Operations Management Exam 2 - Chapter 7 and 7s

An assembly line has 10 stations with times of 1, 2, 3, 4, ..., 10, respectively. What is the bottleneck time? A. 18.18% of the throughput time B. 100% of the throughput time C. 550% of the throughput time D. 50% of the throughput time E. 1.82% of the throughput time

A. 18.18% of the throughput time

Which of the following products is likely to be assembled on a repetitive process line? A. automobiles B. custom furniture C. custom cakes D. steel E. handcraft beer

A. automobiles

A firm that increases capacity at the beginning of each period to stay ahead of demand uses the ________ approach. A. lead with an incremental expansion B. lead with a one-step expansion C. lag with an incremental expansion D. lag with a one-step expansion E. straddle

A. lead with an incremental expansion

Which of the following phrases best describes process focus? A. low volume, high variety B. Finished goods are usually made to a forecast and stored. C. Operators are less broadly skilled. D. high fixed costs, low variable costs E. low inventory

A. low volume, high variety

The use of information technology to monitor and control a physical process is known as: A. process control. B. computer-aided design. C. information numeric control. D. numeric control. E. IT oversight.

A. process control.

Goods made to order are typical of ________ and ________ approaches while goods made to forecast are typical of ________ and ________ approaches. A. process; mass customization; repetitive; product B. product; mass customization; repetitive; process C. product; process; repetitive; mass customization D. repetitive; product; mass customization; process E. repetitive; process; mass customization; product

A. process; mass customization; repetitive; product

An assembly plant manufacturing home appliances is an example of a(n): A. repetitive process. B. continuous process. C. mass customization process. D. intermittent process. E. specialized process.

A. repetitive process.

Which of the following are all strategies for improving productivity in services? A. separation, self-service, automation, and scheduling B. lean production, strategy-driven investments, automation, and process focus C. reduce inventory, reduce waste, reduce inspection, and reduce rework D. high interaction, mass customization, service factory, and just-in-time E. process focus, repetitive focus, product focus, and mass customization focus

A. separation, self-service, automation, and scheduling

Design capacity is the: A. theoretical maximum output of a system in a given period under ideal conditions. B. capacity a firm expects to achieve given the current operating constraints. C. average output that can be achieved under ideal conditions. D. minimum usable capacity of a particular facility. E. sum of all of the organization's inputs

A. theoretical maximum output of a system in a given period under ideal conditions.

Which of the following characteristics best describes repetitive focus? A. It uses sophisticated scheduling to accommodate custom orders. B. Its output is a standardized product produced from modules. C. Operators are broadly skilled. D. It is widely used for the manufacture of steel. E. low volume, high variety

B. Its output is a standardized product produced from modules.

Which of the following is FALSE regarding repetitive processes? A. They use modules. B. They allow easy switching from one product to the other. C. They are the classic assembly lines. D. They have more structure and less flexibility than a job shop layout. E. They include the assembly of basically all automobiles.

B. They allow easy switching from one product to the other.

Which of the following statements regarding fixed costs is TRUE? A. Fixed costs rise by a constant amount for every added unit of volume. B. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs. C. Fixed costs are those costs associated with direct labor and materials. D. Fixed costs equal variable costs at the break-even point. E. Fixed cost is the difference between selling price and variable cost.

B. While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.

Which one of the following products is most likely made in a job shop environment? A. rolls of newsprint B. custom furniture C. television sets D. cigarettes E. canned vegetables

B. custom furniture

A process focused strategy is commonly used to produce: A. high-volume, high-variety products. B. low-volume, high-variety products. C. high-volume, low-variety products. D. low-variety products at either high- or low-volume. E. high-volume products of either high- or low-variety.

B. low-volume, high-variety products.

Customizing a service offering at delivery as part of a service strategy to improve productivity is an example of: A. automation. B. postponement. C. separation. D. self-service. E. focus.

B. postponement.

Basic break-even analysis typically assumes that: A. revenues increase in direct proportion to the volume of production, while costs increase at a decreasing rate as production volume increases. B. variable costs and revenues increase in direct proportion to the volume of production. C. both costs and revenues are made up of fixed and variable portions. D. costs increase in direct proportion to the volume of production, while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts. E. All of these are assumptions in the basic break-even model

B. variable costs and revenues increase in direct proportion to the volume of production.

A work system has six stations that have process times of 10, 8, 5, 12, 10, and 15 minutes. What is the bottleneck time (measured in minutes)? A. 60 B. 10 C. 15 D. 50 E. 12

C. 15

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE? A. The crossover point is approximately 6667 units. B. It is impossible for one process to have both of its costs lower than those of another process. C. Process Y is cheaper than process X at all volumes. D. Process X should be selected for very large production volumes. E. Process X is more profitable than process Y and should be selected.

