OPM 200 Final Exam Study Guide Multiple Choice
Suppose that the normal time for activity C is 10 weeks with a normal cost of $6,000. We can crash it to only 4 weeks at a total cost of $12,000. The total activity cost if we crash it to 7 weeks will be A. $9,000 B. $11,00. C. $8,000 D. $6,000
$9,000.
If the ending inventory last period equals 200 units, production in this period equals 1,000 units, and demand in this period equals 1,200 units, what is the ending inventory at the end of this period? A. 100. B. 0. C. 200. D. -100.
0
It was determined that three time estimates would be used in planning a project. The estimates for task G (in weeks) 4, 6, and 12, respectively, were for optimistic, most likely, and pessimistic times. What is the standard deviation for this task? A. 0.94 B. 0.44 C. 1.33 D. 1.78
1.33
What is the takt time of a manufacturing cell that must produce 250 parts over one shift with 7 hours of available time? A. 1.68 minutes per part B. 35 parts per hour C. 0.60 minutes per part D. 0.60 parts per minute
1.68 minutes per part
The production demand for widgets for a 250-workday year is 7,500 units. Ordering costs are $25.00 per order and carrying costs are $9.00 per unit per year. Four days must be allowed between order placement and order receipt. What is the reorder point, assuming known and constant variables? A. 300 B. 62.5 C. 120 D. 204
120
If 3,000 parts are in work in process before an assembly operation which is scheduled to process 7,500 parts every 5 days, how many days of work in process inventory are sitting before assembly? A. 2.0 days B. 0.4 days C. 0.5 days D. 2.5 days
2.0 days
In ABC analysis, class A items typically represent ____ of the SKUs but account for ____ of the dollar usage. A. 80%; 20% B. 40%; 60% C. 20%; 60% D. 20%; 80%
20%; 80%
The production demand for widgets for a 250-workday year is 7,500 units. Ordering costs are $25.00 per order and holding costs are $9.00 per unit per year. Four days must be allowed between order placement and order receipt. What is the EOQ, assuming known and constant variables? A. 616 B. 0.24 C. 73 D. 204
204
The production demand for widgets for a 250-workday year is 7,500 units. Ordering costs are $25.00 per order and carrying costs are $9.00 per unit per year. Four days must be allowed between order placement and order receipt. What is the number of orders per year, assuming known and constant variables? A. 127 B. 107 C. 27 D. 37
37
The average daily demand for component B is 750 units. The average time for waiting during the production process and materials handling is 0.15 days. Processing time per container is 0.1 days. The container capacity is 50 units and the policy variable is 5%. What number of containers is required for component B? A. 4 B. 2 C. 8 D. 17
4
An end item "A" is assembled from two "B" components and two "C" subassemblies. The "C" subassembly is composed of one of each component "B" and "D." If the gross requirement for "A" is 100 units, what is the demand for component "B"?
400
A firm's database showed that the average value of all inventory items for the year was $7,650. The cost of goods sold was reported at $76,500. Because the company closes for two weeks each year, its business year is reduced in length. How many weeks of supply were held in inventory? A. 10.0 B. 2.0 C. 0.2 D. 5.0
5.0
Dave's Bar-B-Q operated a mobile kitchen that serviced construction sites, office buildings, and public parks. Beginning in June, snow cones were added to the menu. The weekly sales figures for June of the previous year are given in the following chart: Use exponential smoothing, a smoothing coefficient of 0.3, to forecast demand for the third week of June.
5.1
If gross requirements are 100, planned receipts are 120, and inventory on hand from the previous period is 50, then the projected on-hand inventory balance is A. 170 B. 270 C. 70. D. 30
70
A PERT analysis of a small project determined that the duration of the critical path is 17.0 weeks with a variance of 0.70 weeks. What is the probability that the project will be completed within 18 weeks? (Use the Normal Distribution Appendix.) A. Approximately 28% B. Approximately 92% C. Approximately 88% D. Approximately 50%
88%
Lisa's Card Cache uses ABC analysis. Which of the following statements is NOT true of ABC analysis? A. ABC analysis uses the Pareto chart concept. B. Inventory items are ranked on the basis of dollar usage. C. Generally, the Class A items account for approximately 80 percent of the dollar usage. D. ABC analysis allows the company to control inventory shrinkage.
