Operations Final

Even with perfect information available at all levels. The bullwhip effect can be observed in a supply chain because of short replenishment lead times. A) TRUE B) FALSE

B) FALSE Feedback: Even with perfect information available at all levels. The bullwhip effect can be observed in a supply chain because of long replenishment lead times between the entities in the supply chain and long lags in sharing information up and down the supply chain (p. 234).

Counting the number of defects per 100 cars produced is an example of a continuous measurement. A) TRUE B) FALSE

B) FALSE Feedback: It is an example of a discrete measurement (p. 192).

Collaborative Planning, Forecasting, and Replenishment (CPFR) is best suited for situations involving a large population of customers, each with about the same demand. A) TRUE B) FALSE

B) FALSE Feedback: It works best in B2B relationships in which there are only a few customers, for example large retailers, that provide the majority of demand (pp. 271 - 272).

Training is an example of appraisal costs. A) TRUE B) FALSE

B) FALSE Feedback: Table 8.1 - Training is a component of prevention costs (p. 174).

Customer and Market Focus contribute most of the points of the Baldrige criteria. A) TRUE B) FALSE

B) FALSE Feedback: Table 8.4 - Leadership and Results contribute most of the points of the Baldrige criteria (p. 182).

Six Sigma projects tend to use part-time leaders. A) TRUE B) FALSE

B) FALSE Feedback: Table 9.5 -- lean usually uses part-time leaders; Six Sigma usually uses full-time leaders (p. 207).

The best way to improve forecasting accuracy is to utilize sophisticated forecasting software packages. A) TRUE B) FALSE

B) FALSE Feedback: The chapter discusses many other ways to improve forecast accuracy, and the "best" way will generally depend on the situation.

Order placement involves two processes: Getting the order from the customer and providing information regarding the order fulfillment process to the customers. A) TRUE B) FALSE

B) FALSE Feedback: The two processes are order placement and providing information before the order is entered (p. 243).

Outsourcing occurs when a firm moves work performed internally to another facility belonging to the same firm but in another country. A) TRUE B) FALSE

B) FALSE Feedback: This is off-shoring and not outsourcing (p. 237).

Utilization = Capacity/Actual output. A) TRUE B) FALSE

B) FALSE Feedback: Utilization = ((Actual output/Capacity) x 100% (p. 286).

A small value of α (alpha) is used in a simple exponential smoothing model when we want it to be responsive to recent demand. A) TRUE B) FALSE

B) FALSE Feedback: We choose a large value of alpha if we want the model to be very responsive to recent demand (pp. 260 - 261).

CPM methods should be used when the activity times are constant. A) True B) False

B) False Feedback: CPM uses a time cost function rather than the constant times (p. 356).

The measures of quality used in manufacturing processes can be readily transferred to service operations. A) TRUE B) FALSE

B) False Feedback: The definition and measurement of service quality is quite different from that of manufacturing quality (pp. 166 - 167).

A backward pass is required while computing the early start and early finish of activities. A) True B) False

B) False Feedback: A forward pass is required while computing the early start and early finish of activities (p. 348).

There is plenty of slack on a critical path of a network. A) True B) False

B) False Feedback: Critical paths have zero slack (p. 351).

Crashing a project requires shortening activities that are not on the critical path. A) True B) False

B) False Feedback: Only activities on the critical path are crashed because the goal is to reduce the length of the project (p. 358).

The planning phase begins with the construction of a work-breakdown structure. A) True B) False

B) False Feedback: The scheduling phase begins with the construction of a work-breakdown structure (p. 344).

Which of the following statements is incorrect about Gantt Charts? A) Gantt Charts are extremely easy to use and are quite well understood. B) Gantt Charts show interdependencies and relationships between activities. C) Gantt Charts show not only the time required for an activity but also the time at which a particular activity takes place. D) Gantt Charts can also be used while scheduling service operations.

B) Gantt Charts show interdependencies and relationships between activities. Feedback: Gantt Charts become inadequate because they do not show interdependencies and relationships between activities (p. 346).

Facility planning entails five crucial questions, including all of the following except: A) How much total capacity is needed? B) How much capacity does the competition have? C) How large should each unit of capacity be? D) Where should facilities be located? E) What type of facility is best?

