DSCI 303 Exam 2
A computerized inventory system checks inventory levels at the end of the week and produces suggested orders for the coming week. What kind of system is this? A. A periodic review system B. A continuous review system C. A service level system D. An ABC inventory system
A. A periodic review system
The quality cycle: A. Begins with defining customer needs B. Is stated as tolerances or minimum and maximum acceptable limits C. Applies primarily to manufacturing organizations D. Produces control points and inspection techniques
A. Begins with defining customer needs
Which of the quality gurus advocated that organizations should drive out fear from the employees? A. Deming B. Juran C. Crosby D. Ishikawa E. Taguchi
A. Deming
Which of the following statements is incorrect about managing inventory in supply chains? A. In a supply chain, a single firm typically controls all of the inventories that are required while manufacturing a product. B. Coordination among supply chain partners is essential while managing inventory across the supply chain. C. The total cost minimization approach can be applied while managing inventory across the supply chain. D. None of the above
A. In a supply chain, a single firm typically controls all of the inventories that are required while manufacturing a product.
Average inventory under a Q system: A. Is depleted at a constant rate B. Is set to cover average demand over lead time plus the review intervals C. Is relatively flat in the neighborhood of the minimum D. Tends to be less than under a system of periodic review at fixed intervals
A. Is depleted at a constant rate
For production control, lean pull systems are best suited for: A. Repetitive manufacturing B. Job shop production C. Semi‐repetitive batch manufacturing D. None of the above
A. Repetitive manufacturing
The service-profit chain shows that _____ is the key to profitability. A. customer loyalty B. customer satisfaction C. customer contact D. employee productivity E. employee retention
A. customer loyalty
________ is a combination of reliability and maintainability. A. Field service B. Availability C. Quality of conformance D. Warranty E. Mean time to repair
B. Availability
The number of defects in a product would be used to measure the: A. Reliability of the process B. Conformance quality of the process C. Repeatability of the process D. Performance quality of the process
B. Conformance quality of the process
A goal service guarantee: A. Is often an advertising gimmick B. Is an honest assurance that the customer will be satisfied C. Has many stipulations and conditions D. Costs a lot
B. Is an honest assurance that the customer will be satisfied
____ contact services require employees with technical skills and efficient processing routines. A. High B. Low C. Moderate D. Both b and c E. Both a and b
B. Low
Which cost is not considered part of inventory ordering costs? A. Transportation costs B. Obsolescence costs C. Setup costs D. Receiving costs
B. Obsolescence costs
Transportation cost is an example of... A. Item Cost B. Ordering Cost C. Carrying Cost D. Stockout Cost E. Storage Cost
B. Ordering Cost
Which of the following is NOT a correct statement? A. A service is produced and consumed simultaneously B. Services are provided in a bundle of services and goods C. The service delivery system should be designed primarily around the employees in the system D. Low-contact services can usually be made more efficient than high-contact services
B. Services are provided in a bundle of services and goods
Which of the following statements is NOT true about six sigma quality? A. Six Sigma results in 3.4 ppm defects B. Six Sigma is equivalent to a process capability of Cpk=1.5 C. Six Sigma corresponds to 3 standard deviations on either side of the mean D. Six Sigma can be applied to administrative and service processes as well E. Motorola invented the term "six sigma quality" in the mid-80s
B. Six Sigma is equivalent to a process capability of Cpk=1.5
The degree of customer contact measures: A. The amount of time the customer is separated from the service delivery system B. The amount of time the customer is in the service delivery system while the service is being produced C. The customization abilities of the service system D. None of the above
B. The amount of time the customer is in the service delivery system while the service is being produced
External setup time refers to: A. The time it takes workers to set up a machine during scheduled maintenance B. The time to complete setup activities that do not require that the machine be stopped C. The time it takes equipment vendors to set up the machine D. None of the above
B. The time to complete setup activities that do not require that the machine be stopped
The ideal setup time for a lean system is: A. 5 minutes B. The time it takes the line to get ready C. 0 minutes D. 1 hour
C. 0 minutes
If a sales representative tells his or her manager, "I hope to sell 20% more than last year," this should be considered: A. A forecast B. A performance measure C. A goal D. A production plan
C. A goal
Which of the following statements about process quality control is NOT true? A. Assignable cause variation is also referred as special cause variation B. An observation outside the control limits is an example of a special cause of variation C. Common cause variation can be eliminated from the process by removing the potential causes D. The control limits will include 99.74% of the population under the normal probability distribution assuming that the process is in control E. None of the above
C. Common cause variation can be eliminated from the process by removing the potential causes
Reduction of setup time is accomplished by separating internal and external setups and: A. Reducing inventory B. Implementing a Kanban system C. Converting internal setup time to external setup time D. Reducing lot sizes
C. Converting internal setup time to external setup time
When should qualitative methods NOT be used? A. When historic data are unreliable B. When it is impossible to obtain historic data C. For short‐range, repetitive decisions D. When making major, costly decisions, such as facilities location
C. For short‐range, repetitive decisions
A qualitative forecast would most likely be used for: A. Aggregate planning B. Scheduling C. Process design D. Inventory management
C. Process design