ABC analysis allows the company to control inventory shrinkage.
Forward integration can mean which of the following? A. the firm acquires its own distribution centers and retail stores B. the firm acquires more channels of distribution C. the firm acquires its business customers D. All of the above.
All of the above
The methods of project management offer several benefits to project managers. Which of the following is NOT among them? A. forces project teams to identify and organize the data required B. highlights the activities that may be delayed without affecting project completion dates C. helps managers analyze the time and cost implications of resource trade-offs D. All of the above are benefits to project managers.
All of the above
Value stream maps typically include data related to each process including A. cycle time. B. changeover time. C. uptime. D. All of the above
All of the above
The methods of project management offer several benefits to project managers. Which of the following is NOT among them? A. highlights the activities that may be delayed without affecting project completion dates B. helps managers analyze the time and cost implications of resource trade-offs C. forces project teams to identify and organize the data required D. All of the above are benefits to project managers.
All of the above are benefits to project managers.
Which of the following statements is true regarding master production scheduling? A. The sums of the quantities in the MPS must equal those in the sales and operations plan. B. The production quantities should be allocated efficiently over time. C. Capacity limitations and bottlenecks may determine the timing and size of MPS quantities. D. All of the above are true.
All of the above are true
Which of the following statements is false? A. If the lead time to buy raw materials is long, the forecasts go farther out into the future. B. In a make-to-order environment, the forecasts tend to be for groups of products. C. In a make-to-stock environment, forecasts tend to be more detailed and can get down to specific individual products. D. All of the above statements are true.
All of the above statements are true.
An enterprise process is a companywide process that cuts across A. business units and geographic regions. B. functional areas. C. suppliers and customers. D. All of the above.
All of the above.
Forward integration can mean which of the following? A. the firm acquires more channels of distribution B. the firm acquires its own distribution centers and retail stores C. the firm acquires its business customers D. All of the above.
All of the above.
In which of the following ways can supply chain design improve positive net cash flows? A. reducing the time lag between paying for materials and receiving payment for manufactured products B. reducing the backlogs of orders C. reducing lead times D. All of the above.
All of the above.
In which of the following ways is a sales and operations plan for a service provider quite different than for a manufacturing firm? A. their plan focuses on the demand and supply of human resources B. forecasts are typically expressed in terms of employees required C. their plan does not contain an inventory section D. All of the above.
All of the above.
The Bill of Resources (BOR) can be used to determine which of the following? A. how much of a resource a firm will need B. what resources a firm will need C. when resources will be needed by a firm D. All of the above.
All of the above.
Which of these activities is not a major component of the initial phase of planning and managing projects? A. Selecting the organizational structure B. Defining the scope and objectives C. Selecting the project manager and team D. Analyzing time/cost tradeoffs
Analyzing time/cost tradeoffs
An MRP system provides which of the following advantages? A. Smoothing of lumpy demand. B. Automatic update of the dependent demand and replenishment schedules of components when parent schedules change. C. Statistical forecast of component demand. D. Increased vertical integration.
Automatic update of the dependent demand and replenishment schedules of components when parent schedules change.
Which statement about the forecasting process is best? A. Bias is the worst kind of forecast error. B. Quantitative forecasts are better than qualitative forecasts. C. The best way to improve forecast accuracy is to add additional terms to the forecast equation. D. Whenever possible, forecast at the lowest level (greatest level of detail).
Bias is the worst kind of forecast error.
Which error measure lets a forecaster know that the forecast is consistently high? A. CFE B. MAD C. MAPE D. MSE
CFE
Which statement about capacity requirements planning (CRP) is NOT true? A. CRP systems adjust the order release time to prevent a workstation from exceeding its capacity. B. The purpose of CRP is to match the material requirements plan with the plant's production capacity. C. CRP systems enable the identification of "critical" workstations. D. CRP systems access inventory records to determine when planned orders or scheduled receipts will reach a workstation.
CRP systems adjust the order release time to prevent a workstation from exceeding its capacity.