C. Process Y is cheaper than process X at all volumes.

Lag and straddle strategies for increasing capacity have what main advantage over a leading strategy? A. They are cheaper. B. They are more accurate. C. They delay capital expenditure. D. They increase demand. E. All of these are advantages.

C. They delay capital expenditure.

Which of the following is TRUE? A. Service blueprinting focuses on the provider's interaction with its supplier. B. The main purpose of flowcharts is to identify and eliminate waste. C. Value-stream mapping is a variation of time-function mapping. D. A process chart is a flowchart with time added on the horizontal axis. E. Time-function mapping extends the value analysis back to suppliers.

C. Value-stream mapping is a variation of time-function mapping.

A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called: A. an adaptive control system. B. robotics. C. a flexible manufacturing system. D. an automatic guided vehicle (AGV) system. E. a manufacturing cell.

C. a flexible manufacturing system.

Which of the following represents a common way to manage capacity in the service sector? A. appointments B. reservations C. changes in staffing levels D. first-come, first-served service rule E. "early bird" specials in restaurants

C. changes in staffing levels

An assembly line is an example of a: A. product-focused process. B. process-focused process. C. repetitive process. D. line process. E. specialized process.

C. repetitive process.

Adding a complementary product to what is currently being produced is a demand management strategy used when: A. demand exceeds capacity. B. capacity exceeds demand for a product that has stable demand. C. the existing product has seasonal or cyclical demand. D. price increases have failed to bring about demand management. E. efficiency exceeds 100 percent.

C. the existing product has seasonal or cyclical demand.

One fundamental difference between a process chart and a flowchart is that: A. the process chart adds a time dimension to the horizontal axis, while a flowchart is not timeoriented. B. the process chart includes the supply chain, while the flowchart stays within an organization. C. the process chart is more like a table, while the flowchart is more like a schematic diagram. D. the process chart focuses on the customer and on the provider's interaction with the customer, while the flowchart does not deal directly with the customer. E. None of these is true, because a process chart and a flowchart are the same thing.

C. the process chart is more like a table, while the flowchart is more like a schematic diagram.

A retailer is considering building a large store. If the local economy experiences expansion, the firm expects the store to earn a $1,500,000 profit next year. If the local economy experiences a contraction, the firm expects the store to lose $500,000 next year. Analysts estimate a 40% chance for the local economy to experience an expansion next year (hence a 60% chance for contraction). What is the expected monetary value (EMV) of building the large store? A. $880,000 B. $320,000 C. $1,000,000 D. $300,000 E. $1,520,000

D. $300,000

Kirstin is thinking about opening an Italian restaurant and needs to buy a dough maker. Machine A has fixed costs of $2000 and variable costs of $2/pound. Machine B has fixed costs of $5000 and variable costs of $0.50/pound. What is the crossover point? For 2500 pounds of dough, which machine is better? A. 1000; Machine A B. 1000; Machine B C. 2000; Machine A D. 2000; Machine B E. 1500; Machine A

D. 2000; Machine B

. Process A has fixed costs of $6500 and variable costs of $10 per unit. Process B has fixed costs of $2000 and variable costs of $25 per unit. What is the crossover point (in units) between process A and process B? A. 50 B. 200 C. 250 D. 300 E. 500

D. 300

The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the design capacity of the system is 2500 students per semester and that effective capacity equals 88% of design capacity. If the number of students who actually got their orientation session is 2150, what is the utilization of the system? A. 1350 students B. 2150 students C. 88% D. 86% E. 90%

D. 86%

Which of the following is FALSE regarding capacity expansion? A. "Average" capacity sometimes leads demand, sometimes lags it. B. If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting. C. Total cost comparisons are a rather direct method of comparing capacity alternatives. D. Capacity may only be added in large chunks. E. In manufacturing, excess capacity can be used to do more setups, shorten production runs, and drive down inventory costs.

