Operations Management (P370) Final

Which of the following is not a type of inventory?

reorder point stock

Which of the following are the characteristics of a Baldridge Award winner or a company that emphasizes on customer satisfaction and business results?

•The company formulates a vision of what quality is and how to achieve it. •Senior management is actively involved •The company carefully plans and organizes its quality effort. •The company vigorously controls the overall process.

Mole Mfg. has asked you to develop a chase plan for the production of its earth moving equipment. Below is the beginning inventory, monthly demand, and relevant work force information. Determine the total hire/fire costs and the number of workers employed at the end of October. Note: The ending inventory for October should be 0. July Beginning Inventory 1200: Demand is July 3300; Aug 3000; Sept 2550; Oct 2400. Hiring costs $50 per worker; firing costs $100 per worker; production rate 15 units per month per worker; starting workforce 200 workers

$13,000 and 160 workers

A certain product costs $200 to order. The cost per unit is $25 and the cost to carry one unit in inventory for 1 year is 20% of the value of the product. Monthly demand is 1,000 units. The company operates 5 days a week, 4 weeks per month. Assume the company manufactures the unit instead of purchasing it, and so the replenishment is not immediate, but rather gradual over time. If the production rate is 750 units per day, what is the optimal order quantity?

1014

At Q, what is TAHC?

1197.98

The Bloomington Bicycle Bearing company wishes to use a level output plan to plan for the rest of the year. Here is the forecasted demand for all bearing types: Month Demand May 800 Jun 650 July 720 August 690 Sept 530 Oct 610 Nov 630 Dec 610 If the beginning inventory is 300 units and the desired ending inventory at the end of December is 500 units, how many units will be in inventory at the end of August? Assume that backorders are allowed.

160

Suppose that the supplier of the fittings only has the capacity to deliver the fittings at the rate of 500 per week. What is the new optimum order quantity (Q)?

1860

The BBC Company is forecasting demand to fluctuate over the next four periods. If the beginning inventory level is 120 units and the company wants a pure level output plan, what level of production is required to avoid back orders during any period and to keep ending inventory for period 4 at a minimum? The forecast is: Period 1-1900; Period 2-1930; Period 3-2260; Period 4-910.

1990

How many orders will there be per year at the FOQ?

23.96

At Q, what is TAC?

289395.83

The Acme Catalogue Company resells a wide variety of products that they purchase from other companies. One of their best selling products has an average demand of 200 units per week and a standard deviation of demand equal to 50 units per week. The manufacturer of the product, CTI Incorporated, is very reliable with their shipments for Acme, but requires a 10 day lead time. If Acme wishes to achieve a 95% service level, what reorder point should they use? (Both Acme and CTI operate 7 days per week).

384

What is the order quantity that minimizes total annual cost of inventory?

855.7

A certain product costs $200 to order. The cost per unit is $25 and the cost to carry one unit in inventory for 1 year is 20% of the value of the product. Monthly demand is 1,000 units. The company operates 5 days a week, 4 weeks per month. What is the FOQ?

980

Converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as:

Aggregate planning

Comparing an organization's performance on critical business processes against the best performance on the same or similar processes in other organizations is known as:

Benchmarking.

The degree to which the product or service design specifications are met during the transformation process is known as:

Conformance quality

Which of the following is NOT a method used in aggregate planning to cope with fluctuations in demand?

Construction of a new plant and/or finished goods warehouse

Which of the following costs are NOT considered in developing an aggregate production plan?

Depreciation costs

Suppose a company is using pure chase strategy for its aggregate production planning. Which of the following policies would a manager use to deal with (or hedge against) the fluctuation in demand?

Hire additional workers when demand increases and outplace them when demand decreases

Suppose a company is using pure chase strategy for its aggregate production planning. Which of the following policies would a manager use to deal with (or hedge against) the fluctuation in demand?

Hire or fire workers accordingly

Which of the following are characteristic of the companies who have won the Malcolm Baldrige National Quality Award?I. A strategic vision for the organization was developed.II. Senior management was actively involved in improvement efforts.III. They produced highly profitable, high technology products.IV. Quality control and improvement efforts were carefully planned and implemented.

I, II, and IV

Which of the following statements best describe one a basic difference between the Malcolm Baldrige Award and ISO 9000 certification?

ISO 9000 is more important in international commerce

The Shingo system relies on which of the following approaches?

Introduction of quality controls within the process so feedback can occur immediately.

Which of the following statements is not true about the continuous improvement process?

It requires creative thinkers to come up with break-through innovations.

Which aggregate planning strategy typically results in greater inventory carrying costs?

Level strategy

A pure level strategy for aggregate production planning:

Maintains a stable workforce working at a constant output rate.

What is one of the fundamental differences between the Malcom Baldridge Award and ISO9000 certification?

One applies to U.S. firms, while the other applies to companies anywhere in the world.

Which one of the following lists best describes the four steps of the Deming Wheel?

Plan, Do, Check, Act.

In a saw tooth diagram, the peak of each inventory cycle represents?

Q

Which of the following is not a cost associated with cost of quality ?

Scrap, test equipment, inspection, warranty

Which of the following circumstances would provide an incentive for employing a level (vs. chase) plan?

The production process requires highly trained labor