Which of the following is NOT considered a quantitative forecasting method? A. trend projection with regression B. Delphi analysis C. time-series analysis D. causal methods
Delphi analysis
Which is the best statement regarding work breakdown structure? A Level 1 activity is a more micro view (greater level of detail) than a Level 2 activity. B. WBS should not include a task representing planning of the project that is being planned. C. Each activity in the WBS must have an "owner" who is responsible for doing the work. D. A packet is the smallest unit of work effort consuming both time and resources that the project manager can schedule and control.
Each activity in the WBS must have an "owner" who is responsible for doing the work.
The project duration in a network can be determined by the largest value of which variable associated with the critical path? A. Activity time B. Earliest start time C. Earliest finish time D. Slack time
Earliest finish time
Which of the following statements regarding forecasting "units of measurement" is best? A. Forecasted "product units" can be translated to dollars by multiplying them by the unit price. B. "Dollars" is always the best initial forecasting unit of measurement. C. If accurately forecasting demand for a product is not possible in terms of "number of units," forecasting should be avoided. D. Forecasting "product units" should always be avoided.
Forecasted "product units" can be translated to dollars by multiplying them by the unit price.
Which of the following is NOT a benefit of an MRP system? A. Improvement in customer service B. Better utilization of labor and facilities C. Forecasting of finished-goods demand D. Reduction of inventory levels
Forecasting of finished-goods demand
Which of the following is NOT a feature of an ERP system? A. Single database B. Updating of information in all modules C. Identifying the actions planners must take to stay on schedule D. Information entered as transactions
Identifying the actions planners must take to stay on schedule
Which of the following statements does NOT apply to a production plan? A. It provides a view of detailed workforce schedules. B. Plans are consistent with a company's strategic goals and objectives. C. It enables the assessment of financial and physical resource needs without excessive detail. D. It serves as a bridge between the strategic and operational plans.
It provides a view of detailed workforce schedules.
Which of the following is NOT characteristic of a kanban system? A. It controls the movement of containers from source/storage to the production process. B. At least one card is associated with a container of process input material. C. It serves as a push mechanism. D. Each container contains equal numbers of non-defective parts.
It serves as a push mechanism.
_________ methods translate the opinions of managers, expert opinions, consumer surveys, and salesforce estimates into quantitative estimates. A.Judgment B.Estimation C.Arbitration D.Opinion
Judgement
Under a competitive orientation to supplier relations, the relationship does NOT include which of the following? A. High value placed on short-term gains B. Focus on price C. Long-term commitments. D. One firm's gain is the other's loss
Long-term commitments
Under a competitive orientation to supplier relations, the relationship does NOT include which of the following? A. One firm's gain is the other's loss B. Long-term commitments. C. Focus on price D. High value placed on short-term gains
Long-term commitments.
Which of the following are NOT advantages of a periodic review system? A. Lower safety stock B. Convenient administration of inventory control C. Can permit combining orders to common suppliers D. All of the above.
Lower safety stock
What is the one popular design for efficient supply chains? A. assemble-to-order (ATO) B. make-to-stock (MTS) C. make-to-order (MTO) D. design-to-order (DTO)
MTS
An appliance manufacturer initiates a production plan that gets translated into an operational plan called a A. master production schedule. B. business plan. C. staffing plan. D. workforce schedule
Master production schedule
There are four major phases in a project life cycle. Which of the following is NOT included? A. Execution B. Close out C. Maturity D. Planning
Maturity
________ is the best error measure to use when making comparisons between time series for different SKUs A. Mean absolute percent error B. Mean squared error C. Standard deviation of the errors D. Mean absolute deviation
Mean absolute percent error
Which statement is NOT true of seasonal methods? A. No matter what seasonal method is used, the amplitude of the seasonal component remains the same. B. A "season" can be as short as one day. C. A multiplicative seasonal method will show increasing amplitude if there is an upward trend in demand. D. The seasonal component can be constant, in which case an additive method would be appropriate.
