Operations Management - Final Exam Study

(t/f) The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework.

True

(t/f) The output of a process may not conform to specifications even though the process may be statistically "in control."

True

Which of the following is not among the chief reasons organizations fail?

Emphasizing labor productivity in labor-intensive environments

Giving workers responsibility for quality improvements and authority to make changes is known as:

Employee empowerment

Which of the following is not a component of the structure of a linear programming model?

Environmental uncertainty

Cycle stock inventory is intended to deal with:

Expected demand

Which of the following is determined as a direct result of computing the earliest starting and finishing times for the activities of a project network?

Expected project duration

Which is not a cost of quality?

Extended service contract costs

Warranty service, processing of complaints, and costs of litigation are examples of:

External failure costs

(t/f) Broadly defined, quality refers to the ability of a product or service to occasionally meet or exceed customer expectations.

False

(t/f) The value of an objective function always decreases as it is moved away from the origin.

False

(t/f) Tolerances represent the control limits we use on the charts.

False

(t/f) Understocking an inventory item is a sure sign of inadequate inventory control.

False

(t/f) Using the enumeration approach, optimality is obtained by evaluating every coordinate.

False

Increasing the service offered to the customer makes it more difficult to compete on the basis of:

Price

The ratio of good output to quantity of raw material input is called

Process yield

Competitiveness doesn't include:

Profitability

(t/f) Medical malpractice claims are an example of how poor quality can affect an organization through liability.

True

(t/f) Monitoring inventory turns over time can be used as a measure of performance.

True

(t/f) Most likely time generally is at least as long as optimistic time.

True

(t/f) The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisions.

True

(t/f) The inventory value of the supply chain exceeds the inventory value of the organization's work-in-process inventory.

True

(t/f) The latest starting time for an activity is equal to the latest finish time minus the activity time.

True

(t/f) The main function of dummy activities is to clarify relationships in network diagrams.

True

(t/f) The maximin approach involves choosing the alternative that has the "best worst" payoff.

True

(t/f) The network diagram shows sequential relationships among major activities on a project.

True

(t/f) A run test checks a sequence of observations for randomness.

True

(t/f) Many operations management decisions can be described as trade-offs.

True

In acceptance sampling, the level of inspection automatically adjusts to the quality of lots being inspected, assuming that:

"Rejected" lots are subjected to 100 percent inspection

Which objective function has the same slope as this one: $4 x + $2 y = $20? $8x + $8y = $20 $4x + $2y = $10 $2x − $4y = $20 $2x + $4y = $20 $4x − $2y = $20

$4x + $2y = $10

In an A-B-C system, the typical percentage of the number of items in inventory that is classified as A items is about:

10

Which of the following could not be a linear programming problem constraint? 1A + 2B ≤ 3 1A + 2B = 3 1A + 2B + 3C + 4D ≤ 5 1A + 2B 1A + 2B ≥ 3

1A + 2B

A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the maximum inventory would be approximately:

30 percent lower

(t/f) As long as we match a competitor on quality and price we will gain market share.

False

(t/f) Assembly lines improved productivity by using interchangeable parts and craft production.

False

Technology choices can have a major impact on:

All of the above (Productivity, Customer Satisfaction, Quality, and Costs)

A quality circle is:

A group of employees who meet to discuss ways of improving products or processes

In the A-B-C classification system, items which account for about 60 percent of the annual dollar value, but only about 10 to 15 percent of the items in inventory, would be classified as:

A items

A decision tree is:

A schematic representation of alternatives

Which of the following is not true about the systems approach?

A systems approach concentrates on efficiency within subsystems

Which of the following is associated with producer's risk?

AQL

The AQL indicates:

Acceptable quality level

If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher:

Agility

Statistical process control charts are not really used to fix quality so much as they are used to:

Alert when corrective action is needed

Sampling plans typically specify:

All choices are correct (Sample size, Acceptance/rejection criteria, Lot size, Number of samples to be taken)

Inspection is a(n)________ activity.

