Decision making in operations midterm word questions

Which of the following is a system in which low-skilled workers use specialized equipment to produce high volumes of standardized goods? mass production craft production lean systems the Internet supply chain

mass production

Which of the following is used for constructing a control chart? Multiple Choice bias mean squared error mean absolute deviation tracking signal MAPE

mean squared error

Two widely used metrics of variation are the __________ and the _________. standardized mean; assignable deviation normal distribution; random variation productivity ratio; correlation randomized mean; standardized deviation mean; standard deviation

mean; standard deviation

The mean absolute deviation is used to: estimate the trend line. measure forecast accuracy. seasonally adjust the forecast. compute periodic forecast errors. eliminate forecast errors.

measure forecast accuracy.

The fundamental purpose for the existence of any organization is described by its: mission statement. bylaws. policies. corporate charter. procedures.

mission statement.

Which of the following factors would tend to reduce productivity? reductions in the scrap rate more inexperienced workers less variety in the product mix reductions in labor turnover improvements in workplace safety

more inexperienced workers

Which of the following is the case where capacity is measured in terms of inputs? Multiple Choice number of passenger seats that can be filled per day on an airline route tons of steel per day that can be produced by a steel mill number of meals per day that can be served by a restaurant gallons of gasoline that can be produced per day by a petroleum refinery kilowatt hours per day that can be generated by an electrical power plant

number of passenger seats that can be filled per day on an airline route

An example of automated services is: Multiple Choice massage parlors. financial advising. haircuts. build your own pizza. online banking.

online banking.

Scheduling personnel is an example of an operations management: operational decision. functional strategy. mission implementation. organizational strategy. tactical decision.

operational decision

With regard to operations, organization strategy should, ideally, take into account: inventory levels. labor productivity. production processes. product mix. operations' strengths and weaknesses.

operations' strengths and weaknesses.

The external elements of SWOT analysis are: strengths and weaknesses. opportunities and threats. weaknesses and opportunities. strengths and opportunities. strengths and threats.

opportunities and threats.

An organization's mission statement serves as the basis for: core competencies. operating procedures. distinctiveness. environmental scanning. organizational goals.

organizational goals.

Productivity is expressed as: input divided by output. output divided by input. output plus input. output minus input. output times input.

output divided by input.

Managing the supply chain has become more important as a result of firms increasing their levels of: overtime. shipping. marketing. outsourcing. promotions.

outsourcing

Maximum capacity commonly refers to the upper limit on: Multiple Choice the rate of output. utilization. efficiency. finances. the rate of demand.

the rate of output.

Which of the following is not a type of judgmental forecasting? the Delphi method time series analysis executive opinions sales force opinions consumer surveys

time series analysis

At the break-even point: Multiple Choice total cost equals total revenue. variable cost equals fixed cost. total cost equals profit. variable cost equals total revenue. output equals capacity.

total cost equals total revenue.

Gradual, long-term movement in time series data is called: cycles. seasonal variation. random variation. trend. irregular variation.

trend.

Which of the following characterizes decision making under uncertainty? Multiple Choice Lack of knowledge about how risk-averse the decision maker is. Certain parameters have probabilistic outcomes. Relevant parameters have known values. The likelihood of possible future events is unknown. Decision makers must rely on probabilities in assessing outcomes.

The likelihood of possible future events is unknown.

Which of these items would be most likely to be made with a fixed-position layout? Multiple Choice toothpaste all of these applesauce a large, ocean-going cruise ship a computer chip

a large, ocean-going cruise ship

Which of the following would be least important in the pursuit of a time-based strategy? flexible technology cost minimization quick changeover times operational agility reduced complaint resolution times

cost minimization

In order to increase the responsiveness of a forecast made using the moving average technique, the number of data points in the average should be: Multiple Choice increased. eliminated if the MAD is greater than the MSE. decreased. multiplied by a smaller alpha. multiplied by a larger alpha.

decreased

Which of the following is/are a primary input into capacity, sales, and production planning? Multiple Choice globalization demand forecasts product design ethics market share

demand forecasts

Use of simple linear regression analysis assumes that: predictions can easily be made beyond the range of observed values of the predictor variable. variations around the line are nonrandom. the variance of error terms (deviations) varies directly with the predictor variable. all possible predictor variables are included in the model. deviations around the line are normally distributed.

deviations around the line are normally distributed.