No matter what seasonal method is used, the amplitude of the seasonal component remains the same
Which of the following is NOT a benefit of small lot size for lean systems? A. Potential increase in process setups B. Reduction-of-cycle inventory C. Reduction in product lead times D. Enables a uniform system workload
Potential increase in process setups
Which of the following best characterizes JIT systems? A. Build inventory at a modest rate B. Push method of material flow C. Annual review of operation methods D. Pull method of materials flow
Pull method of materials flow
In an environment where the planned activities have been accomplished previously, there are several ways of getting time estimates. Which of the following is the least useful? A. Learning curve models B. Prior experiences C. Statistical methods D. Random number generator
RNG
Which of these terms is NOT one of the Five Ss? A. Store B. Sort C. Shine D. Sustain
Store
Which functions are not part of distribution? A. Taking inventory of finished goods B. Transportation of products C. Flow from firm to customer D. Taking inventory of raw materials
Taking inventory of raw materials
Which functions are not part of distribution? A. Taking inventory of raw materials B. Flow from firm to customer C. Transportation of products D. Taking inventory of finished goods
Taking inventory of raw materials
Which one of the following statements is false? A. The critical path is the sequence of activities between a project's start and finish that takes the shortest time to complete. B. There may be more than one critical path in a project network. C. The activities along the critical path determine the completion time of the project. D If one of the activities on the critical path is delayed, the entire project will be delayed.
The critical path is the sequence of activities between a project's start and finish that takes the shortest time to complete.
Which of these statements is NOT required in order for the EOQ model to be a reasonable approach? A. The demand rate is known and constant. B. No constraints are placed on the size of each lot. C. The lead time is known and constant. D. The setup/ordering cost must exceed the annual holding cost of one unit.
The setup/ordering cost must exceed the annual holding cost of one unit.
Which diagram is NOT a part of value stream mapping? A) current state drawing B) transitional phase diagram C) implementation plan D) future state drawing
Transitional phase diagram
Which of the following is NOT a principle of the forecasting process? A. Whenever possible, forecast in detail at more disaggregated levels. B. The best way to improve forecast accuracy is to focus on reducing forecast error. C. Better processes yield better forecasts. D. Bias is the worst kind of forecast error.
Whenever possible, forecast in detail at more disaggregated levels.
A component that has one or more parents and no components is most likely to be A. an end item. B. a subassembly. C. an intermediate item. D. a purchased item.
a purchased item.
A component that has one or more parents and no components is most likely to be A. an intermediate item. B. a purchased item. C. an end item. D. a subassembly.
a purchased item.
In master production scheduling, what does projected on-hand inventory represent? A. an estimate of the amount of inventory available each week before booked orders have been satisfied B. an estimate of the amount of inventory available each week after demand has been satisfied C. the actual level of inventory that will be available at the beginning of each week D. None of the above.
an estimate of the amount of inventory available each week after demand has been satisfied
Inventory used to absorb uneven rates of demand or supply is referred to as A. independent demand inventory. B. cycle inventory. C. pipeline inventory. D. anticipation inventory.
anticipation inventory.
One of the LEAST effective supplier strategies for lean systems is A. a short-term, competitive relationship between the company and the supplier. B. to include suppliers during the product design phase. C. use of local suppliers. D. smaller, more frequent stock shipments.
a short-term, competitive relationship between the company and the supplier.
A forecast with a large cumulative sum of forecast errors (CFE) indicates A. consistent forecasting mistakes—the forecast is always too high or too low. B. that the forecast has no bias. C. that the forecast will cause very little disruption to planning efforts. D. All of the above.
consistent forecasting mistakes—the forecast is always too high or too low.
A fundamental purpose of supply chain design for manufacturers is to A.minimize the amount of the material it must purchase. B.eliminate the need to manage raw materials. C.control inventory by managing the flow of materials. D.support the essential elements of the various services it delivers.
control inventory by managing the flow of materials.
Projects have a life cycle that consists of all of the following major phases except: A. planning B. definition and organization C. crashing D. close out
crashing
Aggressive alternatives for coping with demand requirements include A. use of subcontractors. B. anticipation inventory. C. creative pricing. D. employee hiring and layoffs.
creative pricing.
Benefits of having a flexible workforce include all of the following EXCEPT: A. a more uniform work flow. B. decreased reliance on inventory buffers. C. decreased worker morale. D. it is easier to relieve bottlenecks.
decreased worker morale.
Total project costs are the sum of A. direct costs, indirect costs, and penalty costs. B. overtime costs, personnel costs, and equipment costs. C. labor costs, material costs, and any other costs directly related to project activities. D. labor costs, overhead costs, and material costs.
direct costs, indirect costs, and penalty costs.