Appraisal

Costs of inspectors, testing, test equipment, and labs are examples of:

Appraisal costs

In "crashing" a project, a manager will generally focus on activities which:

Are on the critical path and are the least costly to crash

________ variation is a variation whose cause can be identified.

Assignable

An AOQ curve shows:

Average outgoing quality relative to incoming quality

The process of identifying other organizations that are best at some facet of your operations, analyzing your performance versus theirs in order to establish a standard against which to judge performance, and identifying a model for learning how to improve is known as:

Benchmarking

When we use less of a resource than was available, in linear programming that resource would be called non-________.

Binding

In a decision-making setting, if the manager has to contend with limits on the amount of information he or she can consider, this can lead to a poor decision due to ________.

Bounded rationality

With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as:

C

In the A-B-C classification system, items which account for about 15 percent of the annual dollar value, but which account for a majority of the inventory items, would be classified as:

C items

A control chart used to monitor the number of defects per unit is the:

C-chart

A process results in a few defects occurring in each unit of output. Long-run, these defects should be monitored with:

C-charts

The quality tool that resembles a "fishbone" is:

Cause-and-effect diagrams

ISO 9000 currently stresses ________ of a certified organization.

Continual improvement

A time-ordered plot of sample statistics is called a(n) ________ chart.

Control

A tool that uses time-ordered values of a sample statistic to help detect the presence of correctable causes of variation in a process is a(n):

Control chart

The process of comparing outputs to previously established standards to determine if corrective action is needed is called:

Controlling

Unique attributes of firms that give them a competitive edge are called:

Core competencies

Shortening activity durations is called:

Crashing

Which of the following is not an approach for decision making under uncertainty?

Decision trees

In linear programming, a nonzero reduced cost is associated with a:

Decision variable not in the solution

An operations strategy for inventory management should work toward:

Decreasing lot size

A fill rate is the percentage of ________ filled by stock on hand.

Demand

The EOQ model is most relevant for which one of the following?

Determining fixed order qualities

The purpose of control charts is to:

Distinguish between random variation and assignable variation in the process

A redundant constraint is one that:

Does not form a unique boundary of the feasible solution space

Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem:

During the design phase

Which of the following is not a characteristic of service operations?

Easy measurement of productivity

(t/f) Because courtesy is subjective, it cannot be considered a factor in service quality.

False

(t/f) "Value added" by definition is always a positive number since "added" implies increases.

False

(t/f) A Gantt chart is a popular visual tool for displaying the established precedence relationships.

False

(t/f) A c-chart is used to monitor the total number of defectives in the output of a process.

False

(t/f) A change in the value of an objective function coefficient does not change the optimal solution.

False

(t/f) A control chart is a visual representation of the steps in a process.

False

(t/f) A disadvantage of activity-on-node diagrams is the occasional need for dummy activities.

False

(t/f) A fishbone diagram identifies which category is most frequently observed out of all the categories for which you have data.

False

(t/f) A hierarchical listing of what must be done during a project is called matrix.

False

(t/f) A histogram is a summarization of data measured on a yes-or-no basis.

False

(t/f) A maximization problem is limited by all greater than or equal to constraints.

False

(t/f) A process that exhibits random variability would be judged to be out of control.

False

(t/f) A quality circle is a management team focused on implementing major changes to improve quality.

False

(t/f) A retail store that carries twice as much inventory as its competitor will provide twice the customer service level.

False

(t/f) A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency.

False

(t/f) Activities not on the critical path have a slack time equal to zero.

False

(t/f) Among decision environments, uncertainty implies that states of nature have wide-ranging probabilities associated with them.

False

(t/f) An R value of zero (on a range chart) means that the process must be in control since all sample values are equal.

False

(t/f) An advantage of Gantt charts in project management is that they identify which activities can be delayed without delaying the overall project.

False

(t/f) An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

False

(t/f) An inventory buffer adds value and lowers cost in all supply chains.

False

(t/f) An organization achieves quality by consistently meeting its competitors' standards.

False

(t/f) An organization that is twice as productive as its competitor will be twice as profitable.

False

(t/f) An x-bar control chart can only be valid if the underlying population it measures is a normal distribution.

False

(t/f) Approving the effort that occurs during the production process is known as acceptance sampling.

False

(t/f) Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used.

False

(t/f) Competitiveness relates to the profitability of an organization in the marketplace.

False

(t/f) Continuous improvement focuses on achieving major breakthroughs in product or service quality.

False

(t/f) Control limits are based on multiples of the process standard deviation.

False

(t/f) Control limits used on process control charts are specifications established by design or customers.

