POM test 2 study guide

Which of the following is not one of the "number of interesting issues that arise in yield management?"

Designing yield management programs that cannot be imitated by a competitor

A finite population in waiting line management refers to a population that is large enough in relation to the service system so that the change in population size caused by subtraction or additions to the population does not significantly affect the system probabilities.

False A finite population refers to the limited-size customer pool that will use the service and, at times, form a line. The reason this finite classification is important is that when a customer leaves its position as a member for the population (a machine breaking down and requiring service, for example), the size of the user group is reduced by one, which reduces the probability of the next occurrence.

A matrix project structure is often referred to as a "skunkworks."

False A pure project is nicknamed skunkworks.

A work breakdown structure is used in project management but it is not used when the critical path method is involved.

False Activities are identified as part of the work breakdown structure. Activities are also the essence of the Critical Path Method. Hence, the work breakdown structure is used when the critical path method is involved.

The Aggregate Operations Plan differs in virtually every aspect in service organizations as contrasted with manufacturing organizations.

False Charting and graphic techniques are also useful for aggregate planning in service applications.

The widespread adoption of computing technology has led to the virtual abandonment of simple cut-and-try charting and graphical methods to develop aggregate operations plans.

False Companies commonly use simple cut-and-try charting and graphic methods to develop aggregate plans.

Firms facing cyclical demand fluctuations would be wise to introduce complementary products whose cycles are the same as their current products.

False Complementary products may work for firms facing cyclical demand fluctuations. For instance, lawnmower manufacturers will have strong demand for spring and summer, but weak demand during fall and winter. Demands on the production system can be smoothed out by producing a complementary product with high demand during fall and winter, and low demand during spring and summer (for instance, snowmobiles, snowblowers, or leafblowers).

A make-to-order firm will work with the customer to design the product, and then make it from purchased materials, parts, and components.

False Firms that make the customer's product from raw materials, parts, and components are make-to-order firms.

Poka-Yoke is roughly translated from Japanese as "Quality Management."

False Poka-yokes (roughly translated from the Japanese as "avoid mistakes") are common in factories and consist of such things as fixtures to ensure that parts can be attached only in the right way, electronic switches that automatically shut off equipment if a mistake is made, kitting of parts prior to assembly to make sure the right quantities are used, and checklists to ensure that the right sequence of steps is followed.

The efficiency of an assembly-line is found by a ratio of the sum of all task times divided by the cycle time.

False See equation 6.5.

The closer the customer is to the customer order decoupling point the longer it takes the customer to receive the product.

False Selection of decoupling points is a strategic decision that determines customer lead times and can greatly impact inventory investment. The closer this point is to the customer, the quicker the customer can be served.

Slack activity time is the difference between the early start and the late finish of a project activity time.

False The difference between the late start time and early start time is the slack time.

When reducing the planned duration of a project using the Time-Cost CPM model we select the activity to crash by determining the cost of each alternative and selecting the one whose cost is the greatest.

False The easiest way to proceed is to start with the normal schedule, find the critical path, and reduce the path time by one day using the lowest-cost activity.

The essence of yield management is the ability to manage supply.

False The essence of yield management is the ability to manage demand.

From an operational perspective yield management is most effective under which of the following circumstances?

Inventory is perishable

Fixed and variable costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

True (Under relevant costs:) Basic production costs. These are the fixed and variable costs incurred in producing a given product type in a given time period.

Ideally in waiting line or queuing Analyze we want to balance the cost of service capacity with the cost of waiting.

True A central problem in many service settings is the management of waiting time. The manager must weigh the added cost of providing more rapid service (more traffic lanes, additional landing strips, more checkout stands) against the inherent cost of waiting.

Break-Even Analysis can be used to help decide whether to perform a task with a special purpose machine or with a general purpose machine.

True A standard approach to choosing among alternative processes or equipment is breakeven Analyze.

Accurate medium-range planning increases the likelihood of operating within the limits of a budget.

True Accurate medium-range planning increases the likelihood of (1) receiving the requested budget and (2) operating within the limits of the budget.

Earned Value Management (EVM) has the capability to combine measurements of scope, schedule and cost in a project.

True EVM has the ability to combine measurements of scope, schedule, and cost in a project.

The Poisson probability distribution is used in waiting line management when we are interested in the number of arrivals to a queue during some fixed time period.

