OM Final Quiz Questions
In an A-B-C system, the typical percentage of the number of items in inventory for A items is about: 10 30 50 70 90
10
In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is: 10 12 24 72 144
12
Scheduling in intermediate-volume systems has three basic issues: run size, timing, and sequence. True False
true
Setup time and its associated cost can often be reduced by the use of group technology. True False
true
Slack time is equal to LS-ES or LF-EF.
true
Some firms have structured their procurement function to include both centralized and decentralized purchasing.
true
Some organizations use a matrix organization to integrate the activities of specialists within a functional framework.
true
Successful lean implementation requires much more than slogans and idealistic goals such as zero inventories and zero defects. True False
true
The SPT priority rule always results in the lowest average completion time. True False
true
The computing algorithm requires both a forward and backward pass. True False
true
The costs associated with risk events tend to be lower near the beginning of a project, and higher near the end of the project.
true
The goal of lean operations is to produce output using fewer resources than traditional planning systems. True False
true
The importance of purchasing is the cost of goods purchased, the quality of goods and services, and the timing of delivery of goods and services.
true
The latest starting time for an activity is equal to the latest finish time minus the activity time.
true
The network diagram describes sequential relationships among major activities on a project.
true
The optimum project length in crashing occurs where the cumulative cost of crashing equals savings in the indirect costs.
true
The output of the system cannot exceed the output of the bottleneck operation(s). True False
true
The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable. True False
true
The small lot-sizing policy works well in a situation where both holding costs and setup costs are high. True False
true
When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves: Line up Equal zero Do not line up Cannot be calculated Depend on the percentage assigned
do not line up
The sum of times of the longest path in a network indicates expected project completion time, and the activities represent the critical activities.
true
The task of identifying risks should involve everyone associated with the project.
true
The theory of constraints has a goal of maximizing flow through the entire system. True False
true
The two main concerns of inventory control relate to the costs and the level of customer service. True False
true
To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: the timing and size of orders. True False
true
Variations create uncertainty, thereby causing inefficiencies in a supply chain.
true
Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.
true
Returned goods are part of reverse logistics.
true
In business, forecasts are the basis for: - capacity planning - budgeting - sales planning - production planning - all of the above
all of the above
In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a majority of the inventory items would be classified as: A items B items C items A items plus B items B items plus C items
C items
Scheduling and maintaining equipment are operational decisions.
true
(T/F) A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average.
False
Which is an application for RFID tags? Monitoring the temperature of fruit during shipment Measuring the urine output of hospital patients Adjusting medications for diabetics Assessing audience response to a new movie Estimating the results of a political election
Monitoring the temperature of fruit during shipment
In a two-bin inventory system, the amount contained in the second bin is equal to the: ROP EOQ amount in the first bin optimum stocking level safety stock
ROP
(T/F) An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago.
True
(T/F) The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.
True
Using the latest observation in a sequence of data to forecast the next period is: - a moving average forecast - a naive forecast - an exponentially smoothed forecast - an associative forecast - regression analysis
a naive forecast
Which of the following is not an example of a high-volume system? aircraft manufacturing magazine printing petroleum refining waste treatment commercial donut baking
aircraft manufacturing
The EOQ model is most relevant for which one of the following? ordering items with dependent demand determination of safety stock ordering perishable items determining fixed interval order quantities determining fixed order quantities
determining fixed order quantities
The standard deviation of the critical path is equal to the sum of the standard deviations of all of the activities on the critical path.
false
"Preventive maintenance" is additional maintenance done immediately after a breakdown has occurred to help prevent any further breakdowns. True False
false
A benefit of lean systems is that lead times are increased allowing more time for processing. True False
false
A functioning MRP system is required prior to adopting lean planning and control systems. True False
false
A hierarchical (vertical) listing of what must be done during a project is called matrix.
false
A schedule chart depicts the loading and idle times for a group of machines or departments. True False
false
Although inventories are maintained, the goal of lean operations is to minimize safety stock. True False
false
An advantage of Gantt charts in project management is that they identify which activities can be delayed without delaying the overall project.
false
Because price isn't a factor in the EOQ formula, quantity discounts won't affect EOQ calculations. True False
false
Centralized or decentralized purchasing is directly related to the size of an organization.