False

(t/f) Cpk can be used only when the process is centered.

False

(t/f) Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique.

False

(t/f) Decoupling operations means to break the linkage between two sequential operations.

False

(t/f) Deterministic networks use three time estimates - shortest, most likely, and longest - for each activity in order to best determine the activity's estimated time.

False

(t/f) Discrete stocking levels are used when an organization does not want visibility of inventory levels.

False

(t/f) EOQ inventory models are basically concerned with the timing of orders.

False

(t/f) Every change in the value of an objective function coefficient will lead to changes in the optimal solution.

False

(t/f) Global competition really only applies to multinational organizations.

False

(t/f) Goods-producing organizations are not involved in service activities.

False

(t/f) Government statistics are a good source of data about productivity trends in the service sector.

False

(t/f) Graphical linear programming can handle problems that involve any number of decision variables.

False

(t/f) High performance and low prices are both considered to be dimensions of quality.

False

(t/f) If people would only work harder, productivity would increase.

False

(t/f) If the expected length of a path is more than 2.5 standard deviations less than a desired project completion time, the path will not be a factor in assessing the probability of finishing the project on time.

False

(t/f) If two consecutive activities have shared slack, this means that each of them can use only half of the slack without delaying completion of the project.

False

(t/f) If two consecutive activities on the same path each have two days of activity slack, this means that each of the can be delayed by two days without delaying the project.

False

(t/f) Improving efficiency will guarantee a similar improvement in productivity.

False

(t/f) In reaching a decision, the alternative with the lowest cost should be ranked number 1.

False

(t/f) In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

False

(t/f) In the EOQ formula, holding costs under 10 percent are expressed as percentages, above 10 percent are expressed as annual unit costs.

False

(t/f) It is critical that the exact quantity calculated in the EOQ model be ordered.

False

(t/f) Larger samples will require wider x-bar control limits because there is more data.

False

(t/f) Linear programming techniques will always produce an optimal solution to an LP problem.

False

(t/f) Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions.

False

(t/f) Many activities have slack time; if we add these slack times together, this represents the potential improvement in early completion for the project.

False

(t/f) Matrix organizations transfer control of workers to project managers for the duration of the project.

False

(t/f) Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials.

False

(t/f) Mission statements should be as specific as possible regarding exactly how they will be accomplished.

False

(t/f) Modern quality management emphasizes finding and correcting mistakes before they reach the customer—catching the errors before they are shipped.

False

(t/f) Most people encounter operations only in profit-making organizations.

False

(t/f) National productivity is determined by averaging the productivity measures of various companies or industries.

False

(t/f) Nonbinding constraints are not associated with the feasible solution space; i.e., they are redundant and can be eliminated from the matrix.

False

(t/f) Nonzero slack or surplus is associated with a binding constraint.

False

(t/f) Once a project is approved and underway, project managers are only responsible for effectively managing time and costs which, if done well, will assure project completion on time and on budget.

False

(t/f) The use of models will guarantee the best possible decisions.

False

(t/f) Operations and sales are the two functional areas that exist to support activities in other functions such as accounting, finance, IT, and human resources.

False

(t/f) Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services.

False

(t/f) Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision making.

False

(t/f) Operations, marketing, and finance function independently of each other in most organizations.

False

(t/f) Organizational strategy should be determined without considering the realities of functional area strength and weaknesses since they can be changed to meet our strategy.

False

(t/f) Outsourcing tends to improve quality but at the cost of lowered productivity.

False

(t/f) Path probabilities are calculated by dividing path mean by path standard deviations.

False

(t/f) Processes that are in control eliminate variations.

False

(t/f) Productivity is defined as the ratio of input to output.

False

(t/f) Productivity tends to be only a very minor factor in an organization's ability to compete.

False

(t/f) Profit maximization could be an objective of an LP problem; but cost minimization cannot be the objective of an LP problem.

False

(t/f) Project management software eliminates constraint violations when there are shared resources.

False

(t/f) Quality at the source means returning all defects to the source—our vendors.

False

(t/f) Range charts and p-charts are both used for variable data.

False

(t/f) Regardless of superior quality, consumers will not pay premium prices.

False

(t/f) Run tests give managers an alternative to control charts; they are quicker and cost less.

