Productions & Operations CH 6,7,8 Questions

Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.32 per unit, and fixed costs of $75,000. Big John is considering purchasing a new machine that would drop the variable cost to $.28 per unit, but has fixed costs of $150,000. What is the cross-over point between the two machines?

75000 +0.32x= 0.28x +150000 x=1875,000

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process B? A) 50 units B) 200 units C) $2,500 D) $5,000 E) $9,500

A) 50 units

A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost? A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. B) Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. C) Plant A, because it is cheaper than Plant B for all volumes. D) Plant B, because it has the lower variable cost per unit. E) Neither Plant A nor Plant B, because the crossover point is at 10 million units.

A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units.

East Texas Seasonings is preparing to build one processing center to serve its four sources of seasonings. The four source locations are at coordinates shown below. Also, the volume from each source is provided. What is the center of gravity? X-coordinate Y-coordinate Volume Athens, Texas 30 30 150 Beaumont, Texas 20 10 350 Carthage, Texas 10 70 100 Denton, Texas 50 50 200 A) X = 28.125; Y = 31.25 B) X = 22000; Y = 24000 C) X = 27.5; Y = 40 D) center of gravity = 28 E) X = 25; Y = 40

A) X = 28.125; Y = 31.25

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using: A) a Pareto chart. B) a scatter diagram. C) a quality loss function. D) a cause-and-effect diagram. E) a flowchart.

A) a Pareto chart.

The advantage of additive manufacturing includes supporting: A) innovative product design. B) ASRS and AGVs. C) information numeric control. D) flexible manufacturing systems (FMS). E) all of the above

A) innovative product design.

Industrial location analysis typically attempts to: A) minimize costs. B) maximize sales. C) focus more on human resources. D) avoid countries with strict environmental regulations. E) ignore exchange rates and currency risks.

A) minimize costs.

A clothing chain is considering two different locations for a new retail outlet. They have identified the four factors listed in the following table as the basis for evaluation, and have assigned weights as shown. The manager has rated each location on each factor, on a 100-point basis, as shown under the respective columns for Barclay and Chester. Factor Factor Description Weight Barclay Chester 1 Average community income .40 30 20 2 Community growth potential .25 40 30 3 Availability of public transportation .15 20 20 4 Labor cost .20 10 30 What is the score for Chester? A) 10.00 B) 24.50 C) 25.75 D) 27.00 E) 100.00

B) 24.50

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

Which of the following is an approach to location analysis that includes both qualitative and quantitative considerations? A) locational cost-volume analysis B) factor-rating method C) transportation model D) center-of-gravity method E) make-or-buy analysis

B) factor-rating method

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a: A) Pareto chart. B) flowchart. C) check sheet. D) Taguchi map. E) poka-yoke.

B) flowchart.

The reason fast food restaurants often are found in close proximity to each other is: A) they enjoy competition. B) location clustering near high traffic flows. C) low cost. D) availability of skilled labor. E) all of the above.

B) location clustering near high traffic flows.

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is: A) in control, but not capable of producing within the established control limits. B) out of control and the process should be investigated for assignable variation. C) within the established control limits with only natural causes of variation. D) monitored closely to see if the next sample mean will also fall outside the control limits. E) none of the above

B) out of control and the process should be investigated for assignable variation.

Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. What is the term associated with this phenomenon? A) bureaucratic risk B) political risk C) legislative risk D) judicial risk E) democratic risk

B) political risk

Marketing issues such as advertising, image, and promotion are important to quality because: A) they define for consumers the tangible elements of a service. B) the intangible attributes of a product (including any accompanying service) may not be defined by the consumer. C) they educate consumers on how to use the product. D) they make the product seem more valuable than it really is. E) they raise expenses and therefore decrease profitability.

B) the intangible attributes of a product (including any accompanying service) may not be defined by the consumer.

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.

9Poka-yoke is the Japanese term for: A) card. B) foolproof. C) continuous improvement. D) fish-bone diagram. E) just-in-time production.

C) continuous improvement.

