OPSM Test 1

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters) From/To I II III I - 10 20 II - 10 III - Flows (loads per week) From/To X Y Z X - 60 90 Y 40 - 160 Z 110 140 - What are total weekly costs for the least costly process layout?

$3,500 Locating department Z in area II will result in the minimum transportation distance and cost. Multiply each load meter by the cost per load meter.

The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a case of Mint Chocolate Chip Cookies. Task Time(secs) Immediate Predecessor u 4 none v 14 u w 12 v x 12 v y 6 w z 8 x,y Without considering projected demands, what is the minimum possible cycle time for this production line?

14 seconds The minimum possible cycle time equals the longest task time.

The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size Yards Installed 2 716 4 1298 3 1017 3 1002 4 1278 2 702

2

A production line is to be designed for a job with three tasks. The task times are .4 minutes, 1.2 minutes, and .5 minutes. The maximum cycle time in minutes is?

2.1. minutes This allows all tasks to be completed in only one workstation.

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters) From/To I II III I - 10 20 II - 10 III - Flows (loads per week) From/To X Y Z X - 60 90 Y 40 - 160 Z 110 140 - What is the distance (in meters) from area III to area I in this new facility?

20 This information is presented in the distance matrix as the distance from area I to area III.

If a line is balanced with 80 percent efficiency, the "balance delay" will be:

20 percent. Efficiency equals 100 percent minus balance delay.

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters) From/To I II III I - 10 20 II - 10 III - Flows (loads per week) From/To X Y Z X - 60 90 Y 40 - 160 Z 110 140 - What is the total flow (loads per week) between department Y and department Z?

300 This information is presented in the flow matrix with 160 loads from Y to Z and 140 loads from Z to Y.

Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: Week #Students 6 Weeks ago 83 5 Weeks ago 110 4 Weeks ago 95 3 Weeks ago 80 2 Weeks ago 65 Last Week 50 What is this week's forecast using exponential smoothing with alpha = .2, if the forecast for two weeks ago was 90?

78 Formulate the forecast for last week, then use that to get this week's forecast. Last Week= 90 + 0.2*(65 - 90) = 85 This Week= 85 + 0.2*(50-85) = 78

Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5 percent is to be maintained, this means that this year's productivity will have to be:

88.2

Which of the following is not true about the systems approach? A) A systems viewpoint is almost always beneficial in decision making. B) systems approach emphasizes interrelationships among subsystems. C) A systems approach concentrates on efficiency within subsystems. D) A systems approach is essential whenever something is being redesigned or improved.

A systems approach concentrates on efficiency within subsystems.

Which closeness rating reflects the highest importance for two departments being close to each other? A) A B) E C) I D) U E) X

A) A Closeness ratings denoted A indicate that it is absolutely necessary for two departments to be close together.

Efficiency is defined as the ratio of: A) Actual output to effective capacity. B) Actual output to design capacity. C) Design capacity to effective capacity. D) Effective capacity to actual output. E) Design capacity to actual output.

A) Actual output to effective capacity. Efficiency measures the usage of effective capacity.

Which of the following would be least important in the pursuit of a time-based strategy? A) Cost minimization B) Quick changeover times C) Operational agility D) Reduced complaint resolution times E) Flexible technology

A) Cost minimization

What is it about repetitive processes that make them appropriate for products in the maturity phase of their life cycle? A) Efficiency B) General-purpose technology C) Possible variety D) Low risk E) Flexibility

A) Efficiency Repetitive processes are more appropriate for mature products, when efficiency is of paramount importance.

Which term is most closely associated with cellular manufacturing? A) Part families B) Assembly line C) Robotics D) CAD E) CAM

A) Part families Part families are central to cellular manufacturing.

The method of financial analysis which focuses on the length of time it takes to recover the initial cost of an investment is: A) Payback. B) Net present value. C) Internal rate of return. D) Queuing. E) Cost-volume.

A) Payback. The payback period does not take into account the time value of money.

Which of the following is least likely to affect the cost an organization incurs in producing its products or services? A) Price B) Productivity C) Location D) Quality E) Inventory management

A) Price

A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more _____________ than a firm pursuing a strategy based on low cost and high volume. A) Variation B) Streamlined flow C) Quality D) Capacity E) Productivity

A) Variation

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year Enrollments 5 Years ago 15,000 4 Years ago 16,000 3 Years ago 18,000 2 Years ago 20,000 Last Year 21,000 What is the forecast for this year using a four-year simple moving average?

