Ops Final Exam

Cycle Time is the inverse of what?

Throughput Rate

Which of these is NOT a benefit of inventory management?

To achieve Six Sigma

Firms keep supplies of inventory for which of the following reasons?

To meet variation in product demand

inventory management, supply chain, forecasting pyramid

Top: inventory mgmt Mid: supply chain Bottom: forecasting

Managing the entire organization to excel in all dimensions of products and services that are important to customers is...?

Total Quality Management

__________ encompasses the whole organization, not just the quality department

Total Quality Management

A reduction in cost of $500,000 from a process improvement is more valuable to a firm than a $1,000,000 sale?

True

A smaller standard deviation means a process is more under control

True

Cost of goods sold as a percentage of revenue has decreased each year for 4 straight years. This company's operations are improving. a) True b) False

True

Four inventory costs: holding, opportunity, ordering, cash flow

True

In Service Operations, the goal is to reduce or accommodate the amount of variability, while in manufacturing the goal is to eliminate it.

True

One of Suntrust's objectives is to be seen as a small, local bank by its customers?

True

Operating income as a percentage of revenue has increased each year for 4 straight years. This company's operations are improving. a) True b) False

True

Productivity metrics must be evaluated in relation to trends or benchmarks in order to be of value to a manger?

True

Self-Service technology is a good solution to reduce waiting times?

True

The penalty for poor quality is much greater than the benefit of good quality

True

What describes the level of variation that a process is able to maintain?

Upper/Lower Process Control Limits

What describes the level of variation that is acceptable for the designer or customer?

Upper/Lower Specification Limits

The proportion of available time that a piece of equipment or system is operating

Utilization

What describes the timing of production resources in lean manufacturing?

"Just-in-Time"

How many positive reviews does it take to cancel out one negative review?

) 10-12

methods that can be used in forecasting that were discussed in class.

- Causal Relationship (Linear regression (trendline, best fit line, Least squares method)) - Time Series (Exponential smoothing, Moving Average, Weighted Moving Average) - Seasonal Variation - Simulation - Qualitative research (market, expert, historical) - Demand forecasting, Demand shaping

What are the penalties for having too little and too much inventory?

- Too little: Lower revenue, missed sales, lower profit. Opportunity cost. Customer satisfaction. Lower on-time delivery. Stock out - Too much: Lower cash flow, high operating costs, No capital available to invest in other projects or inventory, run out of space, risk of obsolescence

Goal of Six Sigma is no more than ____ defects per million opportunities

3.4

How many units would have been produced in the dice game if there was no variability?

35

A bank customer who is unable to use an ATM because they don't understand how to use the technology is an example of what? a) Capability Variability b) Arrival Variability c) Request Variability d) Subjective Preference Variability e) Effort Variability

A

Which one is not a component of demand curves? a) Market Research b) Seasonality c) Trends d) Randomness

A

You are the COO of a manufacturing company whose customers demand quick delivery times. Which manufacturing process is most appropriate? a) Make to Stock b) Make to Order c) Inventory Buffer System d) Critical Inventory System

A

The pareto principle is best applied to which of the following inventory systems

ABC Classification

Which of these does exponential smoothing NOT depend on?

ABC Classification

What is the maximum acceptable percentage of defectives defined by the producer?

Acceptable quality level

_______ is defined as performed on goods that already exist to determine what percentage of the products conform to specifications.

Acceptance Sampling

What process determines what percentage of existing products adhere to specifications?

Acceptance sampling

Forecast error is calculated by?

Actual minus Forecast

Which of the following is not one of the 5 costs of quality discussed in class?

Aesthetics

In the Marshmallow game, what process was determined to be most successful?

Agile, Iterative Process

In a serial production system with variable processing times at each stage, which strategy would you anticipate to increase throughput? a) Remove the buffers between stages and do nothing to the variability of the process b) Increase the buffer between stages and increase the variability in the process. c) Increase the buffer between stages and decrease the variability in the process. d) Decrease the buffer between stages and increase the variability in the process. e) Decrease the buffer between stages and decrease the variability in the process.

C

"Shipping more product out the door using less materials and manpower" best describes____? a) Process Time b) Cycle Time c) Productivity d) Throughput Rate

C

Market Size, Profit Potential, Cost, Urgency and Timing are ways to ______? a) Prioritize competitive strategy b) Assess the results of your competitive strategy c) Prioritize product development d) Prioritize process improvements

C

Which is not a cost of quality? a) Prevention Cost b) Internal Failure Cost c) Analysis Cost d) Opportunity Cost

C

What is NOT a type of qualitative forecasting?

Causal relationships

What is NOT a component of lean supply chains?

Choosing lowest cost suppliers

What was Dell's decision when faced with customer arrival and request variability?

Chose to accommodate it

Using experienced/more employees to compensate for variations among customers

Classic accommodation

Credit card companies and banks use what data analytics technique to instantly approve or deny your application?

Clustering

What was the primary reason the Rio Diamond mp3 player failed?

Complimentary mp3 products required to support the Diamond did not exist at the time.