D. Capacity may only be added in large chunks.

Which of the following statements is (are) true? I. A firm's capacity cannot be limited by members of its supply chain. II. Capacity is the capability of a worker, machine, work center, plant, or organization to produce output per time period. III. For a given fixed cost and revenue, as the variable cost rises, the break-even point drops. IV. When evaluating capacity, managers need to consider both resource inputs and product outputs A. I only B. I and IV only C. II and III only D. II and IV only. E. III only

D. II and IV only

Which of the following technologies could enable a cashier to scan the entire contents of a shopping cart in seconds? A. ASRS B. AGV C. CAD/CAM D. RFID E. FMS

D. RFID

Consider a production line with five stations. Station 1 can produce a unit in 9 minutes. Station 2 can produce a unit in 10 minutes. Station 3 has two identical machines, each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines). Station 4 can produce a unit in 11 minutes. Station 5 can produce a unit in 8 minutes. Which station is the bottleneck station? A. Station 1 B. Station 2 C. Station 3 D. Station 4 E. Station 5

D. Station 4

Which of the following costs would be incurred even if no units were produced? A. raw material costs B. direct labor costs C. transportation costs D. building rental costs E. purchasing costs

D. building rental costs

Effective capacity × Efficiency equals: A. efficient capacity. B. utilization. C. actual capacity. D. expected output. E. design capacity.

D. expected output.

Service blueprinting: A. provides the basis to negotiate prices with suppliers. B. mimics the way people communicate. C. determines the best time for each step in the process. D. focuses on the provider's interaction with the customer. E. uses the schematic of a house to diagram a service process

D. focuses on the provider's interaction with the customer.

Which of the following phrases best describes product focus? A. low volume, high variety B. Finished goods are usually made to order. C. Processes are designed to perform a wide variety of activities. D. high fixed costs, low variable costs E. high inventory

D. high fixed costs, low variable costs

Net present value: A. is gross domestic product less depreciation. B. is sales volume less sales and excise taxes. C. is profit after taxes. D. ignores the time value of money. E. is the discounted value of a series of future cash receipts

D. ignores the time value of money.

Break-even analysis can be used by a firm that produces more than one product, but: A. the results are estimates, not exact values. B. the firm must allocate some fixed cost to each of the products. C. each product has its own break-even point. D. the break-even point depends upon the proportion of sales generated by each of the products. E. None of these statements is true.

D. the break-even point depends upon the proportion of sales generated by each of the products.

The crossover point is that production quantity where: A. variable costs of one process equal the variable costs of another process. B. fixed costs of a process are equal to its variable costs. C. total costs equal total revenues for a process. D. total costs for one process equal total costs for another process. E. the process no longer loses money.

D. total costs for one process equal total costs for another process.

Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $150,000, and its variable cost is $50 per unit. The revenue is $100 per unit. What is the break-even point for machine A? A. $150,000 B. 5000 units C. $4,000 D. 15,000 units E. 3,000 units

E. 3,000 units

Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 75%. What is the expected weekly output of cranks for this company? A. 5100 B. 5700 C. 4845 D. 8421 E. 4275

E. 4275

The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put into use, the program has become more complex, so that 950 now represents the most employees that can be trained per year. In the past year, 850 employees were trained. The efficiency of this system is approximately ________ and its utilization is approximately ________. A. 79.2 percent; 90.5 percent B. 90.5 percent; 79.2 percent C. 87.5 percent; 950 employees D. 950 employees; 850 employees E. 89.5 percent; 70.8 percent

E. 4275

A work system has six stations that have process times of 10, 8, 5, 12, 10, and 15 minutes. What is the throughput time of the system in minutes? A. 15 B. 30 C. 120 D. 50 E. 60

E. 60

Which of the following techniques is NOT a technique for dealing with a bottleneck? A. Schedule throughput to match the capacity of the bottleneck. B. Increase the capacity of the constraint. C. Have cross-trained employees available to keep the constraint at full operation. D. Develop alternate routings. E. All are techniques for dealing with bottlenecks.

E. All are techniques for dealing with bottlenecks.

Process redesign: A. is the fundamental rethinking of business processes. B. is sometimes called process reengineering. C. tries to bring about dramatic improvements in performance. D. often focuses on activities that cross functional lines. E. all of these.

E. all of these.

Which of the following industries is most likely to have low equipment utilization? A. auto manufacturing B. commercial baking C. television manufacturing D. steel manufacturing E. restaurants

E. restaurants