False

(t/f) Service operations require additional inventory because of the unpredictability of consumer demand.

False

(t/f) Specialized machinery or equipment is a common way of offering increased customization in manufacturing or services without taking on additional labor costs.

False

(t/f) Statistical process control focuses on the acceptability of process output.

False

(t/f) Statistical process control is the measurement of rejects in the final product.

False

(t/f) Suppliers are not included in quality assurance and quality improvement efforts in TQM; they should worry about their own problems.

False

(t/f) The A-B-C approach involves classifying inventory items based on their name.

False

(t/f) The average inventory level is inversely related to order size.

False

(t/f) The best way to assure quality is to use extensive inspection and control charts.

False

(t/f) The dimensions of quality are important for products but are not applicable in service organizations.

False

(t/f) The earliest finish time for an activity is equal to the latest finish time minus the activity time.

False

(t/f) The equation 3 xy = 9 is linear.

False

(t/f) The expected value of perfect information is inversely related to losses predicted.

False

(t/f) The feasible solution space is the set of all feasible combinations of decision variables as defined by only binding constraints.

False

(t/f) The higher thee node number, the longer the activity will take.

False

(t/f) The maximax approach is a pessimistic strategy.

False

(t/f) The maximin approach involves choosing the alternative with the highest payoff.

False

(t/f) The number of defective parts in a sample is an example of variable data because it will "vary" from one sample to another.

False

(t/f) The objective of inventory management is to minimize the cost of holding inventory.

False

(t/f) The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities.

False

(t/f) The path in a network with the average length of time to completion is called the critical path.

False

(t/f) The primary purpose of statistical process control is to detect a defective product before it is shipped to a customer.

False

(t/f) 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

(t/f) The simplex method is a general-purpose LP algorithm that can be used for solving only problems with more than six variables.

False

(t/f) 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

(t/f) The term range of feasibility refers to coefficients of the objective function.

False

(t/f) The total cost of crashing any one activity should never exceed 20 percent of the total cost of the original project.

False

The region which satisfies all of the constraints in graphical linear programming is called the:

Feasible solution space

Measurements taken at various points in the transformation process for control purposes are called:

Feedback

Budgeting, analysis of investment proposals, and provision of funds are activities associated with the ________ function.

Finance

Cause-and-effect diagrams are sometimes called:

Fishbone (Ishikawa) diagrams

The tool that is useful in documenting the current process is a:

Flowchart

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to:

Internal audits

Which is not an area of significant difference between manufacturing and service operations?

Forecasting demand

Which of the following is true? -Corporate strategy is shaped by functional strategies. -External conditions are shaped by corporate mission. -Corporate mission is shaped by functional strategies. -Corporate mission is shaped by corporate strategy. -Functional strategies are shaped by corporate strategy.

Functional strategies are shaped by corporate strategy.

A popular visual tool for planning and scheduling simple projects, and for monitoring progress, is the:

Gantt chart

Given the same demand, setup/ordering costs, and carrying costs, the EPQ calculated using incremental replenishment will be ________ if instantaneous replenishment was assumed.

Greater than the EOQ

An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:

Greatly decreased order quantities

Project management differs from management of more traditional activities mainly because of: I.its limited time frame. II.its unique, defined set of activities. III.the requirement for use of the appropriate resources. IV.the need for planning and execution.

I and II

When an organization comes to the realization that there are quality problems in products that are already in service, ethical approaches include: I.divulging the information to the public at large. II.recalling, if possible, affected products. III.handling complaints on an individual rather than a systemic basis.

I and II

Which of the following are advantages of PERT and CPM? I.It is visual. II.It is automatically updated. III.Activities that need to be watched closely can be identified.

I and III

Acceptance sampling, when it is used, is used: I.before production. II.during production. III.after production.

I and III only

In linear programming, sensitivity analysis is associated with: I.the objective function coefficient. II.right-hand-side values of constraints. III.the constraint coefficient.

I, II, and III

Lost production time, scrap, and rework are examples of:

Internal failure costs

Managers have obligations to a wide variety of stakeholders such as shareholders, employees, and customers. When considering outsourcing production to offshore suppliers, managers have to weigh: I.cost benefits that might make shareholders wealthier. II.quality issues that might make firms less productive and/or products riskier. III.the investments already tied up in relationships with existing suppliers.

