to unload. To improve logistics efficiency, the industry is establishing Web sites such as Schneider National's connection (www.schneider.com), which lets shippers and truckers find each other.

A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item.

True

A cause-and-effect diagram helps identify the sources of a problem

True

A checklist is a type of poka-yoke

True

A firm that outsources its internal business activities is called the client firm.

True

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishability of services inventory.

True

A kanban system requires little variability in lead time because shortages have their impact on the entire productive system.

True

A major challenge in inventory management is to maintain a balance between inventory investment and customer service.

True

A process-oriented layout is the traditional way to support a product differentiation strategy.

True

A scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met.

True

A useful tactic for increasing capacity is to redesign a product in order to get more throughout.

True

Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

True

Aggregate planning in manufacturing ties organizational strategic goals to a production plan.

True

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

True

An example of an intangible cost, as it relates to location decisions, is the quality of education.

True

An operations chart, or right-hand/left-hand chart, points out wasted motion and idle time.

True

An organization's unique skills, talents, and capabilities are referred to as its core competencies.

True

Category management is the use of computer software to evaluate the profitability of merchandising plans.

True

Changes in capacity may lead, lag, or straddle the demand.

True

Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

True

Controlling the cost of labor in services involves quick response to consumer demand, on-call labor for unexpected demand, flexibility of labor for reallocation, and flexibility of hours or rate of output of individual workers.

True

Cross-docking processes items as they are received, rather than placing them in storage; this helps explain why "warehouses" are now called "distribution centers."

True

Cross-training is a common JIT tactic to improve flexibility.

True

Cycle time is the maximum time that the product is allowed at each work station.

True

DRP is a time-phased stock-replenishment plan for all levels of a distribution network.

True

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

True

Disaggregation is the process of breaking the aggregate plan into greater detail; one example of this detail is the Master Production Schedule.

True

Equitable pay alone cannot achieve a reasonable quality of work life in an organization.

True

Expected output is sometimes referred to as rated capacity.

True

Finding an ideal mixed strategy is complicated by the huge number of possible strategies.

True

Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.

True

Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.

True

Fixed costs are those costs that continue even if no units are produced.

True

Flexible manufacturing systems, because of easily changed control programs, are able to perform such tasks as manufacturing one-of-a-kind parts economically.

True

Flextime is a system that allows employees, within limits, to determine their own work schedules.

True

Graphical techniques are easy to understand and use, but are not well-suited for generating optimal strategies.

True

Gross material requirements do not take into account the amount of inventory on hand.

True

Hackman and Oldham's five desirable characteristics of job design include job significance and autonomy.

True

Hidden problems are generally uncovered during the process of reducing inventory.

True

High levels of efficiency at Anheuser-Busch are the result of excellence in aggregate planning and in high facility utilization.

True

If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.

True

If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.

True

If parts and subassemblies common to a variety of products are managed through the supermarket concept, formal order releases for such parts are not necessary.

True

If setup times and costs can be reduced enough, the JIT ideal of "Lot Size = 1" can be achieved.

True

If the schedule calls for the production of 120 units per day and 480 minutes of production time are available per day, the cycle time should be 4 minutes.

True

In aggregate planning, one of the adjustable elements of capacity is the extent of subcontracting.

True

In aggregate planning, the amount of overtime and the size of the work force are both adjustable elements of capacity.

True

In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification.

True

In general, the lot-for-lot approach should be used whenever economical.

True

In process-focused facilities, equipment utilization is low.

True

In selecting new equipment and technology, decision-makers look for flexibility—the ability to respond with little penalty in time, cost, or customer value.

True

In the production order quantity (POQ) model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a larger lot size than in an otherwise identical EOQ problem.

True

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.

True

Intermittent processes are organized around processes.

True

Internal failure costs are associated with scrap, rework, and downtime.

True

Inventory has only one positive aspect, which is availability; inventory has several negatives, including increased material handling, obsolescence, and damage.

True

JIT suppliers have concerns that the JIT firm's demands for small lot sizes are simply a way of transferring holding cost from manufacturer firm to the supplier firm.

True

Job lots are groups or batches of parts processed together.

True

Kaizen is similar to TQM in that both are focused on continuous improvement.

True

Kanbans and andons are both elements of the visual workplace, because they are visual signals that replace printouts and paperwork.

True

Labor cost and labor availability often drive the location decision in the call center industry.

True

Labor planning determines employment stability.

True

Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.

True

Line employees need the knowledge of TQM tools.

True

Lists have been developed that rank countries on issues such as "competitiveness" and "corruption."

True

Lower average inventory is feasible only if setup times are short.

True

MRP is generally practiced on items with dependent demand.

True

Manufacturers may want to locate close to their customers, if the transportation of finished goods is expensive or difficult.

True

Many suppliers feel that having a variety of customers is better than being tied to long-term contracts with one customer.

True

McDonald's "Made for You" kitchen system represents a strategic layout decision even though an obvious benefit of the system is a dramatic reduction in the inventory of food prepared in advance.

True

Nearshoring is the practice of choosing an outsource provider in the home country or in a nearby country.

True

Offshoring is the practice of moving a business process to a foreign country but retaining control of it.

True

One advantage of cycle counting is that it maintains accurate inventory records.

True

One drawback of a product-oriented layout is that work stoppage at any one point ties up the whole operation.

True

One essential ingredient of mass customization is modular design.

True

One function of inventory is to take advantage of quantity discounts.

True

One goal of JIT partnerships is the removal of in-plant inventory by delivery in small lots directly to the using department as needed.

True

One guideline for a retail layout is to locate high-draw items around the periphery of the store.

True

One guideline for determining the arrangement and space allocation of a retail store is to place high-impulse and high-margin items such as housewares and beauty aids in prominent locations.

True

One limitation of the net present value approach to investments is that investments with identical net present values may have very different cash flows.

True

One motive for using demand-influencing aggregate planning options is to create uses for excess capacity within an organization.

True

One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.

True

One of the ways that Just-In-Time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

True

One question that operations managers must ask when generating an aggregate plan is what factors are likely to influence demand and by how much.

True

One reason for a firm locating near its competitors is the presence of a major resource it needs.

True

One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.

True

Optical checkout scanners and ATMs are examples of technology's impact on services.

True

Outsourcing has expanded to become a major strategy in business due to the continuing move toward specialization in an increasingly technological society.

True

Outsourcing is not a new concept; it is simply an extension of the long-standing practice of subcontracting production activities.

True

Outsourcing is the practice of procuring from external sources services or products that are normally part of an organization.

True

PDCA, developed by Shewhart, stands for Plan-Do-Check-Act

True

Pareto charts are a graphical way of identifying the few critical items from the many less important ones.

True

Pareto charts are a graphical way of identifying the few critical items from the many less important ones

True

Philip Crosby is credited with both of these quality catch-phrases: "quality is free" and "zero defects."

True

Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.

True

Price changes are useful for matching the level of demand to the capacity of a facility

True

Process control is the use of information technology to monitor and control a physical process.

True

Processes can be environmentally friendly and socially responsible while still contributing to profitable strategies.

True

Quality circles empower employees to improve productivity by finding solutions to work-related problems in their work area.

True

Reduced inventory levels and faster response to market changes are both benefits of MRP.

True

Reducing distance is a common JIT goal.

True

Research indicates that of all the reasons given for outsourcing failure, the most common is that the decision was made without sufficient understanding of the options through quantitative analysis.

True

Retail inventory that is unaccounted for between receipt and time of sale is known as shrinkage.

True

Self-directed teams may mean having no supervision on the factory floor.

True

Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

True

Service firms choose locations based, in part, on the revenue potential of a site.

True

Service level is the complement of the probability of a stockout.

True

Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.

True

Some organizations use outsourcing to replace entire purchasing, information systems, marketing, finance, and operations departments.

True

Starbucks Coffee's use of geocoded demographic and consumer data in site selection decisions is an example of the use of a Geographic Information System, or GIS.

True

TQM is important because quality influences all of the ten decisions made by operations managers.

True

Technology, location, and layout decisions are all possible constraints on the human resource strategy.

True

The 5S's—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self discipline—are important to lean production because they act as a means to reduce waste.

True

The Toyota Production System requires that activities have built-in, automatic tests so that gaps between expectations and actuality are immediately evident.

True

The assembly line is a classic example of a repetitive process.

True

The definition of quality adopted by The American Society for Quality is a customer-oriented definition.

True

The demand for automobiles would be considered an independent demand.

True

The factor-rating method can consider both tangible and intangible costs.

True

The factor-rating method is an excellent tool for dealing with both country risk assessment and source provider selection problems.

True

The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating.

True

The fixed-period inventory model can have a stockout during the review period as well as during the reorder period, which is why fixed-period models require more safety stock than fixed-quantity models.

True

The goal of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized.

True

The graphic approach to location break-even analysis displays the range of volume over which each location is preferable.

True

The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

True

The management coefficients model is a formal planning model built around a manager's experience and performance.

True

The most common tactic to arrange departments in a process-oriented layout is to minimize material handling costs.

True

The objective of layout strategy is to develop an effective and efficient layout that will meet the firm's competitive requirements.

True

The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process capability; the other is a comprehensive system for achieving and sustaining business success.

True

The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.

True

The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.

True

The reorder point is the inventory level at which action is taken to replenish the stocked item.

True

The strategies of aggregate planning are broadly divided into demand options and capacity options.

True

The supply chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.

True

The term "China price" has become the global benchmark—interchangeable with "lowest price possible."

True

The term focused processes refers to the quest for increased efficiency, whether in goods or services, that results from specialization.

True

The theory of comparative advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

True

The time phased product structure, unlike the bill of material, adds the concept of lead times.

True

The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.

True

The use of part-time workers as an aggregate planning option may be less costly than using full- time workers, but may also reduce quality levels.

True

The work cell improves process layouts by reducing floor space and by reducing direct labor cost.

True

Time fences divide that segment of the MPS that can be revised from that section that is "frozen."

True

U.S. government data suggest that foreigners outsource far more services to the U.S. than American companies send abroad.

True

Unfavorable exchange rates can offset other savings in a location decision.

True

Units of safety stock are additions to the reorder point that allow for variability in the rate of demand, the length of lead time, or both.

True

Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate.

True

Waste is anything that does not add value, such as storage or inspection of items; waste also includes any activity that does not add value from the consumer's perspective.

True

Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.

True

When implemented as a comprehensive manufacturing strategy, JIT, TPS, and lean systems sustain competitive advantage and result in increased overall returns.

True

When innovation replaces cost as a firm's focus for location decisions, the presence of other state- of-the-art firms is a plus, not a negative, for the firm's competitiveness.

True

When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected on-hand inventory of the MRP logic.

True

While ERP may provide a strategic advantage over competitors, it is so complex that many companies cannot adjust to it.

True

________ is a capacity option that works especially well in the service sector where labor needs are relatively unskilled.

Using part-time workers

Describe Value-stream mapping. Explain how it is different from process mapping.

Value-stream mapping is a variation on time-function mapping or process mapping. The most fundamental difference between them is that Value-stream mapping is not confined to the organization itself. In particular, in its analysis of where value is added, it extends the analysis to the organization's supply chain. Value-stream mapping takes into account not only the process but also the management decisions and information systems that support the process.

Suppose that a firm incurs a demand variance of 400 units per week, and the variance of orders that it places equals 750 per week. What is the value of the bullwhip measure for this company?

Variance of orders / Variance of demand = 750 / 400 = 1.875 (so amplification is present)

Why is Harley-Davidson identified as a repetitive manufacturer, not a mass customizer?

While Harley-Davidson's motorcycles variety, they are not as individualized as Dell's personal computers. The variety comes from choices in predefined modules, and there is apparently no place for a customer to get customization that would go beyond what is available in these modules.

"Schematic used to investigate movement of people or material" describes a(n) a. flow diagram b. activity chart c. operations chart d. right-hand / left-hand chart e. none of the above

a

. 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 b. $26,160 c. $49,840 d. $70,920 e. $106,990

a

A big advantage of a process-oriented layout is a. its flexibility in equipment and labor assignments b. its low cost c. the simplified scheduling problem presented by this layout strategy d. the ability to employ low-skilled labor e. its high equipment utilization

a

A characteristic of JIT partnerships with respect to quality is to a. help suppliers meet quality requirement b. inspect all incoming parts c. maintain a steady output rate d. impose maximum product specifications on the supplier e. draw up strict contracts ensuring that all defectives will be immediately replaced

a

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 b. critical success factors c. factor rating systems d. geographic information systems e. regression models

a

A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 80, 50, 40, and 90 units. Last quarter, the firm produced 60 units. If it uses level scheduling, the firm will. a. hire workers to permit production of 65 units per quarter for the next four quarters b. hire 20 workers c. have an increase in inventory of 20 units in the next quarter d. have a decrease in inventory of 5 units in the next quarter e. change its workforce each quarter so that inventory does not change

a

A location decision for an appliance manufacturer would tend to have a(n) a. cost focus b. labor focus c. revenue focus d. environmental focus e. education focus

a

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 b. clustering c. tax incentives d. globalization e. proximity

a

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 b. 0.200 c. 0.40 d. 0.667 e. $1.667

a

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 b. has a facility that is above optimum operating level and should build a smaller facility c. is suffering from diseconomies of scale d. has utilization higher than efficiency e. has efficiency higher than utilization

a

By convention, the top level in a bill of material is a. level 0 b. level 1 c. level T d. level 10 e. level 100

a

Computer-integrated manufacturing (CIM) includes manufacturing systems that have a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated b. transaction processing, management information systems, and decision support systems integrated c. automated guided vehicles, robots, and process control d. robots, automated guided vehicles, and transfer equipment e. all of the above

a

Daily capacity of a product layout is determined by a. operating time divided by cycle time b. cycle time divided by operating time c. operating time divided by total task time d. total task time divided by cycle time e. cycle time divided by total task time

a

Disaggregation a. breaks the aggregate plan into greater detail b. transforms the master production schedule into an aggregate plan c. calculates the optimal price points for yield management d. converts product schedules and labor assignments to a facility-wide plan e. is an assumption required for the use of the transportation model in aggregate planning

a

Evaluating location alternatives by comparing their composite (weighted-average) scores involves a. factor rating analysis b. cost-volume analysis c. transportation model analysis d. linear regression analysis e. crossover analysis

a

Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in half, by what proportion must setup cost change? a. Setup cost must be cut to one fourth its current value. b. Setup cost must also be cut in half from its current value. c. Setup cost must double from its current value. d. cannot be determined e. none of the above

a

Flow diagrams are used to analyze a. movement of people and materials b. utilization of an operator and machine c. body movements d. time taken by various activities e. unnecessary micro-motions

a

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 b. 5 minutes c. 6 minutes d. 7 minutes e. 8 minutes

a

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 b. lower prices at all facilities c. build a facility of the correct size d. add a complementary product e. reduce lead times

a

In MRP, system nervousness is caused by a. management's attempt to continually respond to minor changes in production requirements b. the use of the lot-for-lot approach c. management's marking part of the master production schedule as "not to be rescheduled" d. the use of phantom bills of material e. management's attempt to evaluate alternative plans before making a decision

a

In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of a. end items b. modules c. kits d. customer orders e. warehouse orders

a

In the Office Relationship Chart, which rating reflects the highest importance for two departments' closeness to each other? a. A b. E c. I d. O e. X

a

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will a. increase by about 41% b. increase by 100% c. increase by 200% d. increase, but more data is needed to say by how much e. either increase or decrease

a

LaQuinta Motor Inns has a competitive edge over its rivals because it a. uses regression analysis to determine which variables most influence profitability b. picks better locations than its rivals c. picks larger locations than its rivals d. builds only along interstate highways e. all of the above

a

Outsourcing is simply an extension of the long-standing practice of a. subcontracting b. importing c. exporting d. postponement e. e-procurement

a

Planning tasks associated with loading, sequencing, expediting, and dispatching typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. mission-related planning e. strategic planning

a

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 b. 200 units c. $2,500 d. $5,000 e. $9,500

a

Reduction of in-transit inventory can be encouraged through use of a. supplier location near plants b. low setup costs c. low carrying costs d. use of trains, not trucks e. low-cost, global suppliers

a

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 b. gain ISO 14000 certification for the organization c. obtain a product safety certificate from the Consumer Product Safety Commission d. have the organization's legal staff write disclaimers in the product instruction booklets e. compare the cost of product liability to the external failure cost

a

Solving a load-distance problem for a process-oriented layout requires that a. the difficulty of movement be the same for all possible paths b. pickup and setdown costs vary from department to department c. the cost to move a load be the same for all possible paths d. takt time be less than 1 e. CRAFT software examine all possible department configurations

a

Stakeholders who are affected by the production and marketing of poor quality products include a. stockholders, employees, and customers b. suppliers and creditors, but not distributors c. only stockholders, creditors, and owners d. suppliers and distributors, but not customers e. only stockholders and organizational executives and managers

a

Strategies for improving productivity in services are a. separation, self-service, automation, and scheduling b. lean production, strategy-driven investments, automation, and process focus c. reduce inventory, reduce waste, reduce inspection, and reduce rework d. high interaction, mass customization, service factory, and just-in-time e. none of the above

a

Takt time is a. the total work time available divided by units required by the consumer b. the units required divided by workers required c. a fictional time increment similar to a therblig d. the same thing as cycle time in a process layout e. an important consideration in balancing an assembly line

a

The "four Ms" of cause-and-effect diagrams are a. material, machinery/equipment, manpower, and methods b. material, methods, men, and mental attitude c. named after four quality experts d. material, management, manpower, and motivation e. none of the above

a

The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

a

The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. a. bill of material b. master production schedule c. inventory records d. assembly time chart e. net requirements chart

a

The behavioral approach to job design that involves giving the worker a larger portion of the total task is a. job enlargement b. job enrichment c. job enhancement d. job rotation e. job involvement

a

The fixed-period inventory model requires more safety stock than the fixed-quantity models because a. a stockout can occur during the review period as well as during the lead time b. this model is used for products that have large standard deviations of demand c. this model is used for products that require very high service levels d. replenishment is not instantaneous e. setup costs and holding costs are large

a

The goal of inspection is to a. detect a bad process immediately b. add value to a product or service c. correct deficiencies in products d. correct system deficiencies e. all of the above

a

The list of 5S's, although it looks like a housekeeping directive, supports lean production by a. identifying non-value items and removing them, in the "sort/segregate" item b. reducing inventory, in the "standardize" item c. increasing variability through standardized procedures, in the "standardize" item d. eliminating wasted motion through ergonomic studies, in the "support" item e. building good safety practices, in the "shine/sweep" item

a

The type of layout which features departments or other functional groupings in which similar activities are performed is a. process-oriented b. product-oriented c. fixed-position d. mass production e. unit production

a

The use of information technology to monitor and control a physical process is known as a. process control b. computer-aided design c. information numeric control d. numeric control e. none of the above

a

What is the time required to move orders through the production process, from receipt to delivery? a. throughput b. manufacturing cycle time c. pull time d. push time e. queuing time

a

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. lot-for-lot b. EOQ c. part-period balancing d. the Wagner-Whitin algorithm e. All of the above are appropriate for the situation.