B) How much capacity does the competition have? Feedback: The other four and "When is the capacity needed?" are the five crucial questions (p. 288)

Which of the following statements about PERT is correct? A) PERT requires four time estimates, which are difficult to predict. B) PERT assumes that activity times follow a beta probability distribution. C) PERT assumes that the project completion times are random in nature and cannot be predicted with certainty. D) PERT is a constant time scheduling method. E) Two of the above are correct.

B) PERT assumes that activity times follow a beta probability distribution. C) PERT assumes that the project completion times are random in nature and cannot be predicted with certainty. Feedback: B and c are correct (p. 353).

The level of resilience is determined by the ability to: A) Prepare, detect, and mitigate disruptions B) Plan, detect, and act on disruptions C) Diagnose, act, and stop disruptions D) Plan, see, and secure disruptions

B) Plan, detect, and act on disruptions Feedback: Page 246 gives these three factors.

The four different dimensions of manufacturing quality include all of the following except: A) Quality of design B) Quality of correlation coefficients C) Quality of conformance D) Availability E) Field service

B) Quality of correlation coefficients Feedback: The other four options are the dimensions of quality (pp. 164 - 166).

Five commonly employed forms of infrastructural change of a supply chain include each of the following except: A) Partnerships B) Reliance upon fewer suppliers C) Cross-docking D) Setup time reduction E) Cross-functional teams.

B) Reliance upon fewer suppliers Feedback: The other four, plus information systems are the five commonly used initiatives to improve supply chain infrastructure (p. 240).

Aggregate planning must be a coordinated, cross-disciplinary activity, as it should consider the management of both supply (capacity) and demand. From a demand perspective, important factors to consider when managing demand include all of the following except: A) Backlogs B) The size of the sales force C) Promotional events D) Pricing E) Advertising

B) The size of the sales force Feedback: Demand management options include pricing, advertising and promotion, backlogs or reservations, and development of complementary offerings (pp. 297 - 298).

The exponential smoothing forecasting technique rapidly responds to changes in the mean level of demand when: A) a small alpha value is used. B) a large alpha value is used. C) a random alpha value is used. D) an infinite alpha value is used.

B) a large alpha value is used. Feedback: See Figure 11.3.

While monitoring a production process that is in a state of statistical control, a control chart that uses a large confidence interval compared to one that uses a small confidence interval will: A) classify a process as "out of control" more frequently. B) classify a process as "in control" more frequently. C) Both a and b D) Neither a nor b E) More information is required.

B) classify a process as "in control" more frequently. Feedback: The larger the confidence interval, the higher is the probability for the sample percentages to fall within the control limits (pp. 193 - 194).

Generally two types of data may be collected from sampling at an inspection point. These two types of data are: A) Variable and attribute data B) Variable and conditional data C) Constant and attribute data D) Constant and conditional data

A) Variable and attribute data Feedback: There are generally 2 types of measurements: measurement based on variables or on attributes (p. 192).

The moving average forecasting technique rapidly responds to changes in the mean level of demand when: A) a small number of periods is used. B) a large number of periods is used. C) a random number of periods is used. D) an infinite number of periods is used.

A) a small number of periods is used. Feedback: See Figure 11.2.

Service quality is based on the gap between ________________. A) customer expectation and actual service delivered B) customer expectation and performance quality C) actual service delivered and the potential service that can be delivered D) customer expectation and conformance quality E) None of the above.

A) customer expectation and actual service delivered Feedback: Service quality is based on the gap between what the customer expects on each dimension and what is provided (p. 167).

Range charts are used to evaluate: A) the variability of data within samples for variable data. B) the variability of data within samples for attribute data. C) the variability of data among (central tendency) samples. D) the variability of process capability. E) the variability of sample data means.

A) the variability of data within samples for variable data. Feedback: Range charts are variable control charts that measure the variability (the range or standard deviation) (pp. 196 - 197).

Using a simple exponential smoothing forecast model (alpha = 0.3), which generated a forecast of 25.10 units for the most recently completed period which had observed demand of 31 units, what is the forecast of demand for the upcoming period? A) 26.28 units B) 26.87 units C) 29.23 units D) 25.10 units E) 27.38 units

B) 26.87 units Feedback: 25.10 + 0.3 (31 - 25.10) = 26.87 (pp. 260 - 261).