Which of the following is the most important criterion (highest number of points) of the Malcolm Baldrige National Quality Award? A. Process Management B. Measurement, analysis, and knowledge management C. Results D. Customer focus E. Leadership
C. Results
Which phrase most closely describes the Delphi forecasting technique? A. Consumer survey B. Individual opinions C. Rounds of anonymous data collection D. Test markets E. Historic data
C. Rounds of anonymous data collection
Which of the following is NOT a characteristic of service operations? A. Intangible output B. No resale is possible C. The buyer can perform part of the production D. Product cannot be stored E. Ownership is transferred at time of purchase
C. The buyer can perform part of the production
The appearance of a TV cabinet that is not satisfactory is an example of: A. Variable measurement B. Mean chart C. Range chart D. Attribute measurement E. None of the above
D. Attribute measurement
Which of the following is not an example of a high labor-intensive service? A. Retail trade B. Personal services C. Business services D. Auto repair E. Insurance agents and service
D. Auto repair
Which of the following are characteristics of a low-contact service delivery system? A. Lower costs and more standardization B. Greater flexibility, need for people who are highly skilled in interpersonal relations, and a customer orientation C. Need for people with a high level of technical skills oriented toward efficient processing, well-defined procedures, and smooth flow D. Both a and c E. All of the above
D. Both a and c
Which of the following is NOT one of the most important factors in selecting a forecasting model? A. User and system sophistication B. Time and resources available C. Data availability D. Customer sophistication E. Data pattern
D. Customer sophistication
Which of the following is NOT part of Deming's 14 points? A. Cease dependence on mass inspection B. Create constancy of purpose C. All employees should have on the job training D. Exhort the workers to improve the quality system
D. Exhort the workers to improve the quality system
The principal objective of a lean system is: A. Worker participation B. Reduction of inventory C. Reduction of setup times D. Improve the ROI of the firm
D. Improve the ROI of the firm
Independent demand inventory consists of: A. Inventory whose demand comes from independent suppliers B. Inventory that is independent of any known rules of demand and supply C. Demand that is related to the demand for another item D. Inventory whose demand is determined by market conditions outside the firm E. None of the above
D. Inventory whose demand is determined by market conditions outside the firm
A product's conformance to specifications: A. Is in response to customers' needs B. Determines sales price to the customer C. Is defined as continuity of service to the customer D. Is independent of the quality of design
D. Is independent of the quality of design
In the basic EOQ model, if annual demand and carrying charge double, the effect on the EOQ is: A. It doubles B. It is half of it's previous amount C. It is about 70% of it's previous amount D. It remains the same E. It increases by about 40%
D. It remains the same
With regards to suppliers, lean systems typically require: A. Delivery of large lots at frequent intervals B. Buyer inspection of goods and materials C. Multiple sources from which to purchase D. Long‐term relationships and commitments E. The lowest price possible
D. Long‐term relationships and commitments
A kanban card is used to signal that: A. The next work center is stopped B. A materials handler has run out of parts C. A machine has broken down D. Parts are needed by the subsequent work center E. A machine is ready for preventive maintenance
D. Parts are needed by the subsequent work center
Which of the following is not included in internal service quality? A. Workplace design B. Job design C. Employee selection D. Product design E. Employee recognition
D. Product design
If a work center has no empty containers, the workers at the work center will do which of the following? A. Continue to produce as much inventory as they can B. Produce enough inventory to meet the following day's demand C. Produce enough inventory to satisfy the master production schedule D. Stop production
D. Stop production
Which of the following is NOT an element of the service-product bundle? A. Facilitating goods B. Explicit service C. Implicit service D. Value of goods/service E. Tangible service provided
D. Value of goods/service
The Baldrige Award criteria emphasize all of the following EXCEPT: A. Strategic planning B. Process management C. Customer focus D. Zero defects
D. Zero defects
A cause-and-effect diagram: A. Identifies common causes of quality defects on its spines B. Is often used in conjunction with a Pareto chart C. Could be used to facilitate continuous improvement D. Is also called a fishbone diagram E. All of the above are true
E. All of the above are true
Which of the following is NOT a use of the error estimate? A. To monitor erratic demand observations or outliers B. To determine when the forecasting method is no longer tracking actual demand and needs to be revised C. To set safety stocks or safety capacity D. To determine parameter values that provides the most accurate forecasts E. All the above are uses of the error estimate
E. All the above are uses of the error estimate
An example of a service business/organization that has a high degree of customer contact, high customization, and a high degree of labor intensity is: A. Retailing B. Hotels C. Law practice D. Schools E. Hospitals
E. Hospitals
The five initiatives implemented by Motorola for achieving customer satisfaction include all of the following EXCEPT: A. Reduce total cycle time in all activities B. Improve profitability C. Provide a creative and cooperative workplace D. Produce products and services to a six-sigma standard E. Reduce defects to no more than 5 defects per million actions
E. Reduce defects to no more than 5 defects per million actions
Sampling inspection by attributes: A. Means each item sampled is classified as defective or not defective based on quality standards B. Could be used together with process control and variable measurement as part of a quality control system C. Utilizes a discrete scale of measurement D. a and c E. a, b, and c
E. a, b, and c
A Kanban card system finds good utility in a job shop type of production process in regulating the workflow through the shop
False
A time-series forecast model has only one level, trend, and seasonal factor terms in it.