Starbucks focusing on their core products and opening new stores to grow their business is an example of what growth strategy?

Concentration

What shows how process output varies over time?

Control charts

Wal-Mart uses advanced technology in their supply chain and distribution areas that no other competitors can match to achieve this competitive strategy?

Cost Leadership

Which of these is NOT a growth strategy?

Cost leader

What is the first step in analyzing a process?

Create a flow chart map

What is the first step in implementing a new process?

Create the urgency

The time required to complete a function, job, or task from start to finish

Cycle time

In the marshmallow challenge, Kindergarten students perform better than college students primarily because? a) They care more about the results than college students b) The plan their work, and work their plan c) They are more creative d) College students wait until the very end to put their marshmallow on their structure, leaving no time to fix.

D

It is better in the long run to meet customer expectations rather than exceed them. a) False - Exceeding expectations is always the best approach to retaining them b) False - It is better to meet them in the short term and exceed them in the long term c) True - A company should never exceed a customer's expectations d) True - The last experience a customer has now becomes their new standard expectation, making it difficult for a company to meet those new expectations consistently

D

Which of these is NOT a type of variability that contributes to waiting times?

Decision

List out the steps and tools you would use to analyze a process that is experiencing quality problems

Define the problem and priorities Measure: current performance of the process Analyze: build a flow chart, cause-effect diagram, Improve: develop solutions to the root causes Control: determine how to maintain the improvements Tools: flowchart, run chart, pareto chart, checksheet, control chart, etc.

What strategy is characterized by creative design, clever marketing, and higher quality?

Differentiator

Which of these is NOT a characteristic of level strategy?

Difficult to maintain motivated employees

Which one is not a key step for assessing the current state of a process as discussed by Suntrust?

Discussing solutions

"Productivity is a relative measure". What does this mean? a) It is only important for large companies b) It is a tool that can help an organization track inputs and outputs c) It can measure things that are relatively similar to each other d) It is only one part of the strategic planning process e) It has to be compared with something else to have meaning

E

Quality defect rate, human effort, machine downtime and raw material supply issues are_____? a) Factors that affect your competitive strategy b) Negative competitive dimensions c) Customer variabilities d) Factors that affect behavioral science e) Process variabilities

E

First impressions of a strong start to a customer encounter have more of an impact on the customer's satisfaction, then the end of the customer encounter? a) True b) False

False

Intuition decision making uses facts and figures to help guide us?

False

Lean manufacturing allows for flexible manufacturing

False

Linear regression is always the best and most accurate of all forecasting methods

False

Penalties and fines are an effective way at reducing a customer's lack of effort?

False

The fixed-time-period inventory system has a smaller average inventory than the fixed-order-quantity system because it must also protect against stock outs during the review period when inventory is checked.

False

The penalty for poor quality is much less than the benefit of good quality?

False

What is the most appropriate method for setting expectations at a certain level when selling a product or service?

Framing

Where might the needs of the project coincide with the needs of your daily job?

Functional project

Which of these is NOT a component of the "Holy Grail"?

High demand

What two variables must be equal to achieve the lowest total inventory cost?

Holding cost (or carrying cost) and Ordering cost

One of the most important decisions operations management has to make is?

How to handle variation in demand

Which of these is NOT an option if our process is incapable?

Implement lean manufacturing

In the Just in Time for the Holidays case study, which solution(s) were suggested to help them achieve their goals?

Include more data to improve their forecast, Switch to flexible manufacturing

Innovation that stems from listening to the voice of the customer is?

Incremental

Which of these is NOT an approach to competitive strategy?

Integration

You are selling Christmas Trees and your average demand is 3,000. Your sale price is $20.00, your cost is $10.00 and any unsold trees after Christmas can be turned into wood chips and sold for $1.00 per tree. How many trees should you buy?

More than 3,000

What inventory model should be used when we want to maintain a certain item in-stock?

Multi-period fixed order quantity

In what inventory system are items ordered at a certain period in time?

Multi-period fixed time period

The following chart is an example of.......

Needs to have sustained poor performance reviewed

Rank the methods of measuring customer satisfaction from most beneficial to least?

Net Promoter Score, Retention Rate, Customer Surveys

What is NOT a component of lean layouts?

Newest technology possible

If the standard deviation of demand increases, what happens to the optimal order quantity?

No change

This group is responsible for the amount of profit made by the firm?

Operations

Which of the following are costs of quality?

Opportunity Prevention Appraisal

Basic features like having a camera and the ability to access the internet are considered ____ for a smart phone manufacturer?

Order Qualifier

The minimum level of service to be considered

Order qualifier

This is not necessary to compute the order qty using the fixed time period model w/ safety stock

Ordering Cost

A series of tasks that transforms an input into an output of higher value to the firm

Process

Product development is a ____, which can be managed and improved?

Process

Ratio of outputs to inputs is the defition of ?

Productivity

In which type of project does a self-contained team work full time on it?

Pure project

In what system are high WIP inventory and bottlenecks common?

Push manufacturing

"Do it right the first time and if something goes wrong, stop the process immediately"

Quality at the source

In linear regression, what is the indicator of best fit?