Assume you have been assigned the task of identifying a chase strategy aggregate production plan for the upcoming year. You have been informed that beginning inventory is 500 units, your plan should provide an ending inventory for the year equal to 200 units, and you have been provided the following forecasts of aggregate demand. Knowing that the typical objective of chase plans is to avoid carrying inventory, what should be the planned rate of production for the first quarter? 6000 5500 5000 6500 A) 6,000 units B) 5,500 units C) 5,750 units D) 6,250 units E) 5,675 units

B) 5,500 units Feedback: 6000 - 500 = 5,500 (planned production for first quarter) (p. 303).

Which of the following is not a type of e-procurement service? A) Online catalog B) Electronic purchasing C) Third-party auctions D) Private exchanges conducted by major corporations

B) Electronic purchasing Feedback: The other three constitute the different types of e-procurement services (p. 235).

Performance Quality means producing a product or delivering a service that meets the required specifications. A) TRUE B) FALSE

B) FALSE Feedback: Quality of conformance means producing a product to meet specifications (pp. 164 - 166).

Sales and operations planning (S&OP) is a standalone system that is used to match supply and demand using a cross-functional approach. A) TRUE B) FALSE

B) FALSE Feedback: S&OP is not a standalone system. It is a key input into the ERP system (p. 296).

A histogram is a simple chart that differentiates the vital few causes from the trivial many causes. A) TRUE B) FALSE

B) FALSE Feedback: A histogram illustrates the frequency of occurrence of measures (p. 202).

A large capacity cushion indicates that average demand is close to capacity. A) TRUE B) FALSE

B) FALSE Feedback: A large capacity cushion, with capacity in excess of average demand, is planned (p. 290).

A small cushion strategy is appropriate when capacity is very inexpensive. A) TRUE B) FALSE

B) FALSE Feedback: A small cushion strategy is appropriate when capacity is expensive (p. 290).

Aggregate planning is concerned with matching supply and demand of output over a short time range of 2 to 3 months. A) TRUE B) FALSE

B) FALSE Feedback: Aggregate planning is medium-term capacity planning (p. 294).

Amazon.com is an example of B2B operations. A) TRUE B) FALSE

B) FALSE Feedback: Amazon.com is an example of B2C (p. 242).

The SCOR model includes all of the following processes except: A) Source B) Plan C) Deliver D) Recycle E) Make Feedback: The five distinct processes of SCOR model are plan, source, make, deliver, and return (p. 226).

D) Recycle Feedback: The five distinct processes of SCOR model are plan, source, make, deliver, and return (p. 226).

Which of the following statements about Six Sigma is incorrect? A) Six Sigma employs a structured process improvement technique. B) DMAIC is an approach adopted in Six Sigma. C) Six Sigma programs employ full time specialists called Black Belts. D) The Six Sigma approach is best suited for manufacturing processes. E) Data and metrics are vital in a Six Sigma approach.

D) The Six Sigma approach is best suited for manufacturing processes. Feedback: The example of TRW legal departments tells us that six sigma is being applied in the service industry too (pp. 204 - 207).

The first step in designing a quality control system is to: A) decide on the type of measurement to be used at the inspection point. B) decide on the amount of inspection that has to be done. C) decide on the person who should perform the inspection. D) decide on the critical points in the processes where inspection is required. E) eliminate the need for inspection.

D) decide on the critical points in the processes where inspection is required. Feedback: The first step is to identify the critical elements in each of the processes where inspection and testing are needed (p. 191).

_______ are ideal for monitoring continuous data. A) P-charts B) Ishikawa charts C) Pareto charts D) x-bar and R-charts E) None of the above.

D) x-bar and R-charts Feedback: Variable control charts are used for monitoring control data. Mean and range charts are variable control charts (pp. 196 - 197).

Specific measures of supply chain performance include all of the following except: A) Unit cost B) Volume flexibility C) Cash-to-cash cycle time D) On-time delivery E) All of the above are common supply chain performance metrics. Feedback: On pages 230 - 232, there is a list of all of the specific measures of supply chain performance

E) All of the above are common supply chain performance metrics. Feedback: On pages 230 - 232, there is a list of all of the specific measures of supply chain performance (Delivery, Quality, Flexibility, Time, Cost)

Which one of the following is not considered a quality pioneer? A) Edwards Deming B) Joseph Juran C) Kaoru Ishikawa D) Philip Crosby E) All of the above are quality pioneers.

