Operations Management Final Exam Review

6. In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of a. end items b. modules c. kits d. customer orders e. warehouse orders

A end items

8. A bill of materials lists the a. times needed to perform all phases of production b. production schedules for all products c. components, ingredients, and materials required to produce an item d. operations required to produce an item e. components, ingredients, materials, and assembly operations required to produce an item

C components, ingredients, and materials required to produce an item

14. The following table is an example of a(n) Week 1 Week 2 Week 3 Week 4 Week 5 Clothes Washer 200 100 Clothes Dryer 300 100 100 100 Upright Freezer 200 500 a. aggregate plan b. load report c. master production schedule d. capacity plan e. inventory record

C master production schedule

4. A master production schedule specifies a. the raw materials required to complete the product b. what component is to be made, and when c. what product is to be made, and when d. the labor hours required for production e. the financial resources required for production

C what product is to be made, and when

"Yield management" is best described as: A situation where management yields to labor demands. A situation where the labor union yields to management demands. A process designed to increase the rate of output. Capacity allocation to different types of customers in order to maximize profits. Management's selection of product mix yielding maximum profits.

Capacity allocation to different types of customers in order to maximize profits.

Scheduling decisions begin with: Capacity planning. Aggregate planning. Master scheduling. Job sequencing.

Capacity planning.

The overarching objective of an ERP is to: Tie supply chain management into an MRP system. Tie customer relations management into an MRP II system. Tie human resources management into an MRP system. Coordinate a firm's whole business.

Coordinate a firm's whole business.

Information not directly needed to develop an MRP is: Customer demand. A master production schedule. A bill of materials. Inventory availability. Lead times.

Customer demand.

A continuing reconciliation of inventory items with inventory records is known as: Record accuracy. Cycle counting. Taking stock.

Cycle counting.

The following is a long-range planning activity: Production planning and budgeting. Determining job assignments. Dispatching. Facility location.

Facility location.

A system that allows, with MRP in place, inventory data to be augmented by other resource variable, is referred to as a: Closed-loop MRP system. Capacity planning. MRP II.

MRP II.

Which aggregate planning method builds a formal decision model around a manager's experience and performance? Graphical methods. Charting methods. Linear programming. Management coefficients method. Linear decision rule.

Management coefficients method.

Which aggregate planning technique uses a regression analysis of past production decisions made by managers? Graphical methods. Charting methods. Linear programming. Management coefficients method. Linear decision rule.

Management coefficients method.

Inventories are associated with: Manufacturing organizations. Service organizations. Manufacturing and service organizations.

Manufacturing and service organizations.

Aggregate planning is concerned with determining the quantity and timing of production for the: Short range. Medium range. Long range.

Medium range.

Usually, the objective of aggregate planning is to: Smooth employment levels. Drive down inventory levels. Minimize the cost over the planning period. Meet high levels of service.

Minimize the cost over the planning period.

A planning strategy that uses two or more controllable variables to set a production plan is referred to as : Level scheduling. Chase strategy. Mixed strategy.

Mixed strategy.

Bills of material organized by major subassemblies are referred to as: Modular bills. Planning bills. Phantom bills of material.

Modular bills.

Which technique does not help to alleviate a bottleneck? Increasing capacity of the constraint. Developing alternative routing, processing procedures, or subcontractors. Moving inspections and tests to a position just after the bottleneck. Scheduling throughput to match the capacity of the bottleneck.

Moving inspections and tests to a position just after the bottleneck.

Fixing the service level in a probabilistic inventory model does not impact: Holding cost. Total cost. Lead time. Order quantity.

Order quantity.

Which is not an approach for integrating MRP and JIT? Finite capacity scheduling. Pegging. Small buckets. Balanced flow. Supermarkets.

Pegging.

"WIP" refers to: Materials that are usually purchased but have yet to enter the manufacturing process. Products that are no longer raw materials but have yet to become finished products. Maintenance, repair and operating materials. An end item ready to be sold.

Products that are no longer raw materials but have yet to become finished products.

Materials Requirement Planning: Provides an accurate picture of the requirements. Moves materials in small batches. Reduces work-in-process inventory.

Provides an accurate picture of the requirements.

A bill of material does not show: Quantities of product to be made. Listing of components required. Description of components required. Quantities of each required to make one unit of a product.

Quantities of product to be made.

The POQ model assumptions do not include: Demand is known, constant and independent. Receipt of inventory is instantaneous. Stockouts are avoidable. Quantity discounts are not possible. Lead time is known and constant.

Receipt of inventory is instantaneous.

Which item contains important information for an item's flow through the shop? Item master file. Work center master file. Control file. Routing file.

Routing file.