a

When a worker obtains clear and timely information about his/her performance, his/her job is characterized by a. feedback b. skill variety c. job identity d. job significance e. autonomy

a

Which of the following actions is consistent with the use of pure level strategy? a. use inventory to meet demand requirements b. vary the amount of subcontracting to meet demand requirements c. vary production levels to meet demand requirements d. vary work force to meet demand requirements e. none of the above

a

Which of the following aggregate planning strategies is a "demand option"? a. changing price b. subcontracting c. varying production levels d. changing inventory levels e. using part-time workers

a

Which of the following best describes a gross material requirements plan? a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started b. an intermediate range plan for the scheduling of families of products c. a chart illustrating whether capacity has been exceeded d. a table that corrects scheduled quantities for inventory on hand e. a schedule showing which products are to be manufactured and in what quantities

a

Which of the following best differentiates material requirements planning (MRP) from finite capacity scheduling (FCS)? a. FCS recognizes the finite nature of capacity while MRP does not. b. FCS works in services while MRP does not. c. MRP requires time buckets while FCS does not. d. FCS is an input into traditional MRP systems. e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.

a

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. b. Control charts are built so that new data can be quickly compared to past performance data. c. Control charts graphically present data. d. Control charts plot data over time. e. None of the above is false.

a

Which of the following is not an analytical target of methods analysis? a. movement of capital b. body movement c. movement of individuals d. movement of materials e. crew activity

a

Which of the following is not one of McDonald's "seven major innovations"? a. the Happy Meal b. drive-through windows c. breakfast menus d. play areas e. a kitchen system to facilitate mass customization

a

Which of the following is not one of the essential ingredients for mass customization? a. high machine utilizations b. personnel and facility flexibility c. reliance on modular design d. rapid throughput e. very effective scheduling

a

Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

a

Which of the following is the number-one reason driving outsourcing for many firms? a. cost savings b. gaining outside expertise c. improving operations and service d. focusing on core competencies e. gaining outside technology

a

Which of the following is true of a focused factory? a. It may be focused in ways other than by product or layout. b. It may be focused only by processing requirements. c. It is much like a product facility within an otherwise process facility. d. All of the above are true. e. None of the above is true.

a

Which of the following phrases best describes process focus? a. low volume, high variety b. finished goods are usually made to a forecast and stored c. operators are modestly skilled d. high fixed costs, low variable costs e. raw material inventories are high relative to the value of the product

a

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 b. appointments c. reservations d. first-come, first-served e. none of the above

a

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. b. Six Sigma means that about 94 percent of a firm's output is free of defects. c. The Six Sigma program was developed by Toyota in the 1970's. d. The Six Sigma program is for manufacturing firms, and is not applicable to services. e. Six Sigma certification is granted by the International Standards Organization (ISO).

a

Which of the statements below best describes office layout? a. groups workers, their equipment, and spaces/offices to provide for movement of information b. addresses the layout requirements of large, bulky projects such as ships and buildings c. seeks the best personnel and machine utilization in repetitive or continuous production d. allocates shelf space and responds to customer behavior e. deals with low-volume, high-variety production

a

Which term has become interchangeable with "lowest price possible?" a. "China price" b. "Mexico price" c. "India price" d. "Russia price" e. "Korea price"

a

Workers in which of the following countries probably experience the least amount of job expansion, on average? a. United States b. Sweden c. Japan d. Sweden and Japan experience about the same amount, and less than the U.S. e. They all experience about the same amount.

a

Total quality management emphasizes

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

The ________ is a special class of linear programming models that involves assigning tasks or jobs to resources.

assignment method

"Quality is defined by the customer" is a. an unrealistic definition of quality b. a user-based definition of quality c. a manufacturing-based definition of quality d. a product-based definition of quality e. the definition proposed by the American Society for Quality

b

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n) a. modular bill b. engineering change notice c. resource requirements profile d. lead time-offset product structure document e. planning bill

b

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. a. Taguchi loss function b. cause and effect diagram c. scatter diagram d. histogram e. process control chart

b

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? a. Plant A, because it is cheaper than Plant B for all volumes under 8,000,000 units b. Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units c. Plant A, because it is cheaper than Plant B for all volumes d. Plant B, because it has the lower variable cost per unit e. neither Plant A nor Plant B, because the crossover point is at 10 million units

b

A job characterized by _______ allows a worker to use his/her dexterity, physical strength, and skills to do his/her work. a. feedback b. skill variety c. job identity d. job significance e. autonomy

b

A master production schedule contains information about a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

b

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d=400 per day (250 days per year), p=4000 units per day, H=$40 per unit per year, and Q=200 (demand for four hours, half a day). a. $2.00 b. $7.20 c. $18.00 d. $64.00 e. $1,036.80

b

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total annual inventory costs. a. $400 b. $800 c. $1200 d. zero; this is a class C item e. cannot be determined because unit price is not known

b

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order a. all 4000 units at one time b. 200 units per order c. every 20 days d. 10 times per year e. none of the above

b

A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is a. three times as large b. one-third as large c. nine times as large d. one-ninth as large e. cannot be determined

b

A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is a. unchanged b. increased by less than 50% c. increased by 50% d. increased by more than 50% e. cannot be determined

b

A product-oriented layout would be most appropriate for which one of the following businesses? a. fast food b. steel-making c. insurance sales d. clothing alterations e. a grocery store

b

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 a. one-half minute b. one and one-half minutes c. two minutes d. 5,500 minutes e. cannot be determined from the information given

b

A production order quantity problem has daily demand rate = 10 and daily production rate = 50. The production order quantity for this problem is approximately 612 units. The average inventory for this problem is approximately a. 61 b. 245 c. 300 d. 306 e. 490

b

ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high d. more time should be spent on class "C" items because there are more of them e. an item is critical if its unit price is high

b

Activity charts help analyze a. movement of people and materials b. utilization of an operator and machine c. body movements d. activities that can cause injuries e. unnecessary micro-motions

b

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a a. Pareto chart b. process chart c. check sheet d. Taguchi map e. poka-yoke

b

An advantage of the fixed-period inventory system is that a. the supplier will be more cooperative b. there is no physical count of inventory items when an item is withdrawn c. no inventory records are required d. orders usually are for smaller order quantities e. the average inventory level is reduced

b

An approach to location analysis that includes both qualitative and quantitative considerations is a. locational cost-volume b. factor rating c. transportation model d. assignment method e. make or buy analysis

b

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? a. One hundred is the reorder point, and 14 is the order quantity. b. Fourteen is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. Fourteen is the safety stock, and 100 is the reorder point. e. None of the above is true.

b

Balancing a work cell is done a. before the work cell equipment is sequenced b. as part of the process of building an efficient work cell c. before takt time is calculated d. so that each assembly line workstation has exactly the same amount of work e. to minimize the total movement in a process layout

b

Basic break-even analysis typically assumes that a. revenues increase in direct proportion to the volume of production, while costs increase at a decreasing rate as production volume increases b. variable costs and revenues increase in direct proportion to the volume of production c. both costs and revenues are made up of fixed and variable portions d. costs increase in direct proportion to the volume of production, while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts e. All of the above are assumptions in the basic break-even model.

b

Characteristics of just-in-time partnerships do not include a. removal of in-transit inventory b. large lot sizes to save on setup costs and to gain quantity discounts c. long-term contracts d. few suppliers e. buyer helps supplier to meet the quality requirements

b

Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency e. assumes that the most frequently used items must be counted more frequently

b

Distribution resource planning (DRP) is a. a transportation plan to ship materials to warehouses b. a time-phased stock replenishment plan for all levels of a distribution network c. a shipping plan from a central warehouse to retail warehouses d. material requirements planning with feedback loop from distribution centers e. a material requirements planning package used exclusively by warehouses

b

Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is ______ weeks. a. 6 b. 9 c. 12 d. 18 e. 28

b

Effective capacity is the a. maximum output of a system in a given period b. capacity a firm expects to achieve given the current operating constraints c. average output that can be achieved under ideal conditions d. minimum usable capacity of a particular facility e. sum of all of the organization's inputs

b

Firms making many different final products use __________ to facilitate production scheduling. a. planning bills b. modular bills c. phantom bills d. overdue bills e. none of the above

b

For the lot-sizing technique known as lot-for-lot to be appropriate a. future demand should be known for several weeks b. setup cost should be relatively small c. annual volume should be rather low d. item unit cost should be relatively small e. the independent demand rate should be very stable

b

Four of the components of job design are a. employment stability, work schedules, work sampling, motivation, and incentive systems b. job specialization, job expansion, psychological components, and self-directed teams c. labor specialization and enrichment, motivation and incentive systems, employment stability, and work sampling d. ergonomics and work methods, method time measurement, work schedules, and incentive systems e. labor specialization, time studies, work sampling, and pre-determined time standards

b

Globalization of the location decision is the result of all of the following except a. market economics b. higher quality of labor overseas c. ease of capital flow between countries d. high differences in labor costs e. more rapid, reliable travel and shipping

b

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 a. bureaucratic risk b. political risk c. legislative risk d. judicial risk e. democratic risk

b

Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is not part of JIT? They a. communicate their schedules to suppliers b. produce in long production runs to reduce the impact of setup costs c. use a pull system to move inventory d. continuously work on reducing setup time e. produce in small lots

b

If a casual-dining restaurant is attempting to practice JIT and lean operations, which of the following would not be present? a. close relationship with the restaurant's suppliers of food, utensils, and equipment b. food preparation in large batches c. a kitchen set up to minimize wasteful movements d. lean inventories of food e. All of the above should be present.

b

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is a. in control, but not capable of producing within the established control limits b. out of control and the process should be investigated for assignable variation c. within the established control limits with only natural causes of variation d. monitored closely to see if the next sample mean will also fall outside the control limits e. none of the above

b

If the goals of JIT partnerships are met, which of the following is a result? a. For incoming goods, receiving activity and inspection are outsourced. b. In-transit inventory falls as suppliers are located closer to facilities. c. The number of suppliers increases. d. In-plant inventory replaces in-transit inventory. e. All of the above are consequences of meeting the JIT partnership goals.

b

In assembly line balancing, cycle time (the ratio of available production time to scheduled production) is the a. minimum time that a product is allowed at each workstation b. maximum time that a product is allowed at each workstation c. optimum time that a product is allowed at each workstation d. desired cycle time that a product is allowed at each workstation e. all of the above

b

Marketing issues such as advertising, image, and promotion are important to quality because a. they define for consumers the tangible elements of a service b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer c. they educate consumers on how to use the product d. they make the product seem more valuable than it really is e. they raise expenses and therefore decrease profitability

b

Material requirements plans specify a. the quantities of the product families that need to be produced b. the quantity and timing of planned order releases c. the capacity needed to provide the projected output rate d. the costs associated with alternative plans e. whether one should use phantom bills of material or not

b

Methods analysis employs which of the following charts in its analysis of the movement of workers and materials? a. micro-motion chart b. flow diagram c. activity chart d. man-machine chart e. movement chart

b

Mutual trust is a. when employees have gained the trust of management b. reflected in reasonable, documented employment policies, honestly and equitably implemented to the satisfaction of both management and the employees c. when management has gained the trust of the employees d. when management recognizes that the employees are competent, motivated people both able and willing to perform at the level required to produce a quality product e. when management and the employees both agree on the objectives

b

Standard Register a. has dozens of U.S. plants in its Forms Division b. groups people and machines into departments that perform specific activities c. utilizes a product strategy to keep production volume high d. obtains its low-cost advantage by not spending money on CAD systems e. obtains its low-cost advantage by specializing in a relatively small number of products

b

The assumption of stability of demand is important for justifying which of the following layout types? a. fixed-position layout b. product-oriented layout c. process-oriented layout d. all of the above e. none of the above

b

The basic break-even model can be modified to handle more than one product. This extension of the basic model requires a. price and sales volume for each product b. price and variable cost for each product, and the percent of sales that each product represents c. that the firm have very low fixed costs d. that the ratio of variable cost to price be the same for all products e. sales volume for each product

b

The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order entry, purchasing, and direct interface with customers and suppliers is a. MRP II b. enterprise resource planning c. the master production schedule d. closed-loop MRP e. not yet technically possible

b

The main issue in designing process layouts concerns the relative positioning of a. safety devices b. departments c. raw materials d. entrances, loading docks, etc. e. supervisors to their employees

b

The number of kanbans is a. one b. the ratio of the reorder point to container size c. the same as EOQ d. one full day's production e. none of the above

b

The phrase "demand related to the demand for other products" describes a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

b

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. demand options e. strategic planning

b

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 _____. a. 79.2 percent; 90.5 percent b. 90.5 percent; 79.2 percent c. 87.5 percent; 950 employees d. 950 employees; 1050 employees e. 110.5 percent; 114.3 percent

b

The transportation method, when applied to location analysis a. minimizes total fixed costs b. minimizes total production and transportation costs c. minimizes total transportation costs d. maximizes revenues e. minimizes the movement of goods

b

The typical goal used when developing a process-oriented layout strategy is to a. minimize the distance between adjacent departments b. minimize the material handling costs c. maximize the number of different tasks which can be performed by an individual machine d. minimize the level of operator skill necessary e. maximize job specialization

b

Three broad categories of definitions of quality are a. product quality, service quality, and organizational quality b. user-based, manufacturing-based, and product-based c. internal, external, and prevention d. low-cost, response, and differentiation e. Pareto, Shewhart, and Deming

b

Total quality management emphasizes a. the responsibility of the quality control staff to identify and solve all quality-related problems b. a commitment to quality that goes beyond internal company issues to suppliers and customers c. a system where strong managers are the only decision makers d. a process where mostly statisticians get involved e. ISO 14000 certification

b

What does TPS stand for? a. Total Production Streamlining b. Toyota Production System c. Taguchi's Production S's d. Total Process Simplification e. None of the above

b

What term has been created to describe the return of business activity to the client firm? a. renewal b. backsourcing c. reversal d. reversesourcing e. insourcing

b

Which choice below best describes the counterseasonal demand option? a. producing such products as lawnmowers and sunglasses during the winter b. developing a mix of products that smoothes out their demands c. lowering prices when demand is slack d. using subcontractors only when demand is excessive e. the breaking of the aggregate plan into finer levels of detail

b

Which of the following best describes mutual commitment in an organization? a. an instance in which management is committed to the employees and the employees are committed to management b. both management and the employees are committed to the same objective c. both management and the employees are committed, but to different objectives d. management obtains the commitment of the employees to a stated objective e. both management and the employees can rely on each other

b

Which of the following characteristics best describes repetitive focus? a. It uses sophisticated scheduling to accommodate custom orders. b. Its output is a standardized product produced from modules. c. It is too expensive when volumes are low or flexibility is required. d. It is widely used for the manufacture of steel. e. Its costs are often known only after a job is done.