I, II, and III

Among the guiding principles of six sigma are: I.Reduction of variation is an important goal. II.Valid measurement is critical. III.Outputs determine inputs. IV.We should focus on those critical few influences on our quality.

I, II, and IV only

In graphical linear programming to maximize profit, the objective function is: I.a family of parallel lines. II.a family of isoprofit lines. III.interpolated. IV.linear.

I, II, and IV only

Which of the following is not one of the six key decisions in project management? I.Selecting the project team II.Deciding on the project manager's title III.Managing and controlling project resources IV.Deciding which projects to implement V.Selecting the project manager

II

A plot below the lower control limit on the range chart: I.should be ignored since lower variation is desirable. II.may be an indication that process variation has decreased. III.should be investigated for assignable cause.

II and III

The logical approach, from beginning to end, for assembling a linear programming model begins with:

Identifying the decision variables

The "Control" phase of DMAIC is intended to ensure that:

Improvements are sustained

In order for TQM to be successful, it is essential that most of the organization be:

In agreement with the philosophy and its goals

Which of the following stages is that one in which the project's expected costs, benefits, and risks are assessed?

Initiating

The more progressive a firm's approach to quality assurance, the less that company will need to rely on:

Inspection

A stock or store of goods is called a(n):

Inventory

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

It increases by about 40 percent

The advantage a precedence diagram has over a Gantt chart is:

Its ability to reveal relationships among activities.

The basis for use of the beta distribution in PERT is:

Its features that make it attractive in practice

Determining the average payoff for each alternative and choosing the alternative with the highest average is the approach called:

Laplace

In project network analysis, "slack" refers to the difference between:

Latest and earliest times

Which phrase best describes the term "bounded rationality"?

Limits imposed on decision making by costs, time, and technology

The linear optimization technique for allocating constrained resources among different products is:

Linear programming

In a project network, the critical path is the sequence of activities which has the:

Longest duration

Marketing personnel and product designers must work closely with operations to successfully develop and produce new products because operations personnel can best judge how ________ new product designs will be.

Manufacturable

A shadow price reflects which of the following in a maximization problem?

Marginal gain in the objective that would be realized by adding one unit of a resource

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the approach called:

Maximin

The maximin approach to decision making refers to:

Maximizing the minimum return

Before a dimension of quality can be made operationally useful, it must be restated in some ________ form.

Measurable

Quality planning and administration, quality training, and quality control procedures are examples of:

Prevention costs

A risk avoider would want ________ safety stock.

More

Which of the following factors would tend to reduce productivity?

More inexperienced workers

A cycle count program will usually require that A items be counted:

More often than annually

In the probabilistic approach to project network analysis, the time estimate annotated tm for any activity is the:

Most likely time

In graphical linear programming, when the objective function is parallel to one of the binding constraints, then:

Multiple optimal solutions exist

Which is not a true assumption in the basic EOQ model?

No more than three items are involved

A c-chart is used for:

Number of defects per unit

Acceptance sampling plans might call for the selection of:

One or more samples

A graphical representation that shows the risk of: (1) accepting bad lots and (2) rejecting good lots is called the:

Operating characteristic curve

An organization's mission statement serves as the basis for:

Organizational goals

Which of the following raises quality risks?

Outsourcing to less-developed countries

A control chart used to monitor the fraction of defectives generated by a process is the:

P-chart

A chart showing the number of occurrences by category would be used in:

Pareto analysis

The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the:

Pareto phenomenon

A sequence of activities that leads from the starting node to the finishing node is called a:

Path

A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called a:

Payoff table

In the execution phase of a project's life cycle, activities are guided by decisions that were made in the ________ phase.

Planning

Which of the following quality control sample statistics indicates a quality characteristic that is an attribute?

Proportion

Which of the following is typically the largest of all inventory costs?

Purchase cost

The assurance that processes are performing in an acceptable manner is the focus of:

Quality control

Which of the following is not an element of TQM?

Quality management as a specialized function within the firm

Which of the following is not one of the assumptions of the basic EOQ model?