Which of the following is not an appropriate technique for lot sizing? Lot-for-lot. EOQ. PPB. EPP. SOS.

SOS.

A gross materials requirement plan does not show: When production must be started to meet demand by a particular date. When item must be ordered from suppliers. Scheduled receipts.

Scheduled receipts.

Gantt charts are useful for: Loading and sequencing. Sequencing and dispatching. Dispatching and loading. Scheduling and loading.

Scheduling and loading.

In developing an aggregate plan, the primary job of the planner is to: Select the demand forecast. Select facility capacity. Select inventory capacity. Select the rate of output of the facility over the planning horizon.

Select the rate of output of the facility over the planning horizon.

Determining the order in which jobs should be done at each work center is referred to as: Loading. Sequencing. Dispatching. Scheduling.

Sequencing.

Which sequencing rule is generally the best for minimizing job flow? Shortest processing time. First come, first served. Earliest due date. Longest processing time.

Shortest processing time.

The basic EOQ model assumptions do not include: Demand is known, constant and independent. Receipt of inventory is instantaneous. Stockouts (shortages) are unavoidable. Quantity discounts are not possible. Lead time is known and constant.

Stockouts (shortages) are unavoidable.

The following is not a demand option in aggregate planning: Influencing demand. Varying production rate through overtime or idle time. Back ordering during high demand periods.

Varying production rate through overtime or idle time.

At a Burger King, which item experiences independent demand? Lettuce. Tomato. Bun. Whopper. Mayonnaise.

Whopper.

Scheduling is concerned with determining the quantity and timing of production for: 0-2 months ahead. 3-18 months ahead. 18-24 months ahead. 24-48 months ahead.

0-2 months ahead.

Retailers lose what percentage of their profits due to poor inventory records? 1-5% 3-8% 8-15% 10-25% 15-35%

10-25%

Class A items represent approximately: 15% of items and 75% of the total dollar value. 30% of items and 20% of the total dollar value. 55% of items and 5% of the total dollar value

15% of items and 75% of the total dollar value.

Aggregate planning is concerned with determining the quantity and timing of production for: 0-1 month ahead. 1-2 months ahead. 3-18 months ahead. 18-24 months ahead. 24-48 months ahead.

3-18 months ahead.

When safety stock is zero and demand is normally distributed, the probability of a shortage is: 100% 75% 50% 25% 0%

50%

Class C items represent approximately: 15% of items and 75% of the total dollar value. 30% of items and 20% of the total dollar value. 55% of items and 5% of the total dollar value.

55% of items and 5% of the total dollar value.

13. Which of the following lot-sizing techniques results in the lowest holding costs? a. lot-for-lot b. EOQ c. part-period balancing d. Wagner-Whitin algorithm e. the quantity discount model

A lot-for-lot

A timetable that specifies what is to be made and when is referred to as: An aggregate production plan. A master production schedule. A materials requirement plan.

A master production schedule.

A time phased product structure is a bill of material modified by: Adding lead times for each component. Quantities of the final product required. Inventories on hand. Scheduled receipts.

Adding lead times for each component.

Determining the quantity and timing of production for the intermediate future is: Master production scheduling. Disaggregation. Aggregate planning.

Aggregate planning.

In a net requirements MRP, which of the following information is required? Gross requirements. Allocations. On hand inventory. Scheduled receipts. All of the above.

All of the above.

Total inventory costs are relatively insensitive to changes in: Holding cost. Ordering cost. Order quantity. Demand. All of the above.

All of the above.

Which is not variable with respect to order quantity in the quantity discount model? Holding cost. Setup cost. Annual demand. Order quantity. Unit cost.

Annual demand.

The scheduling criterion "minimize WIP" is evaluated by: Average completion time per job. Percent of time facility is utilized. Average number of jobs in the system. Average number of late days.

Average number of jobs in the system.

The scheduling criterion "minimize customer waiting time" is evaluated by: Average completion time per job. Percent of time facility is utilized. Average number of jobs in the system. Average number of late days.

Average number of late days.

A popular use of linear programming in scheduling is for: Loading. Sequencing. Dispatching.

Loading.

2. The phrase "demand related to the demand for other products" describes a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

B dependent demand

11. A major strength of MRP is its capability a. to minimize labor hours used in production b. for timely and accurate replanning c. to reduce lead times d. to maximize production throughput e. to minimize scrap

B for timely and accurate replanning

5. A master production schedule contains information about a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

B quantities and required delivery dates of final products

12. Material requirements plans specify a. the quantities of the product families that need to be produced b. the quantity and timing of planned order releases c. the capacity needed to provide the projected output rate d. the costs associated with alternative plans e. whether one should use phantom bills of materials or not

B the quantity and timing of planned order releases

The following is not a capacity option in aggregate planning: Changing inventory levels. Varying workforce by hiring or layoffs. Back ordering during high demand periods. Subcontracting. Using part-time workers.