A firm has the least amount of control over external causes of supply-chain dynamics. External causes include A. engineering changes to the product. B. product promotions. C. information (e.g., demand forecast) errors. D. expected changes in customer demand.
expected changes in customer demand.
A firm has the least amount of control over external causes of supply-chain dynamics. External causes include A. expected changes in customer demand. B. engineering changes to the product. C. product promotions. D. information (e.g., demand forecast) errors.
expected changes in customer demand.
Quantitative forecasting techniques include A. the Delphi method. B. consumer surveys. C. exponential smoothing. D. manager opinions.
exponential smoothing.
The method that groups products with similar characteristics into families and sets aside groups of machines for their production is called A. kanban. B. 5S. C. jidoka. D. group technology.
group technology.
Which of the following can put pressure on a company to carry small levels of inventory? A. the potential for stockouts and backorders B. the need to increase workforce productivity C. high cost of capital D. high ordering cost
high cost of capital
The chase strategy involves A. maintaining a small workforce and relying heavily on overtime during peak periods. B. hiring and laying off employees to match the demand forecast over the planning horizon. C. matching the demand forecast exclusively through the use of overtime and undertime. D. keeping the workforce constant.
hiring and laying off employees to match the demand forecast over the planning horizon.
A disadvantage of centralized placement is A. reduction in inventory. B. increased cost of warehouse space. C. reduction in safety stock. D. increased cost of shipping small quantities directly to distant customers.
increased cost of shipping small quantities directly to distant customers.
Service providers must plan their resources just as manufacturers do. However, unlike finished goods, services cannot be A. provided on demand. B. resourced to serve all customers. C. inventoried. D. All of the above.
inventoried.
Which of the following costs is NOT considered an inventory holding (or carrying) cost? A. inventory shrinkage costs B. inventory storage costs C. inventory transportation costs D.inventory handling costs
inventory transportation costs
The ability to automatically detect the occurrence of an abnormality, thereby helping achieve quality at the source, is A. muda. B. jidoka. C. poka-yoke. D. kaizen.
jidoka
The level strategy involves A. varying the workforce's regular-time capacity to equate supply to demand. B. hiring and laying off employees to match the demand forecast over the planning horizon. C. continually adjusting workforce levels. D. keeping the workforce constant.
keeping the workforce constant.
Ed's of Edmond has decided to use a level strategy, keeping the number of employees constant, to keep employee goodwill. Ed's will use all of the following EXCEPT A. layoffs. B. anticipation inventory. C. overtime/undertime. D. backorders.
layoffs
Which of the following is NOT one of the three basic ways inventories are reported? A. average aggregate inventory value B. material cost of goods sold C. inventory turnover D. weeks of supply
material cost of goods sold
Which of the following is NOT one of the three basic ways inventories are reported? A. average aggregate inventory value B. weeks of supply C. material cost of goods sold D inventory turnover
material cost of goods sold
On which of the following topics should effective project tracking systems collect information? A. schedule status, personnel status, budget status B. budget conformance, schedule status, and activities successfully crashed C. budget conformance, management support, and activities successfully crashed D. open issues, risks, and schedule status
open issues, risks, and schedule status
Manufacturing an item before it is needed is an example of what form of waste? A. motion B. overproduction C. inappropriate processing D. underutilization of employees
overproduction
Which of the following inventory classifications is one of the four forms that represent how the inventory was created? A. raw material inventory B. pipeline inventory C. service support inventory D. independent demand inventory
pipeline inventory
Design features for efficient supply chains include A. frequent new-product introduction. B. high contribution margins. C. predictable demand. D. customization.
predictable demand.
The total cost for a continuous review system with uncertain demand excludes consideration of A. cycle inventory holding cost. B. ordering cost. C. product cost. D. safety stock holding cost.
product cost
The least predictable pattern of time-series variation is called A. trend. B. random. C. horizontal. D. seasonal.
random.
Which sequence correctly progresses through consecutive, increasing levels of detail? A. resource plan→ sales and operations plan → workforce scheduling B. resource plan→ material requirements plan→ master production scheduling C. sales and operations plan→ resource plan→ workforce scheduling D. master production scheduling→ material requirements plan → manufacturing plan
sales and operations planright → resource planright → workforce scheduling
A repeatable pattern of increases or decreases in demand, depending on periods of time of within one year or less, is a time-series pattern called A. seasonal. B. cyclical. C. trend. D. random.
seasonal.