False
According to ABC Classification, a periodic review system is employed to monitor the A items
False
Appraisal cost is part of the failure cost of quality category
False
Assuming that we are placing orders currently in EOQ amounts, an increase in the order quantity would increase ordering cost per year.
False
Attribute control occurs when the product characteristic is measured on a continuous scale
False
Availability refers to the length of time a product can be used before it fails.
False
Co-routed services offer a larger amount of choices to customers than do customer-routed services
False
Dependent demand is subject to market forces and often exhibits a predictable demand pattern
False
External setups refer to actions that require stoppage of the production process
False
Forecasting of demand is always equivalent to forecasting of sales.
False
If a company uses three parts in a product, each with a yield of 50%, the overall rolled-yield will equal 50%.
False
It is often good to have many conditions in a service guarantee as these conditions minimize the chances of a service failure.
False
Kaizen events typically take between 1 to 2 months.
False
Lean is an example of a pull system while lean thinking is an example of a push system
False
McDonald's uses what Levitt refers to as "the job shop type approach to service
False
Outsourcing is the export of service activities to other countries
False
Poka-yoke is another term for stabilizing the master schedule.
False
Quantitative forecasting methods should be used for determining the demand patterns of new products introduced in the market
False
Simple exponential smoothing forecasts are reliable for forecasting long‐term demand patterns
False
Six sigma efforts are aimed at eliminating waste
False
Surveys indicate that p charts are used more frequently than average (mean) and range charts are used
False
Takt time is calculated by taking demand over some period divided by the available time for production during that period.
False
The Box-Jenkins method requires about 12 periods of past data
False
The average inventory level is defined as the difference between the cycle stock and the safety stock components
False
The quality tool that shows the relationship between two variables is a histogram.
False
We need information only regarding the central tendency of the process while examining a continuous process
False
"A production process delivers large amount of scrap products. Top management has discovered that improper machine maintenance is the reason behind this failure." The above statement is an example of a special cause of variation.
True
A decrease in an item's lead-time will increase the amount of safety stock required.
True
A small improvement in customer loyalty can substantially improve the profitability of a service firm
True
According to the lean philosophy, it is required to maintain a stable master production schedule to reduce the work-in-process inventories
True
All forecasts should include two estimates: An estimate of the demand and an estimate of the forecasting error
True
High-contact and low-contact services can also be classified as front room and back room operations.
True
ISO 9000 does not provide a complete quality system because it does not address competitive strategy, information systems, and business results.
True
If failure costs were very high, a company would still use inspection
True
In general, it is extremely hard to estimate the stockout costs and hence we use the desired service levels while computing the reorder points.
True
It is important to determine the quality of design even before producing the product.
True
Lean and six sigma projects both use 5‐step processes
True
Lean projects are usually simpler than six sigma projects
True
Six sigma projects are typically managed by full‐time black belts
True
The Cp measure requires the process to be centered for an accurate measure of process capability.
True
The EOQ formula could be modified to express demand and the carrying rate on a monthly basis
True
The Japanese term for mistake‐proofing is "poka‐yoke."
True
The customer is a part of the service delivery process and may introduce inefficiencies into the service delivery system.
True
The key to reducing inventory is reducing lead-time.
True
The key to service profitability is focusing on customers and front-line employees as paramount in importance
True
The major difference between the service matrix and the product-process matrix is that service process design generally does not vary with customer volume
True
The original ISO 9000 standard preached, "Do what you document and document what you do."
True
The seven tools of quality control are equally applicable to both manufacturing and service industries
True
Tracking signal is the ratio between cumulative forecast error and the most recent estimate of mean absolute deviation
True
Transit inventories are also referred to as pipeline inventories because they consist of materials that are on their way from one point to another point in the supply chain.
True
Value stream maps are similar to flowcharts and are used for identifying the waste and non-value-added steps in the current process.
True
When kanban is used, only the final assembly department will receive a schedule from the dispatching office
True
With lean thinking, a company's operations layout should evolve to a cellular manufacturing layout
True
