Operations Final Exam
Backordering costs
Which of the following costs are relevant aggregate operations planning
project managers may "hoard" resources for their own projects
Which of the following is a disadvantage of the matrix project structure?
project team members may be worried about their employment after completing a project
Which of the following is a disadvantage of the pure project structure?
Centroid Method
Which of the following is a plant location methodology for locating a facility based on distances and volumes of goods
TL 9000
Which of the following is a quality management standard developed specifically for the telecommunications industry?
Specificity
Which of the following is a sourcing term to describe how common an item is and/or how many substitutes may be available?
activity
Which of the following is a term used to refer to pieces of work that consume time?
warehouse loading factor
Which of the following is not a lot sizing technique used in MRP systems
annualized cost of materials
Which of the following is not included in inventory holding costs
Volume
Which of the following is one of the dimensions depicted on a product-process matrix?
bullwhip effect
Which of the following terms describes the phenomenon of variability magnification as one moves upstream in the supply chain from customer to producer?
flow and run charts
Which of the following tools can be used in the Define step of the DMAIC cycle?
Crashing shortens the project by assigning more resources to critical tasks
Which of these statements regarding time costs in CPM networks is true
Matrix
Which project organizational structure blends properties of functional and pure strategies?
Panel Consensus
Which qualitative forecasting technique is based upon the idea that a group of people with various backgrounds can develop a more reliable forecast than a narrower group?
Delphi Method
Which qualitative technique develops a forecast by polling participants multiple times on expected forecasts?
conformance
Which quality term refers to the degree to which the product or service design specifications are met?
Backordering costs
Which relevant costs are often the most difficult to measure?
Request for Proposal (RFP)
Which sourcing process is used for complex items where there are a number of potential vendors?
Trade-off
Which term defines when activities are incompatible so that more of one thing necessitates less of another activity?
make to stock
Which type of firm invests in lean manufacturing programs in order to improve customer service levels for a given inventory investment?
required coordinated
Which type of supplier relationship should be used when there is a standardized interface between adjacent tasks?
slushy
Which type of time fence allows for changes to a specific product so long as parts are available?
Manufacturing
Work-in-process is considered ___ inventory.
one type of operation
Workcenters are often focused on
Kaizen
___ bursts are specific, short-term projects designed to implement changes to a process.
level
____ strategy is executed by maintaining a stable workforce and producing output at a constant rate.
rough cut
_____ aggregate plan may be further modified by mathematical methods to develop a final and/or lower-cost plan.
dollar value
_______ cost implication schemes divide inventory items into 3 groupings what are these grouping usually
platform
a type of business that does not own inventory, they merely provide a means for connecting parties interested in conducting business.
o Cost quality, delivery speed, delivery reliability, and flexibility
competitive dimensions of a firm
Matrix
project structure minimizes the duplication of resources
functional project structure
team members do not report to a dedicated manager, but remain part of their functional units.
True
3 main inputs of MRP-bill of materials, master schedule, and inventory records file
Motivational impacts due to fear of being laid off during time of low production.
A chase strategy can create what major concern?
Super Bill of Materials
A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material?
third party logistics company
A company that manages all or part of another company's product delivery operations is known as which of the following?
focused factory
A facility designed around a limited set of production objectives is called a
False
A financially driven reason for outsourcing is that it can turn variable costs into manageable fixed costs
make to stock
A firm fills its customers from finished goods inventory it is a
a company's strategic strategy
A firm should have a mix of projects that best support
True
A firm that controls most of its activities in the supply chain is said to be vertically integrated
analyze
A fishbone diagram is part of a six sigma quality improvement process might be found in which DMAIC category
low
A generic pizza box that can be used by multiple pizza shops is an example of a product with ____________ specificity.
True
A major challenge in inventory management is to maintain a balance between inventory investment and customer service
dissimilar
A manufacturing cell is generally made up of ___________ machines.
Benchmarking
A process in which one company studies the processes of another company for best practices is known as
False
A product will always be in the same stage of its product life cycle in all parts of the world regardless of the country
produce buffer inventories
A production manager may ___________ to prevent bottlenecks and ensure employees always have work to do.
tracking the flow of material through the system
A production process map is built by
It is possible to have multiple critical paths
A project has how many critical paths?
the difference between expected excellent performance and the current costs.
A purist view of the cost of quality is one that references all costs until 100% perfection is attained. A less stringent viewpoint is defined as
decision tree
A schematic model of the sequence of steps in a problem and the conditions and consequences of each step is called a
transportation method of linear programming
A special linear programming method that is useful for solving problems involving moving products from several sources to several destinations is known as which of the following?
Project Milestone
A specific event that should be reached at a certain point in time is often referred to as?
