Ops Management Exam 2

d. one worker will not get a project assignment

If an assignment problem consists of 5 workers and 4 projects: a. one project will not get a worker assigned. b. The problem cannot be solved by assignment method. c. the fifth worker will split time among the four projects. d. one worker will not get a project assignment. e. one project will be assigned two workers.

True

T/F: MRP is generally applicable to items with dependent demand.

True

T/F: One question that operations managers must answer when generating an aggregate plan is whether prices or other factors should be changed to influence demand.

e. order size and order spacing

What is the difference between P and Q inventory systems? a. lead time length b. order spacing c. order size d. maximum service level e. order size and order spacing

e. sales and operations planning

What is the effort to plan the coordination of demand forecasts with functional areas of the firm and its supply chain? a. capacity planning b. material requirements planning c. enterprise resource planning d. new product development e. sales and operations planning

e. planning bill

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? a. component bill b. phantom bill c. modular bill d. low-level bill e. planning bill

b. $800

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. a. cannot be determined because the unit price is not known b. $800 c. $400 d. $1200 e. zero; this is a class C item

True

T/F: Reduced inventory levels and faster response to changes in demand are both benefits of MRP.

False

T/F: Short-term scheduling is important to efficiency and to cost reduction, but its impact is not of strategic importance.

False

T/F: The allowance factor that increases normal time to standard time compensates for inadequate worker training and lack of worker dexterity.

c. setting the level of safety stock so that a given stockout risk is not exceeded

The proper quantity of safety stock is typically determined by: a. minimizing total costs b. using a single-period model c. setting the level of safety stock so that a given stockout risk is not exceeded d. multiplying the EOQ by the desired service level e. carrying sufficient safety stock so as to eliminate all stockouts

a. outsourcing

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is: a. outsourcing. b. keiretsu. c. not allowed by the ethics code of the Supply Management Institute. d. offshoring. e. a standard use of the make-or-buy decision.

e. 99%

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

c. BCAD

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? a. DABC b. ABCD c. BCAD d. DCBA e. DACB

e. maximum utilization and minimum average flow time

What does the use of the shortest processing time sequencing rule generally produce? a. maximum effectiveness b. minimum average flow time c. maximum average lateness d. maximum utilization e. maximum utilization and minimum average flow time

c. job enlargement

What is the behavioral approach to job design that involves giving the worker more tasks requiring similar skills? a. job enrichment b. job involvement c. job enlargement d. job rotation e. job enhancement

a. prioritize and allocate demand to available facilities

What is the objective of scheduling? a. prioritize and allocate demand to available facilities b. maximize quality c. minimize response time d. minimize cost e. minimize lead time

b. critical ratio

What is the priority rule that sequences jobs using the smallest ratio of due date from today to processing time? a. shortest processing time b. critical ratio c. earliest due date d. longest processing time e. first come, first served

e. closed-loop supply chain

What term describes a supply chain that is designed to optimize both forward and reverse flows? a. circular supply chain b. recycled supply chain c. full-journey supply chain d. network supply chain e. closed-loop supply chain

c. third-party logistics (3PL)

What term is used to describe the outsourcing of logistics? a. e-logistics b. sub-logistics c. third-party logistics (3PL) d. shipper-managed inventory (SMI) e. hollow logistics

d. inventory costs, transportation costs, and facility costs

What three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network? a. facility costs, inventory costs, and marketing costs b. inventory costs, production costs, and facility costs c. facility costs, production costs, and transportation costs d. inventory costs, transportation costs, and facility costs e. inventory costs, production costs, and transportation costs

e. cost-based price model

What type of negotiation strategy requires the supplier to open its books to the purchasers? a. price-based model b. market-based price model c. competitive bidding d. transparent negotiations e. cost-based price model

c. lot-for-lot

Which MRP lot-sizing technique should be considered to be the goal (i.e., the technique of choice under ideal conditions)? a. Silver-Meal b. EOQ c. lot-for-lot d. POQ e. Wagner-Whitin

d. Inventory goes up or down to buffer the difference between demand and production.