R-Squared

Which is NOT a type of customer variability?

Randomness

Process Control Limits are________________, while Specification Limits are______________?

Range of variation that a process is able to maintain, Range of variation that is considered acceptable by the designer or customer

Companies that rely on operational simplicity and efficiency tend to ____ customer variability?

Reduce

Increasing the batch size of a process will do what to the cycle time?

Reduce it

?? = Estimated Demand + Safety Stock

Reorder Point

What calculations are used to meet the desired service level?

Safety Stock, Reorder Point

Which of the following is an input to an operations plan?

Sales forecast

If demand is continuously increasing twice a year, what pattern is it exhibiting?

Seasonality

What should NPV always contain?

Sensitivity analysis

What is NOT a component of demand?

Service level

Process capability index is a calculation of what

Sigma level

What inventory model should be used for a one-time purchase?

Single period

A philosophy and set of methods to eliminate defects in products and processed

Six Sigma

Which of these are NOT a helpful tool in inventory management when demand is uncertain?

Six Sigma

Which strategy uses the same number of employees each month and matches demand by varying the hours they work?

Stable

In the class example of planning strategies shown Wednesday, which one was the lowest cost?

Stable with Outsource

Which of these is NOT a benefit of fixed quantity ordering?

Standardized delivery times

When activities in a stage must stop because there is no material to work on

Starving

What does SPC stand for?

Statistical Process Control

____ is used to keep processes stable, consistent and predictable

Statistical Process Control

__________ is used to keep processes stable, consistent, and predictable

Statistical Process Control

Which one is NOT a factor to consider when prioritizing product development.

Strategy

Operations includes the following departments (circle all that apply): a) Sales b) Supply Chain c) Manufacturing d) Human Resources e) Product Development

Supply Chain Manufacturing Product Development

Which of these is NOT a question we need to answer for inventory management?

What new products should we sell next?

Is it important for a company to pick a market type to compete in with its source of competitive advantage?

Yes. It is a more effective use of its time and money

every forecast should include a ________

confidence level

If there is a lead time for delivery of my product, the optimal order quantity will increase?

false

What is the most appropriate answer to business decisions?

it depends

Four costs of inventory: holding, ordering, opportunity, cash flow

true

Most customer dissatisfaction comes from a misunderstanding of expectations

true

Pricing adjustments and promotions are an effective strategy to influence demand to help match supply

true

What word describes standard deviation?

variation

What is the benefit of performing a sensitivity analysis on an NPV calculation?

Allows you to evaluate both the pessimistic and optimistic scenarios.

Which of these is NOT a tenet of influencing behavior in service operations?

Always exceed expectations

Which step in the DMAIC process is best described by "determine the most likely causes of defects"?

Analyze

A fishbone diagram as part of a Six-Sigma quality improvement process might be found in which DMAIC category?

Analyze (determine the most likely cause of defects)

What are types of customer variability that can impact service operations?

Arrival Variability & Effort Variability

What types of customer variability contribute to waiting times?

Arrival, Request, Effort

Control over suppliers, control over costs and quality, and keeping profits in house are characteristics of what type of growth strategy? a) Concentration b) Vertical Integration c) Horizontal Integration d) Diversification

B

What is Strategy? a) Identifying best practices of other companies to use at your own company b) The goal directed actions a firm intends to take to gain and sustain a competitive advantage c) The one thing a company can do better than its competitors d) Measure of how well the company's resources are being utilized

B

The following are dimensions of how to achieve a differentiator competitive strategy (circle all that apply): a) Make it cheaper b) Make a great product/service c) Deliver it quicker d) Customization e) Excel at everything

B C D

Which of the following statements is false? a) The economic order quantity model trades off fixed costs of ordering against inventory holding costs in determining the optimal order quantity b) The newsvendor model trades off the cost of having too much against the cost of having too little in determining the optimal order quantity c) The benefits of inventory include hedging against uncertain demand, hedging against uncertain supply and economizing on ordering costs d) Inventory is one of the biggest corporate assets in the US e) The newsvendor framework is not appropriate for perishable goods or goods with a short selling season

E

What project management tool uses schedule and cost to evaluate progress?

Earned Value Analysis

What are the two tenets of lean manufacturing?

Eliminate waste and streamline

Which of the following is a fundamental property of push manufacturing?

Every worker maximizes their own output, making as many products as possible

Achieving all three goals of short lead time, low cost and high performance is easy to do

False

Which strategy allows excess inventory each month in an attempt to economically match supply and demand?

Level

What is the percentage of defectives that defines the consumer's rejection point?

Lot tolerance percent deficit

The "holy grail" of operations priorities that, if achieved, would give your company enormous competitive advantages are?

Low Cost, Short Lead Time, High Quality

Companies are persuading customers to serve themselves

Low cost accomodation

What methodology does lean manufacturing follow?

Make-to-order

According to lean manufacturing, which of the following is not classified as waste?

Manufacturing Equipment

Which of these is NOT a component of the project management constraint?

Materials