b

Which of the following is false regarding repetitive processes? a. They use modules. b. They allow easy switching from one product to the other. c. They are the classic assembly lines. d. They have more structure and less flexibility than a job shop layout. e. They include the assembly of basically all automobiles.

b

Which of the following is most likely to affect the location strategy of a manufacturing firm? a. appearance/image of the area b. utility costs c. purchasing power of drawing area d. competition in the area e. parking availability

b

Which of the following is not among the eight components of revenue and volume for a service firm? a. quality of the management b. shipment cost of finished goods c. purchasing power of the customer-drawing area d. uniqueness of the firm's and the competitor's locations e. competition in the area

b

Which of the following is not an advantage of work cells? a. reduced direct labor cost b. decreased use of equipment and machinery c. heightened sense of employee participation d. reduced raw material and finished goods inventory e. reduced investment in machinery and equipment

b

Which of the following is not one of the requirements of cellular production? a. test (poka-yoke) at each station in the cell b. adequate volume for high equipment utilization c. a high level of training, flexibility, and empowerment of employees d. being self-contained, with its own equipment and resources e. identification of families of products, often through the use of group technology codes

b

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? a. Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. b. Few people will travel out-of state for a haircut. c. Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. d. Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. e. Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source.

b

Which of the following is true for process layouts, but false for product-oriented layouts? a. low in-process inventories b. flexibility in equipment and labor assignments c. low variety of products d. high volume of output e. often solved by assembly line balancing

b

Which of the following layouts generally has the best machine utilization? a. fixed-position layout b. repetitive and product-oriented layout c. process-oriented layout d. office layout e. warehouse layout

b

Which of the following statements about aggregate planning is false? a. Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity. b. Aggregate planning produces a plan detailing which products are made and in what quantities. c. Yield management is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. The transportation method is an optimizing technique for aggregate planning.

b

Which of the following statements is true about the MRP plan when using lot-for-lot ordering? a. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. e. All of the above are true.

b

Which of the following statements regarding Amazon.com is false? a. The company was opened by Jeff Bezos in 1995. b. The company was founded as, and still is, a "virtual retailer" with no inventory. c. The company is now a world-class leader in warehouse management and automation. d. The company uses both United Parcel Service and the U.S. Postal Service as shippers. e. Amazon obtains its competitive advantage through inventory management.

b

Which of the following statements regarding Dell Computer is false? a. Dell is a practitioner of the mass customization process. b. Dell builds its computers overseas in order to gain a low-cost advantage. c. Dell keeps very little inventory of finished goods. d. Dell utilizes a global supply chain, but assembles its computers in the U.S. e. Dell's research focuses on manufacturing issues, not computer part design.

b

Which of the following statements regarding fixed costs is true? a. Fixed costs rise by a constant amount for every added unit of volume. b. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs. c. Fixed costs are those costs associated with direct labor and materials. d. Fixed costs equal variable costs at the break-even point. e. Fixed cost is the difference between selling price and variable cost.

b

Which of the following statements regarding lot-sizing is true? a. EOQ principles should be followed whenever economical. b. Too much concern with lot-sizing results in false accuracy. c. Lot-for-lot cannot be modified for scrap allowance or process constraints. d. The Wagner-Whitin algorithm simplifies lot size calculations. e. All of the above are true.

b

Which of the following statements regarding the production order quantity model is true? a. It applies only to items produced in the firm's own production departments. b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant. d. It minimizes the total production costs. e. It minimizes inventory.

b

Which of the following terms implies an increase in responsibility and control? a. job rotation b. job enrichment c. job re-design d. job enlargement e. job satisfaction

b

Which of these aggregate planning strategies adjusts capacity to match demand? a. back ordering b. using part-time workers c. counterseasonal product mixing d. changing price e. None of the above is a capacity option.

b

Which of these is among the demand options of aggregate planning? a. subcontracting b. back-ordering during high-demand periods c. changing inventory levels d. varying workforce size e. All of the above are demand options.

b

Which one of the following is not a benefit of the implementation of JIT? a. cost reduction b. variability increase c. rapid throughput d. quality improvement e. rework reduction

b

Which one of the following is not a layout tactic in a JIT environment? a. work cells for families of products b. fixed equipment c. minimizing distance d. little space for inventory e. poka-yoke devices

b

Which one of the following products is most likely made in a job shop environment? a. a daily newspaper b. paper forms c. television sets d. cigarettes e. canned vegetables

b

Which one of the following statements is true regarding JIT inventory? a. It exists just in case something goes wrong. b. It is the minimum inventory necessary to keep a perfect system running. c. It hides variability. d. It is minimized with large lot production. e. It increases if setup costs decrease.

b

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

benchmarking

"Designed to show economy of motion by pointing out waste motion and idle time" describes a. flow diagrams b. an activity chart c. an operations chart d. all of the above e. none of the above

c

"Making it right the first time" is a. an unrealistic definition of quality b. a user-based definition of quality c. a manufacturing-based definition of quality d. a product-based definition of quality e. the definition proposed by the American Society for Quality

c

"Operators simply load new programs, as necessary, to produce different products" describes a. CAD b. automated guided vehicles c. flexible manufacturing systems d. vision systems e. process control

c

"Quality Is Free," meaning that the costs of poor quality have been understated, is the work of a. W. Edwards Deming b. Joseph M. Juran c. Philip B. Crosby d. Crosby, Stills, and Nash e. Armand Feigenbaum

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. The crossover point is approximately 6667 units. 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; there is no crossover point. d. Process X should be selected for very large production volumes. e. Process X is more profitable than process Y and should be selected.

c

A bill of material lists the a. times needed to perform all phases of production b. production schedules for all products c. components, ingredients, and materials required to produce an item d. operations required to produce an item e. components, ingredients, materials, and assembly operations required to produce an item

c

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 a. greater than $80,000 b. greater than $130,000 c. less than $30,000 d. impossible to calculate, because no interest rate is given e. impossible to calculate, because variable costs are not known

c

A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 16 b. 70 c. 110 d. 183 e. 600

c

A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles. Some assemblies and parts are common to many end items. To relieve the MPS of performing order releases on these common parts, the firm might choose to use the __________ technique. a. Wagner-Whitin b. economic part period c. supermarket d. gross material requirements e. resource requirements profile

c

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and firing costs will be a. $500 b. $2,500 c. $7,500 d. $7,000 e. $12,500

c

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that a. the January requirement is below level production of 420 units b. level production is approximately 1000 units per day c. level production of 420 units per day is below the January requirement d. level production is approximately 420 units per month e. the firm must hire workers between December and January

c

A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a location decision. a. transportation costs b. cost of raw materials c. parking and access d. climate e. taxes

c

A material requirements plan contains information with regard to all of the following except a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. the capacity needed to provide the projected output rate d. inventory on hand for each final product e. inventory on hand for each subassembly

c

A product-focused process is commonly used to produce a. high-volume, high-variety products b. low-volume, high-variety products c. high-volume, low-variety products d. low-variety products at either high- or low-volume e. high-volume products of either high- or low-variety

c

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. a. 1.8; 1.4 b. 1.6; 0.9 c. 6.4; 2.4 d. 2.4; 0.9 e. none of these

c

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? a. yes, with exactly 100 minutes to spare b. no, but four workstations would be sufficient c. no, it will fall short even with a perfectly balanced line d. yes, but the line's efficiency is very low e. cannot be determined from the information given

c

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? a. assembly line balancing b. load-distance analysis c. center-of-gravity model d. linear programming e. all of the above

c

A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n) a. adaptive control system b. robotics c. flexible manufacturing system d. automatic guided vehicle (AGV) system e. manufacturing cell

c

Adding a complementary product to what is currently being produced is a demand management strategy used when a. demand exceeds capacity b. capacity exceeds demand for a product which has stable demand c. the existing product has seasonal or cyclical demand d. price increases have failed to bring about demand management e. efficiency exceeds 100 percent

c

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 a. 4.2 percent b. 17 percent c. 85 percent d. 100 percent e. none of the above

c

An assembly line is an example of a a. product-focused process b. process-focused process c. repetitive process d. line process e. specialized process

c

Building high-morale organizations and building communication networks that include employees are both elements of a. ISO 9000 certification b. Six Sigma certification c. employee empowerment d. Taguchi methods e. the tools of TQM

c

Characteristics of JIT partnerships with respect to suppliers include a. competitive bidding encouraged b. buyer plant pursues vertical integration to reduce the number of suppliers c. support suppliers so they become or remain price competitive d. most suppliers at considerable distance from purchasing organization e. All of the above are characteristics of JIT partnerships.

c

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? a. 5100 b. 5700 c. 4845 d. 969 e. 6783

c

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50 b. $2.00 c. $3.00 d. $150.00 e. not enough data to determine

c

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 a. 4,000 units, with A more profitable at low volumes b. 4,000 dollars, with A more profitable at low volumes c. 4,000 units, with B more profitable at low volumes d. 4,000 dollars, with B more profitable at low volumes e. none of the above

c

Geographic Information Systems can assist the location decision by a. automating center-of-gravity problems b. computerizing factor rating analysis c. combining geography with demographic analysis d. updating transportation method solutions e. giving good Internet placement for virtual storefronts

c

If a load report (resource requirements profile) shows a work center scheduled beyond capacity a.the company must add capacity by enlarging the facility b. the company must add capacity by such tactics as overtime and subcontracting c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting d. the aggregate plan must be revised e. the Wagner-Whitin algorithm should be used to rebalance the load

c

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately a. 28 units b. 30 units c. 49 units d. 59 units e. 114 units

c

If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, 90 percent service level will require safety stock of approximately a. 7 units b. 10 units c. 13 units d. 16 units e. 26 units

c

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. The standard deviation of demand during lead time is approximately a. 15 units b. 100 units c. 154 units d. 500 units e. 13,125 units

c

In location planning, environmental regulations, cost and availability of utilities, and taxes are a. global factors b. country factors c. regional/community factors d. site-related factors e. none of the above

c

In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per unit per month, the economic order quantity is approximately a. 24 b. 100 c. 141 d. 490 e. 600

c

Low level coding means that a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above

c

MRP II is accurately described as a. MRP software designed for services b. MRP with a new set of computer programs that execute on microcomputers c. MRP augmented by other resource variables d. an enhancement of MRP that plans for all levels of the supply chain e. a new generation of MRP software that extends MRP to planning and scheduling functions

c

Most inventory models attempt to minimize a. the likelihood of a stockout b. the number of items ordered c. total inventory based costs d. the number of orders placed e. the safety stock

c

One fundamental difference between a process chart and a process map is that a. the process chart uses a time dimension while a process map is not time-oriented b. the process chart includes the supply chain, while the process map stays within an organization c. the process chart is more like a table, while the process map is more like a schematic diagram d. the process chart focuses on the customer and on the provider's interaction with the customer, while the process map does not deal directly with the customer e. None of these is true, because a process chart and a process map are the same thing.

c

One of the major advantages of process-oriented layouts is a. high equipment utilization b. large work-in-process inventories c. flexibility in equipment and labor assignment d. smooth and continuous flow of work e. none of the above

c

One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are) a. modular bills b. time phasing c. time fences d. lot sizing e. closed loop system

c

Pareto charts are used to a. identify inspection points in a process b. outline production schedules c. organize errors, problems, or defects d. show material flow e. all of the above

c

Product Focused processes a. allow more customization, but are not very efficient b. are desirable because resource needs increase slowly with the complexity of a process c. are processes that are specialized for relatively few products or customer groups d. apply only to service firms, not to manufacturers e. are profitable because customers demand flexibility, not specialization

c

The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are a. 20 b. 120 c. 180 d. 240 e. 440

c

The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are a. 150 b. 170 c. 300 d. 320 e. 440

c

The assumptions necessary for a successful product layout include all of the following except a. adequate volume for high equipment utilization b. standardized product c. volatile product demand d. All of the above are appropriate assumptions. e. None of the above is an appropriate assumption.

c

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately a. 139 b. 174 c. 184 d. 365 e. 548

c

The center-of-gravity method does not take into consideration the a. location of markets b. volume of goods shipped to the markets c. value of the goods shipped d. combination of volume and distance e. center-of-gravity method considers none of the above

c

The center-of-gravity method is used primarily to determine what type of locations? a. service locations b. manufacturing locations c. distribution center locations d. supplier locations e. call center locations

c

The major problem addressed by the warehouse layout strategy is a. minimizing difficulties caused by material flow varying with each product b. requiring frequent contact close to one another c. addressing trade-offs between space and material handling d. balancing product flow from one work station to the next e. none of the above

c

The practice of choosing an outsource provider in the home country or in a nearby country is referred to as a. homeshoring b. homesourcing c. nearshoring d. nearsourcing e. backsourcing

c

The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as a. continuous improvement b. employee empowerment c. benchmarking d. copycatting e. patent infringement

c

The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level e. ordering cost and carrying cost

c

The two most basic policies associated with employment stability are a. job enrichment and job enlargement b. employment for life and guaranteed minimum wage c. follow demand exactly and hold employment constant d. incentive plans and piece-rate plans e. none of the above

c

The typical time horizon for aggregate planning is a. less than a month b. up to 3 months c. 3 to 18 months d. over one year e. over 5 years

c

The word "kanban" means a. low inventory b. employee empowerment c. card d. continuous improvement e. lot size of one

c

Three types of processes are a. goods, services, and hybrids b. manual, automated, and service c. process focus, repetitive focus, and product focus d. modular, continuous, and technological e. input, transformation, and output

c

Traffic counts and demographic analysis of drawing areas are associated with a. industrial location decisions b. manufacturing location decisions c. service location decisions d. the transportation method e. none of the above

c

Traffic counts and purchasing power analysis of drawing area are techniques associated with a. an industrial location decision b. a manufacturing location decision c. a retail or professional service location decision d. the factor rating method e. the transportation method

c

What is the practice of moving a business process to a foreign country but retaining control of it? a. exporting b. farshoring c. offshoring d. outsourcing e. backsourcing

c

What theory states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can? a. theory of competitive advantage b. theory of core competencies c. theory of comparative advantage d. theory of outsourcing e. theory of offshoring

c

When decision trees are used to analyze capacity decisions, a. "do nothing" is not a possible decision alternative b. probabilities must be assigned to each of the decision alternatives c. states of nature are often demand-based, as in "market favorability" d. states of nature must be known with certainty e. fixed costs are not relevant

c

When making a location decision at the region/community level, which of these would be considered? a. government rules, attitudes, stability, incentives b. cultural and economic issues c. cost and availability of utilities d. zoning restrictions e. air, rail, highway, waterway systems

c

Which of the determinants of service quality involves having the customer's best interests at heart? a. access b. courtesy c. credibility d. responsiveness e. tangibles

c

Which of the following aggregate planning models is based primarily upon a manager's past experience? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

c

Which of the following does not support the retail layout objective of maximizing customer exposure to products? a. locate high-draw items around the periphery of the store b. use prominent locations for high-impulse and high-margin items c. maximize exposure to expensive items d. use end-aisle locations e. convey the store's mission with the careful positioning of the lead-off department

c

Which of the following is an illustration of employee empowerment? a. UPS drivers are trained to perform several motions smoothly and efficiently. b. Unionization of the work place brings better morale and therefore better quality. c. "No one knows the job better than those who do it." d. all of the above e. none of the above

c

Which of the following is false concerning enterprise resource planning (ERP)? a. It attempts to automate and integrate the majority of business processes. b. It shares common data and practices across the enterprise. c. It is inexpensive to implement. d. It provides and accesses information in a real-time environment. e. All of the above are true.

c

Which of the following is most likely to affect the location decision of a service firm rather than a manufacturing firm? a. energy and utility costs b. attitude toward unions c. parking and access d. cost of shipping finished goods e. labor costs

c

Which of the following is not a heuristic rule for assigning tasks to workstations in a product layout? a. longest tasks first b. in order of most number of following tasks c. median tasks first d. shortest tasks first e. in accordance with positional weight

c

Which of the following is not a reason for variability? a. Employees, machines, and suppliers produce units late. b. Customer demand is unknown. c. Employees, machines, and suppliers produce units that conform to standards. d. Engineering drawings are inaccurate. e. Drawings or specifications are incomplete.

c

Which of the following is not an attribute of lean operators? a. eliminating almost all inventory through just-in-time techniques b. minimizing space requirements by reducing the distance a part travels c. pushing responsibility to the highest level possible through centralized decision making d. educating suppliers to accept responsibility for helping meet customer needs e. All of the above are attributes of lean producers.

c

Which of the following is not an ingredient for controlling labor cost in services? a. accurate scheduling of labor-hours to assure quick response to customer demand b. an on-call labor resource that can be added or deleted to meet unexpected demand c. contract overseas labor to obtain a lower wage scale d. flexibility of individual worker skills that permits reallocation of available labor e. flexibility in rate of output or hours of work to meet changing demand

c

Which of the following is not associated with manipulation of product or service demand? a. price cuts or discounts b. promotion c. subcontracting d. counterseasonal products or services e. advertising

c

Which of the following is not one of the Seven Wastes? a. overproduction b. transportation c. assignment d. defective product e. motion

c

Which of the following is not one of the four things needed for aggregate planning? a. a logical overall unit for measuring sales and output b. a method for determining costs, such as hiring, firing, and inventory costs, associated with production schedules c. a mathematical model that will minimize costs over the intermediate planning period d. an aggregate demand forecast for an intermediate planning period e. All of these are needed for aggregate planning.