True In observing arrivals at a service facility, we can look at them from two viewpoints: First, we can analyze the time between successive arrivals to see if the times follow some statistical distribution. Usually we assume that the time between arrivals is exponentially distributed. Second, we can set some time length and try to determine how many arrivals might enter the system within that length of time. We typically assume that the number of arrivals per time unit is Poisson distributed.

An example of an assemble-to-order firm is Dell Computer.

True In the assemble-to-order environment, a primary task is to define a customer's order in terms of alternative components and options since it is these components that are carried in inventory. A good example is the way Dell Computer makes desktop computers

The Aggregate Operations Plan variable "inventory on hand" refers to the balance of unused inventory carried over from the previous time period.

True Inventory on hand is unused inventory carried over from the previous period

A rate fence is a logical justification for different prices for what is essentially the same service.

True One is that pricing structures must appear logical to the customer and justify the different prices. Such justification, commonly called rate fences, may have either a physical basis (such as a room with a view) or a nonphysical basis (like unrestricted access to the Internet)

Project management can be defined as planning, directing, and controlling resources to meet the technical, cost, and time constraints of the project.

True Project management can be defined as planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of the project.

In services, once the aggregate staffing level is determined, the focus is on short-term workforce and customer scheduling.

True See Exhibit 8.1, Overview of Major Operations and Supply Chain Planning Activities.

For the purposes of assembly-line balancing, the required workstation cycle time is found by dividing production time per day by the required units of output per day.

True See equation 6.3.

A car wash is an example of a single channel, multiphase queuing system.

True Single channel, multiphase. A car wash is an illustration because a series of services (vacuuming, wetting, washing, rinsing, drying, window cleaning, and parking) is performed in a fairly uniform sequence.

The activity direct costs associated with a project might include giving workers overtime to complete a project in less-than the expected time.

True The costs associated with expediting activities are termed activity direct costs and add to the project direct cost. Some may be worker-related, such as overtime work, hiring more workers, and transferring workers from other jobs; others are resource-related, such as buying or leasing additional or more efficient equipment and drawing on additional support facilities.

The critical path in a project is that sequence of activities that consume the longest amount of time in a project network of activities.

True The critical path of activities in a project is the sequence of activities that form the longest chain in terms of their time to complete.

Services often take the form of repeated encounters involving face-to-face interactions.

True The top of the matrix shows the degree of customer/server contact: the buffered core, which is physically separated from the customer; the permeable system, which is penetrable by the customer via phone or face-to-face contact; and the reactive system, which is both penetrable and reactive to the customer's requirements.

One trade-off illustrated by the product-process matrix is between flexibility and cost.

True To produce nonstandard products at relatively low volumes, workcenters (flexible) should be used. A highly standardized product (low-cost commodity) produced at high volumes should be produced using an assembly line or a continuous process

The Aggregate Operations Planning variable "workforce level" refers to the number of workers needed to accomplish the planned production.

True Workforce level is the number of workers needed for production (Production = production rate x workforce level).

Workstation cycle time is the time between successive units coming off the end of the assembly line.

True Workstation cycle time is the time between successive units coming off the end of an assembly line.

Yield management is the process of allocating the right type of capacity to the right type of customer at the right prices at the right time to maximize revenue or yield.

True Yield management can be defined as the process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield

The main purpose of aggregate operations planning is to specify the optimal combination of which of the following?

Workforce levels and inventory on hand The main purpose of the aggregate plan is to specify the optimal combination of production rate, workforce level, and inventory on hand.

You have just performed a CPM analysis and have found that more than one path through the project network has zero slack values. What can you conclude?

You have multiple critical paths It is possible and it often happens that there are multiple paths of the same length through the network so there are multiple critical paths.

Which of the following is considered a high-contact service operation?

Physician practice Face-to-face total customization refers to service encounters whose specifications must be developed through some interaction between the customer and server. Legal and medical services are of this type. See also exhibit 7.1.

Which of the following is not a basic type of process structure?

Product-process matrix The formats by which a facility is arranged are defined by the general pattern of work flow; there are five basic structures (project, work center, manufacturing cell, assembly line, and continuous process).

PERT is an abbreviation for which of the following methodologies?

Program Evaluation and Review Technique The Program Evaluation and Review Technique (PERT) was developed for the U.S. Navy's Polaris missile project.