E) All of the above are quality pioneers. Feedback: There are many quality pioneers including Deming, Juran, Crosby, Feigenbaum, Shewart, and Ishikawa (pp. 176 - 179).

Which of the following is not a qualitative approach to forecasting? A) Delphi method B) Market survey C) Life-cycle analogy D) Informed judgment E) Box-Jenkins method

E) Box-Jenkins method Feedback: Box-Jenkins is a quantitative approach (Table 11.2).

Which of the following is not a dimension evaluated by SERVQUAL? A) Tangibles B) Reliability C) Responsiveness D) Empathy E) Conformance

E) Conformance Feedback: The five dimensions of service quality assessed by SERVQUAL are tangibles, reliability, responsiveness, assurance, and empathy (pp. 166 - 167).

The figure shown below represents a control chart determined from attribute data. Given this chart and the plotted observations, the most appropriate action would be: (diagram with all x's within UCL and LCL) A) Take immediate action to identify potential causes of assignable variation. B) Decrease the confidence interval for the control chart. C) Do nothing because the process appears to be operating in control. D) Calculate the process capability index to verify it is greater than one. E) Increase the confidence interval for the control chart.

C) Do nothing because the process appears to be operating in control. Feedback: If the sample percentage falls within the control limits, no action is taken (p. 195).

Which of the following is incorrect about a qualitative approach to forecasting? A) It utilizes managerial judgment while developing forecast data. B) It is useful when past data is not a good indicator of future conditions. C) It is typically used for short-range forecasting decisions. D) A market survey is one example method. E) None of the above.

C) It is typically used for short-range forecasting decisions. Feedback: Qualitative methods are more often used for medium- and long-range forecasting (p. 255).

The concept of mistake-proofing was first developed in the 1960s by Shigeo Shingo. It was called: A) Kaizen B) Jidoka C) Poka-yoke D) Kanban E) Keiretsu

C) Poka-yoke Feedback: The concept of mistake-proofing was first developed in the 1960s by Shigeo Shingo. It was called poka-yoke (p. 170).

Supply chain risk can be mitigated by one of the following: A) Post recovery legal action B) Advance thinking C) Post disruption recovery D) Speedy government assistance

C) Post disruption recovery Feedback: See page 246 for the three stages of risk mitigation.

Factors that need to be considered when making facility-planning decisions include all of the following except: A) Future demand B) Cost of facilities C) Purchased materials D) Business strategies E) International considerations

C) Purchased materials Feedback: The fifth factor is "likely behavior of competitors" and not purchased materials (p. 289).

Reliability refers to: A) restoration of the product or service once it has failed. B) a warranty and repair or replacement of the product or service once it has been sold. C) length of time that a product can be used before it fails. D) the ratio between uptime and uptime plus downtime

C) length of time that a product can be used before it fails Feedback: Reliability refers to the length of time a product can be used before it fails (p. 165).

The four "costs of quality" include all of the following except: A) internal failure costs. B) external failure costs. C) supply chain failure costs. D) prevention costs. E) appraisal costs. Feedback: See Table 8.1 - the other four comprise costs of quality (pp. 173 - 176).

C) supply chain failure costs. Feedback: See Table 8.1 - the other four comprise costs of quality (pp. 173 - 176).

One of the first stages in any statistical process control program is to ascertain that the equipment utilized for an operation is inherently capable of producing within the design tolerance. For a particular lathe operation, run under controlled conditions so that no assignable causes of variation have been introduced, the outside diameter of each sampled part was measured and the operator found that the standard deviation was 0.0075 centimeters (cm). What is the process capability index if the upper specification limit (USL) is 7.508 cm and the lower specification limit (LSL) is 7.388 cm? A) 2.67 B) 1.00 C) 0.375 D) 0.120 E) 0.045

A) 2.67 Feedback: Feedback; Cp = (7.508 - 7.388)/(6 x 0.0075)=2.67) (pp. 198 - 200). Process Capability index: Cp=(range between UCL and LCL)/(6Sigma)

Using a three-period weighted moving average forecast model with weights of W1 = 0.5, W2 = 0.4, and W3 = 0.1, what is the forecast of demand for Week 6 given the historical demands shown below? 1. 24 2. 19 3. 30 4. 25 5. 31 A) 28.50 units B) 28.10 units C) 23.10 units D) 24.00 units E) 25.20 units

A) 28.50 units Feedback: 31(0.5) + 25(0.4) + 30(0.1) = 28.5 (p. 260).