Maintain independence of operations
A supply of materials at a work center allows workers to
Activity-system maps
A tool that shows how a company's strategy is delivered through a set of tailored activities is called a(n)
False
ABC analysis classifies inventory items into three groups based on annual units or quantities used
failure and appraisal
According to a rule of thumb, for every dollar that you spend in prevention, you can save $10 in what type(s) of costs?
air
According to the Logistics-System Design Matrix, which of the following modes of transporting products is the fastest but most expensive?
net
After finding gross requirements, the next step in the MRP explosion process references inventory on hand and scheduled orders to calculate ___ requirements.
True
Aggregate planning occurs over the medium or intermediate future of three to 18 months
Customers
Aggregation on the demand side is done by groups of
False
An improvement in quality must increase costs
modular
An item that can be produced and stocked as a subassembly often uses a ___ bill-of-materials for planning
decreasing costs until a minimum is reached, followed by increasing costs
As production volume increases, a system experiencing economies of scale will observe
True
Assembling to order means moving the customer order decoupling point from finished goods to components
time buckets
At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as
labor
Basic production costs consist mainly of charges related to
a forecast is consistently too high or too low
Bias errors occur when _____.
perceived quality
Brand name recognition is an example of which dimension of quality?
rough cut aggregate plan
By simulating various master production schedules, and calculating corresponding capacity and labor and equipment requirements, one is developing a(n)..
independent
Campbell's Soup makes products for Kroger and other grocery stores based on sales to the final consumer. This inventory management environment is characterized as ________ demand.
True
Capacity can be defined as the amount of availability for inputs relative to the requirements for output over time
Three time dimensions (short, intermediate and long)
Capacity has a time dimensional aspect for operations and supply chain management. A manager must consider capacity planning in how many time durations?
capacity cushion
Capacity in excess of expected demand is known as
True
Constant WIP aid input/output control by limiting the amount of work in work center or production floor
True
Cost incurred in hiring training and laying off persons are considered relevant aggregate operations planning costs
manufacturing manager
Cost of quality (COQ) is a primary function for the
True
Cross docking definition-break down large shipments into small shipments for local delivery
True
Cross docking is used in warehouses where large shipments can be broken down into small shipments for local delivery. True/False
setup costs
Delta Company uses special equipment and personnel to changeover production runs quickly. The costs associated with this changeover approach are considered
Efficiency
Doing something at the lowest possible cost is known as
aggregate
During the sales and operations planning process, both marketing and operations focus on the _____ product and sales volumes.
False
For a location decision, labor productivity may be important but low wage rates are more important
True
Forecast of individual products tend to be less accurate than forecasted product families
False
Forecasts of individual products tend to be more accurate that forecasts of product families
temporary
Hiring ______ employees is a way to avoid the costs of training and laying off personnel.
True
Hiring, training, and laying off are relevant costs
3.4
How many defects per million units are permitted to meet Six Sigma standards?
environmentally
ISO 14000 addresses the need to be ___ responsible.
Platform Project
Identify the type of project that primarily involves fundamental improvements to existing products.
Available to Promise
If a company has more units in the master production schedule than firm customer orders, the residual is called?
is on the critical path
If a delay of an activity delays the entire project, then this activity
random
If an error cannot be explained by the forecast model being used, it is called ________ error.
multiplying the inverse of inventory turn by 365
If inventory turn is known, days-of-supply is calculated by
procurement
In a lean supply chain, which component includes automation for sourcing, bidding, and auctions?
multiplying the number of each choice together
In an assemble-to-order system, the total number of unique combinations possible is calculated by
True
In inventory models a high holding costs tend to favor low inventory levels in frequent replenishment
a period of time
In operations management, capacity must be stated relative to
respect
In the Toyota Production System, ___ for people is exemplified by providing opportunities and job security for employees.
True
In the past half century, while the number of people employed in manufacturing has decreased slightly, the output per worker has increased significantly.
Logistics
In which part of a lean supply chain would you expect to see lean concepts applied to the movement of materials through the system?
False
Individual products are less accurate than families
False
Lean production requires a push and pull system of inventory
integrated
Lean production requires that activities be __________________ to achieve production using minimal inventories.
caused by items being withdrawn from inventory in lots
Lumpiness, or the tendency for uneven production, further down the creation sequence is
True
MRP is generally used for items with dependent demand.
batches
MRP systems tend to work best in companies where products are made in ___ using the same productive equipment.
Level Strategy
Maintain a stable workforce and work schedule while using inventory to meet variation in demand.
inventory
Major information system activities for planning logistics involve allocating resources, managing _______ levels, scheduling, and order tracking.
surveys and interviews
Market research uses data collection methods that are primarily
False
Master production schedule is a sales forecast for family of parts.
Companies should focus on all aspects: social, economic, and environmental
Modern companies need to focus on which aspect of the triple bottom line?
