Operations Final Exam

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Backordering costs

Which of the following costs are relevant aggregate operations planning

project managers may "hoard" resources for their own projects

Which of the following is a disadvantage of the matrix project structure?

project team members may be worried about their employment after completing a project

Which of the following is a disadvantage of the pure project structure?

Centroid Method

Which of the following is a plant location methodology for locating a facility based on distances and volumes of goods

TL 9000

Which of the following is a quality management standard developed specifically for the telecommunications industry?

Specificity

Which of the following is a sourcing term to describe how common an item is and/or how many substitutes may be available?

activity

Which of the following is a term used to refer to pieces of work that consume time?

warehouse loading factor

Which of the following is not a lot sizing technique used in MRP systems

annualized cost of materials

Which of the following is not included in inventory holding costs

Volume

Which of the following is one of the dimensions depicted on a product-process matrix?

bullwhip effect

Which of the following terms describes the phenomenon of variability magnification as one moves upstream in the supply chain from customer to producer?

flow and run charts

Which of the following tools can be used in the Define step of the DMAIC cycle?

Crashing shortens the project by assigning more resources to critical tasks

Which of these statements regarding time costs in CPM networks is true

Matrix

Which project organizational structure blends properties of functional and pure strategies?

Panel Consensus

Which qualitative forecasting technique is based upon the idea that a group of people with various backgrounds can develop a more reliable forecast than a narrower group?

Delphi Method

Which qualitative technique develops a forecast by polling participants multiple times on expected forecasts?

conformance

Which quality term refers to the degree to which the product or service design specifications are met?

Backordering costs

Which relevant costs are often the most difficult to measure?

Request for Proposal (RFP)

Which sourcing process is used for complex items where there are a number of potential vendors?

Trade-off

Which term defines when activities are incompatible so that more of one thing necessitates less of another activity?

make to stock

Which type of firm invests in lean manufacturing programs in order to improve customer service levels for a given inventory investment?

required coordinated

Which type of supplier relationship should be used when there is a standardized interface between adjacent tasks?

slushy

Which type of time fence allows for changes to a specific product so long as parts are available?

Manufacturing

Work-in-process is considered ___ inventory.

one type of operation

Workcenters are often focused on

Kaizen

___ bursts are specific, short-term projects designed to implement changes to a process.

level

____ strategy is executed by maintaining a stable workforce and producing output at a constant rate.

rough cut

_____ aggregate plan may be further modified by mathematical methods to develop a final and/or lower-cost plan.

dollar value

_______ cost implication schemes divide inventory items into 3 groupings what are these grouping usually

platform

a type of business that does not own inventory, they merely provide a means for connecting parties interested in conducting business.

o Cost quality, delivery speed, delivery reliability, and flexibility

competitive dimensions of a firm

Matrix

project structure minimizes the duplication of resources

functional project structure

team members do not report to a dedicated manager, but remain part of their functional units.

True

3 main inputs of MRP-bill of materials, master schedule, and inventory records file

Motivational impacts due to fear of being laid off during time of low production.

A chase strategy can create what major concern?

Super Bill of Materials

A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material?

third party logistics company

A company that manages all or part of another company's product delivery operations is known as which of the following?

focused factory

A facility designed around a limited set of production objectives is called a

False

A financially driven reason for outsourcing is that it can turn variable costs into manageable fixed costs

make to stock

A firm fills its customers from finished goods inventory it is a

a company's strategic strategy

A firm should have a mix of projects that best support

True

A firm that controls most of its activities in the supply chain is said to be vertically integrated

analyze

A fishbone diagram is part of a six sigma quality improvement process might be found in which DMAIC category

low

A generic pizza box that can be used by multiple pizza shops is an example of a product with ____________ specificity.

True

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

dissimilar

A manufacturing cell is generally made up of ___________ machines.

Benchmarking

A process in which one company studies the processes of another company for best practices is known as

False

A product will always be in the same stage of its product life cycle in all parts of the world regardless of the country

produce buffer inventories

A production manager may ___________ to prevent bottlenecks and ensure employees always have work to do.

tracking the flow of material through the system

A production process map is built by

It is possible to have multiple critical paths

A project has how many critical paths?

the difference between expected excellent performance and the current costs.

A purist view of the cost of quality is one that references all costs until 100% perfection is attained. A less stringent viewpoint is defined as

decision tree

A schematic model of the sequence of steps in a problem and the conditions and consequences of each step is called a

transportation method of linear programming

A special linear programming method that is useful for solving problems involving moving products from several sources to several destinations is known as which of the following?

Project Milestone

A specific event that should be reached at a certain point in time is often referred to as?

