Final Exam Principles of Manufacturing Systems

Using the reorder level-order quantity model, and assuming a safety stock of 500, what is the re-order point (R) given a daily demand of 200 units, a lead time of 10 days? A. 2000 B. 2500 C. 1500 D. 500 E. 700

200*10+500 = 2500 B

Bullwhip effect refers to A. increasing variability in the demand as seen by the upstream firms in a supply chain B. decreasing variability in the demand as seen by the upstream firms in a supply chain C. increase in average demand as seen by the upstream firms in a supply chain D. decrease in the average demand as seen by the upstream firms in a supply chain

A

If annual demand is 50,000 units, the ordering cost is $25 per order and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 707 B. 634 C. 141 D. 500 E. None of the above

A

Process capability indices for machines A and B are 1.8 and 1.2 respectively. Which of the machines is likely to produce lower proportion of defectives? A. Machine A B. Machine B C. Process capability index has no influence on the proportion of defectives produced by a machine.

A

Which of the following types of supply chains is most suited for commodity products (such as salt or steel)? A. Efficient Supply Chain B. Responsive Supply Chain C. Risk free Supply Chain D. Uniqlo Supply Chain

A

. If you are a Quality Manager which of the following would you prefer the most? A. The specification limits are at ± 3s for the process B. The specification limits are outside ± 3s for the process C. The specification limits are inside ± 3s for the process D. Process mean equaling six times specification coefficient of variation E. None of the above

B

If you are a Quality Manager which of the following would you prefer the most? A. Machine with high process variance and product with narrow specification limits B. Machine with low process variance and product with wide specification limits C. Machine made in Brazil and product designed in Chile D. Machine made in Chile and product designed in Brazil

B

MRP is a technique designed to manage A. Accounts receivable B. dependent demand items C. critical paths D. finite capacity E. None of the above

B

Total Quality Management (TQM) means that quality is the responsibility of A. top management B. everyone in the firm C. the quality control (QC) department D. marketing E. None of the above

B

Which of the following is the set of all cost components that make up the fixed-order quantity total annual cost (TC) function? A. Annual lead time cost, annual holding cost, annual purchase cost B. Annual holding cost, annual ordering cost, annual purchase cost C. Annual holding cost, annual ordering cost, unit cost D. Annual unit cost, annual set up cost, annual purchase cost E. None of the above

B

Which of the four costs relevant to aggregate production planning is the most difficult to accurately measure?

Backordering costs

List at least three of the four costs relevant to the aggregate production plan.

Basic production costs, costs associated with changes in the production rate, inventory-holding costs, and backordering costs

A firm should be willing to consider outsourcing everything except A. its logistics services B. human resource activities C. its core competencies D. manufacturing E. None of the above

C

Cellular manufacturing concept refers to A. the reorganization of factory into clusters of machines, with each cluster dedicated to manufacture of any type of customer order B. reorganizing the factory into large clusters of machines so that machines in each cluster are very similar to each other C. reorganization of a the factory into clusters of machines, with each cluster dedicated to manufacture of similar set of customer orders D. mitigating the detrimental effects of group technology on allocated overhead in Japanese firms. E. none of the above

C

Factor rating method used in location decisions refers to A. factoring accounts receivables so as to improve cash position (resulting in low location costs) B. reducing bank borrowing by factoring accounts receivables to decrease interest expenses C. a numerical method which is used to evaluate the suitability of different locations taking into consideration various factors used in the evaluation D. a rating method which determines the suitability of various locations by zip codes

C

For an activity in a CPM analysis, the Earliest Start time is 8 days and the Latest Start time is 10 days. Activity duration is 4 days. Which of the following statements is true? A. The Latest Finish is 12 days B. The Earliest Finish is 10 days C. The slack for this activity is 2 days D. Delaying this activity by 4 days will not affect project duration E. None of the above

C

Location decision for profit oriented service firms A. affects only the costs, B. affects only the revenues, C. affects both costs and revenues D. is same as it is for manufacturing firms in that any firm needs to have same hierarchical organizational structure to achieve effectiveness.