Which choice best describes level scheduling? a. Overtime is used to handle seasonal demand fluctuations. b. Subcontracting, hiring, and layoffs 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. Daily production is variable from period to period.

b. price cuts

Which of the following aggregate planning options attempts to manipulate product or service demand? a. inventories b. price cuts c. part-time workers d. subcontracting e. overtime/idle time

d. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

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

e. produce goods or services previously purchased

Which of the following best describes vertical integration? a. develop the ability to produce products that complement the original product b. develop the ability to produce the specified good more efficiently than before c. build long-term partnerships with a few suppliers d. sell products to a supplier or a distributor e. produce goods or services previously purchased

e. local optimization

Which of the following is NOT an opportunity for effective management in the supply chain? a. CPFR b. vendor-managed inventory c. accurate "pull" data d. postponement e. local optimization

d. require overnight delivery

Which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver? a. subcontractors on retainer b. pre-planning c. effective contracts with penalties d. require overnight delivery e. use multiple suppliers

a. the emphasis is on staffing levels, not materials

Which of the following is TRUE regarding services scheduling? a. The emphasis is on staffing levels, not materials. b. Reservations and appointments are often used to manipulate the supply of services. c. Labor use can be intensive, and labor demand is usually stable. d. The critical ratio sequencing rule is widely used for fairness to customers. e. All of these are true.

c. all of these are limitations

Which of the following is a limitation of rules-based dispatching systems? a. Rules need to be revised to adjust to changes in orders, product mix, and so forth. b. Rules may not recognize bottleneck resources c. All of these are limitations. d. Rules may not be able to prioritize two jobs with identical due dates. e. Rules may not recognize idle resources.

c. product development skills

Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy? a. capacity b. speed c. product development skills d. cost e. flexibility

d. FCFS seems fair to customers

Which of the following is an advantage of the FCFS dispatching rule when used in services? a. FCFS maximizes utilization. b. FCFS minimizes the average number of jobs in the system. c. FCFS minimizes the average lateness of all jobs. d. FCFS seems fair to customers. e. FCFS maximizes the number of jobs completed on time.

c. a Gantt schedule chart

Which of the following is an aid used to monitor jobs in progress? a. a Gantt progress chart b. the assignment method c. c. a Gantt schedule chart d. Johnson's rule e. a Gantt load chart

b. movement of capital

Which of the following is not analyzed using methods techniques? a. crew activity b. movement of capital c. body movement d. movement of material e. movement of individuals

d. aggregate planning

Which of the following is the term used for intermediate-range capacity planning with a time horizon of 3 to 18 months? a. enterprise resource planning b. strategic planning c. material requirements planning d. aggregate planning e. job scheduling

d. The larger the annual demand, the less attractive a discount schedule will be.

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 order quantity decisions when a quantity discount is available. c. The smaller the ordering cost, the less attractive a discount schedule will be. d. The larger the annual demand, the less attractive a discount schedule will be. e. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule.

a. The operator is allowed to move, for example, from one type of CNC machine to another.

Which of the following statements describes job rotation? a. The operator is allowed to move, for example, from one type of CNC machine to another. b. The job includes some planning and control necessary for job accomplishment. c. The operator's schedule is flexible. d. The operator works on different shifts on a regular basis. e. The job contains a larger number of similar tasks.

e. Effective control of all goods leaving the facility is one applicable technique.

Which of the following statements regarding control of service inventories is TRUE? a. Service inventory has carrying costs but no setup costs. b. Good personnel selection, training, and discipline are easy. c. Service inventory needs no safety stock, because there's no such thing as a service stockout. d. Service inventory is a fictional concept, because services are intangible. e. Effective control of all goods leaving the facility is one applicable technique.

a. The Scanlon plan is based on individual productivity.