In general, companies perform aggregation along three dimensions A. management, labor, and raw materials. B. services or products, expenses, and resources. C. capital, labor, and management. D. services or products, labor, and time.
services or products, labor, and time.
A design feature for responsive supply chains include firms A. that have an operation strategy that emphasizes high volumes. B. that have high capacity cushions. C. for which supplier selection emphasizes low prices and consistent quality. D. for which inventory investment is low enabling high inventory turns.
that have high capacity cushions.
Which of the following statements best defines "utilized time"? A. that portion of the workforce's time that is paid for B. the average number of hours that an employee is scheduled to work C. the available workforce hours divided by the hours used for production D. that portion of the workforce's regular time that is paid for and productively used
that portion of the workforce's regular time that is paid for and productively used
Step 3 of the procedure to determine the project schedule that minimizes total project costs involves reducing the time for an identified activity until which of the following conditions becomes true? A. the activity's slack time is maximized B. the activity is at its crash time C. the critical path becomes non-critical D. the increase in direct costs equals the indirect and penalty cost savings that result from shortening the project
the activity is at its crash time
Which of the following best defines flow time? A. the start time plus the processing time of a job B. the sum of the times a job spends moving between workstations C. the amount of time a job spends in a service or manufacturing system D. the sum of the waiting time for servers or machines plus the time spent moving between operations
the amount of time a job spends in a service or manufacturing system
Which of the following is NOT considered a pressure to hold large inventories? A. the potential to reduce stockouts B. the cost of placing an order C. the need to increase machine utilization D. the cost of insurance
the cost of insurance
Value stream mapping analysts start from ________ and work _______ to draw the map by hand.
the customer end; upstream
In master production scheduling, what does available-to-promise (ATP) inventory represent? A. the difference between the customer orders already booked and the quantity that operations is planning to produce B. the company's commitment to always hold finished goods in inventory C. the difference between forecasted customer orders and the quantity that operations is planning to produce D. inventory currently being shipped to all customers
the difference between the customer orders already booked and the quantity that operations is planning to produce
A reorder point will fail if A. the chance of a stockout falls. B. the setup cost rises. C. the lead time falls. D. the variance of demand rises.
the lead time fails
In a periodic review inventory system, the protection interval for an individual SKU is equal to A. twice the lead time of the SKU. B. the lead time of the SKU, C. the length of time between reviews of the SKU's inventory position. D. the length of time between reviews of the SKU's inventory position plus the lead time of the SKU.
the length of time between reviews of the SKU's inventory position plus the lead time of the SKU.
Which of the following was NOT a network planning method developed in the 1950s? A. the network project analysis technique (NPAT) B. the critical path method (CPM) C. the program evaluation and review technique (PERT)
the network project analysis technique (NPAT)
When the projected on-hand inventory balance falls in the negative range, then A. too much inventory is on hand. B. the inventory record is incorrect. C. gross requirements must increase. D. the shortage signals it is time for a planned receipt.
the shortage signals it is time for a planned receipt.
Crash time is defined as A. the activity time associated with any management intervention. B. the shortest possible time to complete an activity. C. the difference between earliest start time and earliest finish time. D. the time necessary to complete an activity under abnormal conditions.
the shortest possible time to complete an activity.
Judgment methods may be the only practical way to make a forecast when A. there is a great deal of historical product data. B. quantitative models have been performing particularly well in recent periods. C. there is no historical data due to a new product introduction. D. the forecast made in the previous period had a MAPE of less than 10%.
there is no historical data due to a new product introduction.
It has been determined that 25 containers are necessary to adequately support the workstation that uses component Y. Each container used has a capacity for 90 components. What is the planned daily supply of component Y to the next workstation? A. 3,000 B. 1,750 C. 900 D. 2,250
2,250
Judgment methods are LEAST likely to be indicated in which of the following situations? A. Short-term forecasts are made for a product with stable demand. B. The underlying product technology is in transition. C. The Delphi method is necessary. D. A new product is being introduced.
Short-term forecasts are made for a product with stable demand.