Quantity discounts are available

In a two-bin inventory system, the amount contained in the second bin is equal to the:

ROP

In a linear programming problem, the objective function was specified as follows: Z = 2 A + 4 B + 3 C The optimal solution calls for A to equal 4, B to equal 6, and C to equal 3. It has also been determined that the coefficient associated with A can range from 1.75 to 2.25 without the optimal solution changing. This range is called A's:

Range of optimality

Dealing with the fact that certain aspects of any management situation are more important than others is called:

Recognition of priorities

A tool that is not used for quality management is a:

Redesign

The purpose of cycle counting is to:

Reduce discrepancies between inventory records and actual quantities

Which of the following interactions with vendors would potentially lead to inventory reductions?

Reduced lead times

A constraint that does not form a unique boundary of the feasible solution space is a:

Redundant constraint

The term "suboptimization" is best described as the:

Result of individual departments making the best decisions for their own areas but hurting other areas

The expected monetary value (EMV) criterion is the decision-making approach used with the decision environment of:

Risk

Core competencies in organizations generally do not relate to:

Sales price

The basis for a statistical process control chart is a(the):

Sampling distribution

ISO certification is similar to the Baldrige Award in its emphasis on:

Self-appraisal

The range of probability for which an alternative has the best expected payoff can be determined by:

Sensitivity analysis

________ is a means of assessing the impact of changing parameters in a linear programming model.

Sensitivity analysis

A point which is outside of the lower control limit on an R-chart:

Should be investigated because an assignable cause of variation might be present

Once we go beyond two decision variables, typically the ________ method of linear programming must be used.

Simplex

In the graphical approach to linear programming, finding values for the decision variables at the intersection of corners requires the solving of:

Simultaneous equations

Which of the following is not a key factor of competitiveness?

Size of organization

Product design and choice of location are examples of ________ decisions.

Strategic

Departmentalizing decisions increases the risk of ________ leading to a poor decision.

Suboptimization

Which of the following most involves coordinating the activities among all the elements of the business including its suppliers and distributors?

Supply chain management

Business organizations consist of three major functional areas which, ideally:

Support one another

Which of the following refers to service and production processes that use resources in ways that do not harm ecological systems?

Sustainability

Which of the following is least likely to be included in order costs?

Temporary storage of delivered goods

The amount of inspection needed depends on ________ and ________.

The cost of inspection; the costs of passing on defective items

The responsibilities of the operations manager include:

The creation of goods or provision of services

A p-chart would be used to monitor:

The fraction defective

Which of the following characterizes decision making under uncertainty?

The likelihood of possible future events is unknown

Which of the following would make decision trees an especially attractive decision-making tool?

The need to think through a possible sequence on decisions

(t/f) A scatter diagram is a graphical technique that shows whether two variables may be related.

True

(t/f) A service blueprint is a flowchart of a service process that shows which of its steps has high customer contact.

True

Which of the following is not true for the economic production quantity model?

There are no ordering or setup costs

Which of the following is not a benefit of using models in decision making?

They force the decision maker to take into account qualitative issues such as personalities and emotions.

Which of the following relationships must always be incorrect?

Tolerances > Control limits > Process variability

TQM stands for:

Total quality management

(t/f) A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly.

True

(t/f) A c-chart is used to monitor the number of defects per unit for process output.

True

(t/f) A characteristic that was once an order winner may become an order qualifier.

True

(t/f) A great job of flowcharting and benchmarking a process is of only academic interest if the proposed changes are not implemented.

True

(t/f) A linear programming problem can have multiple optimal solutions.

True

(t/f) A lower control limit must by definition be a value less than an upper control limit.

True

(t/f) A missions statement should provide a guide for the formulation of strategies for the organization.

True

(t/f) A p-chart is used to monitor the fraction of defectives in the output of a process.

True

(t/f) A shadow price indicates how much a one-unit decrease/increase in the right-hand-side value of a constraint will decrease/increase the optimal value of the objective function.

True

(t/f) A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts.

True

(t/f) A weakness of the maximin approach is that it loses some information.

True

(t/f) According to Deming, it is the systems that management puts into place that are primarily responsible for poor quality, not employees.

True

(t/f) Although PERT and CPM were originally developed independently, they are now nearly identical in terms of analysis and procedures.

True

(t/f) Among Ford's many contributions was the introduction of mass production, using the concepts of interchangeable parts and division of labor.

True

(t/f) Among decision environments, risk implies that certain parameters have probabilistic outcomes.