Which of the following statements regarding incentive systems is FALSE? a. The Scanlon plan is based on individual productivity. b. Increasing use of cross-training has led to increasing use of knowledge-based pay systems. c. Bonuses are often used at the executive levels. d. Profit-sharing systems provide some part of the profit for distribution to employees. e. About half of all American manufacturing firms use productivity incentives.

a. to minimize holding costs

Which of the following would NOT generally be a motive for a firm to hold inventories? a. to minimize holding costs b. to hedge against inflation c. to decouple various parts of the production process d. to take advantage of quantity discounts e. to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand

d. 1

With cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)? a. 3 b. equal to the number of countries to which the final product is sold c. 2 d. 1 e. equal to the total number of components

b. flexible workweek

Working four shifts of ten hours each instead of five shifts of eight hours each is known as which of the following? a. constant employment b. flexible workweek c. flexwork d. part-time status e. flextime

d. line balancing

all EXCEPT which of the following are "opportunities" in managing the integrated supply chain? a. drop shipping b. postponement c. blanket orders d. line balancing e. standardization

b. there is a clearly identifiable parent

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

d. earliest due date

EDD stand for what? a. earliest decision date b. economic date determination c. earliest design date d. earliest due date e. earliest detrimental date

c. all of these

Ethical work environment decisions by managers may be guided by which of the following? a. trade associations b. insurers c. all of these d. employees e. state agencies

b. 85 dB

Extended periods of exposure to decibel levels above ___________ has been judged to be permanently damaging. a. none of these b. 85 dB c. 95 dB d. 100 dB e. 90 dB

e. modular bills

Firms making many different final products use __________ to facilitate production scheduling. a. overdue bills b. phantom bills c. gross requirements bills d. planning bills e. modular bills

b. movement of people or material

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

b. jobs as soon as the requirements are known

Forward scheduling is the scheduling of: a. jobs according to their profit contributions b. jobs as soon as the requirements are known c. the start items or component parts d. the final operation first beginning with the due date e. the end items or finished products

b. job specialization, job expansion, psychological components, and self-directed teams.

Four of the components of job design are: a. ergonomics and work methods, method time measurement, work schedules, 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. labor specialization, time studies, work sampling, and pre-determined time standards. e. employment stability, work schedules, work sampling, and motivation & incentive systems.

b. adding safety stock

If demand is not uniform and constant, then stockout risks can be controlled by: a. reducing the reorder point b. adding safety stock c. raising the selling price to reduce demand d. spreading annual demand over more frequent, but smaller, orders e. increasing the EOQ

b. average observed time multiplied by a performance rating factor

In time studies, normal time is: a. converted to standard time by the performance rating factor b. average observed time multiplied by a performance rating factor c. determined by historical experience d. larger than standard time e. one hour later during the summer months

e. increased material handling

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

d. all of these are attributes of lean operations

Lean operations are known for their: a. challenging jobs b. employee development c. supplier education d. all of these are attributes of lean operations e. supplier partnerships

b. reflected in reasonable, documented employment policies that are honestly and equitably implemented to the satisfaction of both management and employee.

Mutual trust is: a. when management and the employees both agree on common objectives. b. reflected in reasonable, documented employment policies that are honestly and equitably implemented to the satisfaction of both management and employee. c. 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. d. when employees have gained the trust of management. e. when management has gained the trust of the employees.

a. all of these are true of outsourcing

Outsourcing: a. All of these are true of outsourcing. b. utilizes the efficiency that comes with specialization. c. None of these is true of outsourcing. d. transfers traditional internal activities to outside vendors. e. allows the outsourcing firm to focus on its key success factors.