C

Sales and operations planning is a technique used to balance the supply and demand of A. dependent demand items B. ordering and holding costs C. items at the aggregate level D. MRO items E. None of the above

C

Which of the following is an advantage of the level strategy for aggregate operations planning? A. Total costs through the entire system are minimized. B. There is variety for the workers through the mixing of models produced C. There is a smooth flow throughout the production system D. The risk of backorders is minimized E. None of the above

C

Which of the following states the long-term relationship between the inventory, throughput, and flow time in a production system that is in steady state? A. Peterson's Rule B. Murphy's Law C. Little's Law D. Robert's Rule E. None of the above

C

In the agriculture industry, migrant workers are commonly employed to pick crops ready for harvest. They are hired as needed and are laid off once the crops are picked. This approach is made necessary by the realities of the industry. Which production planning strategy would this best be an example of?

Chase strategy

3PL refers to A. Outsourcing of process listings to at least 3 outside vendors B. Limiting the total number of suppliers to no more than three in strategic sourcing C. Identifying third parties responsible for the process limits D. Outsourcing of logistics operations to one or more outside firms

D

Cross-Docking refers to A. the layout of factories where truck docks are arranged in "X" shape B. truck docks are strategically interspersed with rail yards so that material handling is reduced, and damage to the products are also reduced, if not eliminated. C. warehouse operations in which inbound materials are crossed with outbound materials and stored in the warehouse D. warehouse space requirements are reduced by synchronized and simultaneous handling of inbound and outbound shipments

D

Lower control limit in a p-chart: A. should be equal to zero B. can be less than zero C. should always be more than zero D. none of the above

D

Which of the following is usually included as an inventory holding cost? A. Order placing B. Quantity discounts C. Typing up an order D. Breakage E. Annualized cost of materials

D

A bottling plant fills 2,400 bottles every two hours. The lead time is 40 minutes and a container accommodates 120 bottles. The safety stock is 10 percent of expected demand. How many kanban cards are needed?

D = 2,400 bottles/2 hours = 1,200/60 minutes = 20 per minute L = 40 minutes S = 0.10 C = 120 bottles k = DL(1 + S)/C k = 20 × 40(1 + 0.10)/120 = 7.33 or 8 Kanban card sets

Nonvalue added activities in a process I) increase the flowtime II) increase the cost of production III) decrease the flowtime IV) decrease the cost of production A. I and IV B. II and III C. I only D. IV only E. I and II only

E

What mode of transportation is involved in the movement of the greatest number of products?

Highway (truck)

Major operations and supply planning activities can be grouped into categories based on the relevant time range of the activity. What time range category does sales and operations planning fit into?

Medium Range

What is the term for a more complex production strategy that combines approaches from more than one basis strategy?

Mixed strategy

What mode of transportation is limited to specialized products such as liquids and gases?

Pipeline

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product. If the beginning inventory is 100 units, the demand forecast is 1,200, and the necessary safety stock is 25% of the demand forecast, which of the following is the production requirement?

Production requirement = Demand Forecast + Safety stock - Beginning Inventory Safety stock (0.25 * Demand Forecast) = 0.25* 1200 = 300 Production requirement = 1200 + 300 - 100 = 1400

What category of planning covers a period from a day to six months, with daily or weekly time increments?

Short Range Planning

If annual demand is 1,600 units, the ordering cost is $100 per order and the holding cost is $2.00 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model? A. 1600 B. 400 C. 120.4 D. 60.56 E. 240

Square root (2*1000*100/2) = 400 B

Some manufacturing firms contract with an outside company to manage the firm's logistics functions. What is the general term for a firm that provides such services?

Third-party logistics (3PL) company

Logistics accounts for about what percent of the U.S. gross domestic product?

about 8-9 percent