Average enrollment from the last four years. (21000 + 20000 + 18000 + 16000) / 4 = 18750

Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: Week #Students 6 Weeks ago 83 5 Weeks ago 110 4 Weeks ago 95 3 Weeks ago 80 2 Weeks ago 65 Last Week 50

Average the three most recent weeks of demand. (50 + 65 + 80) / 3 = 65

Mobile phones have evolved from devices intended to place and receive phone calls into handheld multimedia communications devices, but in the eyes of some customers these new features make the phones less desirable. This is an example of: A) Robust design. B) Creeping featurism. C) sustainable design. D) Quality function deployment. E) component commonality.

B) Creeping featurism. Customer satisfaction isn't strictly dependent on the number of features a product offers.

The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas: A) Sustainability; Flexibility; Efficiency; Technology B) Customers; Financial; Internal Business Processes; Learning and Growth C) Customization; Standardization; Efficiency; Effectiveness D) The Environment; The Community; Suppliers; Other Stakeholders E) Strategy; Tactics; Productivity; Profitability

B) Customers; Financial; Internal Business Processes; Learning and Growth

Which of the following is not typically considered a cure for poor competitiveness? A) Remove communications barriers within organizations. B) Minimize attention to the operations function. C) Put less emphasis on short-term financial results. D) Recognize labor as a valuable asset and act to develop it. E) Improve quality.

B) Minimize attention to the operations function.

A formal way to ensure customer requirements are factored into the product and service development process is: A) Consumer surveys. B) Quality function deployment. C) Focus groups. D) The Delphi technique. E) A sales/marketing matrix.

B) Quality function deployment.

If the average amount of time a product goes without failing decreased by some amount, that product's availability could nevertheless be maintained at previous levels by __________ its __________. A) Increasing; reliability B) Reducing; time required for repair C) Reducing; reliability D) Reducing; reparability E) Increasing; time required for repair

B) Reducing; time required for repair Availability is a function of both the mean time between failures and the mean time to repair.

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Break-even quantity = FC / (Rev - VC) = $2000 / ($2 - $1.60) = 5000. Dividing the fixed costs of $2,000 by the per-unit contribution margin of $0.40 leads to a break-even quantity of 5,000 units.

Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process. A) Capacity cushion B) First station C) Bottleneck D) Economy of scale E) Diseconomy of scale

C) Bottleneck The longest waiting line is generally indicative of a bottleneck operation.

Which of the following is true? A) Corporate strategy is shaped by functional strategies. B) Corporate mission is shaped by corporate strategy. C) Functional strategies are shaped by corporate strategy. D) External conditions are shaped by corporate mission. E) Corporate mission is shaped by functional strategies.

C) Functional strategies are shaped by corporate strategy.

A common goal in designing process layouts is: A) Minimizing the number of workers. B) Minimizing idle time. C) Minimizing transportation costs. D) Maximizing workstation productive time. E) Maximizing transportation distances.

C) Minimizing transportation costs

The external elements of SWOT analysis are: A) Strengths and weaknesses. B) Strengths and threats. C) Opportunities and threats D) Weaknesses and opportunities. E) Strengths and opportunities.

C) Opportunities and threats

Competitiveness doesn't include: A) Productivity. B) Effectiveness. C) Profitability D) Operations strategy. E) Operations management

C) Profitability

Incorporating design for disassembly principles in product design helps firms with ___________ design issues. A) legal B) Social C) Reuse D) Reverse engineering E) Reengineering

C) Reuse

Unique attributes of firms that give them a competitive edge are called:

Core competencies.

Which of the following is an example of a postponement tactic? A) Mass customization B) Standardization C) Process mapping D) Delayed differentiation E) Service blueprinting

D) Delayed differentiation Delayed differentiation is a postponement tactic: the process of producing, but not quite completing, a product or service, postponing completion until customer preferences or specifications are known.

Which of the following would not be a potential upside in a decision to outsource? A) Ancreased total production capacity B) Potential to lower fixed costs C) Supplier may have greater expertise to do the outsourced work D) Disclosure of proprietary information to supplier E) Supplier cost may be lower

D) Disclosure of proprietary information to supplier Loss of direct control over operations, knowledge sharing, and the possible need to disclose proprietary information are three risks of outsourcing.

An operations strategy for process selection should recognize that: A) Process selection seldom requires technical expertise. B) Engineering "white elephants" are uncommon. C) There is little need to manage technology. D) Flexibility is not always the best choice.Correct E) Most technical skills can be contracted out to consultants.

D) Flexibility is not always the best choice.Correct Flexibility isn't so valuable if efficiency is at a premium.

Where a firm locates would typically not affect that firm's: A) Costs. B) Convenience for customers. C) Delivery times. D) Strategy. E) Transportation costs.