Maintain independence of operations

A supply of materials at a work center allows workers to

Activity-system maps

A tool that shows how a company's strategy is delivered through a set of tailored activities is called a(n)

False

ABC analysis classifies inventory items into three groups based on annual units or quantities used

failure and appraisal

According to a rule of thumb, for every dollar that you spend in prevention, you can save $10 in what type(s) of costs?

air

According to the Logistics-System Design Matrix, which of the following modes of transporting products is the fastest but most expensive?

net

After finding gross requirements, the next step in the MRP explosion process references inventory on hand and scheduled orders to calculate ___ requirements.

True

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

Customers

Aggregation on the demand side is done by groups of

False

An improvement in quality must increase costs

modular

An item that can be produced and stocked as a subassembly often uses a ___ bill-of-materials for planning

decreasing costs until a minimum is reached, followed by increasing costs

As production volume increases, a system experiencing economies of scale will observe

True

Assembling to order means moving the customer order decoupling point from finished goods to components

time buckets

At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as

labor

Basic production costs consist mainly of charges related to

a forecast is consistently too high or too low

Bias errors occur when _____.

perceived quality

Brand name recognition is an example of which dimension of quality?

rough cut aggregate plan

By simulating various master production schedules, and calculating corresponding capacity and labor and equipment requirements, one is developing a(n)..

independent

Campbell's Soup makes products for Kroger and other grocery stores based on sales to the final consumer. This inventory management environment is characterized as ________ demand.

True

Capacity can be defined as the amount of availability for inputs relative to the requirements for output over time

Three time dimensions (short, intermediate and long)

Capacity has a time dimensional aspect for operations and supply chain management. A manager must consider capacity planning in how many time durations?

capacity cushion

Capacity in excess of expected demand is known as

True

Constant WIP aid input/output control by limiting the amount of work in work center or production floor

True

Cost incurred in hiring training and laying off persons are considered relevant aggregate operations planning costs

manufacturing manager

Cost of quality (COQ) is a primary function for the

True

Cross docking definition-break down large shipments into small shipments for local delivery

True

Cross docking is used in warehouses where large shipments can be broken down into small shipments for local delivery. True/False

setup costs

Delta Company uses special equipment and personnel to changeover production runs quickly. The costs associated with this changeover approach are considered

Efficiency

Doing something at the lowest possible cost is known as

aggregate

During the sales and operations planning process, both marketing and operations focus on the _____ product and sales volumes.

False

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

True

Forecast of individual products tend to be less accurate than forecasted product families

False

Forecasts of individual products tend to be more accurate that forecasts of product families

temporary

Hiring ______ employees is a way to avoid the costs of training and laying off personnel.

True

Hiring, training, and laying off are relevant costs

3.4

How many defects per million units are permitted to meet Six Sigma standards?

environmentally

ISO 14000 addresses the need to be ___ responsible.

Platform Project

Identify the type of project that primarily involves fundamental improvements to existing products.

Available to Promise

If a company has more units in the master production schedule than firm customer orders, the residual is called?

is on the critical path

If a delay of an activity delays the entire project, then this activity

random

If an error cannot be explained by the forecast model being used, it is called ________ error.

multiplying the inverse of inventory turn by 365

If inventory turn is known, days-of-supply is calculated by

procurement

In a lean supply chain, which component includes automation for sourcing, bidding, and auctions?

multiplying the number of each choice together

In an assemble-to-order system, the total number of unique combinations possible is calculated by

True

In inventory models a high holding costs tend to favor low inventory levels in frequent replenishment

a period of time

In operations management, capacity must be stated relative to

respect

In the Toyota Production System, ___ for people is exemplified by providing opportunities and job security for employees.

True

In the past half century, while the number of people employed in manufacturing has decreased slightly, the output per worker has increased significantly.

Logistics

In which part of a lean supply chain would you expect to see lean concepts applied to the movement of materials through the system?

False

Individual products are less accurate than families

False

Lean production requires a push and pull system of inventory

integrated

Lean production requires that activities be __________________ to achieve production using minimal inventories.

caused by items being withdrawn from inventory in lots

Lumpiness, or the tendency for uneven production, further down the creation sequence is

True

MRP is generally used for items with dependent demand.

batches

MRP systems tend to work best in companies where products are made in ___ using the same productive equipment.

Level Strategy

Maintain a stable workforce and work schedule while using inventory to meet variation in demand.

inventory

Major information system activities for planning logistics involve allocating resources, managing _______ levels, scheduling, and order tracking.

surveys and interviews

Market research uses data collection methods that are primarily

False

Master production schedule is a sales forecast for family of parts.

Companies should focus on all aspects: social, economic, and environmental

Modern companies need to focus on which aspect of the triple bottom line?