a. 7

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. a. 7 b. unable to determine with this information c. 4 d. 6 e. 5

a. drop shipping

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? a. drop shipping b. passing the buck c. channel assembly d. float reduction e. postponement

c. 200 units per order

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: a. 10 times per year b. every 20 days c. 200 units per order d. all 4000 units at one time e. none of these

a. one-third as large

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: a. one-third as large b. cannot be determined c. nine times as large d. one-ninth as large e. three times as large

c. increased by less than 50%

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

d. finite capacity scheduling

A recent advance in short-term scheduling that makes use of expert systems and simulation in solving dynamic scheduling problems is: a. forward scheduling b. infinite scheduling c. backward scheduling d. finite capacity scheduling e. progressive scheduling

d. 100; 64

A work sampling study requires an acceptable error level of 10 percent and z = 2 for 95.45 percent confidence. The adequate sample size is ________ if the sample proportion is thought to be as large as 50 percent, but ________ if the sample proportion is thought to be about 20 percent. a. 50; 20 b. 100; 16 c. 20; 50 d. 100; 64 e. 200; 80

c. They can only be determined after work actually takes place.

Among the advantages of predetermined time standards are all EXCEPT which of the following? a. They can be established in a laboratory setting. b. No performance ratings are necessary. c. They can only be determined after work actually takes place. d. Unions accept them as fair. e. They are available before a task is actually performed.

b. backward integration

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? a. forward integration b. backward integration c. current transformation d. horizontal integration e. job expansion

e. 10 hours

Suppose that the allowance factor for a job is 0.5 and the normal time is 5 hours. What is the standard time? a. 5 hours b. 7.5 hours c. cannot determine with the given information d. 2.5 hours e. 10 hours

a. 141

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? a. 141 b. 24 c. 600 d. 100 e. 490

True

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

False

T/F: ABC analysis is based on the presumption that carefully controlling all items is necessary to product important inventory savings.

False

T/F: 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

T/F: Advertising and promotion are methods of manipulating product or service supply in aggregate planning.

True

T/F: Aggregate planning in manufacturing ties organizational strategic goals to a production plan.

True

T/F: Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

False

T/F: An enlarged job has more responsibility than the same job enriched.

False

T/F: At the economic order quantity, holding costs are equal to product costs.

False

T/F: Because service forms do not acquire goods and services externally, their supply chain management issues are insignificant.

True

T/F: Benchmark firms have driven down costs of supply-chain performance.

False

T/F: Customer demand will always remain an unknown, so it is not considered a source of variability.

True

T/F: Dispatching rules are typically judged by four effectiveness criteria: average completion time, utilization, average number of jobs in the system, and average job lateness.

True

T/F: Finite capacity scheduling provides the user with graphical interactive computing, which is the technique's primary advantage over rule-based scheduling.

True

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

False

T/F: Gantt charts are useful for scheduling jobs, but not for loading them.

True

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

True

T/F: In ABC analysis, "A" items are the most tightly controlled.

False

T/F: In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

True

T/F: Job rotation is a version of job enlargement.

True

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

True

T/F: Labor standards based on historical experience are relatively inexpensive to obtain.

True

T/F: Logistics management can provide a competitive advantage through improved customer service.

True

T/F: One advantage of cycle counting is that it maintains accurate inventory records.

True

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

True

T/F: One use of labor standards is to determine what constitutes a fair day's work.

False

T/F: Process-focused facilities and repetitive facilities generate forward-looking schedules, but process-focused facilities do this with JIT and kanban while repetitive facilities generally use MRP.

True

T/F: The fixed-period inventory model can have a stockout during the review period as well as during the lead time, which is why fixed-period systems require more safety stock than fixed-quantity systems.

False

T/F: The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.

True

T/F: Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories.

False

T/F: With forward scheduling, jobs are scheduled as late as possible within the time allowed by the customer due dates

d. capacity planning, aggregate planning, master schedule, short-term scheduling.

The correct sequence from longest to smallest duration scheduling is: a. master schedule, capacity planning, aggregate planning, short-term scheduling. b. aggregate planning, capacity planning, master schedule, short-term scheduling. c. master schedule, aggregate planning, capacity planning, short-term scheduling. d. capacity planning, aggregate planning, master schedule, short-term scheduling. e. capacity planning, master schedule, aggregate planning, short-term scheduling.