D) Strategy.

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day, what would be its utilization?

Divide actual output by design capacity. Utilization = (35/50) x 100% = 70%.

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. If the holding area at this new location has design and effective capacities of 10,000 and 7,500 prisoners processed annually, respectively, and 5,000 prisoners will be processed per year, what will be the utilization of the holding area?

Divide the actual output by the design capacity. Utilization = (5000/10000) × 100% = 50%.

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. How many rosebushes would she have to produce and sell in order to break even?

Divide the fixed cost of $6,000 by the per-unit contribution margin of $6 &ndash $3 = $3. Break-even quantity = $6000/$3 = 2000.

Productivity growth can be calculated by: A) Outputs minus inputs. B) Inputs divided by the outputs. C) Outputs divided by the inputs. D) Input plus output divided by two. E) (current productivity - previous productivity) x 100 / (previous productivity)

E) (current productivity - previous productivity) x 100 / (previous productivity)

Which of the following is not an information requirement for the design of a process layout? A) A list of departments or work centers B) A projection of work flows between the work centers C) The distance between locations D) The cost per unit of distance to move loads E) A list of product cycle times for every product manufactured

E) A list of product cycle times for every product manufactured Cycle times do not enter into the design of process layouts.

Which of the following is not a key step toward improving productivity? A) Developing productivity measures for all operations B) Improving the bottleneck operations C) Establishing reasonable goals for improvement D) Considering incentives to reward workers E) Converting bond debt to stock ownership

E) Converting bond debt to stock ownership

The term "standardization" is closely associated with: A) Customization. B) High cost. C) Longer lead times. D) Variety. E) Interchangeability.

E) Interchangeability. Modular designs depend on standardized parts that are interchangeable.

The estimation of costs is generally most difficult when the ___________ process has been chosen. A) Project B) Repetitive C) Continuous D) Batch E) Job shop

E) Job shop

Core competencies in organizations generally do not relate to: A) Cost. B) Quality. C) Time. D) Flexibility. E) Sales price.

E) Sales price.

Operation X feeds into operation Y. Operation X has an effective capacity of 55 units per hour. Operation Y has an effective capacity of 50 units per hour. Increasing X's effective capacity to ensure that Y's utilization is maximized would be an example of ________ a(n) constraint. A) Overcoming B) Outsourcing C) Insourcing D) Cushioning E) Supporting

E) Supporting Increasing the effective capacity of an operation that precedes a constraint is an example of supporting the constraint.

Standardization can at times lead to serious difficulties and competitive struggles, particularly when systems are running under different conditions. True or False?

False: It is the lack of standardization that can at times lead to serious difficulties and competitive struggles.

Availability cannot be increased without improving the time between breakdowns. True or False?

False: Reducing the amount of time required to repair a product is also a way of increasing availability.

Commonality of components is beneficial for manufacturing but not for services. True or False?

False: Services can benefit from commonality in service elements.

Taguchi design methods involve identifying the optimal operating or environmental conditions for a given product.. True or False?

False: Taguchi design methods involve designing products that are relatively insensitive to environmental factors.

If a system depends on two subsystems functioning when activated, the reliability of that system is equal to that of the less reliable subsystem. True or False?

False: The reliability is the probability that both subsystems will activate.

Which is not an area of significant difference between manufacturing and service operations?

Forecasting demand

The key questions in the process selection task are: (I) How will the product/service be priced? (II) How much variety will be imposed on the process? (III) What is the target market for the product/service? (IV) At what volume will the process need to operate?

II and IV

Waygate's residential Internet modem works well but is sensitive to power-line fluctuations. On average, this product hangs up and needs resetting every 200 hours. On average about 45 minutes is needed to reset this product. What is this product's availability?

MTBF is 200 and MTR is .75. This leads to an availability of 200 / (200 + 0.75) = 0.996.

Which of the following is not an ongoing trend in manufacturing? A) Globalization B) Quality improvement C) Flexibility and agility D) Mass production for greater economies of scale

Mass production for greater economies of scale

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year Attendance Four Years ago 10,000 Three Years ago 12,000 Two Years ago 18,000 Last Year 20,000 What is this year's forecast using a two-year weighted moving average with weights of .7 and .3?

Multiply last year (20000) by .7 and 2 years ago (18000) by .3, then sum these products. 0.7 x 20000 + 0.3 x 18000 = 19400

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year Enrollments 5 Years ago 900 4 Years ago 700 3 Years ago 600 2 Years ago 500 Last Year 300 What is the forecast for this year using a three-year weighted moving average with weights of .5, .3, and .2?