True

(t/f) An example of a strategic operations management decision is the choice of where to locate.

True

(t/f) An example of a tactical operations management decision is determining employment levels.

True

(t/f) An example of an operational operations management decision is inventory level management.

True

(t/f) An objective function represents a family of parallel lines.

True

(t/f) Annual ordering cost is inversely related to order size.

True

(t/f) As an abstraction of reality, a model is a simplified version of a real phenomenon.

True

(t/f) Attribute data are counted, variable data are measured.

True

(t/f) Bounded rationality refers to the limits imposed on decision making because of costs, human abilities, time, technology, and/or availability of information.

True

(t/f) Business organizations that achieve good quality benefit in a variety of ways, including a positive reputation for quality, increased customer loyalty, and lower production costs.

True

(t/f) Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost.

True

(t/f) Concluding that a process is out of control when it is not is known as a Type I error.

True

(t/f) Constraints limit the alternatives available to a decision maker.

True

(t/f) Control limits tend to be wider for more variable processes.

True

(t/f) Convenience, reliability, and assurance are dimensions of service quality.

True

(t/f) Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs.

True

(t/f) Crosby's concept of "quality is free" means that it is less expensive to do it right initially than to do it over.

True

(t/f) Customer expectations tend to change over time, affecting their perception of service quality.

True

(t/f) Cycle counting can be used in motorcycle inventory control.

True

(t/f) DVD recorders would be an example of independent-demand items.

True

(t/f) Elton Mayo's Hawthorne experiments were significant contributions to the human relations movement, which emphasized the importance of the human element in job design.

True

(t/f) Environmental scanning is a search for events or trends that present either threats or opportunities to the organization.

True

(t/f) Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made.

True

(t/f) Firms that wish to do business with the European Community can benefit from having a quality management system that meets ISO 9000 standards.

True

(t/f) Good project management is very important with virtual teams.

True

(t/f) High-cost, low-volume items often require careful inspection since we may have large costs associated with passing defectives.

True

(t/f) ISO 9000 standards stress continual improvement regardless of how good you currently are.

True

(t/f) If a point on a control chart falls outside one of the control limits, this suggests that the process output is nonrandom and should be investigated.

True

(t/f) If a single optimal solution exists to a graphical LP problem, it will exist at a corner point.

True

(t/f) In decision theory, states of nature refer to possible future conditions.

True

(t/f) In for-profit organizations, the value of outputs is measured by the prices customers are willing to pay for goods or services.

True

(t/f) In order to determine the probability of timely project completion, it is sometimes necessary to take into account paths other than the critical path.

True

(t/f) In the range of feasibility, the value of the shadow price remains constant.

True

(t/f) Interest, insurance, and opportunity costs are all associated with holding costs.

True

(t/f) LP problems must have a single goal or objective specified.

True

(t/f) Lean production systems incorporate the advantages of both mass production and craft production.

True

(t/f) Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations.

True

(t/f) One concern in the design of production systems is the degree of standardization.

True

(t/f) One important use of inventories in manufacturing is to decouple operations through the use of work-in-process inventories.

True

(t/f) One way that project management differs from management of more traditional activities is because of the limited time framework of projects.

True

(t/f) Patterns of data on a control chart suggest that the process may have nonrandom variation.

True

(t/f) People who work in the field of operations should have skills that include both knowledge and people skills.

True

(t/f) Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom-made parts.

True

(t/f) Process capability compares process variability to the tolerances.

True

(t/f) Productivity is defined as the ratio of output to input.

True

(t/f) Productivity is directly related to the ability of an organization to compete.

True

(t/f) Profit margins tend to be inversely related to inventory turns.

True

(t/f) Quality of conformance refers to the degree to which goods and services conform to the intent of the designers as documented in the specifications.

True

(t/f) Quality of design refers to the intention of the designers to include or exclude certain features in a product or service based on marketing and other information.

True

(t/f) Reducing the variability in our product or service is an important key to quality.

True

(t/f) Run tests are useful in helping to identify nonrandom variations in a process.

True

(t/f) Service often requires relatively greater labor content when compared to manufacturing.

True

(t/f) Service typically involves a much higher degree of customer contact that manufacturing.

True

(t/f) Serviceability, conformance, and reliability are dimensions of product quality.