When making a location decision at the region/community level, which of these would be considered? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) cost and availability of utilities D) zoning restrictions E) air, rail, highway, waterway systems

C) cost and availability of utilities

The center-of-gravity method is used primarily to determine what type of locations? A) service locations B) manufacturing locations C) distribution center locations D) supplier locations E) call center locations

C) distribution center locations

A product-focused process 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.

C) high-volume, low-variety products

Three of the four types of processes are: A) goods, services, and hybrids. B) manual, automated, and service. C) process focus, repetitive focus, and product focus. D) modular, continuous, and technological. E) input, transformation, and output.

C) process focus, repetitive focus, and product focus.

In location planning, environmental regulations, cost and availability of utilities, and taxes are: A) global factors. B) country factors. C) regional/community factors. D) site-related factors. E) none of the above.

C) regional/community factors.

A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? A) cost focus B) labor focus C) revenue focus D) environmental focus E) education focus

C) revenue focus

Tangible costs include which of the following? A) climatic conditions B) availability of public transportation C) taxes D) quality and attitude of prospective employees E) zoning regulations

C) taxes

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 time-oriented. 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.

Which of these factors would be considered when making a location decision at the site level? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) zoning regulations D) cost and availability of utilities E) proximity to raw materials and customers

C) zoning regulations

__________________________diagrams use a schematic technique to discover possible locations of quality problems.

Cause & Effect

The ______________________________ method is a mathematical technique used for finding the best location for a single distribution point that services several stores or areas.

Center of Gravity

_______________________________ occurs when competing companies locate near each other because of a critical mass of information, talent, venture capital, or natural resources.

Clustering

________________________________ are graphical presentations of data over time that show upper and lower control limits for processes we want to control.

Control Charts

Which of the following workers is the most productive? A) $50 wages, 10 parts produced B) $10 wages, 1 part produced C) $30 wages, 5 parts produced D) $100 wages, 21 parts produced E) $500 wages, 100 parts produced

D) $100 wages, 21 parts produced

Why is Northern Mexico used as a cluster for electronics firms? A) high traffic flows B) venture capitalists located nearby C) natural resources of land and climate D) NAFTA E) high per capita GDP

D) NAFTA

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

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

When sample measurements fall inside the control limits, it means that: A) each unit manufactured is good enough to sell. B) the process limits cannot be determined statistically. C) the process output exceeds the requirements. D) if there is no other pattern in the samples, the process is in control. E) the process output does not fulfill the requirements.

D) if there is no other pattern in the samples, the process is in control

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

D) separation, self-service, automation, and scheduling

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.

Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in which of the following location decision methods? A) transportation method B) locational cost-volume analysis C) center-of-gravity method D) simulation E) factor-rating method

E) factor-rating method

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

On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity where: A) fixed costs are equal for two alternative locations. B) variable costs are equal for two alternative locations. C) total costs are equal for all alternative locations. D) fixed costs equal variable costs for one location. E) total costs are equal for two alternative locations.

E) total costs are equal for two alternative locations.

______________________________________ involves the ability to respond with little penalty in time, cost, or customer value.

Flexibility

Political risk, cultural issues, and exchange rates are among those ___________that affect which country will be selected for a location decision.

Key Success Factors

______________________________is a rapid, low-cost production process that caters to constantly changing unique customer desires.

Mass Customization

Karla's candle factory is considering two different manufacturing options. Option A is highly automated with fixed costs of $25,000 and variable costs of $.1/candle. Option B uses hand labor with fixed costs of $10,000 and variable costs of $.5/candle. If demand for Karla's candles is 25,000, which option should she pick?

Option A: $25,000 + .1(25,000) = $27,500 Option B: $10,000 + .5(25,000) = $22,500 Karla should pick Option B

An organization's approach to transforming resources into goods and services is called its ________________________________________________.

Process strategy

___________________________________________________ is a process strategy based on a product-oriented production process that uses modules.

Repetitive Focus

_____________________________________ costs are readily identifiable and can be measured with precision.

Tangible

The ____________________ method is popular because a wide variety of factors, from education to recreation to labor skills, can be objectively included.

factor-rating

The strategy for improving service productivity that customizes at delivery, rather than at production, is _______________________________________________.

postponement

A special form of time-function mapping, which goes beyond the organization into its supply chain, is ________________________________________________.

value-stream mapping