Back ordering during high demand periods.

Benefits of using MRP do not include: Improved adherence to schedules. Faster response to market changes. Better product quality. Improved utilization of facilities. Reduced inventory levels.

Better product quality.

3. Dependent demand and independent demand items differ in that a. for any product, all components are dependent-demand items b. the need for independent-demand items is forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.

D All of the above are true.

7. In job shop (make-to-order) operations, the master production schedule is usually expressed in a. end items b. modules c. kits d. customer orders e. warehouse orders

D customer orders

1. Demand for a given item is said to be dependent if a. it originates from the external customer b. there is a deep bill of materials c. the finished products are mostly services (rather than goods) d. there is a clearly identifiable parent e. the item has several children

D there is a clearly identifiable parent

The lead time and reorder point are related by: Holding cost. Setup cost. Order quantity. Demand.

Demand

The purpose of ABC analysis is to: Gauge the level of literacy of the work force. Separate the "important" from the "unimportant". Determine which items in inventory should be monitored with most intensity.

Determine which items in inventory should be monitored with most intensity.

9. The minimum record accuracy required for successful MRP is approximately a. lower than 90% b. 90% c. 95% d. 97% e. 99%

E 99%

10. "Exploding" the bill of materials means a. identifying the various components, ingredients, and materials that make a product b. identifying the lead time of all the components c. determining the various components' quantities that are already on hand d. determining the net requirements for all the components e. converting the bill of materials into components and raw material requirements

E converting the bill of materials into components and raw material requirements

Assigning jobs to work centers is referred to as: Loading. Sequencing. Dispatching. Scheduling.

Loading.

Which sequencing rule is generally the best for minimizing tardiness? Shortest processing time. First come, first served. Earliest due date. Longest processing time.

Earliest due date.

In an ERP system, data is: Obtained from BAPI's. Obtained from EAI software. Entered one time only into a common, complete, and consistent data base.

Entered one time only into a common, complete, and consistent data base.

It is not uncommon for MRP's to be altered as changes in design, schedules and production processes occur as often as: Every day. Every week. Every two weeks. Every month. Once computed, MRP's do not change.

Every week.

A recent advance in short term scheduling that makes use of expert systems and simulation in solving dynamic scheduling problems is: Forward scheduling. Backward scheduling. Infinite scheduling. Finite scheduling. Progressive scheduling.

Finite scheduling.

Which sequencing rule is more important in the service than the manufacturing sector? Shortest processing time. First come, first served. Earliest due date. Longest processing time.

First come, first served.

In MRP, "system nervousness" refers to: Randomness in data. Concern about the accuracy of the forecast. Frequent changes in the MRP system.

Frequent changes in the MRP system.

As the order quantity increases: Total cost increases. Ordering cost increases. Holding cost decreases. Holding cost increases.

Holding cost increases.

Which of the following is generally not considered an advantage of an ERP system? It creates commonality of data bases. It can incorporate improved, reengineered, "best processes." It has a software data base that is off-the-shelf coding. Implementation may require major changes in the company and its processes.

Implementation may require major changes in the company and its processes.

Which is not a direct benefit of effective scheduling? Lower costs. Faster delivery. Improved quality. Dependable delivery.

Improved quality.

Which aggregate planning method produces an optimal plan for minimizing costs? Graphical methods. Charting methods. Linear programming. Management coefficients method. Linear decision rule.

Linear programming.

Companies must strike a balance between: Inventory costs and customer service. Holding costs and shortage costs. Shortage costs and ordering costs.

Inventory costs and customer service.

Which of the following is true regarding forward scheduling? Forward scheduling is the scheduling of: The end items or finished products. Jobs as soon as the requirements are known. The start items or component parts. The final operation first beginning with the due date. Jobs according to their profit contributions.

Jobs as soon as the requirements are known.

Which sequencing rule minimizes the processing time for sequencing a group of jobs through two work centers? Shortest processing time. First come, first served. Earliest due date. Johnson's rule. Longest processing time.

Johnson's rule.

What types of industries are typically associated with yield management? Those that have a predictable duration of use and tend to have a fixed price. Those that have unpredictable duration of use and have a fixed price. Those that tend to have a predictable duration of use and a variable price. Those that have unpredictable duration of use and a variable price.

Those that tend to have a predictable duration of use and a variable price.

Which is not a function of inventories? To decouple various parts of the production process. To decouple the firm from fluctuations in demand. To take advantage of quantity discounts. To hedge against inflation. To guard against product obsolescence.

To guard against product obsolescence.