25%

Most retailers estimate that annual inventory carrying costs equals _____ of what is paid for the product.

increase

Often, a(n) ___ in productivity occurs as a by-product of efforts to reduce the cost of quality.

product families

On the supply side of the business, aggregate planning is done by

accurate

One key to a successful budgeting process is a(n) _______ aggregate plan.

continuous replenishment

One program for automatically resupplying customers on a regular basis is

production scheduling

One purpose of inventory is to provide flexibility in ___ , this can increase lead times but reduce setup costs.

Operation and improvement of systems that create the firm's primary products, and design of delivery systems

Operations and supply chain management includes which of the following activities?

Marketing

Order winners and qualifiers represent a link between operations and what other business function?

a schedule for when each of these should be produced or ordered.

Outside of determining parts, components, and materials, MRP provides

True

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

Energy Usage

Ownership costs encouraged after the initial purchase and associated with beyond going use of the product or material

Operations effectiveness

Performing activities in a manner that best implements strategic priorities without incurring excess costs is known as

True

TPS (Toyota Production System)

short; medium and long

Tactical forecasts are _________ term, while strategic forecasts are _____________ term.

low;low

Spot purchases have ________ specificity and ________ transaction costs.

variations in the product

Standardization on the product-process matrix refers to

Logistics-System Design Matrix

The framework used to describe logistics processes is which of the following?

economies of scale

The idea that as a plant volume increases, the average cost per unit drops is known as

economies of scope

The idea that multiple products can be combined and produced at one facility at a lower cost than they can be produced separately is known as

location clustering near high customer traffic flows

The main reason fast food restaurants are often found in close proximity to each other is

ordering costs

The managerial and clerical costs to prepare purchase or production orders are called

end items

The master production schedule is used to plan

subassemblies

The master production schedule typically deals with end items, but can be broken down to __________ if the item is large or expensive

False

The multi factor measure of productivity of the numerator of the ratio

best operating level

The output level where average unit cost is minimized is known as the

sales and operations

The planning process that helps firms provide better customer service, shorter lead times, and allows top management to get a handle on the business is known as ____ planning.

False

The service system with a high degree of customer contact is less difficult to control than a low degree of contact

False

The term conformance quality refers to the relative level of performance of a product as compared to competing product

lead time

The time required to respond to a customer order is known as

false

The triple bottom line relates to the economic employee and customer impacts of a firms strategy

production/production rate

The workforce level can be determined by which calculation?

False

True or false: A firm can excel simultaneously on all competitive dimensions

True

True or false: A process is made up of one or more activities that transform inputs into outputs.

True

True or false: An operations and supply chain manager helps firms determine the best way to deliver its goods and services

False

True or false: An operations and supply chain strategy is independent of the corporate strategy.

False

True or false: An order qualifier today will be an order winner in the future

True

True or false: Capacity planning in the services industry has added pressure on location requirements versus that with manufacturing.

True

True or false: Distribution and logistics is typically involved in sales and operations planning.

True

True or false: Innovative products have higher profit margins than functional products.

True

True or false: Lean production uses a pull system for production.

True

True or false: One advantage of the pure project structure is that the project manager has full authority over the project

True

True or false: Operations effectiveness is related directly to the costs of doing business.

True

True or false: Product-service bundling occurs when a firm adds a service activity to a product.

True

True or false: The presence of the customer in a service delivery system increases the volatility of demand.

True

True or false: When all the activities are completed, the project is finished.

false

True or false: When comparing service processes and manufacturing, the same sources of variation cause waste.

current and future states

Value stream mapping is a two-part process that details what?

True

Variation in production systems that is caused by factors that can be clearly identified is called common variation?

building inventory during slow periods

What action would be possible in a level strategy plan?

receivables turnover, asset turnover, and net income per employee

What are common measures of efficiency used by Wall Street?

Inventory levels

What are internal factors that influence a production plan?

outsourcing or shared capacity

What are the two strategies an organization can use when adding in-house capacity is not cost effective?

Other Product-Specific Criteria

What competitive dimension relates to environmental impact?

Centroid Method

What is a technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped?

A call center

What is an example of a service business?

waste

What is defined as anything that does not add value from the customer's perspective?

generate access to new markets

What is not an organizationally driven reason to outsource?

Assess the Opportunity

What is the first step in the process for green sourcing?

Value Stream

What is the technique used to identify all of the value adding as well as non value adding processes

free trade zone

What is the term for a closed facility where goods can be brought in without being subject to normal import duties?

Sales and Operations Planning

What process gives senior management a better handle on meeting customer demand over a 3 to 18 month time horizon?