c

Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

c

Which of the following is used by methods analysis in analyzing body movement at the workstation level? a. MTM chart b. flow diagram c. operations chart d. process chart e. improvement chart

c

Which of the following methods best considers intangible costs related to a location decision? a. crossover methods b. locational break-even analysis c. factor rating analysis d. the transportation method e. the assignment method

c

Which of the following represents a common way to manage capacity in the service sector? a. appointments b. reservations c. changes in staffing levels d. first-come, first served service rule e. "early bird" specials in restaurants

c

Which of the following statements about aggregate planning is true? a. The development of mathematical models has allowed aggregate planners to discontinue use of trial-and-error methods. b. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. c. A pure chase strategy allows lower inventories when compared to pure level scheduling. d. Disaggregation turns the master production schedule into an intermediate term master plan. e. All of the above are true.

c

Which of the following statements is most accurate? a. Nearly all outsourcing relationships do not last beyond two years. b. Nearly all U.S. firms that outsourced processes to India have backsourced them. c. Approximately half of all outsourcing agreements fail. d. Outsourcing is a relatively risk-free activity. e. More than 90% of outsourcing agreements succeed.

c

Which of the following statements is not true? a. Self-promotion is not a substitute for quality products. b. Inferior products harm a firm's profitability and a nation's balance of payments. c. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product. d. Quality—be it good or bad—will show up in perceptions about a firm's new products, employment practices, and supplier relations. e. Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.

c

Which of the following statements regarding FedEx is true? a. Its hub in Memphis, Tennessee, was selected because of its low cost. b. Memphis, Tennessee, is the only hub in the company's global flight network. c. FedEx believes the hub system helps reduce mishandling and delays due to better controls. d. FedEx uses a hub system in the U.S., but a city-to-city network in other countries. e. Memphis is FedEx's only hub airport in the United States.

c

Which of the following statements regarding JIT in services is true? a. Restaurants do not use JIT layouts because they interfere with creation of a good servicescape. b. Excess customer demand in services such as air travel is met by dipping into safety stocks. c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used in services. d. Scheduling is not relevant to effective use of JIT in services. e. All of the above are false.

c

Which of the following statements regarding Starbucks Coffee is false? a. The firm plans to open three new cafes per day around the world. b. The firm uses GIS to evaluate every site decision. c. The firm's cafes are exclusively in traditional settings: malls, tourist areas, and airports. d. The firm places cafes into ever more innovative locations. e. The firm put cafes in Japan, even though that country had no GIS data available.

c

Which of the following statements regarding Wheeled Coach is false? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

c

Which of the following statements regarding aggregate planning is true? a. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. b. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. c. In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon. d. Because service firms have no inventory, the pure chase strategy does not apply. e. All of the above are true.

c

Which of the following statements regarding control of service inventories is true? a. Service inventory is a fictional concept, because services are intangible. b. Service inventory needs no safety stock, because there's no such thing as a service stockout. c. Effective control of all goods leaving the facility is one applicable technique. d. Service inventory has carrying costs but not setup costs. e. All of the above are true.

c

Which of the following statements regarding ethical and environmentally friendly processes is true? a. Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy. b. Processes can be environmentally friendly or socially responsible, but not both. c. Operations managers can be environmentally sensitive and still follow a low cost strategy. d. Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly. e. The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.

c

Which of the following transformations generally has the highest equipment utilization? a. process-focused process b. repetitive process c. product-focused process d. specialized process e. modular process

c

Which of these assumptions is not associated with strategies for goods-producing location decisions? a. Most major costs can be identified explicitly for each site. b. Focus on identifiable cost. c. High customer contact issues are critical. d. Intangible costs can be evaluated. e. Location is a major determinant of cost.

c

Which of these factors would be considered when making a location decision at the site level? a. government rules, attitudes, stability, incentives b. cultural and economic issues c. zoning regulations d. cost and availability of utilities e. proximity to raw materials and customers

c

Which of these is not a characteristic that makes yield management attractive? a. demand can be segmented b. service can be sold in advance of consumption c. capacity is easily changed d. variable costs are low and fixed costs are high e. demand fluctuates

c

Which one of the following is a concern expressed by suppliers? a. elimination of in-plant inventory b. delivery to the point of use c. production with zero defects d. large lot sizes e. customers' infrequent engineering changes

c

Which one of the following is not common to repetitive and product-oriented layouts? a. a high rate of output b. specialization of labor c. ability to adjust to changes in demand d. low unit costs e. All are common to product-oriented layouts.

c

Which type of layout is specifically designed to encourage employees to interact? a. warehouse b. job shop c. open office d. retail e. repetitive/continuous

c

The ________ strategy sets production equal to forecasted demand.

chase

A(n) ________ provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times.

closed-loop MRP system

Kaizen is a Japanese term meaning

continuous improvement

PDCA is most often applied with regard to which aspect of TQM

continuous improvement

Developing a mix of ________ products is a widely used demand smoothing technique.

counterseasonal

"A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes what layout type? a. fixed-position layout b. intermittent production c. focused factory d. work cell e. warehouse layout

d

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

d

"Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes a. AGV b. CAD/CAM c. CIM d. ASRS e. FMS

d

"Yield management" is best described as a. a situation where management yields to labor demands b. a situation where the labor union yields to management demands c. a process designed to increase the rate of output d. capacity allocation to different classes of customers in order to maximize profits e. management's selection of a product mix yielding maximum profits

d

A disadvantage of product-oriented layout is that a. there is a lack of flexibility in handling a variety of products or production rates b. high volume is required because of the large investment needed to set up the process c. work stoppage at any one point ties up the whole operation d. All of the above are disadvantages of product-oriented layouts. e. None of the above is a disadvantage of product-oriented layouts.

d

A disadvantage of the fixed-period inventory system is that a. it involves higher ordering costs than the fixed quantity inventory system b. additional inventory records are required c. the average inventory level is decreased d. since there is no count of inventory during the review period, a stockout is possible e. orders usually are for larger quantities

d

A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n) a. net requirements document b. resource requirements profile c. aggregate plan d. master production schedule e. Wagner-Whitin finite capacity document

d

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? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

d

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. In following the chase strategy, the firm will a. add 100 units to inventory in the next period b. add 200 units to inventory in the next period c. hire workers to make up the 100 unit difference d. fire workers to make up the 200 unit difference e. implement a lower price point to increase demand

d

A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action? a. It used a pull system to move inventory. b. It produced in ever smaller lots. c. It required deliveries directly to the point of use. d. It picked the supplier that offered the lowest price based on quantity discounts. e. It worked to reduce the company's in-transit inventory.

d

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. a. 1 b. 4 c. 16 d. 24 e. unknown

d

A quality loss function includes all of the following costs except a. the cost of scrap and repair b. the cost of customer dissatisfaction c. inspection, warranty, and service costs d. sales costs e. costs to society

d

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? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

d

A successful TQM program incorporates all of the following except a. continuous improvement b. employee involvement c. benchmarking d. centralized decision-making authority e. none of the above; a successful TQM program incorporates all of the above

d

According to research, which of the following is the most common reason cited for outsourcing failure? a. core competencies identified as non-core b. erratic power grids in foreign countries c. unable to control product development, schedules, and quality d. decisions made without sufficient understanding of the options through quantitative analysis e. political and exchange rate uncertainty

d

According to the manufacturing-based definition of quality, a. quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost b. quality depends on how well the product fits patterns of consumer preferences c. even though quality cannot be defined, you know what it is d. quality is the degree to which a specific product conforms to standards e. quality lies in the eyes of the beholder

d

All of the following are advantages of enterprise resource planning (ERP) except it a. creates commonality of databases b. increases communications and collaboration worldwide c. helps integrate multiple sites and business units d. requires major changes in the company and its processes to implement e. can provide a strategic advantage over competitors

d

Among the advantages of cycle counting is that it a. makes the annual physical inventory more acceptable to management b. does not require the detailed records necessary when annual physical inventory is used c. does not require highly trained people d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory e. does not need to be performed for less expensive items

d

Because the fixed-position layout problem is so difficult to solve on-site, operations managers a. virtually never employ this layout strategy b. utilize this approach only for construction projects such as bridges and office towers c. increase the size of the site d. often complete as much of the project as possible off-site e. utilize this layout only for defense contractors

d

Break-even analysis can be used by a firm that produces more than one product, but a. the results are estimates, not exact values b. the firm must allocate some fixed cost to each of the products c. each product has its own break-even point d. the break-even point depends upon the proportion of sales generated by each of the products e. None of these statements is true.

d

Cycle time is computed as a. desired output divided by the daily operating time b. daily operating time divided by the product of desired output and the sum of job times c. the product of desired output and the sum of job times divided by daily operating time d. daily operating time divided by the scheduled output e. 1.00 minus station time

d

Demand for a given item is said to be dependent if a. it originates from the external customer b. there is a deep bill of material c. the finished products are mostly services (rather than goods) d. there is a clearly identifiable parent e. the item has several children

d

Dependent demand and independent demand items differ in that a. for any product, all components are dependent-demand items b. the need for independent-demand items is forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.

d

Enterprise resource planning (ERP) a. seldom requires software upgrade or enhancement b. does not integrate well with functional areas other than operations c. is inexpensive to implement d. automates and integrates the majority of business processes e. all of the above

d

Ergonomics is not concerned with a. levels of illumination, noise, temperature, and humidity b. adjusting and providing input to the machine c. feedback (providing information to the operator) d. adequate compensation schemes e. the design of functional and comfortable office furniture

d

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 a. $90,000 dollars b. 90,000 units c. $15,000 dollars d. 15,000 units e. cannot be calculated from the information provided

d

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? a. 2 b. 3 c. 4 d. 5 e. 6

d

Harley Davidson a. utilizes job shops to make each of its modules b. uses product focused manufacturing c. uses a large number of modules to build a small number of different bikes d. uses work cells to feed its assembly line e. All of the above are true.

d

ISO 9000 seeks standardization in terms of a. products b. production procedures c. suppliers' specifications d. procedures to manage quality e. all of the above

d

If demand is not uniform and constant, then stockout risks can be controlled by a. increasing the EOQ b. placing an extra order c. raising the selling price to reduce demand d. adding safety stock e. reducing the reorder point

d

In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket a. signals the need to purchase that end item in that period b. implies that value was scheduled by the MPS c. signals the need for a negative planned order receipt in that period d. is impossible e. All of the above are true.

d

In a large aerospace company, it has been discovered that some insulators have been damaged. A methods specialist is sent out to follow the insulators through the production and storage processes and to try to find out where in the process they are damaged. The specialist should use a. left- and right-hand charts b. man-machine charts c. job analysis charts d. flow diagrams e. activity charts

d

In a product-oriented layout, the process of deciding how to assign tasks to workstations is referred to as a. station balancing b. process balancing c. task allocation d. line balancing e. work allocation

d

In assembly line balancing, the minimum number of workstations is a. the ratio of the sum of all task times to cycle time b. always (when a fraction) rounded upward to the next larger integer value c. not always possible to reach when tasks are actually assigned to stations d. all of the above e. none of the above

d

In job shop (make-to-order) operations, the master production schedule is usually expressed in a. end items b. modules c. kits d. customer orders e. warehouse orders

d

In mass service and professional service, the operations manager should focus on a. automation b. equipment maintenance c. sophisticated scheduling d. human resources e. all of the above

d

Intangible costs include which of the following? a. quality of prospective employees b. quality of education c. availability of public transportation d. all of the above e. none of the above

d

Job a. job enrichment rotation is an example of b. job scheduling c. job training d. job enlargement e. job incentive

d

Kanban is associated with all of the following except a. small lot sizes b. signals, such as cards, lights, or flags c. moving inventory only as needed d. increased material handling e. reductions in inventory

d

Methods analysis focuses on a. the design of the machines used to perform a task b. establishing time standards c. reducing the number of skills needed for the completion of a task d. issues such as the movement of individuals or materials e. evaluating training programs to see if they are efficient

d

Net present value will be greater a. as a fixed set of cash receipts occurs later rather than earlier b. as the total of the cash receipts, made in same time periods, is smaller c. for one end-of-year receipt of $1200 than for twelve monthly receipts of $100 each d. for a 4% discount rate than for a 6% discount rate e. All of the above are true.

d

One factor impacting the fixed-position layout strategy is a. minimizing difficulties caused by material flow varying with each product b. requiring frequent contact close to one another c. the provision of low-cost storage with low-cost material handling d. the movement of material to the limited storage areas around the site e. balancing product flow from one work station to the next

d

Service blueprinting a. provides the basis to negotiate prices with suppliers b. mimics the way people communicate c. determines the best time for each step in the process d. focuses on the provider's interaction with the customer e. can only be successful with two-dimensional processes

d

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? a. The average number of defects will be cut in half. b. The specification limits will be moved twice as far from the mean. c. The average number of defects will be cut by 99.9997%. d. The average number of defects will be cut by 99.87%. e. The average number of defects will be cut by 99.73%.

d

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? a. 1350 students b. 1710 students c. 75% d. 87.7% e. 90%

d

The EOQ model with quantity discounts attempts to determine a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price c. whether to use fixed-quantity or fixed-period order policy d. how many units should be ordered e. what is the shortest lead time

d

The concept of customizing in a warehouse layout a. is possible, but causes serious loss of oversight of the quality function b. cannot be considered seriously in today's high efficiency factories c. is theoretically sound, but several years away in practice d. is a new trend in value-added activities in warehouses e. none of the above

d

The crossover point is that production quantity where a. variable costs of one process equal the variable costs of another process b. fixed costs of a process are equal to its variable costs c. total costs equal total revenues for a process d. total costs for one process equal total costs for another process e. the process no longer loses money

d

The fixed-position layout would be most appropriate in which of the following settings? a. a fast-food restaurant b. a doctor's office c. a casual dining restaurant d. a cruise ship assembly facility e. none of the above

d

The major problem addressed by the process-oriented layout strategy is a. the movement of material to the limited storage areas around the site b. requiring frequent contact close to one another c. the provision of low-cost storage with low-cost material handling d. minimizing difficulties caused by material flow varying with each product e. balancing product flow from one work station to the next

d

The most common tactic followed in process-layout planning is to arrange departments or work centers so they a. minimize the cost of skilled labor b. maximize the machine utilization c. allocate the available space equally to all the departments d. minimize the costs of material handling e. none of the above

d

The number of units projected to be available at the end of each time period refers to a. net requirements b. scheduled receipts c. the projected usage of the item d. the amount projected to be on hand e. the amount necessary to cover a shortage

d

The objective of a human resource strategy is to a. produce the demand forecast at lowest labor cost b. match employment levels with demand c. achieve a reasonable quality of work life at low cost d. manage labor and design jobs so people are effectively and efficiently utilized e. all of the above

d

The proper quantity of safety stock is typically determined by a. minimizing an expected stockout cost b. carrying sufficient safety stock so as to eliminate all stockouts c. meeting 95% of all demands d. setting the level of safety stock so that a given stockout risk is not exceeded e. minimizing total costs

d

The purpose of safety stock is to a. replace failed units with good ones b. eliminate the possibility of a stockout c. eliminate the likelihood of a stockout due to erroneous inventory tally d. control the likelihood of a stockout due to the variability of demand during lead time e. protect the firm from a sudden decrease in demand

d

Throughput measures the time a. that it takes to process one unit at a station b. between the arrival of raw materials and the shipping of finished products c. to produce one whole product through an empty system (i.e., with no waiting) d. required to move orders through the production process, from receipt to delivery e. none of the above

d

Utilization in process-oriented facilities is frequently low because a. the postponement strategy for improving service productivity is being used b. scheduling in process-oriented facilities is not very complex c. with high fixed costs, utilization is not very important d. excess capacity for peak demands is desirable e. low raw material inventories cause machines to be idled

d

What is sometimes referred to as rated capacity? a. efficiency b. utilization c. effective capacity d. expected output e. design capacity

d

When a sample measurement falls inside the control limits, it means that a. each unit manufactured is good enough to sell b. the process limits cannot be determined statistically c. the process output exceeds the requirements d. if there is no other pattern in the samples, the process is in control e. the process output does not fulfill the requirements

d

Which choice best describes level scheduling? a. Daily production is variable from period to period. b. Subcontracting, hiring, and firing manipulate supply. c. Price points are calculated to match demand to capacity. d. Inventory goes up or down to buffer the difference between demand and production. e. Seasonal demand fluctuations are matched without hirings or layoffs.