25%
Most retailers estimate that annual inventory carrying costs equals _____ of what is paid for the product.
increase
Often, a(n) ___ in productivity occurs as a by-product of efforts to reduce the cost of quality.
product families
On the supply side of the business, aggregate planning is done by
accurate
One key to a successful budgeting process is a(n) _______ aggregate plan.
continuous replenishment
One program for automatically resupplying customers on a regular basis is
production scheduling
One purpose of inventory is to provide flexibility in ___ , this can increase lead times but reduce setup costs.
Operation and improvement of systems that create the firm's primary products, and design of delivery systems
Operations and supply chain management includes which of the following activities?
Marketing
Order winners and qualifiers represent a link between operations and what other business function?
a schedule for when each of these should be produced or ordered.
Outside of determining parts, components, and materials, MRP provides
True
Outsourcing has expanded to become a major strategy in business due to the continuing move toward specialization in an increasingly technological society
Energy Usage
Ownership costs encouraged after the initial purchase and associated with beyond going use of the product or material
Operations effectiveness
Performing activities in a manner that best implements strategic priorities without incurring excess costs is known as
True
TPS (Toyota Production System)
short; medium and long
Tactical forecasts are _________ term, while strategic forecasts are _____________ term.
low;low
Spot purchases have ________ specificity and ________ transaction costs.
variations in the product
Standardization on the product-process matrix refers to
Logistics-System Design Matrix
The framework used to describe logistics processes is which of the following?
economies of scale
The idea that as a plant volume increases, the average cost per unit drops is known as
economies of scope
The idea that multiple products can be combined and produced at one facility at a lower cost than they can be produced separately is known as
location clustering near high customer traffic flows
The main reason fast food restaurants are often found in close proximity to each other is
ordering costs
The managerial and clerical costs to prepare purchase or production orders are called
end items
The master production schedule is used to plan
subassemblies
The master production schedule typically deals with end items, but can be broken down to __________ if the item is large or expensive
False
The multi factor measure of productivity of the numerator of the ratio
best operating level
The output level where average unit cost is minimized is known as the
sales and operations
The planning process that helps firms provide better customer service, shorter lead times, and allows top management to get a handle on the business is known as ____ planning.
False
The service system with a high degree of customer contact is less difficult to control than a low degree of contact
False
The term conformance quality refers to the relative level of performance of a product as compared to competing product
lead time
The time required to respond to a customer order is known as
false
The triple bottom line relates to the economic employee and customer impacts of a firms strategy
production/production rate
The workforce level can be determined by which calculation?
False
True or false: A firm can excel simultaneously on all competitive dimensions
True
True or false: A process is made up of one or more activities that transform inputs into outputs.
True
True or false: An operations and supply chain manager helps firms determine the best way to deliver its goods and services
False
True or false: An operations and supply chain strategy is independent of the corporate strategy.
False
True or false: An order qualifier today will be an order winner in the future
True
True or false: Capacity planning in the services industry has added pressure on location requirements versus that with manufacturing.
True
True or false: Distribution and logistics is typically involved in sales and operations planning.
True
True or false: Innovative products have higher profit margins than functional products.
True
True or false: Lean production uses a pull system for production.
True
True or false: One advantage of the pure project structure is that the project manager has full authority over the project
True
True or false: Operations effectiveness is related directly to the costs of doing business.
True
True or false: Product-service bundling occurs when a firm adds a service activity to a product.
True
True or false: The presence of the customer in a service delivery system increases the volatility of demand.
True
True or false: When all the activities are completed, the project is finished.
false
True or false: When comparing service processes and manufacturing, the same sources of variation cause waste.
current and future states
Value stream mapping is a two-part process that details what?
True
Variation in production systems that is caused by factors that can be clearly identified is called common variation?
building inventory during slow periods
What action would be possible in a level strategy plan?
receivables turnover, asset turnover, and net income per employee
What are common measures of efficiency used by Wall Street?
Inventory levels
What are internal factors that influence a production plan?
outsourcing or shared capacity
What are the two strategies an organization can use when adding in-house capacity is not cost effective?
Other Product-Specific Criteria
What competitive dimension relates to environmental impact?
Centroid Method
What is a technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped?
A call center
What is an example of a service business?
waste
What is defined as anything that does not add value from the customer's perspective?
generate access to new markets
What is not an organizationally driven reason to outsource?
Assess the Opportunity
What is the first step in the process for green sourcing?
Value Stream
What is the technique used to identify all of the value adding as well as non value adding processes
free trade zone
What is the term for a closed facility where goods can be brought in without being subject to normal import duties?
Sales and Operations Planning
What process gives senior management a better handle on meeting customer demand over a 3 to 18 month time horizon?