Common characteristics of projects include all of the following except: A) A large batch size, with projects being replicated numerous times B) A large number of activities C) A logical sequence of interdependent activities D) A cross-functional group of people (skill set) E) A stationary work site, requiring labor, material and equipment to be brought to the project

A) A large batch size, with projects being replicated numerous times Feedback: According to PMI, "a project is a temporary endeavor undertaken to create a unique product, service, or result" (p. 342).

The meaning of quality management has evolved greatly over the past century. Which of the following statements best exemplifies the current meaning of quality management? A) Continuous improvement, competitive advantage, and meeting or exceeding customer requirements now and in the future B) Inspection of every item produced to ensure exact customer specifications are met C) Production of parts within control limits and the maintenance of process output in a state of statistical control as measured by statistical process control tools to ensure consistent meeting of customer specifications D) The collaboration of all functional disciplines for the purpose of designing and offering quality products or services

A) Continuous improvement, competitive advantage, and meeting or exceeding customer requirements now and in the future Feedback: Quality management has taken a broader meaning, including continuous improvement, competitive advantage, and a customer focus (pp. 162 - 163).

The longest path in the network from the start to the end of the activities is also referred to as ______. A) Critical path B) Master schedule C) Slack time D) Action path E) Float

A) Critical path Feedback: The critical path is the longest path in the network (p. 350).

Which of the following matches between quality gurus and the guru's philosophy is incorrect? A) Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. B) Juran emphasized the quality trilogy of planning, control, and quality improvement. C) Crosby advocated the "make it right the first time" philosophy.

A) Deming emphasized a philosophy of strict adherence to constant, non-adaptive quality standards through rigorous testing by a quality inspection department using statistical process control charts. Feedback: Deming argued that management should cease its dependence on mass inspection to achieve quality and stress prevention of defects instead (pp. 176 - 179).

The hierarchy of decisions concerning the capacity of operations ranging from long-term to short-term in nature leads from: A) Facility planning to aggregate planning to scheduling, respectively B) Aggregate planning to scheduling to facility planning, respectively C) Scheduling to facility planning to aggregate planning, respectively D) Aggregate planning to facility planning to scheduling, respectively E) Aggregate planning to scheduling to facility planning, respectively

A) Facility planning to aggregate planning to scheduling, respectively Feedback: Figure 12-1 clearly shows the hierarchy (p. 286).

If the population of items produced does not meet or exceed the upper and lower specification limits (all items produced are well within specification limits), the process capability index, Cp will be: A) Greater than 1.0 B) Equal to 1.0 C) Between 0.0 and 1.0 D) Less than 0.0 E) Infinite

A) Greater than 1.0 Feedback: Cp should be greater than 1 when the process width will be within the specification width (pp. 198 - 200).

Five commonly employed forms of structural change of a supply chain include each of the following except: A) Longer term contracts B) Forward and backward integration C) Major process simplification D) Major product redesign E) Changing the distribution network configuration

A) Longer term contracts Feedback: The other four options plus working with third-party logistics providers are the five commonly employed forms of structural change (p. 236).

The variation created from the sudden vibrations of a machine is an example of an assignable cause of variation. A) TRUE B) FALSE

A) TRUE Feedback: Assignable causes are due to a change in the operator, machine, or the material (p. 193).

Cause and effect diagrams are also called fishbone diagrams or Ishikawa diagrams. A) TRUE B) FALSE

A) TRUE Feedback: Figure 9.7 - the appearance of this diagram suggests a fishbone analogy and this tool was invented by Kaouru Ishikawa (p. 203).

Six Sigma projects tend to be more complex than lean projects. A) TRUE B) FALSE

A) TRUE Feedback: Lean projects are usually simple, but Six Sigma is used for complex and difficult process improvement projects (p. 207).

The Box-Jenkins forecasting method is an example of a time series forecasting method. A) TRUE B) FALSE

A) TRUE Feedback: See Table 11.5.