d

Which of the determinants of service quality involves performing the service right the first time? a. access b. courtesy c. credibility d. reliability e. responsiveness

d

Which of the following aggregate planning methods does not work if hiring and layoffs are possible? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods

d

Which of the following aggregate planning strategies is a "capacity option"? a. influencing demand by changing price b. counterseasonal product mixing c. influencing demand by extending lead times d. changing inventory levels e. influencing demand by back ordering

d

Which of the following aggregate planning strategies is known to lower employee morale? a. yield management b. counterseasonal product and service mixing c. changing inventory levels d. varying work force size by hiring or layoffs e. back ordering during high demand periods

d

Which of the following constitutes a major trend influencing office layouts? a. downsizing b. globalization c. environmental issues d. off-site employees e. health issues

d

Which of the following costs would be incurred even if no units were produced? a. raw material costs b. direct labor costs c. transportation costs d. building rental costs e. purchasing costs

d

Which of the following is a common heuristic for assembly line balancing? a. debits near the windows, credits near the door b. manufacturers locate near materials, retailers locate near customers c. earliest due date first d. ranked positional weight e. none of the above

d

Which of the following is false regarding capacity expansion? a. "Average" capacity sometimes leads demand, sometimes lags it. b. If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting. c. Total cost comparisons are a rather direct method of comparing capacity alternatives. d. Capacity may only be added in large chunks. e. All of the above are true.

d

Which of the following is not an advantage of outsourcing? a. cost savings b. gaining outside expertise c. improving operations and service d. outsourcing core competencies e. gaining outside technology

d

Which of the following is not an information requirement for solving a load-distance problem? a. a list of departments or work centers b. a projection of work flows between the work centers c. the distance between locations d. a list of product cycle times e. the cost per unit of distance to move loads

d

Which of the following is not one of the four main types of inventory? a. raw material inventory b. work-in-process inventory c. maintenance/repair/operating supply inventory d. safety stock inventory e. All of these are main types of inventory.

d

Which of the following is not true regarding core competencies? a. They may include specialized knowledge. b. They may represent a small portion of an organization's total business. c. They may include proprietary technology or information. d. They may be good candidates for outsourcing. e. They may include unique production methods.

d

Which of the following is the author of the phrase "Inventory is evil"? a. Poka Yoke b. Pat "Keiretsu" Morita c. Kanban Polka d. Shigeo Shingo e. none of the above

d

Which of the following is the term used for medium range capacity planning with a time horizon of three to eighteen months? a. material requirements planning b. short-range planning c. strategic planning d. aggregate planning e. none of the above

d

Which of the following is true regarding fabrication lines? a. They are the same thing as assembly lines. b. They are the same thing as focused factories. c. They are a special type of process-oriented layout. d. Balancing their assembly line is more technological than worker oriented. e. None of the above is true.

d

Which of the following is true regarding the concept of flexibility? a. It is the ability to change production rates with little penalty in time, cost, or customer value. b. It can be accomplished with sophisticated electronic equipment. c. It may involve modular, movable, even cheap equipment. d. All of the above are true. e. None of the above is true.

d

Which of the following phrases best describes product focus? a. low volume, high variety b. finished goods are usually made to order c. processes are designed to perform a wide variety of activities d. high fixed costs, low variable costs e. raw material inventories are low relative to the value of the product

d

Which of the following statements about ABC analysis is false? a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. e. All of the above statements are true.

d

Which of the following statements about aggregate planning is true? a. Advertising/promotion is a way of manipulating product or service supply. b. Work station loading and job assignments are examples of aggregate planning. c. Overtime/idle time is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. All of the above are true.

d

Which of the following statements about quantity discounts is false? a. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. b. In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available. c. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. d. The larger annual demand, the less attractive a discount schedule will be. e. The smaller the ordering cost, the less attractive a discount schedule will be.

d

Which of the following statements best describes the relationship between quality management and product strategy? a. Product strategy is set by top management; quality management is an independent activity. b. Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies. c. High quality is important to all three strategies, but it is not a critical success factor. d. Managing quality helps build successful product strategies. e. Companies with the highest measures of quality were no more productive than other firms.

d

Which of the following statements regarding Anheuser-Busch is false? a. Aggregate planning is a major part of its competitive edge. b. All four stages of beer production are integrated into the aggregate plan. c. High facility utilization complements its successful aggregate planning. d. Its aggregate planning focuses entirely on facilities, ignoring employee issues. e. Even with excellent aggregate planning, its plants need to have high utilization.

d

Which of the following statements regarding Arnold Palmer Hospital is false? a. The hospital uses a wide range of quality management techniques. b. The culture of quality at the hospital includes employees at all levels. c. The hospital scores very highly in national studies of patient satisfaction. d. The hospital's high quality is measured by low readmission rates, not patient satisfaction. e. The design of patient rooms, even wall colors, reflects the hospital's culture of quality.

d

Which of the following statements regarding MRP in services is true? a. MRP is for manufacturing only, and is not applicable to services. b. MRP can be used in services, but only those that offer very limited customization. c. MRP does not work in services because there is no dependent demand. d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. e. None of the above is true.

d

Which of the following statements regarding a pull system is true? a. Large lots are pulled from upstream stations. b. Work is pulled to the downstream stations before it is actually needed. c. Manufacturing cycle time is increased. d. Problems become more obvious. e. None of the above is true of a pull system.

d

Which of the following statements regarding incentive systems is false? a. Bonuses are often used at the executive levels. b. About half of all American manufacturing firms use productivity incentives. c. Knowledge-based pay systems are increasing in use. d. The Scanlon plan is based on team productivity. e. Increasing use of cross-training has led to increasing use of knowledge-based pay systems.

d

Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds? a. ASRS b. AGV c. CAD/CAM d. RFID e. FMS

d

Which of the following uses regression to incorporate historical managerial performance into aggregate planning? a. transportation method b. simulation c. linear decision rule d. management coefficients model e. keiretsu

d

Which one of the following does not exemplify JIT used for competitive advantage? a. Acme Foods decides to decrease the number of its suppliers to just a few. b. Ajax, Inc. is proud to announce that incoming goods are delivered directly to the point of use. c. Ardoyne Builders has a scheduled preventive maintenance program. d. Cheramie Trucking trains workers to specialize and become very efficient in one job. e. Cajun Contractors has reduced the amount of space for inventory.

d

Which one of the following is a characteristic of a JIT partnership? a. large number of suppliers b. maximal product specifications imposed on supplier c. active pursuit of vertical integration d. removal of incoming inspection e. frequent deliveries in large lot quantities

d

Which one of the following scenarios represents the use of a kanban to reduce inventories? a. A supervisor tells the operators to stay busy and start producing parts for next month. b. A "supplier" work center signals the downstream workstation that a batch has been completed. c. A supervisor signals to several work centers that the production rate should be changed. d. A "customer" work center signals to the "supplier" workstation that more parts are needed. e. An operator asks the next station's operator to help him fix his machine.

d

When demand is constant and lead time is variable, the safety stock computation requires three inputs: the value of Z, ________, and the standard deviation of lead time.

daily demand

If a safety stock problem includes parameters for average daily demand, standard deviation of demand, and lead time, then ________ is variable and ________ is constant.

demand; lead time

Local optimization, incentives, and large lots all contribute to ________ about what is really occurring in the supply chain.

distortions of information

"Kaizen" is a Japanese term meaning a. a foolproof mechanism b. just-in-time (JIT) c. a fishbone diagram d. setting standards e. continuous improvement

e

A good description of "source inspection" is inspecting a. materials upon delivery by the supplier b. the goods at the production facility before they reach the customer c. the goods as soon as a problem occurs d. goods at the supplier's plant e. one's own work, as well as the work done at the previous work station

e

A good layout requires determining a. material handling requirements b. capacity and space requirements c. environment and aesthetics d. cost of moving between various work areas e. all of the above

e

A quasi-custom product a. gets its apparent customization from the combinations available from a small number of modules b. is often the output of repetitive focus facilities c. is a valid description of a fast food sandwich d. is only possible when the focus strategy of service productivity improvement is in use e. All but d are true.

e

Aggregate planning for service firms that provide intangible output deals mainly with a. smoothing the production rate and finding the optimal size of the workforce b. yield management c. centralized purchasing d. centralized production e. planning for human resource requirements and managing demand

e

All of the following costs are likely to decrease as a result of better quality except a. customer dissatisfaction costs b. inspection costs c. scrap costs d. warranty and service costs e. maintenance costs

e

An organization's process strategy a. will have long-run impact on efficiency and flexibility of production b. is the same as its transformation strategy c. must meet various constraints, including cost d. is concerned with how resources are transformed into goods and services e. All of the above are true.

e

Arnold Palmer Hospital uses which of the following quality management techniques? a. Pareto charts b. flow charts c. benchmarking d. Just-in-Time e. The hospital uses all of the above techniques.

e

Break-even is the number of units at which a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total profit equals total cost e. total revenue equals total cost

e

Capacity planning in closed-loop MRP a. utilizes feedback about workload from each work center b. may make use of resource requirements profiles (load reports) c. may smooth work center loads with such tactics as overlapping and lot splitting d. does not add capacity, but rather seeks effective use of existing capacity e. All of the above are true.

e

Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in which of the following location decision methods? a. transportation method b. locational break-even analysis c. center-of-gravity method d. simulation e. factor rating method

e

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be? a. about 18 b. about 24 c. about 32 d. about 38 e. more than 40

e

Distortion in MRP systems can be minimized when safety stock is held at the a. purchased component or raw material level b. work-in-process level c. finished goods level d. aandb e. aandc

e

Enterprise resource planning (ERP) a. has been made possible because of advances in hardware and software b. uses client/server networks c. creates commonality of databases d. uses business application-programming interfaces (BAPI) to access their database e. All of the above are true of ERP.

e

Ethical and environmentally friendly processes include which of the following? a. emission controls b. recycling c. efficient use of resources d. reduction of waste by-products e. all of the above

e

Ethical work environment decisions by managers may be guided by a. state agencies b. trade associations c. insurers d. employees e. all of the above

e

FedEx chose Memphis, Tennessee, as its U.S. hub because a. the city is in the center of the U.S., geographically b. the airport has relatively few hours of bad weather closures c. it needed a means to reach cities to which it did not have direct flights d. the firm believed that a hub system was superior to traditional city-to-city flight scheduling e. All of the above are true.

e

Flexibility can be achieved with a. movable equipment b. inexpensive equipment c. sophisticated electronic equipment d. modular equipment e. all of the above

e

If a layout problem is solved by use of "heuristics," this means that a. there was no other way to solve the problem b. no computer software was available c. the problem has only a few alternatives to evaluate d. no optimum solution exists e. a "satisfactory" solution is acceptable

e

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock? a. 8 units b. 10 units c. 16 units d. 64 units e. cannot be determined without lead time data

e

In JIT partnerships, suppliers have several concerns. Which of the following is not such a concern? a. desire for diversification b. poor customer scheduling c. small lot sizes d. producing high enough quality levels e. customers' infrequent engineering changes

e

In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except a. automation b. standardization c. tight quality control d. removing some services e. customization

e

In the quest for competitive advantage, which of the following is a JIT requirement? a. small number of job classifications b. reduced number of vendors c. reduced space for inventory d. quality by suppliers e. All of the above are JIT requirements.

e

Just-in-time systems make demands on layouts, including a. distance reduction b. increased flexibility c. reduced space and inventory d. cross-trained, flexible employees e. All of the above are JIT influences on layout.

e

Labor standards are defined as the a. preset activities required to perform a job b. amount of space required by a specific crew to perform the job c. standard set of procedures to perform the job d. standard labor agreements e. amount of time required to perform a job or part of a job

e

Location analysis techniques typically employed by service organizations include a. factor rating method b. center-of-gravity method c. purchasing power analysis of area d. traffic counts e. all of the above

e

Making environmentally sound products through efficient processes a. is unprofitable, as long as recyclable materials prices are soft b. is known as lean manufacturing c. can still be profitable d. is easier for repetitive processes than for product-focused processes e. none of the above

e

Manufacturing cycle time is best defined as the a. length of the work shift, expressed in minutes per day b. time it takes a unit to move from one workstation to the next c. time between the start of one unit and the start of the next unit d. sum of all the task times to make one unit of a product e. time from raw materials receipt to finished product exit

e

Net present value a. is gross domestic product less depreciation b. is sales volume less sales and excise taxes c. is profit after taxes d. ignores the time value of money e. is the discounted value of a series of future cash receipts

e

Of the four approaches to capacity expansion, the approach that "straddles" demand a. uses incremental expansion b. uses one-step expansion c. at some times leads demand, and at other times lags d. works best when demand is not growing but is stable e. Choices a and c are both correct.

e

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 a. fixed costs are equal for two alternative locations b. variable costs are equal for two alternative locations c. total costs are equal for all alternative locations d. fixed costs equal variable costs for one location e. total costs are equal for two alternative locations

e

One disadvantage of process-oriented layouts arises from a. the use of special purpose equipment b. machine maintenance, which tends to seriously degrade the capacity of the entire system c. the use of specialized material handling equipment d. the need for stable demand e. the use of the general purpose machines and equipment

e

Operations managers will need to consider ethical and social responsibility issues when location decisions involve a. child labor issues b. sweatshop conditions c. allegiance to the firm's current location d. corruption e. all of the above

e

Outsourcing manufacturing is also known as a. license manufacturing b. sublease manufacturing c. concurrent manufacturing d. hollow manufacturing e. contract manufacturing

e

Quality circles members are a. paid according to their contribution to quality b. external consultants designed to provide training in the use of quality tools c. always machine operators d. all trained to be facilitators e. none of the above; all of the statements are false

e

Techniques for building employee empowerment include a. building communication networks that include employees b. developing open, supportive supervisors c. moving responsibility from both managers and staff to production employees d. building high-morale organizations e. All of the above are techniques for employee empowerment.

e

The 5S's a. have the "flavor" of a housekeeping list b. are a checklist for lean operations c. have become a list of seven items in American practice d. can be used to assist with necessary changes in organizational culture e. All of these are true.

e

The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above

e

The bill of material contains information necessary to a. place an order to replenish the item b. calculate quantities on hand and on order c. convert net requirements into higher level gross requirements d. convert gross requirements into net requirements e. convert (explode) net requirements at one level into gross requirements at the next level

e

The central problem in product-oriented layout planning is a. minimizing material handling within workstations b. minimizing labor movement between workstations c. equalizing the space allocated to the different workstations d. maximizing equipment utilization e. minimizing the imbalance in the work loads among workstations

e

The difference between job enrichment and job enlargement is that a. enlarged jobs involve vertical expansion, while enriched jobs involve horizontal expansion b. enriched jobs enable an employee to do a number of boring jobs instead of just one c. job enlargement is more psychologically satisfying than job enrichment d. job enrichment is suitable for all employees, whereas job enlargement is not e. enriched jobs involve vertical expansion, while enlarged jobs involve horizontal expansion

e

The layout strategy that deals with low-volume, high-variety production is a. fixed-position layout b. retail layout c. warehouse layout d. office layout e. none of the above

e

The main advantage of a product-oriented layout is typically a. low raw material cost b. employability of highly skilled labor c. high flexibility d. low capital cost e. low variable cost per unit

e

The philosophy of zero defects is a. the result of Deming's research b. unrealistic c. prohibitively costly d. an ultimate goal; in practice, 1 to 2% defects is acceptable e. consistent with the commitment to continuous improvement

e

The role of quality in limiting a firm's product liability is illustrated by a. ensuring that contaminated products such as impure foods do not reach customers b. ensuring that products meet standards such as those of the Consumer Product Safety Act c. designing safe products to limit possible harm to consumers d. using processes that make products as safe or as durable as their design specifications call for e. All of the above are valid.

e

The technique known as level schedules a. requires that schedules be met without variation b. processes many small batches rather than one large one c. is known as "jelly bean" scheduling d. is based on meeting one day's demand with that day's production e. All of the above are true regarding level scheduling.

e

The visual workplace a. uses low-cost visual devices to share information b. is an effective means of rapid communication in a dynamic workplace c. helps with both "big picture" and "housekeeping" issues in the workplace d. eliminates non-value added activities by making problems and standards visual e. all of the above

e

The visual workplace includes a. painted symbols to indicate the proper place for tools and equipment b. labeling of parts, bins, and tools to reduce waste c. kanbans, andons, and statistical process control (SPC) charts d. color-coded lights and signs to indicate that there is a problem e. all of the above

e

Value Stream Mapping a. is a variation on time function mapping b. examines the supply chain to determine where value is added c. extends time function mapping back to the supplier d. starts with the customer and works backwards e. All of the above are true.

e

What describes a system that stores and displays information that can be linked to a geographic location? a. AIS b. LOC c. GLOC d. LIS e. GIS

e

When done correctly, mass customization a. increases pressure on supply chain performance b. helps eliminate the guesswork that comes with sales forecasting c. drives down inventories d. increases pressure on scheduling e. all of the above

e

When making a location decision at the country level, which of these would be considered? a. corporate desires b. land/construction costs c. air, rail, highway, waterway systems d. zoning restrictions e. location of markets

e

When quantity discounts are allowed, the cost-minimizing order quantity a. is always an EOQ quantity b. minimizes the sum of holding and ordering costs c. minimizes the unit purchase price d. may be a quantity below that at which one qualifies for that price e. minimizes the sum of holding, ordering, and product costs

e

Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones? a. housing costs b. material handling costs c. labor cost d. parts cost e. pilferage, scrap, and obsolescence

e

Which of the following are elements of inventory holding costs? a. housing costs b. material handling costs c. investment costs d. pilferage, scrap, and obsolescence e. All of the above are elements of inventory holding cost.