Multiply last year (300) by .5, 2 years ago (500) by .3, and 3 years ago (600) by .2, then sum these products. 0.5x300 + 0.3x500 + 0.2x600 = 420

The dean of a school of business is forecasting total student enrollment for this year's summer session classes based on the following historical data: Year Enrollment Four years ago 2000 Three years ago 2200 Two years ago 2800 Last year 3000 What is this year's forecast using exponential smoothing with alpha = .4, if last year's smoothed forecast was 2,600?

Multiply last year's forecast error by the smoothing constant. Add the product to last year's forecast to get this year's forecast. 2600 + 0.4*(3000 - 2600) = 2760

Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: Week #Students 6 Weeks ago 83 5 Weeks ago 110 4 Weeks ago 95 3 Weeks ago 80 2 Weeks ago 65 Last Year 50 What is this week's forecast using the naive approach? Assume that a decreasing trend in student appointments exists.

Other than the original data point 6 weeks ago, there is a clear trend over the last 5 weeks with continuously decreasing demand, so this week's forecast is last week's demand plus the difference between last week's demand and the demand two weeks ago. 50 + (50 - 65) = 35

Dealing with the fact that certain aspects of any management situation are more important than others is called:

Recognition of priorities.

Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of:

Revenue management.

Which one of the following would not generally be classified under the heading of transformation?

Staffing

Most involves coordinating the activities among all the elements of the business including its suppliers and distributors

Supply chain management

Business organizations consist of three major functional areas which, ideally:

Support one another.

Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.5. Demand observed in the previous three periods was as follows: At-3 = 2,200, At-2 = 1,950, At-1 = 2,050. What will be the demand forecast for period t?

The forecast for will be (.2 x 2,200) + (.3 x 1,950) + (.5 x 2,050) = 2,050.

Suppose a four-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-4 = 0.1, wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.4. Demand observed in the previous four periods was as follows: At-4 = 380, At-3 = 410, At-2 = 390, At-1 = 400. What will be the demand forecast for period t?

The forecast will be (.1 x 380) + (.2 x 410) + (.3 x 390) + (.4 x 400) = 397.

An electrical appliance will not work unless component QK does. Component QK's reliability is 0.95. Every other part of the appliance is 100 percent reliable. What would the reliability of the appliance be if a backup QK were added?

The reliability is .95 + [(1 - .95)*.95].

A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of .99. The other has a reliability of .95. The components are independent of one another with respect to reliability. What is the overall system reliability?

The system reliability is the product of the two component reliabilities or 0.99 x 0.95 = 0.94.

Not a benefit of using models in decision making?

They force the decision maker to take into account qualitative issues such as personalities and emotions.

Benefits of using models in decision making?

They provide a standardized format for analyzing a problem. They serve as a consistent tool for evaluation. They are easy to use and less expensive than dealing with the actual situation. They offer insights into fundamental issues at play in a decision-making setting.

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. What would be the county's annual profit if they were to process 4,000 prisoners per year at this new location?

Total revenue would be 4000 × $75 = $300,000. Total cost would be $250,000 (fixed = $50,000; variable = 4000 × $50 = $200,000). Profit = $300,000 - ($50,000 + $200,000) = $50,000.

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: Year Enrollments 5 Years ago 15,000 4 Years ago 16,000 3 Years ago 18,000 2 Years ago 20,000 Last Year 21,000 What is the forecast for this year using the least squares trend line for these data?

Treat 5 years ago as period 0 and this year as period 5. The coefficients of the trend line are: b= [5 x ((0 x 15000)+(1 x 16000)+(2 x 18000)+(3 x 20000)+(4 x 21000)) - (0+1+2+3+4) x (15000+16000+18000+20000+21000)] / [5 x (02+12+22+32+42) - (0+1+2+3+4)2] = 1600 a = [(15000+16000+18000+20000+21000) - 1600 x (0+1+2+3+4)] / 5 = 14800 F5= 14800 + 1600*5 = 22800

Product reliability involves both short-term and long-term perspectives. True or False?

True: Reliability involves whether a product will work at a point in time, as well as the probability that it will work for a given length of time.

A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of .99. The other has a reliability of .95. What is the overall system reliability?

Whether these components' reliabilities are independent of one another is not specified here.

Which of these factors would be least likely to affect productivity?

advertising

The key to successfully competing is understanding what customers want and then __________ satisfy those wants.

finding the best way to

Years ago in the overnight delivery business, providing package tracking capability gave some firms a competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an example of ______________ becoming ____________ over time.

order winners; order qualifiers

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management. A) outsourcing; supply chains B) offshoring; lean C) downsizing; total quality D) optimizing; inventory

outsourcing; supply chains