If the output rate is increased but the average unit costs also increase, we are experiencing: Multiple Choice step-function scaleup. market share erosion. economies of scale. value-added accounting. diseconomies of scale.

diseconomies of scale.

technoloy choice can have a major impact on: a. costs b. productivity c. customer satisfaction d. quality e. all of the above

e. all of the above

Which of the following is a type of transformation process used by operations to convert inputs into outputs? a. analyzing b. cutting c. entertaining d. storing e. all of the above are transformation processes

e. all of the above are transformation processes

Measurements taken at various points in the transformation process for control purposes are called: a. directions b. plans c. controls d. budgets e. feedback

e. feedback

The key to successfully competing is understanding what customers want and then __________ satisfy those wants. designing products and services that finding the best way to finding suppliers who can training production workers to hiring enough workers to

finding the best way to

In an environment in which demand is both substantial and stable, __________ technology tends to be the best choice. Multiple Choice flexible automation fixed automation programmable automation project production batch production

fixed automation

The type of layout in which workers, materials, and equipment are moved to the product as needed is: Multiple Choice mass. fixed-position. process. product. batch.

fixed-position.

What is it about job shops that make them appropriate for products in the introductory phase of their life cycle? Multiple Choice rigidity flexibility high volume capacity efficiency technology

flexibility

Which is not an area of significant difference between manufacturing and service operations? forecasting demand measurement of productivity labor content of jobs customer contact uniformity of input

forecasting demand

Which of the following would tend to reduce effective capacity? Multiple Choice improved production quality greater variety in the product line suppliers that provide more reliable delivery performance employees that are fully trained reduced changeover times

greater variety in the product line

When the output is less than the optimal rate of output, the average unit cost will be: Multiple Choice could be either higher, lower or the same. lower. the same. could be either higher or lower. higher.

higher

Productivity growth can be calculated by: -input plus output divided by two. -(current productivity - previous productivity) x 100 / (previous productivity) -outputs divided by the inputs. -inputs divided by the outputs. -outputs minus inputs.

(current productivity - previous productivity) x 100 / (previous productivity)

The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas: -Sustainability; Flexibility; Efficiency; Technology -Customers; Financial; Internal Business Processes; Learning and Growth -The Environment; The Community; Suppliers; Other Stakeholders -Strategy; Tactics; Productivity; Profitability -Customization; Standardization; Efficiency; Effectiveness

-Customers; Financial; Internal Business Processes; Learning and Growth

Layout design has many objectives, one of which is: Multiple Choice move materials and workers simultaneously. install computer terminals every 500 feet. hold material handling costs to 27 percent or less. use workers and space efficiently. reduce bottlenecks.

use workers and space efficiently.

A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more _____________ than a firm pursuing a strategy based on low cost and high volume. variation productivity quality streamlined flow capacity

variation

hich of the following possible values of alpha would cause exponential smoothing to respond the most quickly to forecast errors? Multiple Choice .10 0 .01 .15 .05

.15

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? Multiple Choice 0 1.0 .01 .1 .5

1.0

Which of the following is not true about the systems approach? -A systems approach is essential whenever something is being redesigned or improved. -A systems approach emphasizes interrelationships among subsystems. -All of the choices are true. -A systems viewpoint is almost always beneficial in decision making. -A systems approach concentrates on efficiency within subsystems.

A systems approach concentrates on efficiency within subsystems.

Which of the following is not a reason why capacity decisions are so important? Multiple Choice Capacity is a major determinant of initial costs. Capacity chunks can be added or deleted quickly and inexpensively. Capacity affects operating costs. Capacity limits the rate of output possible. Capacity is a long-term commitment of resources.

Capacity chunks can be added or deleted quickly and inexpensively.

Which of the following is not a step in the forecasting process? Select a forecasting model. Eliminate all assumptions. Monitor the forecast. Establish a time horizon. Determine the purpose and level of detail required.

Eliminate all assumptions.

A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout. True or False

False

Assembly lines improved productivity by using interchangeable parts and craft production. True or False

False

Exponential smoothing adds a percentage (called alpha) of the last period's forecast to estimate the next period's demand. True or False

False

Flexible manufacturing systems bring the benefits of automation to continuous processes. True or False

False

Global competition really only applies to multinational organizations. True or False

False

In cost-volume analysis, costs that vary directly with volume of output are referred to as fixed costs because they are a fixed percentage of output levels. True or False

False

Most people encounter operations only in profit-making organizations. True or False

False

Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. True or False

False

Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy. True or False

False

The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. True or False

False

Which of the following features would not generally be considered common to all forecasts? Multiple Choice Assumption of a stable underlying causal system. Forecasts for groups of items tend to be more accurate than forecasts for individual items. Actual results will differ somewhat from predicted values. Historical data is available on which to base the forecast. Accuracy decreases as the time horizon increases.

Historical data is available on which to base the forecast.

