Supply Chain Management Exam 1

Given the following historical data, what is the simple three-period moving average forecast for period 6? Period Value 1 73 2 68 3 65 4 72 5 67 115 67 68 69 68.67

68

Drone sales for a New York based firm over the last 4 weeks are depicted in the table below: Week Unit Sales 1 700 2 724 3 720 4 728 What is the equation of the trend line and the predicted sales for week 6? 730 + 8t and 778 734 + 10t and 774 698 + 8t and 746 718 + 10t and 798

698 + 8t and 746

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? 80 percent 70 percent 100 percent 0 percent 75 percent

70 percent Divide actual output by design capacity.

An idle percentage of zero means a line is perfectly balanced. True False

True

LP problems must have a single goal or objective specified. True False

True

The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements. True False

True

The term capacity refers to the maximum quantity an operating unit can process over a given period of time. True False

True

Utilization is defined as the ratio of effective capacity to design capacity. True False

False

Given the following data for a make-or-buy decision: Alternative Fixed Costs Variable Costs Buy $0 per year $8 per unit Make $100,000 per year $4 per unit For what range of output would you prefer to buy? 25,000 unit and more 24,000 units and more Less than 24,000 units none of the above Less than 25,000 units

Less than 25,000 units

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago. True False

True

Reliability is the probability that a product or system will function when activated. True False

True

MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD. True False

false

The time between failures for an electrical appliance is exponentially distributed with a mean of 25 months. What is the probability that the next failure will not occur before 30 months have elapsed? in excess of .4 but not in excess of .6 in excess of .6 not in excess of .2 in excess of .3 but not in excess of .4 in excess of .2 but not in excess of .3

in excess of .3 but not in excess of .4 T/MTBF is 1.2. From the chart, the reliability is 0.3012.

Consider the following decision scenario: High Low Buy 80 0 Rent 70 30 Lease 30 50 *PV for profits ($000) If P(high) is .60, the choice for maximum expected value would be: lease. rent. buy. high. low.

rent.

At the break-even point: variable cost equals total revenue. total cost equals profit. variable cost equals fixed cost. total cost equals total revenue. output equals capacity.

total cost equals total revenue.

The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high. Demand Number of Beauticians Low Medium High One 50 75 100 Two 0 100 100 Three -100 70 300 If she feels the chances of low, medium, and high demand are 50 percent, 20 percent, and 30 percent respectively, what are the expected annual profits for the number of beauticians she will decide to hire? $54,000 $70,000 $55,000 $135,000 $80,000

$70,000

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. What would the profit be if she were to produce and sell 5,000 rosebushes? $30,000 $15,000 $9,000 $10,000 $0

$9,000 Total revenue would be $30,000. Total cost (fixed = $6,000, variable = $15,000) would be $21,000.

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? 2,095 1,875 1,980 2,000 2,050

(.2 * 2,200) + (.3 * 1,950) + (.5 * 2,050) = 2,050.

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? .95 .99 .94 Cannot be determined with this information. .90

.94

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? .95 .9205 .9025 .9975 .9795

.9975 The reliability is .95 + [(1 - .95)*.95].

A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. What is the objective function? $0.20B + $0.40C = Z $0.10B + $0.10C = Z $0.30B + $0.20C = Z $0.20B + $0.30C = Z $0.60B + $0.30C = Z

0.20B + $0.30C = Z

A production line is to be designed for a job with three tasks. The task times are .3 minutes, 1.4 minutes, and .7 minutes. The minimum cycle time in minutes is: 1.4 8. 2.4. .7. .3.

1.4

The production planner for Fine Coffees, Inc., produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. What is the Columbia bean constraint? 2A + 1B ≤ 4,800 12A + 8B ≤ 4,800 4A + 8B ≤ 4,800 8A + 12B ≤ 4,800 1A + 2B ≤ 4,800

12A + 8B ≤ 4,800

Which of the following could not be a linear programming problem constraint? 1A + 2B ≥ 3 1A + 2B = 3 1A + 2B 1A + 2B + 3C + 4D ≤ 5 1A + 2B ≤ 3

1A + 2B

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task Time (secs) Immediate Predecessor u 30 none v 30 u w 6 u x 12 w y 54 x z 30 v,y If the company wants the output rate to be equal to demand, what is the minimum number of workstations needed? 7 4 6 3 5

3 Divide the summed task times by the minimum necessary cycle time. Round up to find the theoretical minimum.

What is the break-even quantity for the following situation? FC = $1,200 per week VC = $2 per unit Rev = $6 per unit 200 300 100 600 1,200

300

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 make a profit of $6,000? 2,400 4,000 3,000 1,000 1,600

4,000 Add the desired profit of $6,000 to the fixed cost, then divide the sum by the per-unit contribution margin.

A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year? 42,100 40,450 42,250 42,400 40,600

40,450 July would be period 3, so the forecast would be 40,000 + 150(3).

The production planner for Fine Coffees, Inc., produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. Which of the following is not a feasible production combination? 400 A and 0 B 400 A and 400 B 0 A and 0 B 0 A and 400 B 200 A and 300 B

400 A and 400 B

Given the following information, what would efficiency be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48 percent 60 percent 48 percent 80 percent 35 percent 20 percent

60 percent If utilization is 48 percent, then actual output must have been 48 units.

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing? 65.5 62.5 57.5 36.9 60.5

62.5 Multiply the previous period's forecast error (-5) by alpha and then add to the previous period's forecast.

Excel Solver does not allow for the inclusion of greater than or equal to, less than or equal to or equal nomenclature as Excel will not recognize these. True False

False

Excel Solver is the only method that one can utilize for automated linear programming solutions. True False

False

The maximax approach is a pessimistic strategy. True False

False

The maximin approach involves choosing the alternative with the highest payoff. True False

False

The percentage of idle time in an assembly line is called cycle time. True False

False

Efficiency is defined as the ratio of: effective capacity to actual output. actual output to effective capacity. design capacity to effective capacity. actual output to design capacity. design capacity to actual output.

actual output to effective capacity.

Consider the following decision scenario: High Low Buy 80 0 Rent 70 30 Lease 30 50 *PV for profits ($000) The maximax strategy would be: rent. high. lease. low. buy.

buy.

Suppose a given control unit fails, on average, every 12,000 hours. It takes an average of 900 hours to repair and reboot this unit. The repair/reboot procedures for this unit are being reconfigured. By how much would average repair/reboot time need to be reduced to increase availability by 5 percent (assuming the control unit's average life remains unchanged)? not more than 200 hours more than 200 hours but not more than 400 hours more than 400 hours but not more than 600 hours more than 600 hours but not more than 800 hours more than 800 hours

more than 600 hours but not more than 800 hours A 5 percent improvement in availability would result in availability being approximately 97.7 percent. To achieve such availability, assuming MTBF remains unchanged, would mean MTTR would have to be reduced by approximately 614 hours.