True

(t/f) Services often don't fit simple yield measurements.

True

(t/f) Six Sigma programs have both management and technical components.

True

(t/f) Slack time is equal to LS-ES or LF-EF.

True

(t/f) Solving quality problems can lead to lower inventory levels.

True

(t/f) Some organizations use a matrix organization to integrate the activities of specialists within a functional framework.

True

(t/f) Standardization has the advantage of reducing variability.

True

(t/f) Strategy includes both organizational and functional strategies.

True

(t/f) TQM expands the traditional view of quality beyond looking only at the quality of the final product or service to looking at the quality of every aspect of the process.

True

(t/f) Tactics support established functional strategies.

True

(t/f) The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable.

True

(t/f) The Laplace criterion treats states of nature as being equally likely.

True

(t/f) The PDSA cycle forms the conceptual basis for continuous improvement.

True

(t/f) The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management.

True

(t/f) The amount of inspection needed is governed by the costs of inspection and the expected costs of passing defective items.

True

(t/f) The amount of inspection we choose can range from no inspection at all to inspecting each item numerous times.

True

(t/f) The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

True

(t/f) The basic EOQ model ignores the purchasing cost.

True

(t/f) 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

(t/f) The customer is the focal point and customer satisfaction is the driving force in quality management.

True

(t/f) The degree to which a product or service satisfies its intended purpose is determined by service after delivery, ease of use, design, and conformance to design.

True

(t/f) The earliest finish time for an activity is equal to the latest finish time minus the activity slack.

True

(t/f) The equation 5 x + 7 y = 10 is linear.

True

(t/f) The expected monetary value approach is most appropriate when the decision maker is risk neutral.

True

(t/f) The feasible solution space only contains points that satisfy all constraints.

True

(t/f) The greater the degree of customer involvement, the more challenging the design and management of operations

True

(t/f) The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

True

(t/f) The primary difference between internal failures and external failures is time and place of discovery of the failure.

True

(t/f) The probability that the project will go beyond the desired time is equal to one minus the joint probability that all paths will be completed within the desired time.

True

(t/f) The project computing algorithm requires both a forward and a backward pass.

True

(t/f) The purpose of benchmarking is to establish a standard against which the organization's performance can be judged and to identify a model for possible improvement.

True

(t/f) The sampling distribution can be assumed to be approximately normal even when the underlying process distribution is not normally distributed.

True

(t/f) The sum of times of the longest path in a network indicates expected project duration, and the activities represent the critical activities.

True

(t/f) The task of identifying risks should involve everyone associated with the project.

True

(t/f) The term isoprofit line means that all points on the line will yield the same profit.

True

(t/f) The term range of feasibility refers to a constraint's right-hand-side quantity.

True

(t/f) The total cost curve is relatively flat near the EOQ.

True

(t/f) The two basic issues in inventory are how much to order and when to order.

True

(t/f) Three key philosophies in TQM are continuous improvement, involvement of everyone in the organization, and customer satisfaction.

True

(t/f) To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: when to order and how much to order.

True

(t/f) Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed.

True

(t/f) Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation.

True

(t/f) User instructions and follow-up services after delivery are important elements of overall product or service quality.

True

(t/f) Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered.

True

(t/f) Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary pressures on a nation's economy.

True

(t/f) When a change in the value of an objective function coefficient remains within the range of optimality, the optimal solution also remains the same.

True

(t/f) When a process is not centered, its capability is measured in a slightly different way. The symbol for this case is Cpk.

True

The theoretical limit on the number of constraints that can be handled by the simplex method in a single problem is:

Unlimited

The theoretical limit on the number of decision variables that can be handled by the simplex method in a single problem is:

Unlimited

The range chart ( R-chart) is most likely to detect a change in:

Variability

At which point does crashing of a project cease?

When the cost to crash equals or exceeds the benefit of crashing

A hierarchical listing of what must be done in a project is called a:

Work breakdown structure (WBS)

A productivity increase in one operation that does not improve overall productivity of the business is not

Worthwhile

A control chart used to monitor the process mean is the:

X-bar chart

A shift in the process mean for a measured characteristic would most likely be detected by a(n):

X-bar chart

For the products A, B, C, and D, which of the following could be a linear programming objective function?

Z=1A+2B+3C+4D