e

Which of the following are typical of process control systems? a. They have sensors. b. The digitized data are analyzed by computer, which generates feedback. c. Their sensors take measurements on a periodic basis. d. The sensors' measurements are digitized. e. all of the above

e

Which of the following attempts to manipulate product or service demand? a. inventories b. part-time workers c. subcontracting d. overtime/idle time e. price cuts

e

Which of the following industries is likely to have low equipment utilization? a. auto manufacturing b. commercial baking c. television manufacturing d. chemical processing e. restaurants

e

Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory.

e

Which of the following is among the eight components of revenue and volume for a service firm? a. uniqueness of the firm's and the competitor's locations b. quality of the competition c. quality of management d. purchasing power of the customer-drawing area e. all of the above

e

Which of the following is consistent with a pure chase strategy? a. vary production levels to meet demand requirements b. vary work force to meet demand requirements c. vary production levels and work force to meet demand requirements d. little or no use of inventory to meet demand requirements e. All of the above are consistent with a pure chase strategy.

e

Which of the following is false regarding the links between JIT and quality? a. Inventory hides bad quality; JIT immediately exposes it. b. JIT reduces the number of potential sources of error by shrinking queues and lead times. c. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. d. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. e. All of the above are true.

e

Which of the following is generally found in most JIT environments? a. a push or pull system, depending upon the rate of demand b. a push system for high margin items and a pull system for low margin items c. a push system for purchased parts and a pull system for manufactured parts d. push systems e. pull systems

e

Which of the following is not a concern of suppliers as they prepare to enter into JIT partnerships? a. Suppliers feel that they would be less at risk if they contracted with more than one customer. b. Suppliers are concerned that customers will present frequent engineering changes with inadequate lead time to deal with them. c. Suppliers feel that their processes are suited for larger lot sizes than the customer wants. d. Suppliers are concerned that frequent delivery of small quantities is economically prohibitive. e. All of the above represent JIT supplier concerns.

e

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. obtain improved quality and reliability e. All of the above are goals of JIT partnerships.

e

Which of the following is not a typical inspection point? a. upon receipt of goods from your supplier b. during the production process c. before the product is shipped to the customer d. at the supplier's plant while the supplier is producing e. after a costly process

e

Which of the following is not consistent with a pure level strategy? a. varying the use of subcontracting b. variable work force levels c. little or no use of inventory to meet demand requirements d. varying production levels and/or work force to meet demand requirements e. All of the above are inconsistent with the pure level strategy.

e

Which of the following is not one of the four approaches to capacity expansion? a. average capacity with incremental expansion b. lead demand with incremental expansion c. lag demand with incremental expansion d. lead demand with one-step expansion e. lag demand with one-step expansion

e

Which of the following is true about ISO 14000 certification? a. It is not a prerequisite for ISO 9000 certification. b. It deals with environmental management. c. It offers a good systematic approach to pollution prevention. d. One of its core elements is life-cycle assessment. e. All of the above are true.

e

Which of the following is true regarding opportunities to improve service processes? a. Automation can do little to improve service processes, because services are so personal. b. Layout is of little consequence, since services seldom use an assembly line. c. If a work force is strongly committed, it need not be cross-trained and flexible. d. All of the above are true. e. None of the above is true.

e

Which of the following is true regarding the steps to reducing setup times? a. The first step involves performing as much setup preparation as possible while the process/machine is operating. b. The cycle of steps is repeated until setup time is reduced to under a minute. c. Standardize tooling and standardize training are included in the same step. d. Improved material handling and move material closer are done before operator training. e. All of the above are true.

e

Which of the following regarding enterprise resource planning (ERP) is true? a. It involves an ongoing process for implementation. b. It can incorporate improved, reengineered "best processes." c. It has a software database that is off-the-shelf coding. d. ERP systems usually include MRP, financial and human resource information. e. All of the above are true.

e

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? a. phantom-docking b. random stocking c. ASRS d. customizing e. cross-docking

e

Which of the following statements about the basic EOQ model is true? a. If the ordering cost were to double, the EOQ would rise. b. If annual demand were to double, the EOQ would increase. c. If the carrying cost were to increase, the EOQ would fall. d. If annual demand were to double, the number of orders per year would increase. e. All of the above statements are true.

e

Which of the following statements describes job rotation? a. The job contains a larger number of similar tasks. b. The job includes some planning and control necessary for job accomplishment. c. The operator works on different shifts on a regular basis. d. The operator's schedule is flexible. e. The operator is allowed to move, for example, from one type of CNC machine to the other.

e

Which of the following statements regarding "proximity" in the location decision is false? a. Service organizations find that proximity to market is the most critical primary location factor. b. Manufacturers want to be near customers when their product is bulky, heavy, or fragile. c. Perishability of raw materials is a good reason for manufacturers to locate near the supplier, not the customer. d. Reduction in bulk is a good reason for a manufacturer to locate near the supplier. e. Clustering among fast food chains occurs because they need to be near their labor supply.

e

Which of the following statements regarding aggregate planning in services is false? a. When outputs are intangible, aggregate planning deals mainly with human resources requirements and managing demand. b. Perishability of inventory is an important consideration of planning. c. Aggregate planning in some service industries can be simpler than in manufacturing. d. Labor is the primary aggregate planning vehicle. e. Level scheduling is far more common than chase.

e

Which of the following statements regarding the gross material requirements plan is true? a. It shows total demand for an item. b. It shows when an item must be ordered from a supplier or when production must be started. c. It combines a master production schedule with the time-phased schedule. d. It requires several inputs, including an accurate bill of material. e. All of the above are true.

e

Which of the following statements regarding the reorder point is true? a. The reorder point is that quantity that triggers an action to restock an item. b. There is a reorder point even if lead time and demand during lead time are constant. c. The reorder point is larger than d x L if safety stock is present. d. The fixed-period model has no reorder point. e. All of the above are true.

e

Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries? a. willing to accept low wages b. have a high level of education c. speak English d. possess an in-depth knowledge of American popular culture e. are young

e

Which of these factors would be considered when making a location decision at the region/community level? a. government rules, attitudes, stability, incentives b. cultural and economic issues c. zoning restrictions d. environmental impact issues e. proximity to raw materials and customers

e

Which one of the following statements is true about the kanban system? a. The quantities in the containers are usually large to reduce setup costs. b. It is associated with a push system. c. It is useful to smooth operations when numerous quality problems occur. d. The supplier workstation signals the customer workstation as soon as a batch is completed. e. The customer workstation signals to the supplier workstation when production is needed.

e

Yield management is most likely to be used in which one of the following situations? a. a fast food restaurant with wide demand fluctuations during the day b. a dental clinic that wants to fill its appointment book c. a firm with a good counterseasonal product mix d. a shipping company that can change its fleet size easily e. an airline attempting to fill "perishable" seats at maximum revenue

e

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

employee empowerment

A(n) ________ system is packaged business software that automates and integrates the majority of business processes, shares common data and practices across the entire enterprise, and produces information in a real-time environment.

enterprise resource planning or ERP

One of Britain's largest children's hospitals working with Ferrari Racing is an example of

external benchmarking

The ________ model adds objectivity to decision making when selecting suppliers.

factor weighting

The priority rule that appears fair to customers in service systems is ________.

first come, first served

A(n) ________ system triggers inventory ordering on a uniform time frequency.

fixed-period (or P)

A(n) ________ uses an automated work cell controlled by electronic signals from a common centralized computer facility.

flexible manufacturing system or FMS

A(n) ________ uses symbols to analyze the movement of people or material.

flowchart

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

flowchart

The primary trade-off in transportation mode analysis involves evaluating ________ against the cost of shipping.

holding cost

Virtual companies are also known as ________ .

hollow corporations or network companies

A hospital benchmarked against Ferrari Racing in an effort to

improve patient handoff quality

When suppliers are encouraged to locate near manufacturing plants, the goal of the JIT partnership is to reduce ________ inventory.

in-transit

In the EOQ model, for a given level of demand, annual holding cost is larger as the order quantity is ________.

larger

A(n) ________ can illustrate whether a work center has been scheduled beyond its capacity.

load report or resource requirements profile

The ________ decision involves choosing between producing a component or a service internally and purchasing it externally.

make-or-buy

A(n) ________ is the result of the disaggregation of an aggregate plan.

master production schedule

Wheeled Coach uses ________ as the catalyst for low inventory, high quality, tight schedules, and accurate records.

material requirements planning or MRP

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

minimum

Bills of material organized by major subassemblies or by product options are called ________.

modular bills

Transferring to external vendors a firm's activities that have traditionally been internal is known as ________.

outsourcing

A hotel room that goes unrented, a dental appointment that no patient booked, and an airline seat that went unsold, are all examples of ________ in services.

perishable inventory

An organization's approach to transforming resources into goods and services is called its ________.

process strategy

A(n) ________ is a concept that results in material being produced only when requested and moved to where it is needed just as it is needed.

pull system

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

quality loss function

In a quantity discount problem, if the savings in annual product cost is smaller than the increase in the sum of annual setup cost and annual holding cost, the discount should be ________.

rejected or refused

In the sequence of decisions that affect scheduling, ________ is (are) the immediate follower(s) of the master schedule (or master production schedule).

short-term schedules

The 5S category ________ includes analysis to improve workflow and reduce wasted motion.

simplify/straighten or simplify

In the disaster risk decision tree model, a(n) ________ disrupts all suppliers simultaneously.

super-event

Of the four stages of supplier selection, the stage at which the factor weighting approach would be used is ________.

supplier evaluation

Among the mathematical approaches to aggregate planning, ________ is good at working with inventories, holding costs, overtime, and subcontracting, but not with hiring and layoffs.

the transportation method of linear programming

Handling material more than once is an example of the waste called ________.

transportation

A special form of time-function mapping, which goes beyond the organization into its supply chain, is ________.

value-stream mapping

Suppliers are also known as ________.

vendors

Amazon's original concept of operating without inventory has given way to a model in which Amazon is a world-class leader in ________.

warehouse automation and management

Identify the nine major categories of supply chain risk.

(1) supplier failure to deliver; (2) supplier quality failures; (3) logistics delays or damage; (4) distribution; (5) information loss or distortion; (6) political; (7) economic; (8) natural catastrophes; (9) theft, vandalism, and terrorism

What are the four functions of inventory?

(1) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand; (2) to decouple various parts of the production process; (3) to take advantage of quantity discounts; and (4) to hedge against inflation

A firm is about to undertake the manufacture of a product, and it is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit. a. At what output does the large intermittent process become cheaper than the small one? b. At what output does the repetitive process become cheaper than the larger intermittent process?

(a) at 1125 units, the large job shop becomes cheaper than the small job shop; (b) at 38,000 units, the repetitive shop is cheaper than the larger job shop.

An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit. a. If the company produced 20,000 units, what would be its cost under each of the three choices? b. Which process offers the lowest cost to produce 40,000 units? What is that cost?

(a) at 20,000 units, the costs are: small intermittent = $203,000; large intermittent = $52,000; and repetitive = $70,000 (b) at 40,000 units, repetitive process is cheapest, at $90,000 (small intermittent = $403,000, and large intermittent = $92,000).

The local convenience store makes personal pan pizzas. Currently, its process makes complete pizzas, fully cooked, for the customer. This process has a fixed cost of $20,000, and a variable cost of $1.75 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked (as before), or partially cooked and then flash frozen for the customer to finish heating at home. This alternate process has a fixed cost of $24,000, but a lower variable cost (because much less energy is used in baking) of $1.25 per pizza. a. What is the crossover point between the existing process and the proposed process? b. If the owner expects to sell 9,000 pizzas, should he get the new oven?

(a) the crossover is 8,000 units (b) for production quantities of 8,000 or larger, the new, more flexible process has a lower cost.

Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.32 per unit, and fixed costs of $75,000. Big John is considering purchasing a new machine that would drop the variable cost to $.28 per unit, but has fixed costs of $150,000. What is the cross-over point between the two machines?

1,875,000 units

Identify and describe briefly the six sourcing strategies.

1. With the many suppliers strategy, a supplier responds to the demands and specifications of a "request for quotation," with the order usually going to the low bidder. 2. The strategy of few suppliers develops long-term "partnering" relationships with a few dedicated suppliers who will work with the purchaser in satisfying the end customer. 3. Vertical integration is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor. 4. Joint ventures represent a formal collaboration between firms, without implying any change of ownership. 5. Suppliers become part of a company coalition in the keiretsu strategy. 6. With the virtual companies strategy, firms rely on a variety of supplier relationships to provide services on demand.

A three sigma program has how many defects per million

2700

A six sigma program has how many defects per million

3.4

A non-profit organization is planning a raffle to raise money. It has two options for tickets. The first option is to do the tickets by hand, with fixed costs of $50 and variable costs of $.05 per ticket. The second option is to outsource production. This would result in fixed costs of $500 and variable costs of $.01. If the organization plans to sell 10,000 tickets which option should it choose?

50 + .05V = 500 + .01V, V = 11,250 tickets (students may solve for the cross-over point and realize higher VC option is cheaper at 10,000 since it is below the cross-over point). Another viable method is to find the cost for each option, yielding Option 1 = 50 + .05(10,000) = $550 and Option 2 = 500 + .01(10,000) = $600. Thus the organization should choose the first option.

Brandon's computer shop is considering two different configuration options. The first one is to have each computer built by the sales associates when they have free time. The second option is to hire a dedicated assembly technician. Option A has variable costs of $50 per computer and no fixed costs. Option B has a fixed cost of $1,000 but variable costs of only $5 per computer. What is the cross-over point?

50V = 1000 + 5V, V (cross-over point) = 22.2 computers

Describe a reverse auction (also known as a Dutch auction).

A buyer initiates the process by submitting a description of the desired product or service. Potential suppliers then submit bids, which may include price and other delivery information. Thus, price competition occurs on the selling side of the transaction—bidding the price down.

Identify the five major tools of process analysis and design. Describe them in a sentence or two each.

A flowchart is a schematic or drawing of the movement of material, product, or people. Time-function mapping is a flow chart, with the addition of time on the horizontal axis. Value-stream mapping shows how to add value in the flow of materials and information through the entire production process. Process charts use symbols, time, and distance to provide an objective and structured way to analyze and record the activities that make up a process. Service blueprinting focuses on the customer and the provider's interaction with the customer.

What is a keiretsu?

A keiretsu is a network of suppliers who become part of a company coalition. It is part collaboration, part purchasing from a few suppliers, and part vertical integration. Usually the suppliers are partially owned or debtors to the purchasing organization. This structure is quite common in Japan.

A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?

A) $0.45

A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $20, and trees sell for $50 what is the service level?

A) .60

With cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)?

A) 1

A work center had actual input of 280 hours and actual output of 270 hours. What is the change in backlog?

A) 10

An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C?

A) 115

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?

A) 12.50

A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level?

A) 41

The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the shortest processing time rule, what is the average completion time?

A) 47.6 days

If the demand for product A is 50 units, how many units of component E will be needed? (2)

A) 50

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. What is the crossover point between process A and process B?

A) 50 units

Which of the following items is mostly likely managed using a single-period order model?

A) Christmas trees

Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory?

A) Just-in-time (JIT)

If a factory wants to cut its current lot size in half, by what proportion must setup cost change?

A) Setup cost must be cut to one fourth its current value.

What directly results from disaggregation of an aggregate plan?

A) a master production schedule

Which of the following best describes a gross material requirements plan?

A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

The fixed-period inventory system requires more safety stock than a fixed-quantity system because:

A) a stockout can occur during the review period as well as during the lead time.

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

A) automobiles

Disaggregation:

A) breaks the aggregate plan into greater detail.

The correct sequence from longest to smallest duration scheduling is:

A) capacity planning, aggregate planning, master schedule, short-term scheduling.

Which of the following is NOT tracked by scheduling optimization systems used in retail stores?

A) cars parked in the parking lot

Which of the following aggregate planning strategies is a demand option?

A) changing price

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT?

A) close relationships with trust

What term describes a supply chain that is designed to optimize both forward and reverse flows?

A) closed-loop supply chain

Computer-integrated manufacturing (CIM) includes manufacturing systems that have:

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

What type of negotiating strategy requires the supplier to open its books to the purchasers?

A) cost-based price model

What is the priority rule that sequences jobs using the smallest ratio of due date from today to processing time?

A) critical ratio

EDD stands for what?

A) earliest due date

Q is to ________ systems as P is to ________ systems.

A) fixed quantity, fixed period

What is a drawing of the movement of material, product, or people?

A) flowchart

What value of the bullwhip measure would indicate that the bullwhip effect exists?