You have been placed in charge of a large project. Shortened communication lines are required to insure quick resolution of problems as they arise. You recognize that the project is going to take a lot of time and require a lot of team pride, motivation, and commitment by all members. Which project management structure should you use in this situation?

Pure Project The pure project has the advantages that lines of communication are shortened, decisions are made quickly and team pride, motivation, and commitment are high.

What is a work breakdown structure?

A definition of the hierarchy of project tasks, subtasks, and work packages The work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages.

Matching the production rate to the order rate by hiring and laying off employees as the order rate varies is which of the following pure production planning strategies?

Chase The chase strategy matches the production rate to the order rate by hiring and laying off employees as the order rate varies.

Which of the following is not a step in developing a manufacturing cell layout?

Disposing of left-over machinery and outsourcing ungrouped processes Shifting to a cellular layout entails three steps: 1. Grouping parts into families that follow a common sequence of steps. 2. Identifying dominant flow patterns of parts families as a basis for location of processes. 3. Physically grouping machines and processes into cells.

You are looking at a chart that has the terms BCWS, BCWP and AC indicating lines on the chart. What kind of chart are you looking at?

EVM Chart See Exhibit 5.5.

Which following queue discipline is discussed in the textbook?

Emergencies first Probably the most common priority rule is first come, first served. Reservations first, emergencies first, highest-profit customer first, largest orders first, best customers first, longest waiting time in line, and soonest promised date are other examples of priority rules.

Because little or no inventory is carried in a service operation, it is easy to separate the operations management functions from marketing in services.

False Too much capacity generates excessive costs. Insufficient capacity leads to lost customers. In these situations, of course, we seek the assistance of marketing. This is one reason we have discount airfares, hotel specials on weekends, and so on. This is also a good illustration of why it is difficult to separate the operations management functions from marketing in services.

Which of the following is a production planning strategy presented in the textbook?

Level There are essentially three production planning strategies. These are called level, chase and stable workforce—variable work hours.

Standing in line to buy a ticket for a movie where there are multiple windows to buy tickets is which type of queuing system line structure?

Multichannel, single phase Multichannel, single phase. Tellers' windows in a bank and checkout counters in high-volume department stores exemplify this type of structure.

In CPM analysis it is generally expected that the relationship between activity direct costs and project indirect costs will be which of the following?

Negatively related Activity direct costs and project indirect costs are opposing costs dependent on time.

Which of the following is a suggestion for managing queues that is mentioned in the textbook?

Segment the customers Useful suggestions for managing are the following: • Segment the customers. • Train your servers to be friendly. • Inform your customers of what to expect. • Try to divert the customer's attention when waiting. • Encourage customers to come during slack periods.

Which of the following is a characteristic that can be used to guide the design of service systems?

Services cannot be inventoried In designing service organizations we must remember one distinctive characteristic of services: We cannot inventory services.

In a college registration process, several department heads have to approve an individual student's semester course load. What is the queuing system line structure?

Single channel, multiphase Single channel, multiphase. A car wash is an illustration because a series of services (vacuuming, wetting, washing, rinsing, drying, window cleaning, and parking)

Which of the following is considered a "pure" production planning strategy?

Stable workforce, variable work hours There are essentially three production planning strategies. These are called level, chase and stable workforce—variable work hours. When just one of these variables is used to absorb demand fluctuations, it is termed a pure strategy.

For an activity in a CPM analysis the Early Finish time is 20 and the Late Finish time is 20. Which of the following statements is true?

The activity is on the critical path The critical path is the longest sequence of connected activities through the network and is defined as the path with zero slack time. Since the critical path has zero slack time each activity on the path must have zero slack time. It follows that an activity with zero slack time (e.g., early start = late start = zero) is on the critical path.

In essence, a queuing system includes several major components. Which of the following is not one of them?

The queue discipline The queuing system consists essentially of three major components: (1) the source population and the way customers arrive at the system, (2) the servicing system, and (3) the condition of the customers exiting the system

A difference between project and continuous flow categories of process flow structures is which two of the following?

The size and bulk of the product In a project layout, the product (by virtue of its bulk or weight) remains in a fixed location. Continuous processes are usually highly automated and, in effect, constitute one integrated machine.

For an activity in a CPM analysis, the Early Start time is 8 and the Late Start time is 10. Which of the following statements is true?

The slack for this activity is 2 The difference between the late start time and early start time is the slack time.