Statement of Work

What term best describes the written description of the objectives to be achieved in a project?

Work Package

What term describes the group of activities assigned to a single organizational unit?

Kaizen

What term is used to describe a philosophy that focuses on continuous improvement?

Six Sigma

What term refers to the philosophy and methods that companies use to eliminate defects in their products and processes?

Risk Mapping

What tool involves assessing the probability or relative frequency of an event against the aggregate severity of the loss?

value adding activities

What type of activities transform materials and information into something the customer wants?

Strategic

What type of forecast should be used for strategy, sourcing, and location decisions?

lean

What type of production focuses on eliminating as much waste as possible?

innovative

What type of products have a life cycle of just a few months?

functional

What type of products have low profit margins, long product life, and predictable demand?

CPFR

What web-based tool is being used as a means to integrate members of a supply chain?

Straddling

When a company seeks to match the benefits of a successful position and maintain their current position in the marketplace it is attempting a(n) ________________ approach.

second party

When a customer audits its supplier in regards to ISO certification, this is referred to as a ____________ certification

shortage

When a customer cancels an order because of item backlogs, that lost revenue is a(n) ___ cost.

task and subtasks

When breaking down a project into smaller elements, what terms are used to describe the subdivisions?

less

When comparing service processes to manufacturing processes, one would say that they are _________ controllable.

vendor managed inventory

When purchasing items that are highly specified and a long contract is desirable, which sourcing process should be used?

False

When using the low cost strategy for supply chain management, the firm should invest aggressively to reduce lead time.

Pareto charts

Which analytical tool of Six Sigma breaks down a problem into the relative contributions of its components?

pareto charts

Which analytical tool of Six Sigma breaks down a problem into the relative contributions of its components?

random variation

Which component of demand reflects the effects of chance events?

Social

Which dimension of the triple bottom line seeks to benefit its employees, the local community, and other entities that are impacted by the firm's existence?

ISO 9000

Which is the ISO certification regarding quality management requirements in business-to-business dealings?

third party

Which is the best form of ISO certification?

manufacturing cell

Which layout format groups machines to work on products that have similar processing requirements?

False

The critical path of a CPM analysis is found by locating activities with large slack times

False

The critical ratio rule will prioritize jobs based on importance or value of customers who have placed the orders

bullwhip effect

The effect of the lack of synchronization amongst supply chain members is referred to as which of the following

The most recent forecast

The exponential smoothing method requires which of the following data to forecast the future

order winner

The feature that actually differentiates one product from the other candidates and is purchased is known as the?

time series analysis

The forecasting technique that uses past demand to predict future demand is known as

True

The four phases of the product life cycle are introduction, maturity, growth, and decline

development of demand forecasts

Point-of-sale (POS) data would be used in which step of the CPFR process

True

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

Stable workforce - variable work schedule

Production output is varied by changing work schedules to include overtime (when more production is needed) and idle time (when less production is needed).

workforce size, inventory, and size of production facility

Production planning strategies involve trade-offs among

Chase Strategy

Production rate is matched to order rate by hiring and firing employees

Motion

Production system identifies which of the following types of waste to be eliminated

outputs to inputs

Productivity is defined as the ratio of

True

Quality at the source requires factory workers to become their own inspectors

a measure of the number of times receivables are collected, on average, during the fiscal year.

Receivables turnover is

True

Service blueprinting is a process analysis technique that focuses on customers and provides interaction with customers

six

Short-range planning covers a period from one day to _____ months.

true

Simple exponential smoothing lags changes in demand

True

Simple exponential smoothing lies changes in demand

False

The "triple bottom line" relates to the economic, employee, and customer impact of a firm's strategy.

True

The 3 main inputs to a MRP system are the bill of materials, the master schedule, and the inventory records file

Japan

The Malcolm Baldrige National Quality Award was created as a response to the US quality shortfalls compared with which country?

economies of scope

The ability to rapidly and inexpensively switch production from one product to another enables what

Capacity Flexibility

The ability to rapidly increase or decrease production levels, or shift from one product or service to another is known as

precedes

The aggregate operations plan ___ the master schedule.

workforce levels and production rates

The aggregate operations plan is mainly concerned with optimal

Production

The aggregate operations plan's objective is to set _____ rates for the intermediate term, from 3 to 18 months

False

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

Toyota Production System (TPS)

The benchmark for lean manufacturing is known as the

Synchronizing

The bullwhip effect can be reduced by ___ efforts among members of the supply chain.

Delivery Reliability

The competitive dimension that deals with getting the product to the customer when promised is called

15-20%

The cost of quality has been estimated at what percentage of every sales dollar?

time fences

are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.


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