Supplier certification means the supplier has control over the processes and can pass an ISO 9000 type of audit at the very least. A) TRUE B) FALSE

A) TRUE Feedback: See page 172.

Transportation of materials into or out of a facility is the responsibility of the logistics function. A) TRUE B) FALSE

A) TRUE Feedback: See the definition of inbound and outbound logistics on page 228.

Tracking Signal measures the forecast bias and is used to verify whether the forecast is tracking the actual demand pattern. A) TRUE B) FALSE

A) TRUE Feedback: TS = CFE/MAD (pp. 264 - 265). Cumulative Sum of forecast errors/Mean absolute deviation of forecast errors

Hiring and layoff of workers are more common in a chase strategy than in a level strategy. A) TRUE B) FALSE

A) TRUE Feedback: The hire and fire of workers each month as necessary to meet demand are options used for chase strategy (p. 303).

Two common measures of flexibility are volume and mix flexibility. A) TRUE B) FALSE

A) TRUE Feedback: Volume flexibility is the time it takes to increase or decrease output while mix flexibility is the time it takes to change the mix of products or services delivered (p. 231)

Which of the following statements concerning the Malcolm Baldrige award is true? A) The Baldrige system represents a comprehensive framework, comprising of seven categories, for quality management and performance measurement. B) The award was established by the U.S. Congress in 1987 to promote better quality management practices and improved quality results by worldwide competitors. C) The Baldrige criteria are based upon 1,000 points, allocated among four categories: strategic planning, information systems, business results, and conformance to documented procedures, policies, and training. D) A disadvantage of the Baldrige award process is its lack of flexibility, requiring each participating firm to utilize the same standardized approach. E) A disadvantage of the Baldrige award process is its lack of a framework for internal assessment of quality and performance improvement systems.

A) The Baldrige system represents a comprehensive framework, comprising of seven categories, for quality management and performance measurement. Feedback: The Baldrige system represents a comprehensive framework, comprising of seven categories (see Table 8.3), for quality management and performance measurement (pp. 181 - 183).

A supply chain refers to: A) The design and management of processes across organizational boundaries to meet the real needs of the end customer B) The route from the producer upstream through the distributors to the customer C) The internal sequence of operations consisting of purchasing, fabrication, assembly, and distribution D) The chain of activities that includes market research, design, production and distribution

A) The design and management of processes across organizational boundaries to meet the real needs of the end customer Feedback: SCM is the design and management of seamless value-added processes across organizational boundaries to meet the real needs of the end customer (p. 225).

Network scheduling methods allow precise determination of the critical path while Gantt Charts cannot be used to determine the critical path. A) True B) False

A) True Feedback: Networks allow precise determination of the critical path and slack (p. 351).

Gantt Charts are scheduling tools that represent the activities on a bar chart. A) True B) False

A) True Feedback: The activities are shown on a bar chart (p. 346).

Which of the following is not a step in the purchasing cycle? A) User requirements B) Relationship management C) Demand management D) Make-or-buy decisions E) Competitive bidding or negotiation

C) Demand management Feedback: Figure 10.3 clearly depicts the 6 steps/stages in the purchasing cycle (p. 227).

Using a simple three-period moving average forecast model, what is the forecast of demand for Week 6 given the historical demands shown below? 1. 24 2. 19 3. 30 4. 25 5. 31 A) 24.33 units B) 27.67 units C) 28.67 units D) 28.00 units E) 25.20 units

C) 28.67 units Feedback: (31 + 25 + 30)/3 = 28.67 (pp. 258 - 259).

Assume you have been assigned the task of identifying a level strategy aggregate production plan for the upcoming year. You have been informed that beginning inventory is 2,000 units, your plan should provide an ending inventory for the year equal to 500 units, and you have been provided the following forecasts of aggregate demand. What should be the planned rate of quarterly production? 6000 5500 5000 6500 A) 6,000 units B) 5,250 units C) 5,375 units D) 5,625 units E) 6,500 units

C) 5,375 units Feedback: [(6000 + 5500 + 5000 + 6500) + 500 - 2000]/4 = 5375 (p. 303).