A) greater than 1

The list of 5Ss, although it looks like a housekeeping directive, supports lean production by:

A) identifying non-value items and removing them, in the "sort/segregate" category.

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will:

A) increase by about 41%.

Which of the following is NOT a key benefit of MRP?

A) increased quality

The main trait of a single-period model is that:

A) inventory has limited value after a certain period of time.

What lot-sizing technique is generally preferred when inventory holding costs are extremely high?

A) lot-for-lot

Which of the following lot-sizing techniques results in the lowest holding costs?

A) lot-for-lot

Which of the following phrases best describes process focus?

A) low volume, high variety

In MRP, system nervousness is caused by:

A) management's attempt to continually respond to minor changes in production requirements.

Align Technology uses a ________ approach to produce clear plastic removable aligners.

A) mass customization

The objective of aggregate planning is to meet forecast demand while ________ over the planning period.

A) minimizing cost

If an assignment problem consists of 5 workers and 4 projects:

A) one worker will not get a project assignment.

Local optimization is a supply-chain complication best described as:

A) optimizing one's local area without full knowledge of supply chain needs.

Which of the following is a requirement of Q systems?

A) perpetual inventory system

What is the practice of keeping a product generic as long as possible before customizing?

A) postponement

Goods made to order are typical of ________ and ________ approaches while goods made to forecast are typical of ________ and ________ approaches.

A) process, mass customization; repetitive, product

Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy?

A) product development skills

Under which of the following do planning tasks associated with job assignments, ordering, job scheduling, and dispatching typically fall?

A) short-range plans

Which of the following dispatching rules ordinarily gives the best results when the criterion is lowest time for completion of the full sequence of jobs?

A) shortest processing time (SPT)

What are the four stages of supplier selection?

A) supplier evaluation, supplier development, negotiations, and contracting

How can a reduction of in-transit inventory be encouraged?

A) supplier location near plants

What is a scheduling technique used to achieve an optimum, one-to-one matching of tasks and resources?

A) the assignment method

Which of the following is NOT an element of the disaster risk decision tree model?

A) the buyer's financial loss incurred in a supply cycle if supplier i were disrupted

Three jobs are to be assigned to three machines. Cost for each job-machine combination appears in the table below. Perform the first two steps of the assignment method (subtract the smallest number in each row and subtract the smallest number in each column; then cover with straight lines). At this point in the problem-solving process:

A) the row for Job 1 contains the values 5, 6, and 0.

What is the formula for the bullwhip measure?

A) variance of orders / variance of demand

_______ is a method for dividing on-hand inventory into three classifications based on annual dollar volume.

ABC analysis

Describe ABC inventory analysis in one sentence. Identify three policies that may be based upon the results of an ABC analysis.

ABC inventory analysis is a method for dividing on-hand inventory into three classifications based on annual dollar volume. Some policies include: (1) purchasing resources expended on supplier development should be much higher for individual A items than for C items; (2) A items should have tighter physical inventory control; and (3) forecasting A items may warrant more care than forecasting other items.

A company is deciding where to assign its summer intern. The manager estimates that the intern can save the company $10,000 in supply chain costs. Given the table below, what increase in sales (revenue) by the intern is required to show an equal profit?

Additional sales would increase costs by (.35+.25) × Sales. Profit would therefore be X - .6X = .4X, where X is the increase in sales (revenue). Solve for when .4X = 10,000 or X = $25,000 required in increased sales to account for the same profit level.

Identify the advantages and disadvantages of using the "few suppliers" sourcing strategy.

Advantages: long-term suppliers are more likely to understand the broad objectives of the procuring firm and the end customer; using few suppliers can create value by allowing suppliers to have economies of scale and a learning curve that yields both lower transaction costs and lower production costs; and the strategy also encourages those suppliers to provide design innovations and technological expertise. Disadvantages: concern about trade secrets and suppliers venturing out on their own; the high cost of changing partners; and risk of poor supplier performance.

________ is an approach to determine the quantity and timing of production for the intermediate future.

Aggregate planning

Compare the assumptions of the production order quantity model to those of the basic EOQ model.

All are the same, except for the assumption that receipt of inventory is instantaneous, which holds for the EOQ, but not the POQ.

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%. In addition, the firm currently uses four suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 20%. Supplier management costs during this period are $50,000 per supplier. The financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000. What is the expected monetary value (cost) of the current supplier diversification arrangement?

B) $415,680

Suppose that a product's value is $1000. The manufacturer experiences a holding cost of 2.5% per month. The firm ships the product across country by truck, and it arrives six days later. The shipping cost is $80 per unit. What is the holding cost on each unit shipped? (Assume 30 days per month.)

B) $5.00

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d = 400 per day (250 days per year), p = 4000 units per day, H = $40 per unit per year, and Q = 200 (demand for four hours, half a day).

B) $7.20

A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost ________ per year in total annual inventory (holding and setup) costs.

B) $800

A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, and in period 2, demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1? (Assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour.)

B) 125

A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order:

B) 200 units per order.

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

B) 245

A work center is interested in limiting work-in-process by not allowing production to start again until the current batch is finished. The best solution most likely involves:

B) ConWIP cards.

An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is TRUE?

B) Fourteen is the reorder point, and 100 is the order quantity.

If the goals of JIT partnerships are met, which of the following is a result?

B) In-transit inventory falls as suppliers are located closer to facilities.

Which one of the following statements is TRUE regarding JIT inventory?

B) It is the minimum inventory necessary to keep a perfect system running.

Which of the following dispatching rules tends to minimize job flow time?

B) SPT: shortest processing time

Which of the following is NOT one of the five parts of the Supply Chain Operations Reference (SCOR) model?

B) Sell

Which of the following statements regarding Amazon.com is FALSE?

B) The company was founded as, and still is, a "virtual" retailer with no inventory.

Which of the following is TRUE regarding services scheduling?

B) The emphasis is on staffing levels, not materials.

Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering?3

B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.

If the variance of orders of a manufacturer equals 800, and the variance of orders of its supplier equals 750, what is happening at this part of the supply chain?

B) The supplier is providing a dampening (anti-bullwhip) effect.

Suppose that in month 1, both the retailer and the wholesaler in a supply chain ordered 20,000 units. Then in month 2, the retailer decreases its order size by 1000 units. If the wholesaler then decreases its order size in month 2 by 700 units, which of the following is TRUE?

B) The wholesaler is providing a dampening (anti-bullwhip) effect.

Which of the following is FALSE regarding repetitive processes?

B) They allow easy switching from one product to the other.

Which of the following statements regarding lot-sizing is TRUE?

B) Too much concern with lot-sizing results in false accuracy.

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices?

B) Toyota Production System (TPS)

Consider the disaster risk decision tree model. Using the notation from the model, what is the expected monetary value (cost) of choosing two suppliers?

B) [1-P(2)] × 2C + P(2) × (L + 2C)

Vertical integration appears particularly advantageous when the organization has:

B) a large market share.

Distribution resource planning (DRP) is:

B) a time-phased stock replenishment plan for all levels of a distribution network.

Which of these is among the demand options of aggregate planning?

B) back-ordering during high-demand periods

Which of the following is NOT a potential cause of the bullwhip effect?

B) channel coordination

Which choice below best describes the counterseasonal product demand option?

B) developing a mix of products that smoothes out their demands

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing which of the following?

B) drop shipping

Cycle counting:

B) eliminates annual inventory adjustments.

Which one of the following is NOT a layout tactic in a JIT environment?

B) fixed equipment

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following?

B) forward integration

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

B) increased by less than 50%.

Under which of the following do planning tasks associated with production planning and budgeting, as well as setting employment, inventory, and subcontracting levels, typically fall?

B) intermediate-range plans

E-procurement:

B) is the same thing as Internet purchasing.

Forward scheduling is the scheduling of:

B) jobs as soon as the requirements are known.

The cook in a fast-food restaurant knows that 2 hamburger patties and an order of fries should be started for each car that is waiting in line. This is best an example of:

B) kanban.

Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called?

B) keiretsu

Characteristics of just-in-time partnerships do NOT include:

B) large lot sizes to save on setup costs and to gain quantity discounts.

To use revenue management strategies, a business should have which combination of costs?

B) low variable and high fixed

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use FEWER suppliers?

B) lower L, higher C

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers?

B) lower S, higher U

Which sourcing strategy is particularly common when the products being sourced are commodities?

B) many suppliers

Firms making many different final products use ________ to facilitate production scheduling.

B) modular bills

A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is:

B) one-third as large.

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

B) paper forms

Which lot-sizing technique orders the quantity needed during a predetermined time between orders?

B) periodic order quantity

Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is NOT part of JIT? They:

B) produce in long production runs to reduce the impact of setup costs.

Frito-Lay is to ________ focus as Harley Davidson is to ________ focus.

B) product, repetitive

In most manufacturing industries, which of the following would likely represent the largest cost to the firm?

B) purchasing

Designing distribution networks to meet customer expectations suggests what three criteria?

B) rapid response, product choice, and service

For the lot-sizing technique known as lot-for-lot to be appropriate:

B) setup cost should be relatively small.

Which of the following is not characteristic of a TPS employee?

B) strict job classifications

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

B) subcontracting

In aggregate planning, which one of the following is not a basic option for altering demand?

B) subcontracting

In the service sector, which of the following aggregate planning strategies might direct your client to a competitor?

B) subcontracting

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?

B) the bullwhip effect

The number of kanbans should be equal to which of the following?

B) the ratio of (demand during lead time + safety stock) to container size

ABC analysis is based upon the principle that:

B) there are usually a few critical items, and many items that are less critical.

An advantage of the fixed-period inventory system is that:

B) there is no physical count of inventory items when an item is withdrawn.

Which of the following is NOT an advantage of a virtual company?

B) total control over every aspect of the organization

Industries in which revenue management techniques are easiest to apply are those where:

B) use tends to be predictable, and pricing tends to be variable.

Which of these aggregate planning strategies is a capacity option?

B) using part-time workers

Which one of the following is not a benefit of JIT implementation?

B) variability increase

Which of the following is NOT required to be known in order to schedule process-focused facilities?

B) which workers are assigned to each work center

There are two jobs to be assigned to two workers. The profit for worker A on job 1 is $5 and on job 2 is $8. The profit for worker B on job 1 is $10 and on job 2 is $12. How should the work be divided using the assignment method?

B) worker A assigned to job 2 and worker B assigned to job 1

_______ scheduling begins with the due date and schedules the final operation first and the other job steps in reverse order.

Backward

________ are the time units in a material requirements planning (MRP) system.

Buckets

Which of the following is an illustration of employee empowerment?

C) "No one knows the job better than those who do it."

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $600. What is the inventory carrying cost per unit per year for this item?

C) $3.00

A firm practices a pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and layoff cost is $5 per unit. Over the next year, what will be the sum of hiring and layoff costs?

C) $7,500

A work center had planned outputs of 10, 15, 13, and 20 hours with actual outputs of 12, 14, 13, and 18 hours. What is the cumulative deviation in output?

C) -1

Suppose that papers for a newspaper stand cost $0.40 and sell for $0.80. They currently have no salvage value. If the stand owner is able to find an outlet that would provide a salvage value of $0.10, what would be the increase in service level?

C) .07

If job 5 takes 3, 4 or 5 hours to be completed by workers A, B, and C, respectively, what would the row values for job 5 be after performing Step 1A of the assignment method?

C) 0, 1, 2

Eight jobs have been sequenced at a single work center. Total processing time for the eight jobs is 34 hours, and total flow time for the sequence is 85 hours. For this schedule, utilization is ________ and the average number of jobs in the system is ________.

C) 0.400 or 40 percent; 2.5

A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?

C) 110

If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, a 90 percent service level will require how much safety stock?

C) 13 units

In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5 per unit per month, what is the economic order quantity?

C) 141

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. What is the standard deviation of demand during lead time?

C) 154 units

An order for 110 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements for B?

C) 180

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem?

C) 184

An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N?

C) 300

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires how much safety stock?

C) 49 units

Lead time for computers is 7 days with daily demand of 5 computers and a safety stock of 1 day. Each kanban holds 8 computers. What is the correct number of kanbans?

C) 5

A grocery store is trying to find a new supplier for carrots. Its three most important supplier criteria are freshness, lot size, and cost, with factor weights of 0.6, 0.1, and 0.3, respectively. What would a supplier with ratings of 6, 8, and 10 in the three respective categories score as a weighted total?

C) 7.4

If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed?

C) 70

Which of the following statements about aggregate planning is TRUE?

C) A pure chase strategy allows lower inventories when compared to a pure level scheduling.

In what type of auction does a buyer initiate the process by submitting a description of the desired product or service?

C) Dutch

Which of the following statements regarding control of service inventories is TRUE?

C) Effective control of all goods leaving the facility is one applicable technique.

Which of the following is NOT a source of variability?

C) Employees, machines, and suppliers produce units that conform to standards.

Which of the following is FALSE concerning enterprise resource planning (ERP)?

C) It is inexpensive to implement.

Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants?

C) Lean operations

Which of the following statements regarding aggregate planning is TRUE?

C) Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon.

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?

C) Process Y is cheaper than process X at all volumes.

Which of the following statements is true regarding the leverage of supply chain savings?

C) Supply chain savings exert more leverage as the firm's net profit margin decreases.

The Great East Japan Earthquake of 2011 was centered off of the Pacific coast of which region of Japan?

C) Tohoku

Which of the following statements regarding Wheeled Coach is FALSE?

C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

Which of the following is an aid used to monitor jobs in progress?

C) a Gantt schedule chart

Low-level coding means that:

C) a component item is coded at the lowest level at which it appears in the BOM structure.

A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called:

C) a flexible manufacturing system.

The assignment method is:

C) a form of linear programming for optimally assigning tasks or jobs to resources.

Which of the following is NOT one of the four things needed for aggregate planning?

C) a mathematical model that will minimize costs over the intermediate planning period

Which one of the following distribution systems offers speed and reliability when emergency supplies are needed overseas?

C) airfreight

Product focused processes:

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

Which of the following is NOT one of the Seven Wastes?

C) assignment

The short-term scheduling activity called "loading":

C) assigns jobs to work centers

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following?

C) backward integration

Which of the following characteristics makes revenue management UNATTRACTIVE to organizations that have perishable inventory?

C) capacity is easily changed

What does the Japanese word "kanban" mean?

C) card

Which of the following describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other?

C) cross-sourcing

Typically, a more expensive shipping option is:

C) faster with a lower holding cost.

Orders are processed in the sequence in which they arrive if (the) ________ rule sequences the jobs.

C) first come, first served

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

C) flexible manufacturing systems.

Which one of the following is a concern expressed by suppliers in JIT partnerships?

C) having limited ability to respond to changes in product and quality

A product-focused process is commonly used to produce:

C) high-volume, low-variety products.

What three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network?

C) inventory costs, transportation costs, and facility costs

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* =

C) is one-half of the economic order quantity.

When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following?

C) joint venture

The Japanese concept of a company coalition of suppliers is:

C) keiretsu.

Which critical ratio value implies that a job is already late?

C) less than 1

Which of the following is NOT an advantage of the "few suppliers" sourcing strategy?

C) less vulnerable trade secrets

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period), it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that:

C) level production of 420 units per day is below the January requirement.

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services?

C) little flexibility in worker hours to decrease the burden on management

Top executives tend to focus their attention on which type of forecasts?

C) long-range

Which MRP lot-sizing technique should be considered to be the goal (i.e., the technique of choice under ideal conditions)?

C) lot-for-lot

Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes.

C) low variable cost and high fixed cost

Which of the following is NOT an advantage of level scheduling?

C) matching production exactly with sales

MRP II is accurately described as:

C) material resource planning.

Drop shipping:

C) means the supplier will ship directly to the end consumer, rather than to the seller.

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors , then the bills of material are classified as which of the following?

C) modular

Which of the following is NOT a remedy for the bullwhip effect?

C) order batching

What is the process of tracing upward in the bill of material from the component to the parent item in order to determine the cause for the component requirement?

C) pegging

Three of the four types of processes are:

C) process focus, repetitive focus, and product focus.

Which of the following best describes vertical integration?

C) produce goods or services previously purchased

In level scheduling, what is kept uniform from month to month?

C) production/workforce levels

The Institute for Supply Management:

C) publishes the principles and standards for ethical supply management conduct.

Which of the following is NOT an attribute of lean operations?

C) pushing responsibility to the highest level possible through centralized decision making

An assembly line is an example of a:

C) repetitive process.

Among which of the following industries are purchasing costs the LOWEST percentage of sales?

C) restaurants

Which of the following aggregate planning options is NOT associated with manipulation of product or service demand?

C) subcontracting

A material requirements plan contains information with regard to all of the following EXCEPT:

C) the capacity needed to provide the projected output rate.

One fundamental difference between a process chart and a flowchart is that:

C) the process chart is more like a table, while the flowchart is more like a schematic diagram.

If a load report (resource requirements profile) shows a work center scheduled beyond capacity:

C) the work center's load may be smoothed by such tactics as operations splitting or lot splitting.