When new products or services are being planned, process selection occurs as a matter of course. Process selection also comes into play as a result of: (I) technological changes. (II) competitive pressures. (III) fundamental changes in demand patterns. Multiple Choice I, II, and III I and II but not III II only I only III only

I, II, and III

The key questions in the process selection task are: (I) How will the product/service be priced? (II) How much variety will be imposed on the process? (III) What is the target market for the product/service? (IV) At what volume will the process need to operate? Multiple Choice I and IV II and IV II and III III and IV I and III

II and IV

Accuracy in forecasting can be measured by: Multiple Choice MRP. MTM. MTE. MPS. MSE.

MSE

Which of the following is a potential shortcoming of using sales force opinions in demand forecasting? Multiple Choice Members of the sales force have direct contact with consumers. Customers often are quite open with members of the sales force with regard to future plans. Members of the sales force often have substantial histories of working with and understanding their customers. Members of the sales force often are well aware of customers' future plans. Members of the sales force can have difficulty distinguishing between what customers would like to do and what they actually will do.

Members of the sales force can have difficulty distinguishing between what customers would like to do and what they actually will do.

The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the: Stevenson phenomenon. Tellier phenomenon. Pareto phenomenon. Irwin phenomenon. Adam Smith phenomenon.

Pareto phenomenon.

The global market enables the operations manager: To offer new products To improve the environment To provide job transfers to other countries To shutdown domestic operations To choose the most cost effective supplier To layoff employees

To choose the most cost effective supplier

A characteristic that was once an order winner may become an order qualifier. True or False

True

Forecasts based on an average tend to exhibit less variability than the original data. True or False

True

In order to update a moving average forecast, the values of each data point in the average must be known. True or False

True

Lean production systems incorporate the advantages of both mass production and craft production. Ture or False

True

Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts. True or False

True

Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom-made parts. True or False

True

Productivity is directly related to the ability of an organization to compete. True or False

True

Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast. True or False

True

The greater the degree of customer involvement, the more challenging the design and management of operations. True or False

True

The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisions. True or False

True

Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed. True or False

True

Operations management incorporates which of the following groups? a. Suppliers, employees, distributors, and retailers b. b. Suppliers and employees c. Distributors and retailers d. All functional groups are included e. Suppliers and distributors f. Competitors, suppliers, employees, distributors, and retailers

a. Suppliers, employees, distributors, and retailers

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management. a. outsourcing; supply chain b. optimizing; inventory c. downsizing; total quality d. offshoring; lean e. internationalization; intercultural

a. outsourcing; supply chain

Efficiency is defined as the ratio of: Multiple Choice design capacity to effective capacity. actual output to effective capacity. effective capacity to actual output. actual output to design capacity. design capacity to actual output.

actual output to effective capacity.

Which of these factors would be least likely to affect productivity? advertising product mix workers methods and technology management

advertising

Allowances for which of these factors would be subtracted from design capacity when calculating effective capacity? Multiple Choice personal time scheduling problems changing the mix of products all of the other choices equipment maintenance

all of the other choices

A forecast based on the previous forecast plus a percentage of the forecast error is: Multiple Choice an exponentially smoothed forecast. an associative forecast. a centered moving average forecast. a naive forecast. a simple moving average forecast.

an exponentially smoothed forecast.

Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process. Multiple Choice capacity cushion first station economy of scale diseconomy of scale bottleneck

bottleneck

If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher: a. sustainability. b. marketability. c. agility. d. productivity. e. efficiency.

c. agility.

marketing personnel and product designers must work closely with operations to successfully develop and produce new products becasue operations personnel can best udge how ______ new product design wil be a. marketable b. progitable c. manufacturable d. segmentable e. nameable

c. manugacturable

Which of the following is essential to consider with respect to managing a process to meet demand? capacity trends in fashion financial reporting standards advertising global economic trends

capacity

Capacity in excess of expected demand that is intended to offset uncertainty is a: Multiple Choice timing bubble. margin protect. capacity cushion. line balance. positioning hedge.

capacity cushion.

Key aspects of the process selection challenge include _________ and __________. Multiple Choice process flexibility; marketing strategy capacity planning; marketing strategy capital intensity; process flexibility marketing strategy; operations strategy information technology; marketing strategy

capital intensity; process flexibility

The grouping of equipment by the operations needed to perform similar work for part families is: Multiple Choice product layout. fixed-position layout. process layout. cellular manufacturing layout. functional layout.

cellular manufacturing layout.

Forecasting techniques generally assume: continuity of some underlying causal system. accuracy that is better when individual items, rather than groups of items, are being considered. a linear relationship between time and demand. the absence of randomness. accuracy that increases the farther out in time the forecast projects.

continuity of some underlying causal system.