Assume you have been assigned the task of identifying a level strategy aggregate production plan for the upcoming year. You have been informed that beginning inventory is 0 units, your plan should provide an ending inventory for the year equal to 0 units, and you have been provided the following forecasts of aggregate demand. What should be the planned rate of quarterly production? 6000 5500 5000 6500 A) 6,000 units B) 5,500 units C) 5,750 units D) 6,250 units E) 6,500 units

C) 5,750 units Feedback: (6000 + 5500 + 5000 + 6500)/4 = 5750 (p. 303).

Which of the following is not a reason for quality improvement failure? A) Focus on short-term financial results B) Managers always blame employees when there is a quality problem C) Continuous trade-off quality to reduce cost or meet schedules D) Suppliers are certified for functioning quality systems E) Managers continue to interfere with team work

C) Continuous trade-off quality to reduce cost or meet schedules (ANSWER GIVEN) D) Suppliers are certified for functioning quality systems (ANSWER THAT MAKES SENSE GIVEN FEEDBACK) Feedback: Many quality improvement efforts fail because suppliers are not certified for a functioning quality system (pp. 183 - 184).

Assume you discovered from historical records that simple linear regression is an effective means of predicting the labor cost of some project tasks. You found that the weight associated with an item (in pounds) produced in historical projects is an accurate and reliable predictor of labor cost. You develop a linear equation expressing the relationship between item weight and labor cost. The estimated regression equation is yhat=1300+0.25x For an upcoming project, that includes the task of manufacturing an item weighing 7000 pounds, estimate the task cost using this regression equation. A) $6,250 B) $3,000 C) $1,750 D) $3,050 E) $7,000

D) $3,050 Feedback: 1300 + 0.25(7000) = 3,050 (pp. 267 - 268).

Assume a business has $700,000 worth of inventory and averages $10,000 per day in sales. Also assume it takes 30 days for the average customer to pay off its accounts receivable to this company and it takes 120 days for the company to pay for the materials supplied by the suppliers. What is the company's average cash-to-cash cycle time? A) 40 days B) 80 days C) -10 days D) -20 days E) 20 days

D) -20 days Feedback: Cash-to-cash cycle time = (700000/10000) + 30 - 120 = -20 days (pp. 231 - 232). Inventory-Sales + Avg A/R Payback - Avg A/P Payback

Which of the following statements concerning ISO 9000 is false? A) ISO 9000 standards are meant to describe how a company should go about ensuring quality. B) ISO 9000 standards specify that a company must have a quality system in place, which documents procedures, policies, and training. C) A quality manual and careful record keeping are integral elements of ISO 9000 documentation. D) An ISO 9000 registered company signifies the company produces items of the highest quality. E) ISO 9000 certification must be periodically renewed via return audits by a registrar.

D) An ISO 9000 registered company signifies the company produces items of the highest quality. Feedback: ISO 9000 does not provide a complete quality system because it does not address competitive strategy, information systems, and business results (pp. 179 - 181).

The major components (patterns) of a time series consist of all of the following except: A) Trend B) Seasonality C) Random error D) Correlation E) Cycle

D) Correlation Feedback: The major components of a time series are cycle, seasonality, trend, level, and random error (Figure 11.1).

The three distinct objectives while managing a project are: A) Cost, schedule, and resources B) Schedule, specifications, and milestones C) Resources, conflicts, and work breakdowns D) Cost, schedule, and performance E) Schedule, conflicts, and work breakdowns

D) Cost, schedule, and performance Feedback: In projects, there are three distinct objectives: cost, schedule, and performance (p. 343).

There are four basic types of facility choices. Which of the following statements concerning facility choices is not true? A) Among the Fortune 500 companies, the most common type of facility choice is a product-focused facility, which typically produces one family or type of product. B) Process-focused facilities generally have one technology, or at most two, and usually produce components or parts that are shipped to other facilities for further processing or assembly. C) Market-focused facilities are typically located in the markets they serve, commonly serving local customers and are frequently service firms. D) Demand-focused facilities are quickly constructed and have the ability to serve global markets with fast order response times as warranted by the nature of customer demand. E) General purpose facilities are commonly used by smaller companies and may produce several types of products and use several different processes.

D) Demand-focused facilities are quickly constructed and have the ability to serve global markets with fast order response times as warranted by the nature of customer demand Feedback: The four types of facilities are product-based, market-focused, process-focused, and general-purpose. Demand-focused is not a facility type (p. 293).