What is one of the tools that is particularly useful in reducing system nervousness in an MRP system?

C) time fences

The two most basic inventory questions answered by the typical inventory model are:

C) timing of orders and order quantity.

Average completion time for a schedule sequence at a work center is the ratio of:

C) total flow time to the number of jobs.

The U.S. ________ program, designed to stimulate the economy and improve fuel efficiency, produced an unintended bullwhip effect in the automobile industry.

Cash for Clunkers

________ postpones final assembly of a product so the distribution channel can assemble it.

Channel assembly

Why is channel assembly popular in the personal computer industry?

Channel assembly is popular in the personal computer industry because of better market response with less investment. This is possible because the late-stage assembly and customization is a natural part of a rapidly changing industry. With this strategy, finished-goods inventory is reduced because units are built to a shorter, more accurate forecast.

________ cards are used to control the amount of work in a work center, aiding input-output control.

ConWIP or Continuous work-in-process

________ describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other.

Cross-sourcing

What is cycle counting?

Cycle counting is a continuing audit to reconcile inventory with inventory records.

The jobs listed below need to be completed. Assume that it is now day 140. If the jobs are sequenced according to the longest processing time rule, what is the lateness of job A?

D) 10.0 days

A bakery wants to determine how many trays of doughnuts it should prepare each day. Demand is normal with a mean of 5 trays and standard deviation of 1 tray. If the owner wants a service level of at least 95%, how many trays should he prepare (rounded to the nearest whole tray)? Assume doughnuts have no salvage value after the day is complete.

D) 7

Which one of the following scenarios represents the use of a kanban to reduce inventories?

D) A "customer" work center signals to the "supplier" workstation that more parts are needed.

Which of the following statements about ABC analysis is FALSE?

D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

All EXCEPT which of the following statements about ABC analysis are true?

D) ABC analysis suggests that all items require the same high degree of control.

Which one of the following technologies is used ONLY for material handling, NOT actual production or assembly?

D) AGVs

Which of the following provides automatic placement and withdrawal of parts and products into and from designated places in a warehouse?

D) ASRS

Which of these statements about the production order quantity model is FALSE?

D) All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.

Outsourcing:

D) All of the above are true of outsourcing.

Dependent demand and independent demand items differ in that:

D) All of the above are true.

Which of the following is TRUE regarding vision systems?

D) All of the above are true.

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

D) All of the above are true.

What is a method of input-output control that uses a system of cards to limit the amount of work at a work center and also to control lead time and monitor backlog?

D) ConWIP cards

Which of the following is TRUE regarding the POQ lot-sizing method?

D) Each order quantity is recalculated at the time of the order release.

Which of the following statements about the basic EOQ model is FALSE?

D) If annual demand were to double, the EOQ would also double.

Which choice best describes level scheduling?

D) Inventory goes up or down to buffer the difference between demand and production.

A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action?

D) It picked the supplier that offered the lowest price based on quantity discounts.

Which of the following statements regarding a pull system is TRUE?

D) Problems become more obvious.

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* =

D) Production and use can occur simultaneously.

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

D) RFID

Which of the following statements regarding MRP in services is TRUE?

D) Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling.

Which of the following is NOT true about reverse logistics as compared to forward logistics?

D) Speed is often very important.

Which of the following statements about quantity discounts is FALSE?

D) The larger the annual demand, the less attractive a discount schedule will be.

A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans?

D) The meat department stocking up on turkeys before Thanksgiving.

As the number of facilities increases, total logistics costs tend to follow a curve that first declines, then rises. Why?

D) Transportation costs first decline steeply, then rise, while facility and inventory costs always rise.

It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 As?

D) Week 4, 40 As

Which of the following is NOT REQUIRED information to obtain to conduct the factor weighting technique in supplier selection analysis?

D) a qualitative scale on which to rate suppliers

If demand is not uniform and constant, then stockout risks can be controlled by:

D) adding safety stock.

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months?

D) aggregate planning

Revenue (or yield) management is best described as:

D) allocation of scarce resources to customers at prices that will maximize revenue.

Among the advantages of cycle counting is that it:

D) allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory.

Enterprise resource planning (ERP):

D) automates and integrates the majority of business processes.

Which of the following aggregate planning strategies is a capacity option?

D) changing inventory levels

What are the three classic types of negotiation strategies?

D) cost-based price model, market-based price model, and competitive bidding

What technique does the text use to determine the best number of suppliers to manage disaster risk?

D) decision tree

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing which of the following?

D) drop shipping

A recent advance in short-term scheduling that makes use of expert systems and simulation in solving dynamic scheduling problems is:

D) finite capacity scheduling.

Short-term schedules are prepared:

D) from master schedules, which are derived from aggregate plans.

Advances in technology:

D) have had a dramatic impact on customer interaction with services and with products.

Which of the following phrases best describes product focus?

D) high fixed costs, low variable costs

Which of the following is NOT a key direct benefit from effective internal or external scheduling?

D) higher quality

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

D) human resources.

Kanban is associated with all EXCEPT which of the following?

D) increased material handling

Which of the following is not a goal of JIT partnerships?

D) inspect all incoming shipments to ensure zero defects

Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes?

D) inventory

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy?

D) lay off workers to match the 200-unit difference

What value of the bullwhip measure would indicate that a dampening scenario exists?

D) less than 1

Which of the following is NOT an opportunity for effective management in the supply chain?

D) local optimization

Which of the following is characteristic of lean operations?

D) low space requirements

If an assignment problem consists of 6 workers and 7 projects:

D) one project will not get a worker assigned.

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is:

D) outsourcing.

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of which of the following?

D) postponement

What is the objective of scheduling?

D) prioritize and allocate demand to available facilities

In MRP, the number of units projected to be available at the beginning of each time period refers to:

D) projected on hand.

Which of the following is NOT a typical benefit of centralized purchasing?

D) reduce lead times

Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels?

D) refrigeration

Which one of the following is a characteristic of a JIT partnership?

D) removal of incoming inspection

Which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver?

D) require overnight delivery

Which of the following is NOT one of the four main types of inventory?

D) safety stock inventory

What is the effort to plan the coordination of demand forecasts with functional areas of the firm and its supply chain?

D) sales and operations planning

The proper quantity of safety stock is typically determined by:

D) setting the level of safety stock so that a given stockout risk is not exceeded.

Which one of the following is NOT one of the six sourcing strategies?

D) short-term relationships with few suppliers

A disadvantage of the fixed-period inventory system is that:

D) since there is no count of inventory during the review period, a stockout is possible.

Which of the following is NOT a condition that favors the success of vertical integration?

D) small market share

While freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes?

D) speed of shipment

A disadvantage of the "few suppliers" sourcing strategy is:

D) the high cost of changing partners.

Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

D) the transportation method

Demand for a given item is said to be dependent if:

D) there is a clearly identifiable parent.

Flow time represents the time:

D) to complete an order, including time spent in processing and in waiting.

Which of the following would NOT generally be a motive for a firm to hold inventories?

D) to minimize holding costs

What is the primary purpose of the basic economic order quantity model shown below? Q* =

D) to minimize the sum of setup cost and holding cost

The crossover point is that production quantity where:

D) total costs for one process equal total costs for another process.

Aggregate planning would entail which of the following production aspects at BMW for a 12-month period?

D) total number of cars to produce

Harley Davidson:

D) uses work cells to feed its assembly line.

Which of the following is NOT consistent with level scheduling?

D) varying production levels and/or work force to meet demand requirements

Which of the following aggregate planning strategies is known to lower employee morale?

D) varying work force size by hiring or layoffs

What is DRP?

DRP is a time-phased stock replenishment plan for all levels of a distribution network.

Explain what "decoupling" means in the context of inventory management.

Decoupling means to separate various parts of the production process. Each of the parts can then function at its own best pace.

________ is the process of breaking the aggregate plan into greater detail.

Disaggregation

What is disaggregation?

Disaggregation is the process of breaking the aggregate plan into greater detail.

________ management focuses on the outbound flow of products.

Distribution

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next five years that will disrupt all suppliers as 0.23%. In addition, the firm currently uses three suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next five years to be 1.4%. What is the probability that all three suppliers will be disrupted at the same time at some point during the next five years?

E) 0.2303%

Lead time for computers is 5 days with daily demand of 25 and safety stock of 5 computers. If management wants to use 10 kanbans how many computers should each one hold?

E) 13

Lead time for cakes is 2 days with daily demand of 10 cakes and a safety stock of ½ a day. Each container (kanban) holds 1 cake. What is the correct number of kanbans?

E) 25

If the demand for product A is 50 units, how many units of component E will be needed?

E) 300

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold?

E) 4.16

An industrial producer is searching for a supplier for ball bearings. Its three most important supplier criteria are price, quality, and delivery reliability. The firm has decided that quality and delivery reliability should carry the same weight, and that each of them are twice as important as price. If the weights sum to 100%, what would a supplier with ratings of 40, 90, and 75 in the three respective categories score as a weighted total?

E) 74

The minimum record accuracy required for successful MRP is approximately which of the following?

E) 99%

A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified?

E) A and B

What is the difference between P and Q inventory systems?

E) A and B

Which of the following companies use a mass customization approach?

E) A and B

Distortion in MRP systems can be minimized when safety stock is held at the:

E) A and C

High fixed costs and low variable costs are typical of which approach?

E) A and C

A quasi-custom product:

E) All but D are true.

Lean operations are known for their:

E) All of the above are attributes of lean operations.

Which of the following is consistent with a pure chase strategy?

E) All of the above are consistent with a pure chase strategy.

Which of the following is an element of inventory holding costs?

E) All of the above are elements of inventory holding costs.

Which of the following is a function of inventory?

E) All of the above are functions of inventory.

Which of the following is NOT a goal of JIT partnerships?

E) All of the above are goals of JIT partnerships.

Which of the following is a limitation of rules-based dispatching systems?

E) All of the above are limitations.

In supply chain management, ethical issues:

E) All of the above are true.

The bullwhip effect:

E) All of the above are true.

Value-stream mapping:

E) All of the above are true.

Which of the following is TRUE regarding the steps to reducing setup times?

E) All of the above are true.

Which of the following statements is TRUE regarding the 2011 Tohoku earthquake and tsunami?

E) All of the above are true.

Which of the following statements regarding the gross material requirements plan is TRUE?

E) All of the above are true.

Which of the following statements regarding the reorder point is TRUE?

E) All of the above are true.

Which of the following would NOT be subject to negotiation between a buyer and supplier?

E) All of the above could be negotiated.

Which of the following would NOT be considered (in addition to delivery speed) when choosing a mode of transportation?

E) All of the above may be considered.

Which of the following is NOT a concern of suppliers as they prepare to enter into JIT partnerships?

E) All of the above represent JIT supplier concerns.

The 5Ss:

E) All of these are true.

Service level is:

E) B and D

What does the use of the shortest processing time sequencing rule generally produce?

E) B and D

Using LPT priority would result in what sequence for Jobs A, B, C, and D if their process times are 4, 6, 5, and 2 respectively?

E) BCAD

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

E) Cannot be determined without lead time data.

Which of the following statements regarding scheduling at Delta Airlines is FALSE?

E) Delta's rapid rescheduling promotes air safety and limits traveler inconvenience, but has not resulted in money savings for Delta.

What does the POQ interval equal?

E) EOQ / average demand per period

Which of the following is an advantage of the FCFS dispatching rule when used in services?

E) FCFS seems fair to customers.

Which of the following is FALSE regarding the links between JIT and quality?

E) JIT increases the cost of obtaining good quality.

When a set of jobs must pass through two workstations whose sequence is fixed, ________ is the sequencing rule most commonly applied.

E) Johnson's rule

Which of the following statements regarding aggregate planning in services is FALSE?

E) Level scheduling is far more common than using a chase strategy.

Which of the following statements best compares modular bills and phantom bills?

E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

Which one of the following statements is TRUE about the kanban system?

E) The customer workstation signals to the supplier workstation when production is needed.

Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?

E) The process must adhere to stringent quality control standards.

Just-in-time systems make demands on layouts, including the need for:

E) all of the above

Process redesign:

E) all of the above

Which of the following devices represents an opportunity for technology to improve security of container shipments?

E) all of the above

Which of the following is the prescribed remedy when the bullwhip effect is caused by shortage gaming?

E) allocate orders based on past demand

Revenue management is MOST likely to be used in which one of the following situations?

E) an airline attempting to fill "perishable" seats at maximum revenue

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

E) annual dollar volume

Effective use of MRP and other dependent demand models does not require which of the following?

E) cost of individual components

In JIT partnerships, suppliers have several concerns. Which of the following is NOT such a concern?

E) customers' infrequent engineering changes

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

E) customization.

If safety stock is desired, it should be built into which portion of MRP?

E) either C or D

An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following?

E) facility capacity

Which of the following considers process capacity when scheduling?

E) finite loading

What have restaurants such as Steakhouses and Stacked Restaurants replaced their traditional paper menus with?

E) iPad menus

Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain?

E) landscaping contractors

All EXCEPT which of the following are "opportunities" in managing the integrated supply chain?

E) line balancing

For which corporate strategy(ies) should supply chain inventory be minimized?

E) low cost and differentiation

Which of the following is not one of the strategies for improving service productivity?

E) mass customization

Which of the following is not an effectiveness criterion for scheduling?

E) maximizing flow time

When quantity discounts are allowed, the cost-minimizing order quantity:

E) minimizes the sum of holding, ordering, and product costs.

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be?

E) more than 40

Which category of inventory holding costs has a much higher percentage than average for rapid-change industries such as PCs and cell phones?

E) pilferage, scrap, and obsolescence

Aggregate planning for service firms that provide intangible output deals mainly with:

E) planning for human resource requirements and managing demand.

Which of the following aggregate planning options attempts to manipulate product or service demand?

E) price cuts

Which of the following is generally found in most lean environments?

E) pull systems

Which of the following is an advantage of the postponement technique?

E) reduction in inventory investment

Which of the following statements does NOT accurately explain what occurs when the number of facilities in a distribution network increases?

E) response time first decreases, then increases

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

E) restaurants

Which of the following should be higher in P systems than Q systems?

E) safety stock

Which of the following would most likely fall under the scope of only an operations manager?

E) setting inventory levels

TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney in an example of which of the following?

E) single-stage control of replenishment

What term is used to describe the outsourcing of logistics?

E) third-party logistics (3PL)

Manufacturing cycle time is best defined as the:

E) time from raw materials receipt to finished product exit.

Which of the following best describes Vizio's sourcing strategy?

E) virtual company

________ is the term describing purchasing facilitated through the Internet.

E-Procurement

Quality is mostly the business of the quality control staff, not ordinary employees.

False

Source inspection is inferior to inspection before costly operations.

False

The Japanese use the term "poka-yoke" to refer to continuous improvement.

False

The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.

False

The typical full-service restaurant uses a product-focused process.

False

A process map with the addition of a time axis becomes a process chart.

False

Activity times should not be included in a service blueprint.

False

An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

False

An improvement in quality must necessarily increase costs.

False

Benchmarking requires the comparison of your firm to other organizations; it is not appropriate to benchmark by comparing one of your divisions to another of your divisions.

False

Conforming to standards is the focus of the product-based definition of quality.

False

Dell's approach to personal computer manufacturing is to use a product focus, which gives the company its low-cost competitive advantage.

False

Deming's writings on quality tend to focus on the customer and on fitness for use, unlike Juran's work that is oriented toward meeting specifications.

False

For most, if not all organizations, quality is a tactical rather than a strategic issue.

False

Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.

False

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 b. 6.0 c. 34 d. 2700 e. 6 times the monthly standard deviation of passengers

a

Which of the following is not one of the major categories of costs associated with quality? a. prevention costs b. appraisal costs c. internal failures d. external failures e. none of the above; they are all major categories of costs associated with quality

e

A cause-and-effect diagram helps identify the source of a problem.

True

A firm's process strategy is its approach to transforming resources into goods and services.

True

A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

True

Automated storage and retrieval systems are commonly used in distribution facilities of retailers

True

Continuous improvement is based on the philosophy that any aspect of an organization can be improved.

True

High-quality products and services are the most profitable.

True

ISO 9000 has evolved from a set of quality assurance standards toward a quality management system.

True

Improved quality can increase profitability via flexible pricing.

True

A fishbone diagram is also known as a a. cause-and-effect diagram b. poka-yoke diagram c. Kaizen diagram d. Kanban diagram e. Taguchi diagram

a

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 b. a scatter diagram c. a Taguchi loss function d. a cause and effect diagram e. a flow chart

a

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 b. Pareto chart c. process chart d. control charts e. activity chart

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? a. communication, courtesy, and credibility b. competence, courtesy, and security c. competence, responsiveness, and reliability d. communication, responsiveness, and reliability e. understanding/knowing customer, responsiveness, and reliability

a

Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the a. Taguchi Loss Function b. Pareto chart c. ISO 9000 Quality Cost Calculator d. process chart e. none of the above

a