Statement of Work
What term best describes the written description of the objectives to be achieved in a project?
Work Package
What term describes the group of activities assigned to a single organizational unit?
Kaizen
What term is used to describe a philosophy that focuses on continuous improvement?
Six Sigma
What term refers to the philosophy and methods that companies use to eliminate defects in their products and processes?
Risk Mapping
What tool involves assessing the probability or relative frequency of an event against the aggregate severity of the loss?
value adding activities
What type of activities transform materials and information into something the customer wants?
Strategic
What type of forecast should be used for strategy, sourcing, and location decisions?
lean
What type of production focuses on eliminating as much waste as possible?
innovative
What type of products have a life cycle of just a few months?
functional
What type of products have low profit margins, long product life, and predictable demand?
CPFR
What web-based tool is being used as a means to integrate members of a supply chain?
Straddling
When a company seeks to match the benefits of a successful position and maintain their current position in the marketplace it is attempting a(n) ________________ approach.
second party
When a customer audits its supplier in regards to ISO certification, this is referred to as a ____________ certification
shortage
When a customer cancels an order because of item backlogs, that lost revenue is a(n) ___ cost.
task and subtasks
When breaking down a project into smaller elements, what terms are used to describe the subdivisions?
less
When comparing service processes to manufacturing processes, one would say that they are _________ controllable.
vendor managed inventory
When purchasing items that are highly specified and a long contract is desirable, which sourcing process should be used?
False
When using the low cost strategy for supply chain management, the firm should invest aggressively to reduce lead time.
Pareto charts
Which analytical tool of Six Sigma breaks down a problem into the relative contributions of its components?
pareto charts
Which analytical tool of Six Sigma breaks down a problem into the relative contributions of its components?
random variation
Which component of demand reflects the effects of chance events?
Social
Which dimension of the triple bottom line seeks to benefit its employees, the local community, and other entities that are impacted by the firm's existence?
ISO 9000
Which is the ISO certification regarding quality management requirements in business-to-business dealings?
third party
Which is the best form of ISO certification?
manufacturing cell
Which layout format groups machines to work on products that have similar processing requirements?
False
The critical path of a CPM analysis is found by locating activities with large slack times
False
The critical ratio rule will prioritize jobs based on importance or value of customers who have placed the orders
bullwhip effect
The effect of the lack of synchronization amongst supply chain members is referred to as which of the following
The most recent forecast
The exponential smoothing method requires which of the following data to forecast the future
order winner
The feature that actually differentiates one product from the other candidates and is purchased is known as the?
time series analysis
The forecasting technique that uses past demand to predict future demand is known as
True
The four phases of the product life cycle are introduction, maturity, growth, and decline
development of demand forecasts
Point-of-sale (POS) data would be used in which step of the CPFR process
True
Product storage is an example of waste in the sense that no value is added
Stable workforce - variable work schedule
Production output is varied by changing work schedules to include overtime (when more production is needed) and idle time (when less production is needed).
workforce size, inventory, and size of production facility
Production planning strategies involve trade-offs among
Chase Strategy
Production rate is matched to order rate by hiring and firing employees
Motion
Production system identifies which of the following types of waste to be eliminated
outputs to inputs
Productivity is defined as the ratio of
True
Quality at the source requires factory workers to become their own inspectors
a measure of the number of times receivables are collected, on average, during the fiscal year.
Receivables turnover is
True
Service blueprinting is a process analysis technique that focuses on customers and provides interaction with customers
six
Short-range planning covers a period from one day to _____ months.
true
Simple exponential smoothing lags changes in demand
True
Simple exponential smoothing lies changes in demand
False
The "triple bottom line" relates to the economic, employee, and customer impact of a firm's strategy.
True
The 3 main inputs to a MRP system are the bill of materials, the master schedule, and the inventory records file
Japan
The Malcolm Baldrige National Quality Award was created as a response to the US quality shortfalls compared with which country?
economies of scope
The ability to rapidly and inexpensively switch production from one product to another enables what
Capacity Flexibility
The ability to rapidly increase or decrease production levels, or shift from one product or service to another is known as
precedes
The aggregate operations plan ___ the master schedule.
workforce levels and production rates
The aggregate operations plan is mainly concerned with optimal
Production
The aggregate operations plan's objective is to set _____ rates for the intermediate term, from 3 to 18 months
False
The aggregate planning process usually includes expediting and dispatching of individual finished products
Toyota Production System (TPS)
The benchmark for lean manufacturing is known as the
Synchronizing
The bullwhip effect can be reduced by ___ efforts among members of the supply chain.
Delivery Reliability
The competitive dimension that deals with getting the product to the customer when promised is called
15-20%
The cost of quality has been estimated at what percentage of every sales dollar?
time fences
are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.