In which type of processing system would gasoline be produced from crude oil? Multiple Choice continuous project batch job shop assembly

continuous

The type of processing system which is used for highly standardized products is: Multiple Choice continuous. batch. project. intermittent. unit.

continuous.

Which of the following is not a key step toward improving productivity? converting bond debt to stock ownership considering incentives to reward workers developing productivity measures for all operations establishing reasonable goals for improvement improving the bottleneck operations

converting bond debt to stock ownership

When choosing a forecasting technique, a critical trade-off that must be considered is that between: Multiple Choice cost and accuracy. length and duration. time series and associative. simplicity and complexity. seasonality and cyclicality.

cost and accuracy.

Which of the following would tend to increase the importance of supply chain management? lower levels of outsourcing increased globalization increased supply chain stability reduced competitive pressures greater emphasis on local markets

increased globalization

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to: internal audits. delivery time. processing time. product/service design time. response time for complaints.

internal audits.

Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's: internal supply chain. market development. outsourcing. division of labor. external process orientation.

internal supply chain.

Which of the following does not relate to system design? inventory management physical arrangement of departments location of facilities selection and acquisition of equipment altering the system capacity

inventory management

An advantage of a U-shaped production line is that: Multiple Choice workers are specialists. it is less compact. work assignments are more rigid. it is more efficient than a traditional product layout. communication is reduced among employees.

it is more efficient than a traditional product layout.

Which type of processing system tends to produce the most product variety? Multiple Choice continuous assembly mass customization job shop batch

job shop

Which of the following is not necessarily an element of a good forecast? Multiple Choice low cost timeliness written estimate of accuracy meaningful units

low cost

Which of the following is not true about process layouts when they are compared to product layouts? Multiple Choice lower rates of output lower unit costs higher in-process inventories lower span of supervision more involved cost accounting

lower unit costs

A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called a: Multiple Choice decision tree. payoff table. payback period matrix. Laplace table. feasible region.

payoff table.

Which of the following is least likely to affect the cost an organization incurs in producing its products or services? quality price location inventory management productivity

price

A service organization such as a hospital is likely to use a(n) ________ layout because of variability in customer processing requirements. Multiple Choice process assembly flow project nonrepetitive

process

Everything else being equal, a firm considering outsourcing would find all of the following desirable except: Multiple Choice it can maintain tight control over knowledge. total costs will be lower for outsources goods or services. control over operations will be maintained by the firm. proprietary information will be disclosed to the supplier. its supplier has more expertise in whatever is being outsourced.

proprietary information will be disclosed to the supplier.

The two general approaches to forecasting are: mathematical and statistical. precise and approximation. historical and associative. judgmental and qualitative. qualitative and quantitative.

qualitative and quantitative.

Dealing with the fact that certain aspects of any management situation are more important than others is called: analysis of variance. analysis of trade-offs. sensitivity analysis. decision table analysis. recognition of priorities.

recognition of priorities.

One reason for using the Delphi method in forecasting is to: be able to replicate results. reduce the risk that one individual's opinion will prevail. achieve a high degree of accuracy. prevent hurt feelings. maintain accountability and responsibility.

reduce the risk that one individual's opinion will prevail.

In which type of operation are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment? Multiple Choice intermittent production batch processing a job shop repetitive production a project

repetitive production

Which is not a characteristic of simple moving averages applied to time series data? Multiple Choice smoothes random variations in the data requires only last period's forecast and actual data weights each historical value equally smoothes real variations in the data lags changes in the data

requires only last period's forecast and actual data

Which phrase most closely describes the Delphi technique? Multiple Choice developed in India series of questionnaires consumer survey historical data associative forecast

series of questionnaires

Job shops tend to be __________ while continuous processes tend to be __________. Multiple Choice low cost-per-unit; high cost-per-unit standardized; customized small scale and flexible; large-scale and inflexible short-term and capital intensive; long-term and labor intensive in services; in manufacturing

small scale and flexible; large-scale and inflexible

Averaging techniques are useful for: distinguishing between random and nonrandom variations. smoothing out fluctuations in time series. eliminating historical data. average people. providing accuracy in forecasts.

smoothing out fluctuations in time series.

Product design and choice of location are examples of _______ decisions. design customer-focused operational tactical strategic

strategic

Product design and process selection are examples of _______ decisions. system design tactical system operation forecasting financial

system design

Which of the following is not a reason for poor performance of our organization in the marketplace? -failing to monitor the external environment -failing to take into account customer wants and needs -placing too much emphasis on product/service design and too little on process design -taking advantage of strengths/opportunities, and recognizing competitive threats -putting too much emphasis on short-term financial performance

taking advantage of strengths/opportunities, and recognizing competitive threats