MAN4504

Consider a process with a learning rate of 0.5. What is the unit cost for the first unit if the unit cost for the 15th unit is $16?

TN = T1(Nb) where TN = Cost for the Nth unit T1 = Cost to produce the first unit b = (log of the learning rate)/(log 2) = slope of the learning curve, 240

What happens to takt time if demand rate is doubled?

Takt Time = 1/Demand rate, -50%

__________ is a statistical approach to determine the __________ of the log-log representation of the learning curve.

Regression analysis, slope

__________ refers to a __________ of activities or an extra set of activities that have to be completed by a defective unit in order to be restored to a good flow unit.

Rework, repetition

Which of the following statements about takt time and cycle time is true?

Takt time only depends on demand, not capacity. Cycle time does depend on capacity.

A __________ determines how many flow units of each type are flowing through each __________.

demand table, resource

A bank is underwriting loans for small businesses. Currently, about 5 percent of the underwriting decisions are found to be incorrect when audited by the bank's quality assurance department. The bank has a goal of reducing this number to 1 percent. What form of an improvement trajectory is most likely to occur?

exponential decay

Taking piano lessons to improve one's piano-playing skill is an example of __________ learning.

induced

How does the target manpower change as the demand rate increases?

it increases

Which of the following plots is the learning curve that portrays the power law on a log-log graph?

linear decreasing function.

In what situation is labor cost considered a variable cost?

paying employees by the hour even when they are idle

Rework is a __________ of activities that have to be completed by a __________ flow unit in order to be restored to a good flow unit.

repetition, defective

learning-curve coefficient for 500th unit

search Table 6.3 for the 500th unit and a learning factor of 0.7

In a process with attrition loss, all flow units start at __________ resource and drop out of the process at __________ points.

the same, different

When estimating the slope of the line in a log-log graph, we pick two points with coordinates (x1, y1) and (x2, y2). Which of the following statements is true?

y1 needs to be the value on the y-axis corresponding to the initial cost, c(1).

The employee turnover can be computed as

½ × average time an employee spends with the company

The improvements gained through doing an activity over and over again is the result of __________ learning.

autonomous

C&A operates three eight-hour shifts to produce 600 gallons of a chemical per day. It requires 12 minutes of labor to produce a gallon of the chemical. What is C&A's takt time in minutes per gallon, and what is the target manpower?

3 eight hour shifts produce 600 gallons. So, 1 eight hour shift will produce 6003 = 200 gallons. So, as 8 hrs produce 200 gallons, 1 hour or 60 mins produce 2008 = 25 gallons. 12 minutes of labour is required to produce 1 gallon, so in 1 hour 1 labour can produce 6012 = 5 gallons of chemical. So, to produce 25 gallons, we need 255 = 5 labours. Again as we already know in 1 hour we can produce 25 gallons, the time taken for producing 1 gallon overall (not per labour) is 6025= 2.4. This is the takt time (time taken per unit of material). So, the answer is option d i.e. 2.4,5

Which of the following is a fixed cost in operating a dental clinic?

Advertising in the local newspaper

A process is replicated in another country where wages are 50 percent lower. Staffing and processing times are identical. What would be the effect on the costs of direct labor?

Costs of direct labor would be 50 percent lower.

Which of the following ways to assign employees to activities will more likely lead to a higher labor utilization? Assume demand is unlimited.

Each employee takes care of all activities involved in the process.

C&A started production in two factories in 2005. Both factories had the same cumulative output and unit costs in the first year. A decade later, factory A has a greater cumulative output than factory B. The unit costs in 2015 are the same between the two factories. Both learning curves in a log-log graph are linear. Which factory has a higher learning rate?

Factory A

Consider a process that has multiple flow units with different demand rates and different paths through the process flow diagram. Consider the following statements: I. The resource with the largest total demand rate is the bottleneck. II. The implied utilization can never be bigger than 100%. III. The resource that has the highest implied utilization is the bottleneck. Which of the following choices identifies the correct statement(s)?

III only

Which of the following statements is TRUE regarding utilization and implied utilization?

Implied utilization can exceed 1.

Which of the following statements is FALSE regarding the workload table? Multiple Choice It has the same number of columns and rows as the demand table. It computes the total amount of work requested at a resource across all customer types. It captures the time available at each resource. It has flow unit types as columns and resource types as rows.

It has the same number of columns and rows as the demand table.

Which of the following is an example of attrition loss?

More loan applications are received than approved.

Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer As and 15 customer Bs. Which of the following is the workload table for this situation?

The demand per hour for Customer A = 10. Time spent by Customer A at Resource X = 2 minutes. Total time consumed at Resource X for 10 numbers of Customer A = 10 x 2 = 20 minutes. Time spent by Customer A at Resource Y = 5 minutes. Total time consumed at Resource Y for 10 numbers of Customer A = 10 x 5 = 50 minutes. The demand per hour for Customer B = 15. Time spent by Customer B at Resource X = 5 minutes. Total time consumed at Resource X for 15 numbers of Customer B = 15 x 5 = 75 minutes. Time spent by Customer B at Resource Y = 2 minutes. Total time consumed at Resource Y for 15 numbers of Customer B = 15 x 2 = 30 minutes. So the workload matrix for the given situation is as follows: Resource Customer A Customer B Resource X 20 75 Resource Y 50 30

A process has an initial cost of $100, a learning rate of 0.7, and a cumulative experience of 500. The learning curve in a log-log graph is linear. Using the learning curve coefficient method, what will be the expected unit costs in producing the 500th unit? (Use Table 6.3.)

Therefore the cost to produce the 500th unit = Initial cost of the process * learning-curve coefficient for 500th unit

About 80% of customers who receive a promotion coupon will visit the store, but only 20% of those in the store will make a purchase. What is the overall process yield of the promotion?

Yield of promotion = Customers visiting the store * Customers making the actual purchase, 16%

When analyzing a process flow with flow-dependent processing times, the flow unit is changed from using __________ to __________.

a unit of demand, a unit of work

A workload table captures the __________ that each flow unit type requires for each resource.

amount of work

Assume a learning curve following the power law. If you double the initial cost c(1) of a product, the cost of the 21st unit, c(21), will:

be doubled.