false
Distribution requirements planning (DRP) is an expanded concept of MRP which incorporates multinational inventory management.
false
Event management is the advanced planning required for major performances such as concerts or conferences.
false
Global standards allow RFID technology to be identical worldwide. True False
false
Global supply chains make purchasing easier because of ore options.
false
If optimal sequencing through three work centers is desired, Johnson's Rule II is used rather than Johnson's Rule. TRUE FALSE
false
If the expected length of a path is more than 2.5 standard deviations less than a desired project completion time, the path would not be a factor in assessing the probability of finishing the project on time.
false
Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.
false
Kanban is the Japanese term for autonomation. True False
false
Lean systems typically require that suppliers be able to provide large lots at periodic intervals. True False
false
Line balancing is a major factor in the design and scheduling of low volume systems because of batch processing. True False
false
Many activities have slack time; if we add these slack times together, this represents the potential improvement in early completion for the project.
false
Matrix organizations transfer control of workers to project managers for the duration of the project.
false
On disadvantage of RFID is that they may require a "line of sight" for reading.
false
Priority rules are used in low-volume systems to identify an optimal processing sequence. True False
false
Priority rules are widely used to sequence jobs in high-volume systems. True False
false
Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.
false
Supplier certification is the first step required in a supplier audit program.
false
The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as 'A' items and low cost items classified as 'C' items. True False
false
The assignment method is limited to a maximum of two jobs per resource. True False
false
The elimination of idle time on both bottleneck and non-bottleneck operations must be accomplished to optimize output. True False
false
The objective of inventory management is to minimize the cost of holding inventory. True False
false
The path in a network with the average length of time to completion is called the critical path.
false
The probability of occurrence of risk events is lower near the beginning of a project and higher near the end of the project since very few activities remain.
false
The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items.
false
The quantity sent to a bottleneck operation could be split into two or more process batches to better utilize a bottleneck resource rather than process the entire batch. True False
false
A non-linear cost related to order size is the cost of: interest insurance taxes receiving space
recieving
Which of the following is the last step in the capacity/scheduling chain? product planning process planning capacity planning aggregate planning scheduling
scheduling
Gradual, long term movement in time series data is called: - seasonal variation - cycles - irregular variation - trend - random variation
trend
A benefit of the lean philosophy is the flexibility to respond quickly to changing customer requirements. True False
true
An advantage of decentralized purchasing is the attention given to local needs.
true
Bottlenecks may shift with the passage of time, so that different operations become bottleneck operations at different times. True False
true
DVD recorders would be an example of independent demand items. True False
true
Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.
true
In a "pull system," a quantity of inventory in front of a workstation indicates problems at that workstation. True False
true
In a balanced system cycle time is equal to Takt time. True False
true
In a lean environment, anything not essential to the product or process is viewed as waste. True False
true
In the decision-making hierarchy, scheduling decisions are the final step in the transformation process before actual output occurs. True False
true
In the lean approach, inventories are reduced gradually, instead of eliminating inventories as rapidly as possible. True False
true
Information technology is the key to success of global supply chains.
true
JIT delivery, i.e. frequent deliveries of small shipments, actually result sin an increase in the transportation cost per unit.
true
Johnson's rule is a technique used to sequence jobs through a two-step work sequence. True False
true
Kanban focuses on specific part numbers; CONWIP does not. True False
true
Lean systems often use layouts that are based on group technology product requirements. True False
true
Loading is the determination of which work centers should perform which jobs. True False
true
One important use of inventories in manufacturing is to decouple operations through the use of work in process inventories. True False
true
One major difference between the use of kanban and MRP II in scheduling the products to be built is that kanban is primarily a manual system while MRP II uses computers. True False
true
One of the major reasons for a company to adopt third party logistics is to concentrate on one's core business.
true
One problem with lean operations is that they can lead to much frustration and disappointment of people on the shop floor due to the need for continuously monitoring and expediting resource availability. True False
true
One way that project management differs from management of more traditional activities is because of the limited life-time of projects.
true
Project managers are sometimes able to reduce indirect project costs by increasing direct costs.
true
Organizations with fixed capacity can benefit from ? Yield Management Price increases Constraints Sub-optimization Waiting lines
yield management