Which of the following statements about forecasts is incorrect? A) Forecasts will almost always be wrong. B) Forecasts should have at least two numbers: One for the best estimate of demand and the second for forecasting error measurement. C) There is no universal forecasting method for all situations. D) Forecasts of sales and demand will always be equal. E) Forecasting is both an art and a science.

D) Forecasts of sales and demand will always be equal. Feedback: It is rare for sales to exactly equal the forecast (pp. 251 - 252).

Which of the following is true for a critical activity? A) ES = EF B) LF = LS C) EF = LS D) LF = ES E) ES = LS Feedback: Critical path consists of all activities where ES = LS and EF = LF (p. 350).

D) LF = ES Feedback: Critical path consists of all activities where ES = LS and EF = LF (p. 350).

Which of the following is NOT a type of facility choice? A) General-purpose B) Process-focused C) Market-focused D) Material-focused E) Product-focused

D) Material-focused Feedback: The four types of facilities are product-based, market-focused, process-focused, and general-purpose (p. 293).

The major difference between PERT and CPM is that: A) PERT does not assume independence among the activities. B) PERT does not assume precise breaking points between activities. C) PERT does not focus too much attention on the activities on the critical path. D) PERT does not assume certainty in activity durations. E) PERT assumes activity durations are not crashable.

D) PERT does not assume certainty in activity durations. Feedback: PERT requires three time estimates for each activity (p. 353).

Critical inspection points where inspection and testing of products occur in a quality control system include each of the following: A) Just prior to an irreversible operation such as drilling B) Just prior to a masking operation (an operation that may hide a defect) such as painting or plating C) Just prior to a costly, labor-intensive operation D) Just prior to packaging and shipping a finished product E) Each of these may represent a critical inspection point and therefore a point where inspection may be justified.

E) Each of these may represent a critical inspection point and therefore a point where inspection may be justified. Feedback: Under point 1 of section 9.1, the critical points in each of the processes are listed (pp. 191 - 192).

Which of the following is not an element of the quality cycle? A) Determination of customer needs B) Specification of quality attributes C) Interpretation of customer needs D) Production of product as specified E) Maintenance of current quality standards into the future

E) Maintenance of current quality standards into the future Feedback: Figure 8.2 depicts the elements of the quality life cycle (pp. 167 - 170).

When selecting a forecasting method, one should consider all of the following except: A) The user's sophistication B) Availability of data C) Data patterns such as trend, seasonal, and cyclical patterns D) Available time to collect and analyze data and to prepare the forecast E) The least expensive option

E) The least expensive option Feedback: The other options, along with the use or decision characteristics of the forecast, are the five most important factors in selecting a forecasting method (pp. 268 - 270).

Slack is defined as: A) LS - LF B) ES - EF C) LS - ES D) LF - EF E) Two of the above are correct.

E) Two of the above are correct. Feedback: Slack is the difference between LS and ES, or equivalently, LF - EF (p. 350).

Effective capacity is: A) The amount of capacity that can be used in planning for actual facility output over a period of time B) Capacity minus downtime due to maintenance and breaks C) Also called theoretical capacity D) a & c E) a & b

E) a & b Feedback: In addition to the theoretical peak capacity, there is an effective capacity (p. 287).

The popular "seven tools of quality control" include all of the following except: A) flow charts. B) Pareto chart. C) cause and effect (fishbone) diagram. D) scatter diagram. E) brainstorming.

E) brainstorming. Feedback: Figure 9.5 - the seven basic tools are flowcharts, check sheets, histograms, Pareto diagrams, cause-and-effect diagrams, scatter diagrams and control charts (pp. 201 - 204).

Correctly complete the following sentence. Aggregate planning typically: A) entails a planning horizon of about 12 months. B) is an activity of matching supply with demand. C) is done for a single, or a few, overall measures of output. D) Only a and b are correct. E) e Only b and c are correct. F) All of these are correct (a, b and c).

F) All of these are correct (a, b and c). Feedback: Page 294 provides a complete overview of aggregate planning.

The responsibilities of logistic functions include: A) Choice of transportation B) Packaging and material handling C) Location and managing of storage points D) Both a and b E) Both a and c F) a, b, and c

F) a, b, and c Feedback: All are responsibilities of the logistic function (p. 228).